Sprott Resource Holdings Inc. Investor Presentation Ja January 2019 2019 All figures in US dollars, unless otherwise stated Investor Presentation | 1
About SRHI Based in Toronto, SRHI is part of the Sprott Group of Companies. We invest in producing natural resource companies to generate strong cash flows for our shareholders. Investor Presentation | 2
Part of the Sprott Group of Companies Sprott is a specialized natural resource manager with $10B in AUM Exchange Listed Public Equities Private Equity Private Lending 4 Physical Bullion Managing public Diversified portfolio of Specializes in bespoke • • • • Trusts resource equities since natural resource and debt investments to 1981 infrastructure mining and resource 2 Gold Miners ETFs • investments companies C$8B in AUM C$1B in AUM C$1.1B in AUM Over US$640M in • • • • committed capital *As of Sept 30, 2018. All AUM figures expressed in Canadian dollars Investor Presentation | 3
Board of Directors and Management Team Terrence A. Lyons Steve Yuzpe Chairman, Independent Director President, Chief Executive Officer, Director Lead Director of Canaccord Genuity Group Inc. Rick Rule Lenard Boggio Vice Chairman, Chief Investment Officer, Director Independent Director Michael Staresinic Retired Chartered Accountant (FCA) Chief Financial Officer, Managing Director Joan E. Dunne Independent Director Arthur Einav Former CFO, Painted Pony Petroleum, former, General Counsel, Managing Director Vice President, Finance and CFO of True Energy Inc . Andrew Stronach John Embry Managing Director Director Michael Harrison David Smith Managing Director Independent Director Senior Vice President and CFO, Agnico Eagle Mines Limited. Corey Posesorski Steve Yuzpe Senior Associate President, Chief Executive Officer, Director Sarah-Jane Martin Rick Rule Associate General Counsel, Corporate Secretary Vice Chairman, Director, Chief Investment Officer Investor Presentation | 4
SRHI Ownership and Market Capitalization SRHI Shareholders Shareholders Breakdown Major Shareholders 15% Sprott Inc. 7% Major Directors & Management 6% Shareholders Other Friendlies 3% 15% Other 69% Total 100% Sprott Inc. Market Capitalization 7% Share Price (as of Jan-20-2019) C$1.15 Basic Shares Outstanding 34,082,992 Directors & Market Cap C$39.2 million Management Other (+) Stock Options (avg. exercise C$3.74) 175,000 6% 69% (+) Warrants (exercise at C$6.66, expiry Feb 2022) 10,056,928 Other Fully Diluted Share Count 44,314,920 Friendlies Fully Diluted Market Cap C$51.0 million 3% Cash and Cash Equivalents (1) C$20.7 million (+) Debt Receivables C$12.3 million (-) Trade and Other Assets/Liabilities C$0.3 million Net Cash Position C$32.8 million (1) At September 30, 2018 converted to USD/CAD at FX of 1.2945. Investor Presentation | 5
Portfolio Summary SRHI NAV Breakdown (1) Other 10% Oil & Gas 9% Cash 15% Mining 66% (1) As of Sept 30, 2018. Investor Presentation | 6
SRHI Trades at Deep Discount to Producing Assets MTV is expected to generate strong cash flow by 2020 (1) which implies SRHI trades at a heavily discounted free cash flow multiple Illustrative SRHI Enterprise Value (2) $50 $40 $39 Based on recently released technical report $30 results, SRHI is trading at a discount to $33 CAD$ million Junior Producers on a 2020E P/CF (3) (4) $20 multiple $10 3.2x $6 $20 1.9x $20 $0 ($15) -$10 SRHI Junior Producers -$20 Current Market Net Cash Enterprise Public Adjusted Cap Value Company Enterprise Investments Value (IPO + CSO) MTV has the potential to provide SRHI with an attributable free cash flow yield ~40% by 2020 (3) 1) Based on results of Technical Report press release on November 2, 2018. Assumes a long-term flat copper price of US$2.75/lb 2) Market data and public company investments as at January 20, 2019. 3) Cash flow is based on the PEA Case and a long-term flat copper price US$2.75/lb less US$12M estimate for corporate G&A, exploration drilling and other costs. The PEA Case is preliminary in nature and includes inferred mineral resources that are too speculative geologically to have the economic considerations applied to them. There is no certainty that the PEA Case will be realized. See “Notes on Preliminary Economic Assessment”. 4) Junior Producers multiple based on consensus analyst estimates as at January 16, 2019. Source: Capital IQ. Investor Presentation | 7
Core Asset: MTV Copper Mine Aerial View of Don Gabriel Open Pit Crusher – Four-stage crushing 7,000tpd capacity Cathode Produced on Site – Capacity of 18,500tpa Processing Plant – Room for further expansion Investor Presentation | 8
Core Investment - Minera Tres Valles Provides SRHI with a cash flowing business with exposure to copper and a growth platform in Chile In October 2017, SRHI acquired a 70% stake in S.C. Minera • Tres Valles, for US$40 million Located near Salamanca, Chile, 200km north of Santiago • Previously developed by Vale, spending over US$240 • million on the property including associated infrastructure Overview 44,000 hectares of mining property • Currently producing ~6,000 tonnes of copper cathodes • and ramping to full production in 2020 Produces high-grade copper cathodes – 99.99% Cu • content 4-stage crushing, agglomeration and leaching • Nameplate capacity: 7,000 tpd of ore o Conventional leaching solvent extraction electrowinning • Mining & (SX-EW) plant Processing Nameplate cathodes capacity: 18,500 tpa o Toll milling for small miners and government entities • Third party ore provides alternate source of high-grade ore • and de-risks own mining operations Strong community and stakeholder relations • Investment Highly experienced management team • Highlights Located in a premiere investor-friendly mining jurisdiction • Strong long-term copper fundamentals • Investor Presentation | 9
MTV Technical Report Highlights Robust Economics at $2.75/lb Copper Price $129M Highlights Base Case PEA Case (2) Pre-tax Net Present Value (NPV) (8%) $87M $129M NPV (8%) After-tax (2) After-tax Net Present Value (NPV) (8%) $87M $129M 131% Pre-tax Internal Rate of Return (IRR) 93% 131% After-tax IRR (2) After-tax Internal Rate of Return (IRR) 93% 131% 34M lbs Payback (years) 2.0 1.2 Average Annual Copper Cathode Production (2019-2025) 24M lbs 34M lbs Avg. Annual Cu Production (2,9) Total Copper Cathode Production (LOM) 177M lbs 250M lbs $1.65/lb 2020 Cash Flow $23M $34M Life of Mine 6.5 years 7.5 years Operating Cash Cost (2) Operating Cash Cost (per lb of finished copper) $1.66/lb $1.65/lb $34M Upfront Capital Cost $15M $21M LOM Capital Cost $32M $52M Project Cash Flow in 2020 (2) 1) Base Case includes only the Don Gabriel Manto open pit, Papomono Masivo underground and ENAMI tolling revenues. The PEA Case includes the Don Gabriel Manto, Papomono Masivo, Don Gabriel Vetas, Papomono Norte, Manto Norte, Epitermal, Papomono Cumbre, Papomono Mantos Conexión and Papomono Sur. The PEA Case also includes ENAMI tolling revenues. 2) The PEA Case is preliminary in nature and includes inferred resources that are too speculative geologically to have the economic considerations applied to them. There is no certainty the PEA Case will be realized. 3) Base Case capital cost estimate was completed at a cost accuracy of +/- 25%. PEA Case capital cost estimate was completed at a cost accuracy of +/- 50%. 4) Based on long-term flat copper price forecast of US$2.75/lb. 5) Includes revenue from long-term tolling contract with ENAMI of minimum of 15,000 t/month and a tolling rate of US$27.50/t of material received. MTV delivers copper cathodes produced from supplied feed material to ENAMI, on the basis of a contractual metallurgical recovery of 78%. 6) MTV has tax losses available to apply that will shelter any tax payable on operating profits, due to capital costs and operating losses sustained by prior operators. MTV is subject to a sliding scale copper royalty payable to the Chilean government. 7) Does not include copper production from purchasing of mineralized material from small scale third party miners and any additional copper production pursuant to excess recovery from the ENAMI toll milled material. 8) NPV is calculated based on monthly discounting using a reference date of July 2018. 9) Based on average annual cathode production from 2019 to 2025. Investor Presentation | 10
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