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Presented by Chad Williams
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The material in this presentation has been prepared by Red Cloud Klondike Strike Inc. (“Red Cloud”) and is general background information current as at the date of this presentation. This information is given in summary form and does not purport to be complete. Red Cloud believes that the information provided is reliable, however, it does not warrant that it is accurate and persons relying on the information do so at their own risk. Any opinions or analysis contained in this publication may be subject to change and Red Cloud does not undertake to advise the reader of such changes. Information in this presentation should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments and does not take into account your particular investment objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice. All securities and financial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international transactions, currency risk.
Red Cloud Klondike Strike Inc. is registered as an Exempt Market Dealer in Canada. Although Red Cloud has an association with North Capital, a FINRA registered broker/dealer, US investors are not yet permitted to participate in offerings posted on the platform.
equity crowd funding for mining:key take-aways
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The internet has changed everything – it’s even started changing the way mining companies issue securities
Crowd funding (i.e. the online issuance of securities) is a win, not a threat, for issuers, investors, capital providers, and regulators
Demographic changes will create increased demand by investors for online products
the redcloudksservice matrix: dedicated to mining
page04
• Deal & Non-Deal Roadshows
• Investor Updates• Institutional & Retail• Investor Feedback• Conferences• Themed Lunch
Presentations• Media Relationships• Site Visits & Corporate
Events
• Conventional Equity Financing
• Equity Crowdfunding• Non-Traditional Debt • Equity Syndicate
Management• Strategic Corporate
Introductions• Private Equity• Alternative Financing
Options
• Corporate Strategy• Press Release
Messaging• Corporate
Presentations• Comparable Company
Analysis• Board Meeting
Preparation• People Search
• Idea Generation • Project Screening• Pro-Forma
Analysis • No-Names
Inquiries• Transaction
Support• Asset Divestiture
marketing strategyfinancing m & a ideas
“RCKS Talk”• Mining Focused• Unique Investment
Ideas• Timely Updates• Company, Industry, &
Commodity Analysis
definition
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Equity Based Regulated Crowdfunding:
Is the aggregation of small amounts of capital from a large number of people made possible via the internet in order to fund a business
different types of crowdfunding
Contributors receive a predefined service or product in return for their contribution.
Reward01
Investors are repaid with interest for their investment over a period of time.
Lending03
Funds are collected for a publicly disclosed initiative but there is no financial return.
Donation02
Investors receive securities in a company.
Regulated04
online investing Is global have equity crowdfunding portals.
+17 countries
Source: http://www.cnbc.com/id/102590451, Marketwired.com-”Crowdfunding Market Grows 167% in 2014”* Crowdfunding is a blanket term used to categorize and group different forms of online financing platforms
reshaping mining investment:online investment platform
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01 Investors get access
02 Issuers get access
03 Due diligence by professionals
04 Change and innovation
05 Exempt market dealer
06 Always free for investors
regulatory environment: united states
page09
Jumpstart Our Business Startups (JOBS) Act, Obama signs into law Apr. 2012
JOBS Act - Title II, Sept 2013: allows public advertising, but only accredited investors
JOBS Act - Title III, May 2016:• Accredited & non-accredited investors• Issuers may raise USD $1M in 12 month period• Must use funding portals –regulated by SEC and FINRA
USA tangled in state rules on top of federal exemptions, but feds have power to override states in certain situations.
Fix Crowdfunding Act (HR 4855), proposed to fix 5 issues with Title III rules• Passed in June 2016, but heavily amended.• No change approved with respect to issuer/investor caps, potential portal liability
and/or the ability of issuers to test the waters.
regulatory environment: canada
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Crowdfunding Exemptions are not harmonized and vary considerably
No national securities regulator – everything managed at provincial level
Two crowdfunding specific exemptions:• Start-Up Crowdfunding Exemption (May 2015 – BC, SK, MB, QU, NB, and NS)• Integrated Crowdfunding Exemption (Jan. 2016 - MB, ON, QU, NB, and NS)
Offering memorandum exemption NI 45-106, permits via equity crowd funding platforms:• Non-accredited investment of CAD $2.5K (single), $10K (annual)
fresh investor potential
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25.5 M
1.4 M
Non-Accredited Invstors Accredited Invstors
20X more non-accredited than accredited investors.
Traditional financing methods focus only on a small subset (friends & insiders) of the accredited group.
Example: Canada
RedCloud KS
Traditional Financings (number of individuals)
equity crowdfunding platforms: challenges
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* Must change habits
* Highly regulated environment
* New platform/technology
recent statisticsunited states crowd funding: Q1/2016
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82 campaigns were filed with the SEC and $7.2 million of capital was committed
On average, each campaign has 145 backers (investors) investing $810 which is 10X donation/reward
Number of days to reach $1 million has fallen from mid 20s to 8
Median offering is $50,000
Top capital committed by sector:
• Wine & Spirits• Tech Hardware• Entertainment/media• Food/Beverage• Real Estate
Source: CrowdCapAdviser
innovation & technology adoption
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• Rate of technological change has accelerated drastically in 100 years
• Emergence of internet, social networking platforms, viral messaging drive acceleration
shifting demographics
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Digital Natives• Often called ‘millennials’• Children raised in a digital, media-saturated world• ‘Native speakers’ of the digital language of
computers, viral video, social media and other online platforms
Digital Immigrants• In North America, those born prior to 1980• Find it difficult to keep up with speed of
technology adoption
Digital Intermediates • Middle ground• Started using digital technology in their teens
The time required to train each category on new technology is about the same
shifting demographics
page016
Cash Fixed Income Stocks Other0%
10%
20%
30%
40%
50%
60%52%
7%
28%
13%
23%
15%
46%
16%
Millennials Non-Millennials
Millennials Gen-X Boomers Other0%5%
10%15%20%25%30%35%40%45%50%
17%
10%6%
2%
47%
30%
13%
4%
Have given Likely to give
millennials are largest group
yet more likely to participate in online financing
Participation in crowdfunding and similar online financing
platforms(next 12 months)Source: Goldman Sachs, Gallup
1>10 11>35 36>50 51>70 71>760
20
40
60
80
100
120
36
105
60
75
12
Age
HomelandGeneration
(2005 >Present)
MillionsMillennials
(1980 >2004)
Generation X(1965 >1980)
Baby Boomers(1945 >1964)
Silent Generation (1945 >1964)but are less invested in stocks
Registeras an investor
Financing Closeswhen the indicated minimum or maximum investment has been reached
Browse & Research
posted opportunities
Initiate Investmentin a selected opportunity
investorshow it works: 24/7
Completeonline investment form
Money Is Transferredand held in trust until the deal closes
Documents Deliveredshare certificates are distributed to each investor
Registeras an issuer
Financing Closeswhen the minimum or maximum investment set is reached or when chosen for alternative reasons
Documents Gathering/Upload
Due Diligence Review
issuerhow it works: 24/7
Legal Docs
Marketingsocial media, corporate materials,
road shows
Money TransferredTo Issuerthe money is transferred to the company, minus transaction fees, and share certificates are delivered to new shareholders
Launch Financingwill be posted on the platform for 30-90 days
sample recent mandates
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C$3.6 million
Dec 2015Broker
on flow-through financing
C$7.5 million
Feb 2016Strategic Advisor on acquisition of
Salt Lake Mining Ltd.
C$20 million
Sept 2015Strategic Advisor on acquisition of
Temex Resources Corp.
C$31.6 million
Apr 2015Strategic Advisor on acquisition of
Soltoro Ltd.
C$38.5 million
Jan 2015Strategic Advisor
on bought deal financing
+ 12 additional deals with an aggregate value of over $1.5
billion.
C$10.8M
Apr 2016Co-Lead
on financing
US$10.6M
Jan 2016Strategic Advisor
on financing
C$40.0M
Feb 2016Strategic Advisor
Option Agreementwith BHP Billiton Ltd.
Undisclosed
2016Strategic Advisor
on M&A
C$0.4M
May 2016Lead
on financing
C$2.2M
Jun 2016Co-Lead
on financing
C$2.3M
Jun 2016Selling Agenton financing
C$2.3M
Jun 2016Lead Selling Agent
on financing
C$0.8M
Jun 2016Lead
on bridge loan
C$2.0M
Jul 2016Lead Selling Agent
on financing
C$7.7M
Aug 2016Lead Selling Agent
on bought deal
C$3.0M
Aug 2016Selling Agenton financing
C$1.0M
Aug 2016Lead Selling Agent
on financing
conclusions
page020
Mining companies have started to issue securities online
The online issuance of securities is a positive for the entire mining ecosystem
Demographics will drive increased demand for online products
ourcontacts
page21
address79 Wellington St. W.
Suite 1630,
PO Box 148, Toronto ON.,
M5K 1H1
come visit us!
onlinewww.RedCloudKS.com
Red Cloud Klondike Strike Inc. is an exempt market dealer focused on providing unique and innovative financing alternatives, growth opportunities, and market exposure for select mining companies. The Red Cloud Klondike Strike Inc. team has a mix of technical and financial expertise with over 100 cumulative years of combined mining and corporate finance experience. Working as an extension of management, the Red Cloud Klondike Strike Inc. team uses its global network of mining and capital markets professionals and extensive in-house experience in the many facets of the mining business to help companies identify sources of capital and quality actionable merger, acquisition and divestiture opportunities, and to generate and maintain important relationships with key investors. Red Cloud Klondike Strike Inc.’s signature online investment platform offers a unique alternative method of accessing capital for mining companies. It enables investors to directly participate in security offerings of companies selected by RedCloudKS’ experienced team and provides companies access to a fresh pool of investors in a streamlined and secure online process.
