Trends in Gold Transaction Values 2014-17 Current Trends in Mining - - PowerPoint PPT Presentation

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Trends in Gold Transaction Values 2014-17

Current Trends in Mining Finance New York SME Conference

William E. Roscoe and Paul Chamois RPA Inc. May 2, 2017

Toronto Denver London Vancouver Quebec City

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Gold Property Transaction Values Agenda

• Gold property transaction data
• $/oz of gold equivalent as common comparison metric
• Trends in gold property transaction values by:
• Producing vs non-producing properties
• Date of transaction
• Proportion of Reserves in total Reserves + Resources
• Western vs non-Western countries

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Gold Property Transaction Data

• Search SNL Financial database of property transactions
• Publicly disclosed transactions globally
• Screen for gold property deals with Mineral Reserves and Resources
• Compile information on each transaction from 2014 to 2017 Q1
• Analyze transactions to derive value in US$ for 100% property interest
• Compile contained oz of gold equivalent (AuEq) in Reserves+Resources
• Calculate $/oz AuEq to use as common comparison metric
• Transaction value for 100% property interest divided by total

contained ounces = $/oz AuEq

• Streamline dataset by eliminating small deals, small resources, low gold

in AuEq, and small acquired interest

• 179 transactions in 35 countries on 43 producing properties and

136 non-producing properties

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Gold Property Transaction Values - $/oz AuEq

10 20 30 40 50 60 0.3 to 1 1 to 3 3 to 10 10 to 30 30 to 100 100 to 300

Frequency $/oz AuEq Ranges

All Transaction Data 2014 to 2017 Q1

Mean = $31/oz Median = $14/oz N = 179

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Gold Property Transactions - Property Values

5 10 15 20 25 30 35 40 45 50 <1M 1M to 3M 3M to 10M 10M to 30M 30M to 100M 100M to 300M >300M

Frequency Property Value

All Transactions 2014 to 2017 Q1

Mean = $51.9M Median = $6.8M N = 179

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Gold Property Transactions – Contained oz AuEq

10 20 30 40 50 60 70 <100K 100K to 300K 300K to 1M 1M to 3M 3M to 10M >10M

Frequencey Contained oz AuEq

All Transactions 2014 to 2017 Q1

Mean = 1.56M oz Median = 0.48M oz N = 179

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Gold Property Transaction Values

Overall downward trend over the period 2014 to 2017 Q1

• Spike in 2015 Q2 is due to 5 producing property transactions >$80/oz

10 20 30 40 50 60 70 80 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q2 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017

$/oz AuEq Quarter

All Transactions

Mean Median

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Gold Property Transaction Values

Producing vs Non-Producing Properties – overall data

• Producing properties have significantly higher $/oz AuEq values, higher property

values, and more contained ounces AuEq overall

Producing Properties N = 43 Non-Producing Properties N = 136 Mean Median Middle 50% Mean Median Middle 50% $/oz AuEq 56 33 13 to 89 23 11 5 to 29 Property Value $M 160 38 5 to 253 18 5 2 to 15 M oz AuEq 2.7 1.7 0.4 to 3.2 1.2 0.4 0.2 to 1.0

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Gold Property Transaction Values

Producing vs Non-Producing Properties

• Producing properties have significantly higher $/oz values, higher property

values, and more contained gold in Reserves + Resources than non-producing properties

• Note geometric progression with many low $/oz values and few high values.

2 4 6 8 10 12 14 16

0.3 to 1 1 to 3 3 to 10 10 to 30 30 to 100 100 to 300

Frequency $/oz AuEq Ranges

All Producing Properties

Mean = $56/oz Median = $33/oz N = 43

5 10 15 20 25 30 35 40 45

0.3 to 1 1 to 3 3 to 10 10 to 30 30 to 100 100 to 300

Frequency $/oz AuEq Ranges

All Non-ProducingProperties

Mean = $23/oz Median = $11/oz N = 136

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Gold Property Transaction Values over Time

Trends in Producing and Non-Producing $/oz Values over Time

• Producing and non-producing $/oz values similar in 2014
• Producing properties increased in $/oz from 2014 to 2015 and 2016, then

decreased

• Non-producing properties decreased in $/oz from 2014 to 2016-17
• The number of non-producing property deals increased in 2016 and 2017
• Dominated by low $/oz value transactions

Producing Properties Non-Producing Properties Mean Median N Mean Median N 2014 33 19 11 32 24 36 2015 79 82 13 25 13 27 2016 58 39 15 17 6 57 2017 Q1 35 37 4 24 9 15

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Gold Property Transaction Values over Time

Producing properties - slight upward trend ca $30/oz to $50/oz ? Non-producing properties - downward trend ca $30/oz to $15/oz ?

• Producing properties spike in 2015 Q2 is due to 5 transactions >$80/oz
• Producing properties spike in 2016 Q2 is due to 2 deals >$100/oz

20 40 60 80 100 120 140 160 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q2 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017

$/oz AuEq Quarter

All Transactions - $/oz Average by Quarter

Prod Mean Non-Prod Mean

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Gold Property Transaction Values – over Time

0.00 50.00 100.00 150.00 200.00 250.00 1-Jan-14 28-Oct-14 24-Aug-15 19-Jun-16 15-Apr-17

$/oz AuEq Transaction Date

Producing Properties

0.00 50.00 100.00 150.00 200.00 250.00 01-Jan-14 28-Oct-14 24-Aug-15 19-Jun-16 15-Apr-17

$/oz Transaction Date

Non-Producing Properties

• Producing properties $/oz values increased from 2014 to 2015

and 2016, then decreased in late 2016 and 2017 Q1

• Non-producing properties $/oz values decreased from 2014 to

2016 and 2017 Q1

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Gold Property Transaction Values - Reserves

Proportion of Reserves in Total Reserves and Resources

• For no Resources only, producers are similar to non-producers at $20/oz AuEq
• For producing properties, $/oz AuEq increases with % of Reserves
• For non-producing properties, no change in $/oz with % of Reserves
• Apparently the market values Reserves in producers only

0.00 50.00 100.00 150.00 200.00 250.00 300.00 0% 20% 40% 60% 80% 100%

$/oz AuEq Percent of Reserves in Total Reserves & Resources

Producing Properties

0.00 50.00 100.00 150.00 200.00 250.00 0% 10% 20% 30% 40% 50% 60% 70%

$/oz AuEq Percent of Reserves in Total Reserves&Resources

Non-Producing Properties

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Gold Property Transaction Values – Producing Properties by Country

• For Western countries, Australia and Canada have similar $/oz values, but USA

$/oz values are higher

• For non-Western countries, $/oz values in Asia are higher than Latin American

and African countries, which are similar

• Overall, $/oz values are similar for Western and non-Western countries

Producing Properties Country/Region Mean Median N Australia 45 20 15 Canada 29 19 3 USA 58 56 9 Western Countries 54 20 29 Latin America 37 19 5 Asia 94 89 6 Africa 33 33 3 Non-Western Countries 61 43 14

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Gold Property Transaction Values – Producing Properties by Region over Time

• Both Western and non-Western properties show the same hump trend
• For Western properties, $/oz values peak in 2015
• For non-Western properties, $/oz values peak in 2016

0.00 50.00 100.00 150.00 200.00 250.00 300.00 1-Jan-14 28-Oct-14 24-Aug-15 19-Jun-16 15-Apr-17

$/oz AuEq Transaction Date

Producing Western Countries

0.00 50.00 100.00 150.00 200.00 250.00 300.00 1-Jan-14 28-Oct-14 24-Aug-15 19-Jun-16 15-Apr-17

$/oz AuEq Transaction Date

Producing Non-Western Countries

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Gold Property Transaction Values – Non-Producing Properties by Country

• For Western countries, Australia and Canada have nearly identical $/oz values,

but USA $/oz values are significantly higher

• For non-Western countries, Latin American and Asian $/oz values are higher

than African and Russian $/oz values

• Overall $/oz values for non-Western countries are very similar to Western

countries

Non-Producing Properties Country/Region Mean Median N Australia 16 9 34 Canada 16 8 31 USA 47 23 21 Western Countries 23 10 88 Latin America 28 23 19 Asia 31 32 6 Africa 19 11 18 Russia 11 9 5 Non-Western Countries 23 12 48

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Gold Property Transaction Values

• Non-Producing Properties by Region over Time
• Downward trend for Western and non-Western countries $/oz values from 2014

to 2017 Q1

• In both cases, from ca $30/oz in 2014 to ca $15/oz in 2017 Q1
• Increased number of transactions in 2016 and 2017 Q1 in both Western and

non-Western countries, dominantly at low $/oz values

0.00 50.00 100.00 150.00 200.00 250.00 1-Jan-14 28-Oct-14 24-Aug-15 19-Jun-16 15-Apr-17

$/oz AuEq Transaction Date

Non-Producing Western Countries

0.00 50.00 100.00 150.00 200.00 250.00 1-Jan-14 28-Oct-14 24-Aug-15 19-Jun-16 15-Apr-17

$/oz AuEq Transaction Date

Non-Producing Non-Western Countries

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Gold Property Transaction Values Summary and Conclusions

• Data on 179 property transactions compiled for the period 2014-2017 Q1
• The $/oz AuEq value for each property is used as a comparison metric
• The $/oz values covers a wide range and follows a geometric

progression, with many low values and fewer high values

• The property values and the contained ounces also exhibit a geometric

progression with many lows and fewer highs

• The producing and non-producing properties differ significantly in $/oz

values

• 43 producing properties average $56/oz with median of $33/oz
• 136 non-producing properties average $23/oz with median of $11/oz

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Gold Property Transaction Values Summary and Conclusions - continued

• Producing and non-producing properties had similar $/oz values in 2014,

but their trends diverged after 2014

• Producing properties $/oz values increased in 2015 and decreased in late

2016 and 2017 Q1

• Non-producing properties values decreased from 2014 to 2016 and 2017 Q1

due to increased number of transactions with low $/oz values

• The market pays higher $/oz values for reserves in producing properties,

but not in non-producing properties

• Overall, $/oz values are similar for Western and non-Western countries
• $/oz values for USA properties are higher than Australia and Canada for

both producing and non-producing properties

• Overall market transaction data should not be used to value individual

properties

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Gold Property Transaction Values

Contact us: Bill Roscoe Tel: +1 (416) 947-0907 Email: william.roscoe@rpacan.com Paul Chamois Tel: +1 (416) 947-0907 Email: paul.chamois@rpacan.com

Toronto Denver London Vancouver Quebec City

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