Hudson Bay Resources AS invites investors to join
Hudson Bay Resources AS invites investors to join us in developing a large scale gold concessions situated in Ghana’s gold belt and the Echo Valley claims in California. Financial adviser; Procorp ASA 1 Independent Corporate Finance
Investment case • This investment proposal gives investors the opportunity to participate in developing prospective licenses into resources and a consequent higher level of value. • The Company has attractive mineral licenses with high potential in Ghana and California. • The Ghana concession is 134, 7 sq km and exploration has shown gold resources to be further explored. Its size and location is what mining companies are looking for. • Echo Valley in California has proven the existence of gold, copper and silver on our claims and further exploration is recommended by our geological expertise. • At a pre money valuation of NOK 13 million, the company is priced to less than historic capex and when economical gold resources are established, the share price will multiply. 2
Strategic positioning Hudson Bay Resources is well positioned for value creation, and corporate strategy is aimed at stage of development that offers the most attractive risk/reward ratio HBR’s assets and strategic focus
Term Sheet Issuer Issue size Hudson Bay Resources AS 33 million ordinary shares Issue price NOK 0, 20 per share Gross proceeds NOK 6, 6 million Shares pre issue 66. 905. 620 Founders ownership 29 % Pre-money evaluation NOK 13 million Lot size 50. 000 shares Closing On or about 1. October, 2009 Managers Pro. Corp ASA 4
Board and Management Chairman Johs. Jamne. More than 30 years international management experience within different industries. Holds the position as chairman, board member and manager in a number of companies. Board members: Rune Sørum has outstanding experience in business development world wide. He is currently a partner in Telenor Venture AS. Boye Flood is a well known Norwegian geologist with long experience from gold exploration in Norway and the rest of the world. He currently manages and owns his own geological service company. President Jan Høvik has extensive experience in business development, international marketing and management. Former managing director and director in the software, media and telecom industry. 5
Senior Geologists Boye Flood is M. Sc. in Geology from the University of Oslo. He has worked in Spain, Australia, Africa and in the Nordic Area for many years. Flood has experience from BHP and LKAB Prospecting AB and other exploration companies. He has worked on gold exploration projects in Africa and other parts of the world. In 1985 he established his own consulting company; Geologiske Tjenester AS. 6
Senior Geologists Paul Chamois, senior geologist from Scott Wilson RPA, has over 25 years of senior exploration and management experience from Canada, Mexico, Sweden, and Africa. He has held senior positions with various mining companies and has a solid background with base metal and gold exploration projects bringing them all the way to production. Neil Macfarlane, Country Manager Ghana, has 30 years experience as a geologist and has spent one third of his time working in Ghana, Kenya, Zambia, Mali and Niger. He his Country Manager for Hudson Bay in Ghana. His on the ground experience with gold exploration and production in Ghana is of great value to us. 7
Hudson Bay Resources AS organization 2009 Hudson Bay Resources AS, holding company with head office in Oslo Norway. Hudson Gold Ghana Ltd. , a 100 % owned subsidiary in Ghana, Africa. Holds one large scale concession. Echo Valley Inc. , a Nevada registered and 70 % owned subsidiary that holds 30 claims in California. 8
Property summary • HBR owns a large scale reconnaissance license of 134, 7 sq. km. in the interesting Western Region of Ghana along the river Tano. First two rounds of exploration shows high grades of gold in more than 100 different locations on the concession. • In Echo Valley, California, HBR owns 30 claims that will be increased to a targeted 100 claims during this autumn. Exploration in the general area shows impressive Au at 23, 6 g/ton. • All together HBR has an interesting portfolio of properties that has been evaluated by renowned geological consultants, who recommend that we continue to develop the properties towards the identification of indicated and measured resources. 9
Ghana, West Africa HBR 10
Ghana, West Africa Ghana is an independent country since 1957 and has open and fair elections and a stable political system. President John Atta Mills was elected in December 2008 after a close race with the sitting president Kufour. The transition of government has delayed the work of the Minister of mining and of the Mineral Commission, but it is now fully operating. Licenses and permits are now back to normal schedules. The new government has not changed taxation or other important parameters for the mining industry. 11
Ghana, West Africa • • • Population is estimated to 23 mill. people. Accra, the capitol is speculated to have more than 5 mill. residences. Area is 238. 537 sq km. Which is 5 times the area of Finnmark. Population density is 91 people per sq km. Economic figures: – GDP 17, 72 billion USD, – GDP – per capita 1. 500, - USD – Unemployment 11 % – Exports 5, 4 billion USD – GDP per sector; Agriculture 37, 3 %, Industry 25, 3 % and Services 37, 5 % – Main exports gold, cocoa, timber, bauxite and diamonds. 12
Gold Production in Ghana • • • Production in 2008 ended at 2, 6 million ounces of gold. Totaling 2, 3 billion USD in sales. Ghana is the second largest gold producer in Africa. The Ashanti Gold Belt has produced 40 million ounces of gold. Taxation on gold production is 3 % of sales. Possible to increase to 6 % by the government. International money transactions works well. Transportation biggest problem because of neglected railway. Also roads are not in best conditions but improvement is under way. 13
Mining Companies in Ghana • Red Back Mining Inc. large scale mining operation target 170. 000 ounces of gold in 2009. The mine is not far from our large scale concession. • Perseus Mining Ltd of Australia has just decided to start production with a target of 140. 000 ounces from 2010. • Anglo. Gold Ashanti Ltd operates mines in Ghana, Obuassi, that produced 557. 000 ounces of gold in 2008. • Newmont Inc. is another mining company in Ghana with 504. 000 ounces last year. • Golden Star Resources Ltd operates mines near Prestea and produced 295. 926 ounces in 2008, with a possible increase in 2009. 14
Mining License Regime q Reconnaissance Licence covers the acquisition of properties and the first stages of exploration. Phase I and Phase II. q Prospecting Licence gives the right to drill and excavate. q Mining Lease gives the right to extract minerals. q Small scale mining licence is mainly for the local population. 15
Large scale Reconnaissance Licence • The concession is 134, 7 sq km and was acquired late 2007. • Reconnaissance Licence granted February 2008. • First exploration visit 2008 by consultants from Scott Wilson RPA, Toronto. • Gold were found in 80 % of samples collected from the large scale. • Exploration project Phase I headed by Country Manager Neil Macfarlane. • Local exploration company finished Phase I spring 2009. • Surface samples were taken from stream sediments in 144 locations. • Results ranging from 0, 5 gr. /ton to 2, 4 gr. /ton from top soil and sediments. • Implies that grades can be substantially higher in deeper tests. • Pan testing with nugget counts were also used on each spot. • Recommendations from consultants, Scott Wilson RPA, to continue to Phase II. 16
Our concession and test results 17
Ghana Phase II • Extensive perusal of former reports and maps • Explore the concession and collect around 8. 000 new samples. • Both river sediments and hard rock chips will be collected. • Establish areas with possible alluvial production opportunities. • Analyze the samples to identify gold content in veins and soil. • Establish areas with possible hard rock gold deposits. • Deliver report with further recommendations. 18
Investment Budget Ghana Phase II (To cover next 8 months) Ghana (USD) Geological database 25. 000 Exploration and sample collection 250. 000 Project management 100. 000 Laboratory analyses 50. 000 Reports and recommendations 25. 000 Travel and accommodations 50. 000 Management services: Travel, accommodations, office, telecommunications and work (13 %) 100. 000 Total : 600. 000 19
Expected results from Ghana Phase II • Duration of Phase II is estimated to be from 6 to 8 months. • Overview of gold finds from all over the large scale concession is expected. • Identification of inferred gold deposits. • Identification of inferred alluvial production sites. • Resulting in recommendations for a Phase III and Phase IV work program. • Phase III and Phase IV is expected to be finished within 24 months after start up. 20
Echo Valley Claims X 21
Gold mining in California The discovery of gold on January 24, 1848 by James Marshall at Sutter's Sawmill on the South Fork of the American River started a bonanza that brought California global fame and gave it the title of the "Golden State". Since then California has been known for goldmines and gold production from the northern parts of the state all the way to the Mexican border, and still there are unexplored parts with prospective goldmines hidden in the ground. Echo Valley Inc. claims are located in Riverside County in the Chuckwalla mountains and valleys. Exploration in the area have revealed grades of gold up to 23, 6 g/ton. 22
Mining activities around Echo Valley New Gold Inc. commenced mining the old Mesquite Mine in County Diego Imperial in California, close to the Arizona border in 2008. The mine is situated South – East of our Echo Valley claims. Production is estimated to 150. 000 ounces of gold in 2009. 23
Test results Phase I Selected Rock Chip Sampling Echo Valley February 2009 Sample Au g/ton Ag g/ton Pb g/ton Cu g/ton 1 1, 49 207, 00 26, 10 4. 680, 00 2 5, 10 77, 70 7, 49 1, 49 3 1, 69 12, 00 1, 65 214, 00 4 4, 45 29, 60 1, 61 5. 010, 00 5 3, 51 966, 00 54, 60 6, 23 24
Echo Valley Phase II A and B Phase II A; • Increase the number of claims to more than 100. • Take samples from veins and systematically along lines. • Run ground magnetic and geological mapping along same lines • Analyze the samples to identify gold content in veins and soil. • Evaluate results and decide Phase II B; • Diamond drilling of six initial holes to establish vein width/depth. • Collect all data to find a first resource estimate. • Plan next Phase and extensive drill program. 25
Investment budget Echo Phase II A (To cover next 8 months) Echo (USD) Exploration and sample collection 50. 000 Project management 75. 000 Laboratory analyses 50. 000 Reports and recommendations 25. 000 Travel and accommodations 50. 000 Management services: Travel, accommodations, office, telecommunications and work (14 %) 50. 000 Total : Contingency reserve ( 14 % ) 300. 000 50. 000 26
Expected results from Echo Phase II A • We are targeting to claim more than 100 claims. • Sample collection along lines and veins. • Analyses will be the basis for further work. • Recommendations for further work and drill program. 27
Objectives and strategy next 3 years Objective: – Build our properties value through step by step exploration. – Make the shareholder values accessible. • Strategy: – Raise funding per phase of development subject to identified resources of gold and minerals. – Either sell all or part of the properties or enter into joint ventures. – Establish a public market place for the shares by a listing either local or international. 28
Why invest in HBR? • The Company has concessions with documented gold potential • Further explorations are required to determine the value and possible mining of these findings • Mining operations are taking place close to our concessions on the same geological structures • The Company has an effective operation with low overhead costs, funds are used for explorations. • Best available expertise world wide is hired on contracts as need be, not employed. HBR has experienced geologists with strong track records involved with the company. • The Company intends to enter into joint ventures or sell the concessions subject to achieving the best value for our shareholders The entry value for participating in this venture is favorable compared to alternatives 29
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