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Pilbara PlaybookWhat we learned from our trip to the Pilbara

April 5, 2018

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Pilbara PlaybookExecutive Summary

Conclusion: It remains early days in the Pilbara gold rush (only 6 months in), but our recent site visits suggest there continues to be the potential for one or more world class discoveries in the Pilbara. In our view, the preferred way to play this exciting theme are:• Novo Resources Corp. (TSXV:NVO, C$4.34, C$634M) – the most advanced by a meaningful

margin and best funded company in the area is taking the right steps to advance towards discovery

• De Grey Mining Ltd. (ASX:DEG , A$0.16, A$52M) – the second most advanced project, with its traditional hard rock assets underpinning its value providing investors a low cost option on conglomerate success

• NxGold Ltd. (TSXV:NXN, C$0.18, C$10) – a late entrant into this gold rush, but quickly advancing its Mt. Roe project which appears to be one of the richest areas from a prospector perspective providing positive read through to its conglomerate potential

Upcoming Catalysts:With the weather cooling in the Pilbara, field work is likely to pick up on all conglomerate gold projects, particularly those that are at an early stage. For our preferred companies, the next important catalysts are: • Novo – First results from the larger 5 tonne bulk samples are expected in April – likely to be

positive for Novo and the other players in the space.• De Grey – Receipt of heritage clearance and the start of large scale mechanical trenching.• NxGold – Completion of the ongoing mapping, heritage clearance and the start of trenching.

Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).

All values in CAD unless otherwise noted.

For Disclaimer and Applicable Disclosures, see the end of this report

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Table of Contents

Main Content

Conglomerate Gold in the Pilbara 4

The Pilbara Players - Comparable Table 7

Pilbara Overview - Map of Landholders 8

The Playbook - What we are looking for 8

Our Preferred Players 10

Novo Resources Corp. (TSXV:NVO) 11

De Grey Mining Ltd. (ASX:DEG) 18

NxGold Ltd. (TSXV:NXN) 22

Disclosures 42

Appendix 43

Other Companies

New Frontier Exploration (Private) 24

Calidus Resources Ltd. (ASX:CAI) 25

Kairos Minerals Ltd. (ASX:KAI) 27

Marindi Metals Ltd. (ASX:MZN) 28

Artemis Resources Ltd. (ASX:ARV) 29

Pacton Gold Inc. (TSXV:PAC) 31

Int. Prospect Ventures Ltd. (TSXV:IZZ) 32

Coziron Resources Ltd. (ASX:CZR) 33

Millennium Minerals Ltd. (ASX:MOY) 34

Arrow Minerals Ltd. (ASX:AMD) 35

Impact Minerals Ltd. (ASX:IPT) 36

Kalamazoo Resources Ltd. (ASX:KZR) 37

DGO Gold Ltd. (ASX:DGO) 38

Macarthur Minerals Ltd. (TSXV:MMS) 39

Haoma Mining NL (Delisted) 40




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Conglomerate Gold in the PilbaraWhat we know today – Part 1

Over an almost two week period we visited 5 conglomerate gold projects and a conglomerate gold conference. These are the key findings from our trip:

• Very Early Days – On a scale of 1 to 10 (1 being an interesting property, 10 being a mineable resource), Novo the most advanced project in the area is likely a 3 (most others are essentially between 0 and 1). It has only been 6 months since the “discovery”, and Novo is aggressively exploring which makes it very early days, particularly when you take into account the rarity of this deposit style.

Source: Novo Resources Investor Presentation

Figure 1: Map of the Pilbara Craton with known gold-bearing conglomerate

• Big Scale Potential – Currently, nugget discoveries with associated conglomerates span an area of +300km by +150km (Figure 1), suggesting a massive gold system once existed but is now partially eroded. We believe there are sufficient large enough pieces of the gold hosted conglomerate remaining to deliver one or more world class discoveries; however, a lot more work is needed to prove us right.




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• Novo is Back on Track – A key challenge for this style of deposit is the ability to demonstrate a resource over a meaningful area. We believe Novo is back on the path of delivering a resource over a small area, which they hope to translate to the large scale. Novo is also blazing a trail for others in the area and its success is expected to drive others share price.

• Each Deposit is Likely to be Unique – With these deposits being spread over hundreds of kilometers, the expectation is that each is likely to be similar but have unique characteristics. As well, Novo believes that these deposits are near-shore marine alluvial deposits (Figure 2), it is expected that the deposits characteristics are likely to change as you move closer to or further away from the historic shore.


Figure 2: Diagram of a near-shore marine alluvial gold deposit




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• Similar to the Wits but not Really – The conclusion of the Pilbara conference we attended was that while this is a conglomerate gold deposit, of a similar age to Witwatersrand (Figure 3) with similar potential scale. The markers and style of mineralization appear to differ materially. While it is early days in the Pilbara, the history of the Wits may not provide Pilbara explorers the guidance they were hoping for.

• Experts are Playing Catch-up – The conference we attended had presentations by a number of geologic and mining experts (conglomerate gold, sedimentology, government, processing, etc.) and they are learning about these projects for the first time while trying to catch-up on this unique style of mineralization in a new place.

Source: Modified after Rogers (1996) and Saha et al. (2016)

Figure 3: Proposed position of the cratons from the Archean Ur supercontinent

Witwatersrand

Pilbara district, WA




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The Pilbara PlayersComparable Table

There are a number of gold-focused companies active in the Pilbara, listed in both Australia and Canada. We have tried to assemble a comprehensive list and would note that not all have conglomerate gold projects or are actively exploring them.

Price Mrkt Cap EV Cash Debt Property

$/sh C$M C$M C$M C$M sq. km

NVO.V Novo Resources Corp $4.34 0.0% -0.2% -6.9% 17.6% 478.7% CAD 146.0 $634 $562 $72.00 $0.00 12,000 $0.05

ARV.AX Artemis Resources Ltd $0.17 0.0% -5.7% -19.5% -37.7% 725.0% AUD 628.0 $102 $86 $15.28 $0.00 2,000 $0.04

MOY.AX Millennium Minerals Ltd $0.24 2.1% 6.7% 9.1% 41.2% 100.0% AUD 791.7 $186 $168 $17.90 $0.00 262 $0.64

KAI.AX Kairos Minerals Ltd $0.04 -2.6% 0.0% -5.1% -15.9% -16.1% AUD 836.8 $30 $21 $9.66 $0.00 1,158 $0.02

DEG.AX De Grey Mining Ltd $0.16 -3.0% -3.0% 28.0% 0.0% 700.0% AUD 331.0 $52 $46 $6.15 $0.00 1,800 $0.03

CAI.AX Calidus Resources Ltd $0.04 0.0% -2.3% 0.0% 10.5% -86.0% AUD 704.1 $29 $20 $9.30 $0.00 363 $0.05

MZN.AX Marindi Metals Ltd $0.01 5.0% 5.0% 16.7% -12.5% 6.2% AUD 1,780.5 $18 $14 $4.00 $0.00 220 $0.07

AMD.AX Arrow Minerals Ltd $0.03 0.0% 3.0% 0.0% -15.0% -51.4% AUD 226.0 $8 $2 $5.50 $0.00 615 $0.00

IPT.AX Impact Minerals Ltd $0.01 -7.1% -7.1% -13.3% -27.8% -55.2% AUD 1,321.7 $17 $12 $5.29 $0.00 1,300 $0.01

KZR.AX Kalamazoo Resources Ltd $0.08 0.0% -12.8% -5.1% -31.8% NA AUD 62.7 $5 $2 $2.14 $0.00 44 $0.06

DGO.AX DGO Gold Ltd $0.87 3.6% 2.4% 47.5% -17.9% 419.8% AUD 10.6 $9 $8 $0.67 $0.00 5,002 $0.00

IZZ.V International Prospect Ventures Ltd$0.20 0.0% 11.1% 14.3% 0.0% 300.0% CAD 25.1 $5 $4 $0.80 $0.00 464 $0.01

NXN.V NxGold Ltd $0.18 0.0% 2.9% -25.0% -48.6% -26.5% CAD 57.9 $10 $7 $3.88 $0.00 10 $0.66

PAC.V Pacton Gold Inc $0.26 0.0% -1.9% 0.0% -12.1% 292.3% CAD 58.9 $15 $15 $0.12 $0.00 492 $0.03

MMS.V Macarthur Minerals Ltd $0.05 0.0% -10.0% -18.2% -30.8% 12.5% AUD 242.3 $11 $9 $1.84 $0.00 1,527 $0.01

CZR.AX Coziron Resources Ltd $0.03 4.2% 13.6% 38.9% 47.1% 212.5% AUD 1,785.6 $44 $44 $0.05 $0.00 317 $0.14

(Private) New Frontier Exploration NA NA NA NA NA NA NA NA NA NA NA NA NA NA

(Private) Haoma Mining NL NA NA NA NA NA NA NA NA NA NA NA NA NA NA

Source: Thomson Eikon, Company Reports

Figure 4: Comparable Companies in the Pilbara District

EV/sq.kmBasic

Shares

Rpt.

Curr.Ticker Company Name 1 Day Δ 7 Day Δ 30D Δ YTD Δ 2yr Δ




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Pilbara OverviewPilbara Gold Players – Landholders

Figure 5: Map of Landholders in the Pilbara Region

Source: S&P GlobalPriced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).



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The PlaybookWhat we are looking for

Based on our site visits and the recent conference, these are the key themes that we are looking for when evaluating companies with conglomerate gold in the Pilbara.

1. Big Cheque Book or Another Asset to Underpin Valuation – At this early stage, conglomerate exploration is both expensive and the methodology is still being developed. The only player with the deep pockets to develop the methodology is Novo. For everyone else, they are at least one step behind and learning from Novo, we would like to see another asset in the portfolio that supports the company’s valuation.

2. Gold and Conglomerates Already Identified on the Property – There are a lot of companies that claim to be Pilbara conglomerate gold plays; however, much of the ground has been staked based on historic wide-scale mapping. In our view, the project has to have sufficient work completed that both conglomerates and gold have been identified on the property.

3. A Credible Plan to Move Ahead – As traditional sampling methods can provide inconsistent data, the company needs to have a plan to advance the project. First step is mapping and soil sampling, along with metal detecting, which should identify conglomerates and gold, and likely followed by systematic trenching to determine the gold-bearing conglomerate horizons and understand the stratigraphy. This is likely to be followed by bulk-sampling and drilling for structure as Novo is doing. We note that this is not the only way to advance a project, but appears to be working based on the activity to date.




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Our Preferred PlayersBased on What We Know Today

Based on our site visits and the recent conference, these are the three key names that we like based on the work to date and the next steps planned by each company:

1. The Technical & Financial Leader – Novo Resources (TSXV:NVO, C$634 Market Cap, C$4.34/share) is currently leading the space with the largest land package of 12,000 sq. km across the Pilbara. As the first company to identify the conglomerate gold potential, Novo has been leading the Pilbara gold rush as the most technically advanced team backed by a strong shareholder base with a cash balance of C$72M to fund its exploration plans.

2. One Step Behind with Hardrock Assets to Underpin – De Grey Mining (ASX:DEG, A$52 Market Cap, A$0.16/share) is right behind Novo in the race to explore conglomerate gold in the Pilbara. De Grey has a sizeable land package with a hard rock asset that has already demonstrated economic potential in a Scoping Study released in 2017. Based on the study, we see the asset worth ~A$50-75M, which underpins De Grey’s current valuation providing investors a low-cost option on the conglomerates.

3. An Impressive Newcomer – NxGold (TSXV:NXN, C$10 Market Cap, C$0.18/share) is led by a management team that has already discovered a world class asset through NexGen Energy and has a credible plan to do so again by aggressively exploring the Pilbara Region. Field teams have already discovered conglomerate-hosted gold at surface demonstrating the significant prospectivity at the Mt. Roe project.




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Valuation• We believe Beatons Creek is worth between C$1.00-1.30/sh – see slide 17• Karratha is reasonably worth between C$3.25-16.25/sh – see slide 16• This gives us a value between C$4.70-17.90/sh (incl C$0.45/sh in cash) – suggesting upside to the

current share price C$4.34Conclusion• Novo is the Pilbara conglomerate gold leader, and while it has the most value associated with

conglomerate gold in its share price, because of its liquidity, market cap and balance sheet is likely the “lowest-risk” way to play this theme

Novo Resources Corp. (TSXV:NVO)The Technical & Financial Leader

Our View• Novo continues to be the leader in this space• From our site visit to Comet Well and Purdy’s Reward,

we came away with two key findings:1. Back on track to demonstrate the scale potential

of these deposits2. Our view that Comet Well and Purdy’s Reward has

+10M oz potential remains intact• From our site visit to Beatons Creek, we also came

away with two key findings:1. Grade appears to be understated – work

underway to prove otherwise – a 25% increase in grade increases estimated value by ~50%

2. Confirmed our estimated value for this asset of between ~C$150-200M

TSXV.NVO - Stock Chart

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Share Price (C$/sh) $4.34

Common Shares O/S (M) 146

Equity Value (C$M) $633.64

Add: Debt (C$M) $0.00

Less: Cash (C$M) $72.00

Enterprise Value (C$M) $ 561.64Source: Thomson Eikon, Company Reports

Capital Structure




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Novo Resources Corp. (TSXV:NVO)The Technical & Financial Leader

First Mover Advantage• Novo was the first to identify the conglomerate

gold potential and have staked and acquired as much land as they could , which is now covers 12,000 sq. km across the Pilbara (Figure 6)

• This advantage has resulted in Novo being the best funded (currently C$72M in cash) and most technically advanced player in the region positioning them to be the leader in the space –as goes Novo, so goes the space

First Mover Disadvantage• With this being a new discovery, with a

technically challenging deposit style, Novo is blazing a trail for the other players, with most patiently waiting for Novo to determine best practices with its much stronger balance sheet

• We would note, that to date Novo has been relatively open with other companies, but this may not continue over the long-term

#REF!


Figure 6: Novo Resources Tenements Map


Figure 7: Map of the Pilbara Craton with known gold-bearing conglomerate




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Novo Resources Corp. (TSXV:NVO)Karratha Gold Project – Progress to Date

• Gold-bearing conglomerate at Karratha occurs at the base of the Fortescue Group below basalt flows and interbedded with sandstone horizons

• Based on the work to date, this is believed to be a Marine Lag environment (Figure 2) with gold being deposited during specific periods

• At Purdy’s Reward (50/50 JV with Artemis):• Gold was identified only in the basal conglomerate only (~1m in width) with an average grade

of 14.7 g/t Au based on all the bulk samples released (~300kg bulk samples)• Outside of a halo around the nuggets, no fine gold component was identified

• Two key learnings surfaced from this work1. Sampling methodology needed to change – larger scale trenches (see Figure 9 & 11)2. Sample size needed to increase from ~300kg to ~5 tonnes (see Figure 8 & 10)

• Comet Well (80% Interest):• Gold has been identified in two conglomerate sequences – one that appears to be older and

higher energy with a higher conglomerate sequence to the gold-bearing conglomerate at Purdy’s

• 60 of the larger samples are planned for Comet Well over the next few months• First 5-tonne sample results expected in April• It is unknown if there is a fine gold component in this newly discovered gold bearing

conglomerate




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Novo Resources Corp. (TSXV:NVO)Karratha Gold Project – Different Approach at Comet Well

Source: Photo from RCKS Site Visit

Figure 9: Purdy's Reward Trench


Figure 11: Comet Well Trench

Source: Company Reports


Figure 8: Basal conglomerate section and footwall dolerite at Purdy’s Reward

Figure 10: Illustration showing samples taken from the basal boulery conglomerate




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Novo Resources Corp. (TSXV:NVO)How Big Could Karratha be?

There are a large number of unknowns with respect to this deposit making it difficult to determine the scale, here we talk about some of the known items and present sensitivity to the unknowns.Assumptions:• Specific Gravity: 2.8 t/m3• Strike Length: ~8km (1.5km Purdy’s Reward, 6.5km Comet Well)• Width before it dips under the Mt. Roe Basalt: ~800 m• Continuity: ~75% - it is unlikely that the deposit is continuously mineralized over the entire volume, so

an estimate needs to be made

Key Variables:• Grade – results from smaller

samples vary from 0.03 g/t to 87.8 g/t with an average of 14.7 g/t

• Thickness – thickness of mineralized zone has varied from 0.5m to 5m but wider is possible

Conclusion:• 10-25M oz discovery

appears possible• Based on data to date likely

mid-grade (10-15 g/t) and narrower (1-5m)

Figure 12: Size Sensitivity (Moz Au)

1.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0 22.5 25.0 27.5 30.0

0.5 0.24 0.59 1.19 1.78 2.37 2.96 3.56 4.15 4.74 5.33 5.93 6.52 7.11

1.0 0.47 1.19 2.37 3.56 4.74 5.93 7.11 8.30 9.48 10.67 11.85 13.04 14.22

1.5 0.71 1.78 3.56 5.33 7.11 8.89 10.67 12.44 14.22 16.00 17.78 19.56 21.33

2.0 0.95 2.37 4.74 7.11 9.48 11.85 14.22 16.59 18.96 21.33 23.70 26.07 28.44

2.5 1.19 2.96 5.93 8.89 11.85 14.82 17.78 20.74 23.70 26.67 29.63 32.59 35.56

3.0 1.42 3.56 7.11 10.67 14.22 17.78 21.33 24.89 28.44 32.00 35.56 39.11 42.67

3.5 1.66 4.15 8.30 12.44 16.59 20.74 24.89 29.04 33.19 37.33 41.48 45.63 49.78

4.0 1.90 4.74 9.48 14.22 18.96 23.70 28.44 33.19 37.93 42.67 47.41 52.15 56.89

4.5 2.13 5.33 10.67 16.00 21.33 26.67 32.00 37.33 42.67 48.00 53.33 58.67 64.00

5.0 2.37 5.93 11.85 17.78 23.70 29.63 35.56 41.48 47.41 53.33 59.26 65.19 71.11

5.5 2.61 6.52 13.04 19.56 26.07 32.59 39.11 45.63 52.15 58.67 65.19 71.70 78.22

6.0 2.84 7.11 14.22 21.33 28.44 35.56 42.67 49.78 56.89 64.00 71.11 78.22 85.33

6.5 3.08 7.70 15.41 23.11 30.82 38.52 46.22 53.93 61.63 69.33 77.04 84.74 92.45

7.0 3.32 8.30 16.59 24.89 33.19 41.48 49.78 58.08 66.37 74.67 82.96 91.26 99.56

7.5 3.56 8.89 17.78 26.67 35.56 44.45 53.33 62.22 71.11 80.00 88.89 97.78 106.67

8.0 3.79 9.48 18.96 28.44 37.93 47.41 56.89 66.37 75.85 85.33 94.82 104.30 113.78

8.5 4.03 10.07 20.15 30.22 40.30 50.37 60.45 70.52 80.59 90.67 100.74 110.82 120.89

9.0 4.27 10.67 21.33 32.00 42.67 53.33 64.00 74.67 85.33 96.00 106.67 117.34 128.00

9.5 4.50 11.26 22.52 33.78 45.04 56.30 67.56 78.82 90.08 101.34 112.59 123.85 135.11

10.0 4.74 11.85 23.70 35.56 47.41 59.26 71.11 82.96 94.82 106.67 118.52 130.37 142.22Source: RCKS Estimates

Grade (g/t Au)

Figure xx: Size Sensitivity (Moz Au)

Thickness (m)




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Novo Resources Corp. (TSXV:NVO)What’s Karratha worth?

• In our view, ounces in the ground at Karratha should trade at premium to peers ($42/oz):• A flat lying, near surface deposit, near a sealed road and in one of the best jurisdictions in the

world suggests a premium is warranted• Recall that Novo has 80% of Comet Well and 50% of Purdy’s Reward resulting in ~74% of the

deposit size being attributable to the company

• Using C$50-100/oz, as a benchmark, accounting for premium nature of ounces found at Karratha and the risk of this early stage• Based on 10M oz (attributable) – potentially value is C$500M-1.0B or C$3.25-6.50/share• Based on 25M oz (attributable) – potentially value is C$1.25-2.5B or C$8.10-16.25/share

• Working backwards the market cap of C$634M is pricing in 7.2-8.2M oz at C$50/oz or 3.6-4.1M oz at C$100/oz after removing Beatons Creek and current cash

Figure 13: Value Sensitivity (C$M)

1.0 2.5 5.0 7.5 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0

25 25 63 125 188 250 375 500 625 750 875 1000 1125 1250

50 50 125 250 375 500 750 1000 1250 1500 1750 2000 2250 2500

75 75 188 375 563 750 1125 1500 1875 2250 2625 3000 3375 3750

100 100 250 500 750 1000 1500 2000 2500 3000 3500 4000 4500 5000

125 125 313 625 938 1250 1875 2500 3125 3750 4375 5000 5625 6250

150 150 375 750 1125 1500 2250 3000 3750 4500 5250 6000 6750 7500

175 175 438 875 1313 1750 2625 3500 4375 5250 6125 7000 7875 8750

200 200 500 1000 1500 2000 3000 4000 5000 6000 7000 8000 9000 10000Source: RCKS Estimates

Figure xx: Value Sensitivity (C$ millions)

Attributable Size (M oz)EV/oz (C$)




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Novo Resources Corp. (TSXV:NVO)Beatons Creek

A quality asset with near-term development potential• Project was sidelined as momentum built in Karratha

and limited human resources were focused there; however, it continues to provide a supporting value for Novo.

• Our preliminary value for Beatons Creek is a post-tax NAV of ~C$150-200 million based on its near surface resource, this translates to ~C$1.00-1.30/share

• Grade upside exists as it appears the bulk sample results may have understated the deposit grade, which already suggested the resource model understates grade by ~45-50%• Novo is completing a series 2 tonne bulk

samples at Beatons Creek to better define grade• For every 25% increase in grade, our estimated

value increases by 50%.

RCKS Estimate*Resource (k oz) 496 Head grade (g/t) 2.6 Throughput (tpd) 2,000 Average annual prod. (k oz) 56.6 Mine life (years) 8.75 Capital Costs (A$M) $123.77Mining costs (A$/tonne) $2.50Processing costs (A$/tonne) $25.00Total cash costs (US$/oz) $371*Estimates assume $1,300/oz Au and 0.80 AUD/USD

Source: Company Reports, RCKS Estimates

Figure 14: Model Assumptions


Figure 16: Mineralization in a trench at Beatons Creek

Cut-off Grade Tonnes Grade Ounces Au

Au g/t (x1000) Au g/t (x1000)

Measured 0.5 515 3.1 51

Indicated 0.5 2,822 2.7 241

Measured + Indicated 0.5 3,337 2.7 292

Inferred 0.5 2,668 2.4 203Source: Company Reports

Classification

Figure 15: Beatons Creek Resource (2015)

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De Grey Mining Ltd (ASX:DEG)One Step Behind with Hardrock Assets to Underpin

Our View• De Grey has done the most work outside of Novo

on its conglomerate targets and pending a heritage survey (expected in Q2/18) plans to start systematic stripping and sampling – recent soil sampling results have been encouraging

• Has a hard rock asset that underpins the current value and a conglomerate based resource would be additive to economics – existing project is not dependent on it and consequently does not need the sampling rigor that is being applied at Novo

Valuation• We believe the hardrock portion is worth between

A$0.15-0.23/sh – see slide 21• Based on the current share price of A$0.16,

investors are getting a low-cost option on the conglomerates

Conclusion• We believe that at its current value De Grey may be at an attractive entry point particularly as

news flow heats up from both its own projects and Novo’s.

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De Grey Mining Ltd (ASX:DEG)The Pilbara Gold Project – Hardrock plus Conglomerates

98,000ha land package in the Pilbara with +1.2Moz resource & upside• Potential near-term mine development with positive scoping study and pending PFS

• Further resource expansion potential with ongoing drilling• Three conglomerate gold targets: Loudens, Jarret and Steel Well (Figure 17)• Kirkland Lake Gold invested $5M in September 2017 to become 10% shareholder• Additional Zn-Ag and Li assets in Western Australia


Figure 17: Map of Land Package in the Pilbara District




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De Grey Mining Ltd (ASX:DEG)The Pilbara Gold Project – Conglomerate Gold Targets

Conglomerate gold targets within trucking distance of proposed plant (Figure 18)• Louden Patch: 91 gold nuggets

discovered at target with a fine grained gold halo similar to Novo’sPurdy’s Reward ~130km away

• Jarret and Steel Well: 3 gold nuggets discovered

• Visible gold panned from streams draining all 3 targets, further confirms the conglomerate gold style of mineralization at all target

• Importantly, a discovery is additive to the near-term production story

Next steps:• Once the heritage survey is

complete, systematic trenching and sampling to follow

• Potential to be followed by diamond drilling for structure


Figure 18: Map of Conglomerate Gold Targets




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De Grey Mining Ltd (ASX:DEG)The Pilbara Gold Project – Hardrock Asset Underpins Value

Hardrock targets underpin current value• The company’s focus has been primarily on

advancing its structural hosted gold deposits which have a recently updated resource (Figure 21) and scoping study

• We believe these traditional assets are worth between A$50-75M, which accounts for the remaining property payment, giving a per share value of A$0.15-0.23/sh (current share price A$0.16)

• We note that our estimated value excludes a likely mine-life extension or exploration upside

• Next step is a pre-feasibility study, expected later this year on the hardrock assets

RCKS Estimate*

Resource (k oz) 323

Head grade (g/t) 2.1

Dilution (%) 5%

Throughput (tpd) 2,750

Average annual prod. (k oz) 56.6

Mine life (years) 5.00

Capital Costs (A$M) $108.60

Mining costs (A$/tonne) $3.50

Processing costs (A$/tonne) $21.00

Total cash costs (US$/oz) $737*Estimates assume $1,300/oz Au and 0.80 AUD/USD



Tonnes Grade Ounces Au

(Mt) Au g/t (x1000)

Measured 4.39 1.7 241.7

Indicated 5.44 1.7 295.1

Measured + Indicated 9.83 1.7 536.8

Inferred 9.01 1.6 465.5Source: Company Reports

Figure 21: De Grey's Pilbara Gold Resource

Classification


Figure 22: De Grey's Pilbara Gold Project




22

NxGold Ltd. (TSXV:NXN)Mt. Roe Project

Our View:• Strong management - founded by team behind NexGen Energy (TSXV:NXE)• Conglomerate-hosted gold discovered at surface and has a credible plan to advance the assets• Mt. Roe located close to Novo’s Karratha Gold Project (Figure 23) – appears to have well-above average

prospectivity• Other exploration stage assets, the ~60,000ha Chicobi Project in the Abitibi Greenstone Belt of Quebec and

the 4,174ha Kuulu Project in Nunavut provide underpinning value

Valuation:• In our opinion the current C$10M market cap could be justified by any of its existing projects and probably

materially understate its Pilbara assets, where similar stage peers trade at 2-4x its current value

Conclusion:• While a late entrant, its our preferred early stage company in the space because of its top-notch

management team, good plan and the projects prospectivity

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Capital Structure




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NxGold Ltd. (TSXV:NXN)Mt. Roe Project – Gold Endowment Appears Impressive

Our Site Visit Suggests this Could be One of the More Prospective Projects• A smaller land package at 1,232ha but an estimated 5km

of continuous strike length of gold-bearing conglomerate• Conglomerate-hosted gold discovered at surface with

nuggets revealing similar characteristics to Comet Well & Purdy’s Reward

• Our discussion with prospectors who have worked the area and our visit to site, suggests this could be one of the more prospective projects

• The company has recently completed an extensive mapping program (results pending) and is working towards large scale trenching once a heritage survey is completed (H2 2018)


Figure 24: Conglomerate at Mt. Roe


Figure 23: Mt. Roe Land Package




24

New Frontier Exploration (Private – formerly LMTD)Multiple Conglomerate Gold Projects

Key Projects (Figure 26):1. Hardy Prospect (earn-in/JV), Karratha

• 6km along strike from Purdy’s 2. Comet East (acquired), Marble Bar

• Adjacent to Comet mine3. Charteris Creek (acquired), East Pilbara

• Large strike of outcropping conglomerate4. Strattons (acquired), Bamboo Creek

• Along strike from Bamboo Creek5. Warren’s Quest (earn-in), Nullagine

• Adjacent to Beatons Creek6. Areas under application, West and East Pilbara

Our View:• Have assembled an impressive ~5,700 sq. km

land package• Preliminary work completed with both

conglomerates and gold identified on multiple projects

• Exploration led by George Merhi, experienced conglomerate-gold exploration in the Pilbara region with Novo and the Creasy Group

• Mapping, metal detecting and sampling currently underway with trenching/drilling

Conclusion:• One of the better early stage conglomerate gold

companies and one we’ll be watching when it becomes public later this year


Figure 27: Conglomerate at Mt. Hardy Prospect


Figure 26: Labelled Map of LMTD Tenements




25

Calidus Resources Ltd. (ASX:CAI)Warrawoona Gold Project

Our View:• Good structural gold deposit, with medium term production

potential and meaningful exploration upside• Management has done a good job consolidating the region,

allowing for resource growth on recently acquired properties• Actively drilling to expand resources and completing

engineering work, progressing towards a prefeasibility study• Have mapped 27km of Mt. Roe basalts and conglomerates on

its property but not a focus – waiting on others to advance the science

Valuation:• In our view the Warrawoona gold project is worth A$150-200

million, or ~A$0.11-0.15/shareConclusion:• An attractively valued, traditional project, with exploration

upside

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Figure 28: Novo's tenements with Calidus70% Earn-in agreement

Ticker CAI.AX




Add: Debt (A$M) 0



Capital Structure




26

Calidus Resources Ltd. (ASX:CAI)Warrawoona Gold Project

Near-surface gold deposit with significant upside• 36,300ha under control which have historically hosted

+200 mines• Land package has not experienced any mining in the

modern era and limited exploration• Recently identified 45 high priority exploration targets in

Pilbara, to be followed up with mapping, rock chip & soil sampling

• 9.9Mt at 2.06g/t Au for 654,000oz (0.5g/t cut-off)• Mineralization outcrops along the entire strike length of

2.6km, within the unexplored 12.5km strike of the Klondyke shear zone

• We see resource expansion potential to >1Moz as exploration continues along strike, which may prove to support a standalone operation or toll milling at Millenium’s Nullagine project 65km away



Figure 29: Cross-section of Klondyke deposit


Figure 30: Standing in the middle of the deposit looking A) West and B) East

A B

RCKS Estimate*

Resource (k oz) 712

Head grade (g/t) 2.1

Dilution (%) 5%

Throughput (tpd) 5,000

Average annual prod. (k oz) 106.8

Mine life (years) 6.00

Capital Costs (A$M) $175.38

Mining costs (A$/tonne) $3.50

Processing costs (A$/tonne) $21.00

Total cash costs (US$/oz) $652

*Estimates assume $1,300/oz Au and 0.80 AUD/USD






27

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Kairos Minerals Ltd (ASX:KAI)Croydon Project

Our View – We consider this 115,800ha project with 22km of strike to be modestly advanced but perspective based on initial results. However, there is no road access, increasing exploration costs and the next round of work is pending a native title agreement. We would note that Eric Sprottis a significant investor.

Valuation – current market cap puts it in line with other conglomerate peers and other assets do not appear to provide much supporting value

Conclusion – one too watch but would wait for the next round of work to start

Ticker KAI.AX




Add: Debt (A$M) 0



Capital Structure


Figure 32: Prospective regional geology and tenure, Pilbara Region




28

Marindi Metals Ltd (ASX:MZN)Bellary Dome Project

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Our View – the property covers ~25km of Mt Roe basalts in the southern portion of the basin. Initial work has demonstrated significant potential, including a slightly different style of mineralization and finer gold component than we have seen in other parts of the basin. Management has taken its initial steps and plans to follow-up.

Valuation – current market cap puts it at a slight discount to other conglomerate peers; but does not account for its attractive zinc, lithium assets or A$4 million in cash

Conclusion – an interesting entry point, particularly based on the company’s initial results

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Common Shares O/S (M) 1,780


Add: Debt (A$M) 0



Capital Structure


Figure 33: Map of Landolders in the Pilbara District




29

Artemis Resources Ltd. (ASX:ARV)The Pilbara Gold Project

Our View• Artemis is Novo’s 50/50 JV partner at Purdy’s

Reward and is benefiting from the work Novo is doing there

• Radio Hill mill appears to need significant work to be serviceable for conglomerates and its main value is the permitted tailings facilities but there is limited available capacity

• The company’s plans for its 100% owned assets appears to be focused on alluvial gold, not conglomerates

• Company plans to drill a +3km hole in the deeper portions of the basin, targeting both base metals and conglomerates at depth – we do not see this as a potential game changer

Valuation• Company’s portion of Purdy’s Reward based on our estimates is worth between A$0.075-0.30/sh• Cash balance of A$15.3M is worth ~A$0.023/shConclusion• With the company not in control of its own destiny at Purdy’s Reward (its most valuable asset) and

a questionable exploration strategy, we prefer other Pilbara players over Artemis

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Capital Structure




30

Artemis Resources Ltd. (ASX:ARV)West Pilbara Projects

Purdy’s, processing plant and more• Interest in ~2,000 sq. km of land in the Pilbara

region, which includes both Purdy’s Reward and Mt. OscarWits

• Mt. OscarWits (16km from Purdy’s)• Approved 118 sq. km exploration license

with heritage surveys• 75m thick stacked conglomerates with an

E-W strike outcropping at surface• Next steps include extensive exploration

over 14km of new gold-bearing sequences identified by field teams

• Other assets:• Carlow Castle Au-Cu-Co Project – 418kt

resource @ 3 g/t Au and 0.6% Cu• Silica Hills – Quartz vein hosted gold• Weerianna – 1Mt @ 2.2 g/t Au• Munni Munni – Australia’s largest PGE

resource, economic study to be completed


Figure 34: Western Australia Assets




31

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Pacton Gold Inc (TSXV:PAC)Pilbara Gold Project

Portfolio of assets in mining-friendly jurisdictions• Gold-bearing conglomerates of the Fortescue

Group mapped extensively around Pacton’s 492 sq. km of tenements in the Pilbara

• Focused on exploring the northern extension of De Grey’s Mallina Basin gold occurrences, which includes 5-80m thick gold nugget conglomerate beds

• Recently signed LOI to earn up to an 80% interest in Arrow Minerals Pilbara properties (Slide 35) totalling 609 sq. km (4 tenements) of prospective ground

• Other assets:• Tully West gold project in Timmins, ON• Birch Gold project 120km NE of Red Lake,

ON

Ticker PAC.V







Capital Structure


Figure 35: Location of Pacton Gold Tenements




32

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International Prospect Ventures Ltd (TSXV:IZZ)Wits End Gold Project

8 properties in the gold-bearing Pilbara region• >927 sq. km of property in the Fortescue

Basin southeast of Karratha• Currently reviewing and collecting data in

order to continue planning a field program for Q2 2018 and targets for drilling in Q3 2018

• Other assets:• Porcupine Miracle Gold Prospect

(100%-owned)• 4 claims located in Langmuir Township,

ON, 30 km south of Timmins• Planned exploration program includes

ground magnetic and IP geophysical surveys


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Figure 36: Location of Int. Prospect Venture Tenements




33

Coziron Resources Ltd. (ASX:CZR)Croydon Top-Camp Project

New Gold Play Added to Pilbara Asset Portfolio• Agreement to acquire the 317km2 tenement

in West Pilbara, ~80km SE of Karratha.• Planning for 2018 field season underway to

follow up on; the source of anomalous gold in basal parts of the Fortescue Group as well as sampling results and a historical RC hole from the De Grey Super Basin which suggest a 1.5km long by 500m wide zone.

• Other assets - Pilbara:• Yarraloola Iron Ore Project (85%)• Buddadoo Iron Ore Project (70%)• Shepherds Well Iron Ore Project (70%) • Yarrie Iron Ore Project (70%)

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Add: Debt (A$M) $0.00



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Figure 37: Location of Coziron's projects in the Pilbara




34

Millennium Minerals Ltd (ASX:MOY)Nullagine Project

Only ASX-listed gold producer in the Pilbara• Ownership of a 2Mtpa processing facility

represents a significant regional strategic advantage • Possibility of processing ore from Novo’s

Beatons Creek project and/or Calidus’ Warrawoona project

• Currently producing ~80koz Au per year with a mineral resource inventory of 1.3Moz Au remaining; however, our understanding is that there are limited open-pittable oxide resources remaining and the current plant configuration cannot handle sulfide resources

• Recently initiated field exploration programs to evaluate conglomerate-hosted gold targets

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Capital Structure


Figure 38: Map of Landolders in the Pilbara District




35

Arrow Minerals Ltd (ASX:AMD) – Formerly Segue ResourcesPilbara Gold Project

600𝐤𝐦𝟐 of prospective property for conglomerate gold

• Previous discovery of several gold nuggets from conglomerate units of the Mallina Basin

• Discovery of detrital uranium, common for paleoplacer gold in the Witwatersrand Basin

• Identification of 2 basement gold targets off the Mallina Shear zone

• Other assets include lithium, gold and nickel projects in Australia with each covering significant land positions

Recently signed LOI with Pacton Gold, whereby the company can earn up to an 80% interest in Arrow (Pilbara) Pty Ltd., an Arrow

Minerals subsidiary holding its four tenements in the Pilbara district (Figure 39)

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Figure 39: Map of Mineral Claims in Western Australia's Pilbara District




36

Impact Minerals Ltd (ASX:IPT)Pilbara Gold Project

100km strike of prospective near surface Fortescue Group conglomerates• Focused on exploring the conglomerates

of the Hardy Formation and conglomerates at the base of the Mt Roe Basalt but limited work completed to-date

• Four main gold-bearing conglomerate occurrences on the company’s tenements

• Other asset: Commonwealth project• Au-Ag-base metals in New South

Wales• High grade Au-Ag veins at Silica Hill

over 500x500m area to a considerable depth

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Capital Structure


Figure 40: Location of Impact Minerals Tenements




37

Kalamazoo Resources Ltd. (ASX:KZR)Pilbara Project

Nuggety gold discovered with metal detector• Secured option to acquire between 80-

100% of three prospective gold projects in the Pilbara covering 252 sq. km

• Also the option to acquire 100% of its DOM’s Hill project where it has discovered a new zone of nugget occurrence (Figure 41)

• Other assets:• Cork Tree: Cu exploration underway,

project surrounded by Sandfire/Talisman JV

• Snake Well: Updated JORC (2012) mineral resource of 63koz Au

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Capital Structure


Figure 41: Location of Kalamazoo Pilbara Projects




38

DGO Gold Ltd. (ASX:DGO)Pilbara Project

Actively exploring for gold in the Pilbara• 5,002 sq.km of property in the

Fortescue Group of the Pilbara• Exploration currently focused on its

Mallina tenements, 75km SE of Karratha

• 4km of strike length of the basal contact of the Mt Roe basalt with conglomerate outcrop

• 12 gram nugget detected at Scottie Well in the first couple days of field exploration (Figure 42)

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Capital Structure


Figure 42: Location of DGO Gold Tenements




39

Macarthur Minerals Ltd. (TSXV:MMS)Pilbara Project

Copper and Gold in the Pilbara• 3 exploration licenses located ~185km SE of

Port Hedland and ~50km SW of Marble Bar (Figure 43)

• Historic surface rock samples of up to 447 g/t Au and 3.2% Cu

• Option over adjoining tenement with 700oz Au previously extracted by prospectors

• Next steps include field mapping and sampling to be followed up with generating drill targets around historic mine workings

• Other Western Australia assets:• 1300 sq. km hard rock lithium project• 62 sq. km iron ore projects (PFS

stage)

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Figure 43: Location of Macarthur Minerals Tenements




40

Haoma Mining NL (Delisted) Comet Mine

Recovering Gold & Platinum in Pilbara• In 2017, recovered gold nuggets from

conglomerates through bulk sampling at Just-in-Time and Tassie Queen, near the Comet Mine, reporting gold grades of 6.57 g/t

• 18.6 tonne bulk test samples were collected from Nuggety Gully (Bamboo Creek) “scree and alluvial material”, a 4.27 tonne sub-sample returned 164.77 g/t gold and 188.59 g/t platinum. Processing of bulk trial samples is set to start in the coming weeks

• Recently delisted from the ASX, regarding exploration reporting issues

• Other assets:• Elazac Quarry• Mt Webber Dalton Deposit


Figure 44: Haoma Mining Tenements in the Pilbara District




Contact Us

If you have any follow-up questions please contact:

Derek Macpherson, VP Mining [email protected]

Alex Pitcher, Associate, Mining [email protected]

Victoria Ellis Hayes, Associate, Mining [email protected]

mailto:[email protected]



42

DisclosuresDisclaimerRed Cloud Klondike Strike Inc. is registered as an Exempt Market Dealer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia,Prince Edward Island, Newfoundland & Labrador, and the Yukon. Part of Red Cloud Klondike Strike Inc.'s business is to connect mining companies with suitable investors thatqualify under available regulatory exemptions (the "Red Cloud KS Business"). Red Cloud Klondike Strike Inc., its affiliates and associates, and their respective officers,directors, representatives, researchers and members of their families (collectively, "Red Cloud KS") may hold positions in the companies mentioned in this presentation andmay buy or sell, their securities or securities of the same class on the market or otherwise. Additionally, Red Cloud KS may have provided in the past, and may provide in thefuture, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services.Red Cloud KS has prepared this presentation for general information purposes only, and is NOT as part of the Red Cloud KS Business. This presentation should not beconsidered a solicitation to purchase or sell securities or a recommendation to buy or sell securities. The information provided by Red Cloud KS for the purposes of thispresentation has been derived from sources believed to be accurate, but cannot be guaranteed. Opinions or analysis contained in this presentation may be subject to changeand Red Cloud KS does not undertake to advise the reader of such changes. This presentation does NOT take into account the particular investment objectives, financialsituations, or needs of individual recipients and other issues (e.g. prohibitions to investments due to law, jurisdiction issues, etc.) which may exist for certain persons.Recipients should rely on their own investigations and obtain their own professional advice before investment. Red Cloud KS will not treat recipients of this presentation ascustomers or clients by virtue of having viewed this presentation.

Company Specific Disclosure Details

1) A member of Red Cloud KS team has visited/viewed material operations of the issuer.2) In the last 12 months, Red Cloud KS has been retained under a service or advisory agreement by the subject issuer.3) In the last 12 months, Red Cloud KS has received compensation for investment banking services.4) Red Cloud KS or a member of the Red Cloud KS team or household, has a long position in the shares and/or the options of the subject issuer.5) Red Cloud KS or a member of the Red Cloud KS team or household, has a short position in the shares and/or the options of the subject issuer.6) Red Cloud KS or a member of the Red Cloud KS team own more than 1% of any class of common equity of the subject issuer.7) A member of Red Cloud KS team or a member’s household serves as a Director or Officer or Advisory Board Member of the subject issuer.

Novo Resources Corp NVO.V 1,2,3,4

Artemis Resources Ltd ARV.AX 1

Millennium Minerals Ltd MOY.AX None

Kairos Minerals Ltd KAI.AX None

De Grey Mining Ltd DEG.AX 1

Calidus Resources Ltd CAI.AX 1

Marindi Metals Ltd MZN.AX None

Arrow Minerals Ltd AMD.AX None

Impact Minerals Ltd IPT.AX None

Rugby Mining Ltd RUG.V None

Kalamazoo Resources Ltd KZR.AX None

DGO Gold Ltd DGO.AX None

International Prospect Ventures Ltd IZZ.V None

NxGold Ltd NXN.V 1,2

Pacton Gold Inc PAC.V None

Macarthur Minerals Ltd MMS.V None

Coziron Resources Ltd CZR.AX None

New Frontier Exploration (formerly LMTD) Private 1,2

Haoma Mining NL Private None

Appendix

44

AppendixMetal Price & Currency Assumptions

2018E 2019E 2020E 2021E 2022E

Gold Price (US$/oz) $1,300 $1,300 $1,300 $1,300 $1,300

Consensus Gold Price (US$/oz) $1,290 $1,317 $1,349 $1,417 $1,274Source: Red Cloud KS Estimates, Bloomberg

2018E 2019E 2020E 2021E 2022E

AUD/USD Exchange Rate 0.80 0.80 0.80 0.80 0.800.80 0.80 0.80 0.80 0.80

Source: Red Cloud KS Estimates

CAD/USD Exchange Rate

Figure 45: Gold Price Forecast

Figure 46: Exchange Rate Forecasts




Documents

Pilbara Playbook - degreymining.com.au · and mining experts (conglomerate gold, sedimentology, government, processing, etc.) and they are learning about these projects for the first