Morien Resources Corp. · TSXV:MOX
Morien Resources — Shareholder Meeting (May 2023)
43 slides from Morien Resources's shareholder meeting presentation, May 17, 2023
Slide 1: Annual General Meeting
This presentation will follow the formal AGM Annual General Meeting May 17, 2023
Slide 2: Disclaimer
Disclaimer The information in this presentation is provided as of July, 2022, for information purposes only, and may constitute "forward-looking information" as defined under applicable securities laws. All statements in this presentation other than statements of historical fact, including those tha
Slide 3: Agenda
Agenda Corporate Value Update Drivers Coal Why Markets Morien?
Slide 4: Update on Corporate Activity
Update on Corporate Activity
Slide 5: Since Donkin Opened … 1-Year Share Performance
Since Donkin Opened … 1-Year Share Performance; Insider Buying, Buy-Backs, & Dividends April 18, 2022, to April 18, 2023 Share Price Volume (mln) $0.90 Donkin 1.8 Share price reopens Daily trading volume $0.80 1.6 Normal course issuer bid $0.70 1.4 Insider open market buying Insider early option exe
Slide 6: Significant Insider Ownership
Significant Insider Ownership Insider Ownership in Morien Includes management and directors 18% 18% 16% 14% 12% 10% 8% 6% 5% 4% 2% 0% 2015 2016 2017 2018 2019 2020 2021 2022 2023 6
Slide 7: Share Buy Backs
Share Buy Backs Monthly Normal Course Issuer Bid NCIB Scorecard 2015 - 2022, millions Since 2015 1.20 1.00 $5.1 mln Total capital spent 0.80 0.60 $0.35 / sh Average purchase price 0.40 0.20 14.5 mln Total shares bought back 0.00 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 2015 201
Slide 8: Among Lowest Share Count vs. Royalty Peers
Among Lowest Share Count vs. Royalty Peers Total Shares Outstanding of 27 TSX/TSXV Mining Royalty Companies1 27 North American, publicly-traded mining royalty companies, million shares outstanding > 200 180 160 140 120 100 80 60 40 20 0 n M * * er er er er er er er er er er er er er er er er er er e
Slide 9: Three Reasons to Own MOX
Three Reasons to Own MOX The Cline Group Donkin’s Competitive Advantage Global Coal Markets
Slide 10: The Cline Group
The Cline Group
Slide 11: The Cline Group
W ill i a Bu Su m s ll M ga on ou r C 16.6 nt a ai m p ns 13.2 N o. Hi 1 13.0 Sa l ls n b Ju o ro an 12.2 N o. 1 11.3 Su Ca M fc st le ac o o 11.3 Va u p lle in y 10.7 No M i n .3 9.2 e Ne N o w .1 The Cline Group Fu 8.4 tu W re 8.4 es t De Elk 8.4 The Cline Group Be ser av ad er o 8.4 Sk V al yli l
Slide 12: The Cline Group's Alberta Mine
The Cline Group’s Alberta Mine Production Profile of Hinton Mine, Alberta 2019 - 2022, million tonnes1 12 10.4 10 8.5 8.6 8 6 4 3.0 2 - 2019 2020 2021 2022 1. Alberta Energy Regulator 12
Slide 13: The Cline Group's Donkin Mine
The Cline Group’s Donkin Mine Q2-2022 Q3-2022 Q4-2022 Q1-2023 Cline submits NS gov’t approves Operations Operation ramping proposal to Mining Permit & & commercial up, 130 employees reopen Mine operations resume sales commence on site
Slide 14: Donkin's Competitive Advantage
Donkin Headland Donkin’s Competitive Advantage
Slide 15: Seam-to-Market Infrastructure
Seam-to-Market Infrastructure DEEPWATER HARBOUR DONKIN MINE SITE MINED-OUT AREA 1863-2001: 258 mln tonnes coal mined Ongoing $4.5 mln program from Canadian Over $250 million invested by The Cline Coast Guard to allow Capesize vessel entry. Group into the mine since 2015. PEV COAL EXPORT TERMINAL PRI
Slide 16: Donkin's Transportation Advantage
Donkin’s Transportation Advantage Mine to Port Port to Market Kilometres %USD per tonne, Panamax size vessel Donkin Mine to Sydney Port 30 Cerrejon Mine (Colombia) to Puerto Bolivar Port 150 Bowen Basin (Australia) to Hay Point Port 250 US Appalachians to to US East Coast Ports 275 Alabama mines to
Slide 17: Steel and Metallurgical Coal Markets
Steel and Metallurgical Coal Markets
Slide 18: Steel Needs Metallurgical Coal
Steel Needs Metallurgical Coal “ Metallurgical coal is an essential ingredient in the production of steel Primary ingredients in the manufacturing of steel1 High-quality steelmaking coal is essential in 0.7 & 1.4 1 pursuing our carbon neutral tonnes tonnes tonne strategy.” Metallurgical coal Iron-Or
Slide 19: Donkin's Primary Market - Steel Sector
Donkin’s Primary Market - Steel Sector “ The [Donkin] mine, as I understand it, is focused on metallurgical coal, which is used to make steel. That is something there will continue to be a need for, for some time, as we work to implement technologies that will allow us eventually to get rid of it. S
Slide 20: Limitations of Hydrogen-Based Steel
Limitations of Hydrogen-Based Steel Producing enough hydrogen to move to 100% hydrogen-based steel production would require more than 2,500 terawatt-hours of electricity. This is the combined electricity consumption of India, Japan and South Korea per year1. 1. Wood Mackenzie, 2020. Green hydrogen:
Slide 21: The World Needs Steel
The World Needs Steel World Crude Steel Consumption Steel Demand Drivers 1950-2040, million tonnes1 Population | Urbanization | Clean Energy 2000 1800 1600 9B (vs. 8B in 2022) Global population in 2040; equivalent of adding a city the size of LA to the world every month for 15 years 1400 1200 1000 8
Slide 22: Energy Transition a Key Demand Driver
Energy Transition a Key Demand Driver Renewable power requires more steel vs. fossil fuels Tonnes steel per MW of capacity1 Average offshore wind turbine requires 1,800 tonnes of steel Wind offshore 190 Hydro 161 Wind onshore 124 Average onshore wind turbine requires 300 tonnes of steel Nuclear 59 C
Slide 23: Steelmaking Coal Trade Up 9% in 2022 vs. 2021
Steelmaking Coal Trade Up 9% in 2022 vs. 2021 328 mln tonnes 9.1% (vs. 2021) 1) Wood MacKenzie, August 2021. Semi-Soft Metallurgical Coal Market Overview and Donkin Assessment. 2) Map data source: Coal Mint, January 2023 23
Slide 24: …But Down vs. 2019 (Pre-COVID)
…But Down vs. 2019 (Pre-COVID) Top three steelmaking coal export countries 2022 exports versus 2019 (Pre-COVID) exports1 United States Australia Canada 19.4% 11.5% 19.5% 1. MSHA, customs data, Australian Bureau of Statistics 24
Slide 25: Shrinking Pool of Funding for Coal Projects
Shrinking Pool of Funding for Coal Projects Global Coal Mine Capital Expenditures1 2008 - 2022, billion dollars1 $450 $400 $350 $300 -6x $250 $200 $150 $100 $50 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 1. In $ Billions, Real 2022. Source: Jefferies 25
Slide 26: …Yet Demand is Increasing
…Yet Demand is Increasing Global Seaborne Metallurgical Coal Supply-Demand Imbalance1 Million tonnes Supply Demand 120 Mt Supply Gap 1. Wood Mackenzie 26
Slide 27: Price Chart for Donkin-Quality Steelmaking Coal
Price Chart for Donkin-Quality Steelmaking Coal Met Coal Price Since Donkin Was Idled1 2020 - 2023, $USD per tonne Donkin Beginning of Russia invades Donkin $500 idled global energy Ukraine reopens $450 crises $400 $350 $300 $250 USD $255/t $200 2013-2023 Avg. $158/t $150 $120/t (when Donkin was idl
Slide 28: Energy and Thermal Coal Markets
Energy and Thermal Coal Markets
Slide 29: "Record Levels" in Renewable Energy Growth
“Record Levels” in Renewable Energy Growth 29
Slide 30: "Record Levels" in Chart Form
“Record Levels” in Chart Form Wind & Solar as a Percentage of Total Global Primary Energy Consumption 1 2010 - 2022, Exajoules per year 12.0 10.0 8.0 +8x 6.0 4.0 2.0 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 30
Slide 31: "Record Levels" Put Into Perspective
“Record Levels” Put Into Perspective Global Primary Energy Consumption Per Fuel Type1 2010 - 2022, Exajoules per year 1. BP Statistical Review of World Energy 31
Slide 32: Growing Seaborne Thermal Coal Trade
Growing Seaborne Thermal Coal Trade Seaborne Thermal Coal Import Demand 2016 - 2024, Million tonnes +4.6% +3.5% +1.0% 1000 Africa 800 Southeast Asia South Asia 600 Northeast Asia China 400 Americas 200 Middle East & N.Africa Europe 0 2016 2017 2018 2019 2020 2021 2022 2023e 2024e Source: Argus Globa
Slide 33: Demand for High Energy Thermal Coal
Demand for High Energy Thermal Coal Coal Seam Energy Content BTU/lb, gross as received basis “ Donkin Mine 13,500 High energy coal USA (NAPP) 12,800 prices are likely to remain elevated, as USA (CAPP) 12,350 Russia supplies over USA (Ilinois) 11,500 a quarter of the high- energy coal in the Indonesi
Slide 34: Thermal Coal Price Chart Since Donkin Was Idled
Thermal Coal Price Chart Since Donkin Was Idled Thermal Coal Price Since Donkin Was Idled1 2020 - 2023, $USD per tonne $450 Donkin Beginning of Russia invades Donkin idled global energy Ukraine reopens $400 crises $350 $300 $250 $200 $150 USD $144/t $100 2013-2023 Avg. $98/t $46/t 2011-2021 Avg. $76
Slide 35: Why Invest in Morien Resources
250% 200% 150% 100% 50% 0% -50% -100% Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-2 Why Invest in Morien Resources
Slide 36: Hope (vs. Analytics)
Hope (vs. Analytics) Advanced Target Continuity at Depth Experienced Management Team World Class District Prospective Land Position Tier 1 Di strict a Expansion Simple Metallurgy er a Assays Pending Exploration U pside iil i Open at Depth Supportive Jurisdiction Large-Scale Mineralization High-Grade
Slide 37: Morien Analytics - A Clear Investment Case
Morien Analytics - A Clear Investment Case Investor’s Investor’s Description Reality Perceptions Perception Punitive Donkin Implied investor discount rate applied on 28% IRR Industry norm: 8% to 12% Discount Rate future Donkin cashflows Discounted Coal Investor inferred coal price required on Curren
Slide 38: Morien Offers Exceptional Value to Peers
Morien Offers Exceptional Value to Peers P/NAV Discount Rate Used in NAV Peer Group in footnotes Peer Group in footnotes 0.0x 1.0x 2.0x 3.0x 0.0% 2.5% 5.0% 7.5% 10.0% Morien Mo rie n Morien Mo rie n Non- Peer Non- Peer Peer precious Peer precious Peer Peer peers Peer peers Peer Peer Peer Peer Peer P
Slide 39: Unique Level of Shareholder Alignment
Unique Level of Shareholder Alignment Business Discipline Capital Allocation Going Forward Corporate overheads, millions $CAD Simplified model for illustrative purposes $1.20 Dividend • Paid quarterly • Designed to increase $1.00 commensurate with increased -42% royalties from the Donkin Mine $0.80
Slide 40: Donkin Projected Royalty Revenue
Donkin Projected Royalty Revenue Annual Royalty at 3 Million Tonnes Saleable Production1 $CAD Millions ANNUAL ROYALTY AT 3 MLN TONNES SALEABLE PRODUCTION4 $35 COAL PRICE $31 $30 C$100/tonne ANNUAL ROYALTY ($CAD MILLIONS) C$200/tonne $25 C$300/tonne $23 C$400/tonne $20 $15 $15 $10 $7 $5 $0 3.0 ANNUAL
Slide 41: Delivering Dividends
Delivering Dividends § Reinstated quarterly dividend Dividend Calculator on Morien Website For illustrative purposes only program in advance of receiving first royalty cheque § Declared a special dividend of $0.005/share in December 2022 § Quarterly dividend of $0.0025/share commenced in Q1-2023 § D
Slide 42: Morien is More Business Than Mining
Morien is More Business Than Mining Cash-In, Cash-Out Model Clear track record of wealth redistribution to shareholders; dividends and buy backs Shareholder Alignment 18% ownership, recent insider buying, low corporate overheads, no debt High Demand Sectors Bulk commodities; steelmaking coal and agg
Slide 43: MOX
MOX