People & MiningContinuously Balancing & Increasingly Challenging

IntroductionLessons Learned

1) Stakeholder Engagement

2) Financial Discipline

IntroductionOur perspective

Miner

Investors

Government

Employees

Community

1. Fair Share2. Continuously Balancing 3. Increasingly Challenging

CommunityWeb 2.0 era

CommunityShared values

Cost of Conga:- USD 5 B project halted;

Water

Doña Maxima Acuña Chaupe

Independent system to review environmental impact assessments

Social License

Miner

Investors

Government

Employees

Community

CommunityConflict

CommunitySocial License to Operate

Corporate Social ResponsibilityNo formal AgreementDynamic

“…Permission is like dating. You don't start by asking for the sale at first impression. You earn the right, over time, bit by bit..”

GovernmentResource Nationalism

Cost of Resource Nationalism:• Multi Billion Dollar

Forms of Resource Nationalism:• Beneficiation• Government Ownership• Taxes/Royalties

FDI & Resource Nationalism:• Rule of law;• Accountability;• Transparency;• Integrity;

Miner

Investors

Government

Employees

Community

GovernmentJudicial/Regulatory activism

Cost of Malku Khota*:- USD 16 M Development Stage;- Support from 43-46 of indigenous groups;

Miner

Investors

Government

Employees

Community

*http://www.northernminer.com/news/bolivian-govt-seizing-malku-khota/1001553854/?&er=NA

GovernmentCompliance

National Instrument 43-101

GovernmentCSR & GRI

Government of Canada International CSR performance guidelines Canadian companies:

1. International Finance Corporation Performance Standards;

2. The Voluntary Principles on Security and Human Rights; and

3. The Global Reporting Initiative .

The government will work with the GRI and stakeholders to develop GRI supplements for junior mining companies.

http://www.miningfacts.org/communities/what-is-corporate-social-responsibility/#sthash.yZfAfEYl.dpuf

InvestorsGovernance

Cost for Bumi Plc:- Shares price plunged 69%;

Miner

Investors

Government

Empoyees

Community

InvestorsReputation

Loss: 3,000 Alaskan jobs$ 541 M Investment

Miner

Investors

Government

Employees

Community

EmployeesEmpowerment

Management Team

EmployeesGovernance

Cost of Marikana:- FDI in SA;- PMG production;- Workers;

Miner

Investors

Government

Employees

Community

Investment ModelTriple Bottom Line

Why?

Equator Principles Adoption:• > 80 financial institutions;• > 35 countries; and• > 70% of Project Finance debt in emerging markets.

IFC Performance Standards:• 184 member countries

Global Reporting Initiative:• > 4,000 organizations;• In 60 countries;

Investment ModelStock Exchange & Exploration

Short Term vs Long Term

Public Interest vs Private Interest

Transparency vs Confidentiality

Investor Focus vs Project Focus

Stone Capital ResourcesOur Principles

Performance Standard 1Assessment and Management of Environmental and Social Risks and Impacts

Performance Standard 2 Labor and Working Conditions

Performance Standard 3 Resource Efficiency and Pollution Prevention

Performance Standard 4 Community Health, Safety, and Security

Performance Standard 5 Land Acquisition and Involuntary Resettlement

Performance Standard 6Biodiversity Conservation and Sustainable Management of Living Natural Resources

Performance Standard 7 Indigenous Peoples

Performance Standard 8 Cultural Heritage

Stone Capital ResourcesOur Investment Criteria

Stage Early Stage ExplorationGeograp

hy South America

Metals Precious & BaseInvestm

ent Up to USD 10 M per project

Term Between 5-7 years

Stone Capital ResourcesOur Project Stages

Decision Point

> 1 million hectare of prospective land

Generative

Drill Target Generation

Target Delineation

Drilling & Ressource Delineation

Economic Studies (PEA, PFS, FS)

Mine Construction & Production

Current Operations

Advanced Projects

Target Testing

Decision Point

Decision Point

Decision Point

Stone Capital ResourcesOur Entry Process

ScreeningStep 1

EvaluationStep 2

ReviewStep 3

Due Diligence

Step 4

Investment

Step 5

• Check for right fit based on investment criteria

• Introduction Management Team;

Finding alignment with Key People, Goals, ExpectationsMeet with Management Team to assess any existing EHS and/or other project plans in order to determine actual Scope of Work.

LOI | Termsheet | Full Legal & Operational Due Diligence prior to Investment | Inspect site and evaluate current conditions: i)Environmental impacts / community receptors, ii) Review existing EHS plans, iii) Benchmark current conditions with IFC and government requirements.

• Capital call | Enter into agreement | Tax & Legal structuring | Investment

Stone Capital ResourcesOur Monitoring

Assist in Environmental & Social Impact Assessment.

Amend Company’s corporate EHS plan/program to address risks and requirements of the

particular project.Train personnel on EHS

program; Develop performance metrics;

Conduct periodic audits of the site program;

Develop and monitor implementation of corrective

actions; andImplement continuous

improvement loop & management of change

processes.

Stone Capital ResourcesContact

Egbert Hennen Stephanie Ashtonhennen@stonecapitalfund.com stephanie@stonecapitalfund.com

Gideon Blaauw Eric Rothgideon@stonecapitalfund.com eric@stonecapitalfund.com

@Stonecapital