Louis DoyleVice-President, Montreal,Listed Issuer ServicesTSX Venture Exchange

Going Public on TSX Venture with a CPCWelcome & Overview of Public Capital

2

Agenda

4:30 pm Welcome and Overview of Public Venture Capital

Louis Doyle, TSX Venture Exchange

4:45 pm Going Public with a CPCAllan L. Jenkins, PricewaterhouseCoopers LLPGlenn Jessome, JESSOMELAWScott Urquhart, Jennings Capital

6:00 pm Case Study

6:30 pm Networking Reception

3

Disclaimer

This document is for information purposes only and is not an invitation to purchase

securities listed on Toronto Stock Exchange and/or TSX Venture Exchange or Natural

Gas Exchange. TMX Group Inc. and its affiliates do not endorse or recommend any

securities referenced in this document. Please seek professional advice to evaluate

specific securities.

While the information herein is collected and compiled with care, neither TMX Group

Inc. nor any of its affiliated companies represents, warrants or guarantees the

accuracy or the completeness of the information. You agree not to rely on the

information contained herein for any trading, business or financial purpose.

This information is provided with the express condition, to which by making use

thereof you expressly consent, that no liability shall be incurred by TMX Group Inc.

and/or any of its affiliates as a result of any errors or inaccuracies herein or any use

or reliance upon this information.

© 2010 TMX Group Inc.

4

Market dataEnergy Cash trading& related

Issuer servicesDerivatives

(~54% Ownership)

(51% Ownership)

(19.9% Ownership)

TMX Group is at the Heart of Canada’s Capital Markets

55

7th

in MarketCapitalizatio

n

Canadian Markets… Global Leaders

8th

in EquityFinancing in 2010

*S&P is a trademark owned by Standard & Poor’s Financial Services LLCUnless otherwise noted, as at June 30 2011

6

2,193 companies

18 graduates in First Half 201140 graduates in 201020 graduates in 200945 graduates in 2008

1,554 companies

TSX Venture Exchange

• Access to capital for earlier stage companies or smaller financings

• Total market cap of $64.7 Billion & average market cap of $29.5MM

• Cost effective stepping stone for international companies looking to list on a quality North American market

• Exchange mandate to mentor management of newly public companies

• Streamlined graduation to TSX when senior market requirements are met

• 105 year history

Toronto Stock Exchange

• Senior market for well established businesses and management teams with experience in public markets

• Total market cap of $2.2 Trillion & average market cap of $1.4B

• 30% of TSX issuers >$500M are interlisted on a US exchange

• Access to larger, more international institutional investors and greater analyst coverage

• Globally visible specialized indices

• 159 year history

Unique Equity Market Structure

7

TMX Group’s Equity Exchanges Support a Diverse Issuer Base

Min

ing

159

2

Oil &

Gas &

En

erg

y S

erv

ices 4

76

Div

ersifi

ed

Ind

ustria

ls 360

Tech

nolo

gy 1

82

Finan

cial S

erv

ices 1

28

Stru

cture

d P

rod

ucts 2

25

Life S

cien

ces 1

25

CPC

139

Cle

an

Tech

nolo

gy 1

31

Real E

state

80

ETFs 2

10

Com

m &

Med

ia 4

5U

tilities &

Pip

elin

es 2

7Fo

rest P

rod

ucts 2

7

Number of Issuers by Sector

Includes issuers on Toronto Stock Exchange and TSX Venture Exchange (100% = 3747)

As at June 30 2011

8

TMX Group Serves Companies at all Stages of Growth

Market Capitalization Toronto Stock Exchange and TSX Venture

Exchange

Unique feeder system

509 graduates

+ 105 M&A*

*From January 1, 2000 – June 30, 2011

8

Toronto Stock Exchange issuer base: 1,554 issuers, ~$2.2 trillion market capTSX Venture Exchange issuer base (excludes NEX): 2,193 issuers, ~$64.7 billion market cap

As at June 30, 2011

32%38%

87%

11%2%

30%

<$50 Million $50 - $250 Million >$250 Million

% of TSX Issuers

% of TSXV Issuers

459

Issuers

598

Issuers497

Issuers

1913

Issuers

237

43 Issuers

9

Access to capital – Toronto Stock Exchange

2004 2005 2006 2007 2008 2009 2010 2011

YTD

J une

IPO Company IPO Income Trust IPO ETF/ Structured prod. TSX V Graduate Other

204

Going public activity on TSXGoing public activity on TSX

197

223207

126

Equity financing on TSX ($B)Equity financing on TSX ($B)

2004 2005 2006 2007 2008 2009 2010 2011YTDJ une

Supplementary financings Secondary offerings

Private Placements IPOs

46,5 $46,2 $41,8 $

47,6 $

35,3 $100

60,0 $187

44,1 $115

22,4 $

10

Access to capital – TSX Venture Exchange

Going public activity on TSX VentureGoing public activity on TSX Venture

2004 2005 2006 2007 2008 2009 2010 2011

YTD

J une

IPO CPC IPO RTO QT Other

237259

281

366329

2004 2005 2006 2007 2008 2009 2010 2011YTDJ une

Prospectus offerings Private placements IPO

Equity financing (B$)Equity financing (B$)

4,2 $

6,1 $

7,9 $

11,1 $

5,5 $ 202

4,8 $

337 9,8 $

161

7,0 $

11

TSX and TSX Venture Exchange have shown consistent growth in liquidity

64.2

82.0

96.1

109.2118.5

104.6

51.1 54.9

2005 2006 2007 2008 2009 2010 2010

YTD

J une

2011

YTD

J une

Billions of Shares

Toronto Stock ExchangeVolume of Shares Traded

Toronto Stock ExchangeVolume of Shares Traded

21.1

37.1

52.6

43.6 46.2

67.3

29.8

41.3

2005 2006 2007 2008 2009 2010 2010

YTD

J une

2011

YTD

J une

Billions of Shares

TSX Venture ExchangeVolume of Shares Traded

TSX Venture ExchangeVolume of Shares Traded

12

Going Public with aCapital Pool Company™

An alternative source of growth capital

13

Panel: Going Public with a CPC

Allan L. Jenkins, PWC

Glenn Jessome, JESSOMELAW

Scott Urquhart, Jennings Capital

14

Benefits of Going Public

Access capital and

future financing

opportunities

Facilitate

growth

Increase visibility

and prestige

Provide liquidity

for shareholders

Create employee

incentive

mechanism

15

Going Public Transactions

TMX Equity markets embrace multiple mechanisms for “go-public” transactions

16

Capital Pool Company™ (CPC) Program has a Strong Track Record

As at June 30 2011

Since inception:•Over 2185 CPCs were created•80% have completed their QT – over 1750 companies

Currently:•336 Graduates now trade on TSX•93 of the grads were CPCs•49 QTs in 2011 first half - 27 Mining QTs - 8 Oil and Gas QTs - 7 Diversified Industries QTs - 2 Clean Technology QTs

17

Seed Financing – Minimum of $100,000 seed financing of the company by 3-5

Founders/Directors

– Up to $500,000 can be discount seed

CPC IPO – a prospectus offering to create a corporate vehicle with

public distribution (maximum that can be raised $5,000,000).

Qualifying Transaction (QT)– a target business is identified, disclosed and acquired

Aftermarket and Growth– company trades and executes its business plan

Capital Pool Company: Milestones

18

Seed Financing and Prospectus

Seed

1. Seed Financing

• 3-5 CPC Founders:

• Collectively invest $100,000 or more in seed funding

• Up to $500,000 can be discount seed

• Appoint CPC Board of Directors

• Seed investors do not have to be Directors

• $5,000 minimum investment / Director

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Seed Financing and Prospectus

Public Offe

ring

Trade as CPC

Public Financing and CPC Trades

Prospectus Receipt

Seed

2. CPC Initial Public Offering

• CPC IPO is completed:

• President’s list

• Broker’s list

• Stock options

• Agent(s) compensation

20

Seed Financing and Prospectus

Public Offe

ring

Trade as CPC

Announce QT

File Disclosure Statement

CPC Acquires Business (QT)

Public Financing and CPC Trades

Prospectus Receipt

Close Transaction

Seed

Identify Q

ualifying Transactio

n

3. Qualifying Transaction

24 Months Maximum

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• Considerations for a Qualifying Transaction:

• Significant growth opportunity & reason to be public

• Strong & coachable management

• Capital needs: $1 M to $20 M

• Close to commercialization

• Meets minimum listing and audit requirements

• Stock options and acquisition currency

• Strong market appetite

• 12 to 18 month cash requirements (can be financed)

Selecting a QT Candidate

22

Seed Financing and Prospectus

Public Offe

ring

Trade as CPC

Announce QT

File Disclosure Document

Trade as Venture

Company

CPC Acquires Business (QT)

Public Financing and CPC Trades

Prospectus Receipt

Close Transaction

Seed

Identify Q

ualifying Transactio

n

Aftermarket and Growth

Execute Business

Plan; IR Program

24 Months Maximum

4. Aftermarket and Growth

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• TargetCo post QT Investor relations program

– Shortlist IR firms early on

• Consider CPC board members with capital market experience

• Execute business plan

• Private placements

• Acquisitions

• Governance/compliance with securities laws and Exchange policies

Aftermarket

24

Why/When a CPC

• Alternative access to capital; Retain higher ownership• Want to be public company (M&A currency, stock options, visibility)• Greater flexibility, certainty and control in the process• Going public risk reduced

• Management• Long term strategy to grow as a public company• Reasonable valuation = Viable share structure• Investor support• Appropriate advisors (lawyer, broker, investment banker)

Company Wants/ Needs

Critical Success Factors

• Company is too early stage for a broadly distributed regular IPO• IPO market is not strong enough in general• VC financing is not viable or management prefers not to use• Market appears to reward growth business of target company’s

sector

Market Conditions

25

Key Considerations

• The ‘Team’• Internal – management and board of directors• External – advisors (financial, legal, accounting, investor relations)

• Business Plan• Clarity of goals / milestones• Realistic and attainable

• Financial Plan• Budget for costs of being public• How much $ to raise, and why?

• Understand the drawbacks• Disclosure, transparency and public scrutiny• Costs• Management time commitment away from core business.

• The ‘Story’ – growth potential and attracting investors

• Commitment to ‘Act Public’ early

• Timing – long term decision

26

2011 Atlantic Canada Clients - TSX

Exchange NameRoot

TickerHQ

Location Listing Type

Date of TSX Listing

YYYYMMDD QMV(C$)

31-July-2011 SectorTSX Imvescor Restaurant Group Inc IRG NB 20040607 32,094,455 Diversified IndustriesTSX Major Drilling Group International Inc. MDI NB 19950308 1,027,295,762 Diversified IndustriesTSX Altius Minerals Corporation ALS NF TSXV Grad 20070115 332,247,269 MiningTSX Rutter Inc. RUT NF TSXV Grad 20040401 4,217,212 TechnologyTSX Fortis Inc. FTS NF 19691119 6,871,794,020 Utilities & PipelinesTSX Bell Aliant Inc. BA NS Other 20060710 6,309,794,274 Comm & MediaTSX Bell Aliant Preferred Equity Inc. BAF NS IPO 20110315 294,400,000 Comm & MediaTSX DHX Media Ltd. DHX NS IPO 20060518 53,017,784 Comm & MediaTSX Newfoundland Capital Corporation Limited NCC NS 19730130 246,158,871 Comm & MediaTSX Clarke Inc. CKI NS 19980316 176,939,309 Diversified IndustriesTSX Clearwater Seafoods Income Fund CLR NS 20020730 126,778,368 Diversified IndustriesTSX Empire Company Limited EMP NS 19820709 1,956,682,455 Diversified IndustriesTSX High Liner Foods Incorporated HLF NS 19710115 236,904,005 Diversified IndustriesTSX Matrix Asset Management Inc MTA NS 20010710 47,541,123 Financial ServicesTSX Acadian Mining Corporation ADA NS TSXV Grad 20071101 15,985,065 MiningTSX AuRico Gold Inc. AUQ NS 20000221 2,004,960,553 MiningTSX Brigus Gold Corp BRD NS 19450425 355,380,027 MiningTSX Erdene Resource Development Corporation ERD NS TSXV Grad 20051214 70,452,234 MiningTSX Linear Metals Corporation LRM NS TSXV Grad 20080211 21,970,075 MiningTSX Namibia Rare Earths Inc. NRE NS IPO 20110413 45,918,815 MiningTSX Corridor Resources Inc. CDH NS TSXV Grad 20060417 267,995,822 Oil & GasTSX Crombie Real Estate Investment Trust CRR NS IPO 20060322 629,038,934 Real EstateTSX Holloway Lodging Real Estate Investment Trust HLR NS TSXV Grad 20070717 68,338,673 Real EstateTSX Homburg Invest Inc. HII NS 20010115 55,117,974 Real EstateTSX Killam Properties Inc. KMP NS TSXV Grad 20030403 596,740,145 Real EstateTSX Emera Incorporated EMA NS 19990106 3,976,952,684 Utilities & PipelinesTSX Nova Scotia Power Inc. NSI NS 19920811 149,580,000 Utilities & Pipelines

27

2011 Atlantic Canada Clients - TSXV

Exchange Name RootTicker

QMV (C$)31-July-2011

HQLocation Sector

CPC/Former

CPCTSXV Trius Investments Inc TRU 969,634 NB Clean TechnologyTSXV Azura Ventures Ltd AZV.P 436,475 NB CPC 1TSXV Landdrill International Inc. LDI 20,899,189 NB Diversified IndustriesTSXV Slam Exploration Ltd. SXL 17,120,681 NB MiningTSXV Plazacorp Retail Properties Ltd. PLZ 228,989,081 NB Real Estate 1TSXV West Mountain Capital Corp WMT 4,995,185 NL Clean Technology 1TSXV Cornerstone Capital Resources Inc. CGP 31,791,642 NL MiningTSXV Golden Dory Resources Corp GDR 9,998,001 NL Mining 1TSXV New Island Resources Inc. NIS 502,274 NL MiningTSXV Prominex Resource Corp. PXR 2,916,045 NL MiningTSXV Vulcan Minerals Inc. VUL 12,006,987 NL MiningTSXV Canadian Imperial Venture Corp. CQV 25,616,918 NL Oil & GasTSXV NWest Energy Corp NWN 2,030,174 NL Oil & GasTSXV Shear Wind Inc SWX 30,442,197 NS Clean Technology 1TSXV Oceanus Resources Corporation OCN.P 1,650,000 NS CPC 1TSXV Zephyr Minerals Ltd. ZFR.P 1,058,575 NS CPC 1TSXV Immunovaccine Inc IMV 19,693,019 NS Life Sciences 1TSXV MedMira Inc MIR 9,667,026 NS Life SciencesTSXV Advanced Primary Minerals Corporation APD 3,587,539 NS MiningTSXV Black Bull Resources Inc. BBS 908,533 NS MiningTSXV Buchans Minerals Corporation BMC 8,299,420 NS MiningTSXV Capella Resources Ltd. KPS 7,450,371 NS MiningTSXV Frontline Gold Corporation FGC 4,803,510 NS Mining 1TSXV GoGold Resources Inc. GGD 63,433,998 NS Mining 1TSXV Merrex Gold Inc. MXI 58,260,899 NS MiningTSXV Mountain Lake Resources Inc. MOA 23,613,534 NS MiningTSXV Silver Spruce Resources Inc. SSE 10,656,531 NS MiningTSXV Silvore Fox Minerals Corp SFX 23,808,483 NS Mining 1TSXV Innovative Properties Inc. INR 368,067 NS Real Estate 1TSXV SolutionInc Technologies Limited STL 290,854 NS Technology

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Case Study

Going public with a CPC the traditional way

29

CPCSeed (Founder) =

4 M shares @ $0.05IPO =

3 M shares @ $0.10

New TSX Venture Company

Qualifying Transaction

New Financing = $ 2.1 M

Private Company/Asset purchase

20 M shares @ $0.30

Anatomy of a Qualifying Transaction:West Mountain Capital Corp

30

Shares PriceInvested/ Valuation

Ownership

Seed Investors* 4,000,000 $0.05 $200,000 12%

CPC IPO* 3,000,000 $0.10 $300,000 9%

Acquisition of QT 20,000,000 $0.30 $6,000,000 59%

Financing 7,000,000 $0.30 $2,100,000 20%

Totals 34,000,000 100%

*CPCs shares were not consolidated on the QT which often happens.

Traded in the last 12 months in the $0.13-$0.405 range (early September 2011 at $0.20)

Resulting Share Structure

31

Seed Investment:

$200,000 invested at $0.05 = 4,000,000 shares

Post QT:

4,000,000 shares @ $0.30 = $1,200,000

at today’s price:

4,000,000 shares @ $0. 20 = $800,000

$1,000 invested in the seeds ……

32

CPCSeed (Founder) =

10 M shares @ $0.05IPO =

5 M shares @ $0.10

New TSX Venture Company

Qualifying Transaction

New Financing = $ 0.5 M

Private Company/Asset purchase

250 000 shares @ $0.27

Anatomy of a Qualifying TransactionGoGold Resources Inc.

33

Shares PriceInvested/ Valuation

Market @ $0.25

Ownership

Seed Investors* 10,000,000 $0.05 $500,000 $2.5 M 59%

CPC IPO* 5,000,000 $0.10 $500,000 $1.25 M 30%

Acquisition of QT 250,000 $0.27 $225,000 $0.2 M 1%

Financing 1,666,665 $0.30 $500,000 $0.42 M 10%

Totals 16,916,665 $4.23 M 100%

*CPCs shares were not consolidated on the QT which often happens.

Closing price the first day of trading post QT: $0.25. Closing price on September 8, 2011: $1.78

Resulting Share Structure

34

Seed Investment:

$500,000 invested at $0.05 = 10,000,000 shares

Post QT:

10,000,000 shares at $0.25 = $2,500,000

ROI:

400%

As of September 8, 2011:

10,000,000 shares at $1.78 = $17,800,000

$1,000 invested in the seeds ……

35

Case Study

CPC as a mean of achieving a corporate spin off

36

CPCSeed (Founder) =

2.5 M shares @ $0.05IPO =

4 M shares @ $0.10

New TSX Venture Company

Qualifying Transaction

New Financing = $ 2.7 M

Private Company/Asset purchase

18,675,000 shares @ $0.17

Anatomy of a Qualifying TransactionFrontline Gold Corporation

37

Shares PriceInvested/ Valuation

Ownership

Seed Investors* 2,500,000 $0.05 $125,000 38%

CPC IPO* 4,000,000 $0.10 $400,000 62%

Totals 6,500,000 $525,000 100%

CPC Share Structure

38

The Qualifying Transaction

• acquisition of interest in 3 mining properties from Merrex Gold Inc. (TSXV: MXI) in consideration of the issuance of 18,675,000 common shares at $0.17 per share ($3,174,750) and the funding of the recommended Phase 1 of $413,600.

• Acquisition of a 100% interest in a mining properties located in Mali from Touba Mining for $400,000 cash, the issuance of up to 7,750,000 shares and work commitment of $600,000.

• Flow through financing: 2,518,400 shares at $0.19. • Common shares financing: 12,782,769 shares at

$0.17.

39

Share structure post QT-Financing

 

Shares PriceInvested/

ValuationOwnership

Seed Investors* 2,500,000 $0.05 $125,000 5%

CPC IPO* 4,000,000 $0.10 $400,000 9%

Acquisition of properties from Merrex

18,675,000 $0.17 $3,174,750 40%

Acquisition of Niaouleni Permits

6,567,943 $0.17 $600,000 14%

Flow through financing 2,518,400 $0.19 $478,496 5%

None flow through financing 12,782,769 $0.17 $2,173,070 27%

Totals 47,044,112   $4,299,750 100%

The common shares closed at $0.22 on the first day of trading (January 14, 2010). They are currently trading in the $0.07-$0.10 range

40

Thank you to our partners

Allan L. Jenkins Glenn Jessome Scott Urquhart

41

Contact our Business Development Team to learn more about Your Capital Opportunity www.tmx.com/bdInternational Toll Free:Europe - 0800 5600 5700China - 00 800 258 9999North America - 1 888 873 8392

ChinaGeorge Gao416 814-8869george.gao@tsx.com

Diversified IndustriesJustin Canivet416 947-4710justin.canivet@tsx.com

United StatesTala Zarbafi416 947-4636tala.zarbafi@tsx.com

EnergyCindy Gray403 218-2822cindy.gray@tsx.com

MiningOrlee Wertheim416 947-4477orlee.wertheim@tsx.com

TechnologyRobert Peterman416 947-4305robert.peterman@tsx.com

Louis DoyleVice President, Listed Issuer ServicesTSX Venture ExchangeT: 514-788-2407louis.doyle@tsx.com

Disclaimer

This document is for information purposes only and is not an invitation to purchase securities listed on Toronto Stock Exchange and/or TSX Venture Exchange or Natural Gas Exchange. TMX Group Inc. and its affiliates do not endorse or recommend any securities referenced in this document. Please seek professional advice to evaluate specific securities.

While the information herein is collected and compiled with care, neither TMX Group Inc. nor any of its affiliated companies represents, warrants or guarantees the accuracy or the completeness of the information. You agree not to rely on the information contained herein for any trading, business or financial purpose.

This information is provided with the express condition, to which by making use thereof you expressly consent, that no liability shall be incurred by TMX Group Inc. and/or any of its affiliates as a result of any errors or inaccuracies herein or any use or reliance upon this information.

© 2011 TMX Group Inc.