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Investment Banking Activities - Resources
December 2011



 

Starting in 2007, Wingate, as an exempt market dealer, has been actively involved in raising funds for resource exploration and development companies - primarily in mining.

Private placement financings have included the issuance of new treasury shares and the purchase and sale of privately owned common equity positions, by way of secondary transactions. Wingate has also designed highly securitized, royalty investments, resulting in high cash yield returns for investors on a risk mitigated basis.

Over the last three years, Wingate has participated in over C$100 million in mining - resource based financings. Typically, investors are afforded an opportunity to purchase equity at a pre IPO or pre merger /acquisition stage. This may range from essentially a seed round of financing, where the anticipated liquidity event may be a few years away to the last private - pre IPO round, where realization is much closer.

Wingate's objective is to secure high quality mining resource based exploration opportunities on an advantageous and timely basis. A critical component of this process is the opportunity to co-invest with a renowned group of leading mining entrepreneurs and senior-most executives with decades of combined mining experience. These are all higher risk, higher potential return opportunities, typically associated with junior exploration companies.

Examples of Wingate's mining based financings and the subsequent realization events include:



   

Description of Royal Nickel Corporation:

One of the world's largest undeveloped sulphide nickel deposits, 9.6 billion pounds measured and indicated and 2.9 billion pounds of inferred resources located in the Abitibi region of Quebec. Revised pre feasibility study (released May 2012) increases nickel project value to $1.4 billion (NPV 8%).

Private Placements: Wingate participated in private placements at $0.35 per share (March 2007) and $2.50 per share (October 2007).

Secondary Transactions: While still private, Wingate arranged for the purchase and sale of Royal Nickel common shares at prices ranging from $3.50 per share (March 2008) and $0.50 to $1.50 per share (all 2010).

Realization Event: Royal Nickel went public in December 2010. RBC Capital and UBS led a $51 million financing at the time, priced at $2.25 per share. Post IPO, the shares reached a recent high price of $2.99 per share, 8.5x gain from initial pre IPO financing.

References:

www.royalnickel.com
www.sedar.com, symbol RNX






Description of Royal Coal Corp:

Royal Coal is developing high quality surface coal mining operations in the U.S. Central Appalachian Basin (Kentucky), Four mines have combined reserves (permitted and leased of 12.6 million tons.

Private Placements: Wingate participated in raising $3 million in pre IPO funding for Royal Coal in June 2009 and January 2010, priced at $0.20 per equity unit, including long term (5 year warrants). Wingate also participated in the qualifying transaction in August 2010, raising a total of $4.7 million (at $0.20 per equity unit plus 5 year warrants). In February, 2011 Coremark Securities raised $34.5 million by way of Special Warrants, exchangeable into equity units at $0.25 per unit.

Royalty Arrangements: Wingate raised $1.5 million by way of a royalty agreement. Royalty holders receive US$1.50 per ton mined until a cumulative $3 million is distributed (i.e. 2X original cash advance), thereafter the royalty is US$0.60 per ton, for the life of the designed mines.

Realization Event 1: Royal Coal went public on the Toronto Stock Exchange - Ventures in August 2010. The shares hit a post IPO high of $0.36, a 80% gain from our pre IPO financings. Realization Event 2: The Royalty Arrangement generated a 44% cash yield in year one.

References:

www.royalcoal.com
www.sedar.com, symbol RDA






Description of Potash Mining Investment:
*Note: Corporate name cannot be legally identified at this time

Privately owned Canadian company, formed to develop mineral properties in Saskatchewan's potash fairway. This company amassed the largest land package in the designated potash area (2.7 million acres).

Secondary Transaction: In August 2008 and December 2008, Wingate investors purchased shares in this privately owned potash development company. Price per share ranged from $0.015 to $0.28.

Realization Event: In September 2010, our potash investment was acquired by offshore investors in a significantly accretive transaction.

References: Unavailable at this time






Description of Juno Special Situations Corporation:

JUNO was formed for the purposes of (i) investing in early stage resource equities and (ii) creating and acquiring natural resource royalties with a specific emphasis on mineral royalties. Anchor assets include holdings in Royal Nickel Corporation, Royal Coal Corp. and Romex Mining Corporation. Through the network and experience of its management team, the Company has access to many early stage equity financings of resource issuers that are not typically available to the average investor.

Co Chairman: A. Thomas Griffis and Scott Hand

Private Placements: In May 2007, Wingate participated in raising $30 million for Juno at $0.50 per share.

Secondary Transactions: Wingate investors have participated in private purchases over 2008 and 2010 at prices ranging from $0.10 to $1.00 per share.

Realization Event: Juno was dissolved at the end of 2011 and the assets of the company were distributed to the shareholders on a prorate ownership basis.

References:

www.junossc.com




Other transactions, where Wingate arranged direct participation in select private placement opportunities either through equity or debt arrangements include:





Romex Mining Corporation - September 2010

Romex involves the Aburi Gold Property, located in Ghana, Africa. Major gold mines in the vicinity of Aburi include: PMI's Obotan deposit, Kinross $7.1 billion Red Back Mining acquisition and Anglo Gold Ashanti's flagship mine - Ashanti Goldfields

Private Placement: Wingate arranged for investors to participate in private placement of equity units, comprising common shares priced at $0.10 and a 1/2 warrant exercisable at $0.15 per share.

Realization Event 1: Romex subsequently raised equity capital by way of a private placement of common shares priced at $0.25 per share.

References:
www.romexmining.com



Kharrouba Copper Company Inc. - March 2011

The Kharrouba Copper - Cobalt - Gold mining property comprises three exploration permits covering 48 sq. km. in the province of Marrakech, Morocco. Each of the three areas is known for copper mineralization






Ghana Gold Corp. - August 2011

Owns alluvial gold mining concessions in Aburi and Mos - Kibi regions of Ghana. Renconnaissance license offshore Ghana.

Private Placement: Wingate acted as agent to complete a $1.7 million private placement of common shares priced at $0.10 per share.




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