Friday, 6 October 2023

TNR Gold Corp. Executive Chairman Kirill Klip Responds to Unsolicited Non-binding Offer by Lithium Royalty Corp.

NEWS RELEASE

TNR Gold Responds to Unsolicited Non-binding Offer by Lithium Royalty Corp.

"VANCOUVER, British Columbia – October 3, 2023: TNR Gold Corp. (TSX-V: TNR) (“TNR”, “TNR Gold” or the “Company”) wishes to comment on the announcement by Lithium Royalty Corp. (“LRC”) of its unsolicited and non-binding offer to the board of directors of TNR (the “Board”) to acquire the issued and outstanding common shares of the Company for cash consideration of $0.08 per share.

LRC made an unsolicited non-binding offer to the Board to acquire the issued and outstanding common shares of the Company for cash consideration of $0.08 per share (the “Offer”). Given the Offer represents such a small premium to the closing price of $0.0725 on September 29, 2023, the Board believes the Offer is an opportunistic, “low-ball” offer that is financially inadequate and not in the best interests of TNR or its shareholders.

Kirill Klip, Chief Executive Officer and Executive Chairman of TNR commented, “We welcome this opportunity for increased attention on our fantastic company and we believe shareholders and investors will see that the current share price of TNR deeply undervalues the Company. Given that LRC valued only a portion of the Company at US $9 million, based on its purchase in February 2023 of the 0.5% NSR royalty involving the Mariana Lithium project in Argentina for US $9 million, the offer of CDN $15 million (approximately US $11 million) for the entire Company is considered opportunistic and inadequate.

TNR retains a 1.35% NSR on the Mariana Lithium project that is being developed by Ganfeng Lithium in Argentina; we hold a 0.36% NSR royalty on the Los Azules copper project, which is being developed by McEwen Mining in Argentina. TNR also holds a 7% net profits royalty holding on the Batidero I and II properties of the Josemaria project that is being developed by Lundin Mining in Argentina.

Our duty as a Board is to maximize the potential value of our assets and our Company’s valuation for all of our shareholders, and the fair treatment of all shareholders. We are engaging with multiple parties proposing much higher potential valuations for our assets than the present LRC proposal. We have to wonder if LRC’s low-ball offer reflects its own declining share price over 2023.

Our shareholders have been patient with the Company, and they deserve fair and maximized value for their shares.

The shareholders of TNR have known me for over 16 years of my tenure with TNR, they trust our Board of Directors and Management. They know us and we know our shareholders. Other major shareholders do not agree to sell their holdings of TNR at this very low valuation of our assets. We have spoken with numerous shareholders. They know the true potential of the Company’s assets and the bright potential for our Company.

There is no alignment with LRC. The TNR team and its shareholders have been supporting the Company through all these years even during the darkest days of the worldwide pandemic. We have built this strong, viable portfolio of assets including royalties in world-recognized projects containing lithium, copper, gold, and silver, under the management of such industry leaders as Rob McEwen, McEwen Mining, Rio Tinto, Stellantis, Ganfeng Lithium and Lundin Mining.

This opportunistic hostile takeover attempt of TNR following LRC’s partial royalty purchase earlier this year is very disappointing, much like the LRC poor share performance after its IPO this year.

We are creating shareholder value, not reducing it by accepting any deal we can find. We are demonstrating our commitment to maximizing shareholder value and increasing TNR’s share price through actions such as the Company’s normal course issuer bid. TNR’s share price was up 75% in July compared to the start of this year and increased 81% year-to-date on September 29, 2023.

Despite LRC’s assertion that they have sought to engage with us since mid-July 2023, in fact, we have been thoughtfully engaged with LRC since January 2022 and have engaged in many discussions with them about possible transactions. The lead-up to the partial Mariana royalty purchase in February 2023 started between TNR and LRC in January 2022, and the only prior non-specific proposal from LRC was a non-binding offer of $0.085 per share in July 2023. This non-binding offer was rejected by the Company in July as it undervalued TNR.

TNR Gold shareholders are well-informed about the potential valuations of our assets as we build the Green Energy Metals Royalty and Gold Company.

The bottom line is, we believe we can deliver a lot more value for our shareholders.

Using this opportunity, we would like to thank all our shareholders for their support of the TNR Gold team and our Company."

How to spot the next M&A target? What if you learn that insiders of major Royalty companies have bought personal stakes in a small but very promising company holding royalties in lithium, copper, gold and silver projects under development by industry leaders like Ganfeng Lithium, Rio Tinto, McEwen Mining and Lundin Mining?

Maybe you are already as well in a very good company with your investment by now. But first, let’s dive into Royalty companies and their business models.

The concept of long-term investing and holding your positions until the fruition of your investment thesis was trashed by the crypto bros by their "HODL" in recent years. Probably because the longer you hold any crypto digital scam - the more confirmations you get that they are working exactly the same way as "The Thousand and One" known to humans old scams.

But how other way can you enjoy Apple growing all the way up? Just a couple of years ago every crypto ape was laughing at Warren Buffett and some potheads from the media were calling SBF the "next Warren Buffett" and "JP Morgan" of Crypto, now SBF is calling his mum from jail.

Some things are fundamental in life, like true values and solid assets, and other very simple concepts which are very hard to follow. In order to sell something you have to have it in the first place. In order to sell it high you have to buy it low.

Chart by Nicholas Winton

And yes, in order to sell something very high you have to buy it very low and hold for it to grow. It was like magic for Ronald Wayne when he became a founder of Apple, but the magic was gone once he sold his stake in Apple.

"Twelve days after Wayne created the document that formally created Apple, he returned to the county registrar's office filing an amendment formally withdrawing his name and involvement in the company". Wayne was later paid US$800 in exchange for relinquishing his equity stake in the company." (Google)

But how can you survive with your long-term investment strategy in this age of Pump and Dump? How can you safely navigate the promising high-reward resource sector? How can you play it right with all its volatility? Start with your own research.

"THERE IS MAGIC, BUT YOU HAVE TO BE MAGICIAN TO MAKE THE MAGIC HAPPEN." SIDNEY SHELDON

Sean Mason from Proactive is giving some answers highlighting Royalty companies, including my beloved TNR Gold and I can add some of my personal observations as well. M&A activity among Royalty companies can provide the catalyst to the best and underappreciated Stories in the market.

"Resource investors drawn to the sector’s upside but nervous about the higher risk might want to consider royalty companies instead.

Royalty companies act as alternative financiers to help fund exploration and production projects for explorers and miners in need of money but who do not want to issue more equity (company shares).

In return for cash, royalty companies will receive a percentage of future production revenue. And, unlike traditional mining companies that are subject to input costs that vary (fuel, equipment, labour), royalty companies receive all their revenue from the agreements they negotiate and the cost of those revenues are the responsibility of a project’s owners/operators.

As a result, royalty companies have high profit margins along with among the most revenue per employee of any industry.

Also, whereas many junior mining companies have a single project in one country, royalty companies provide portfolio diversification by having agreements with several companies in different jurisdictions throughout the world. This reduces jurisdictional risk, project/production risk, and commodity-price risks that have plagued many mining companies in the past.

Given that a royalty is a perpetual option on new discoveries made on the land by the operators, royalty companies offer substantial exploration upside for their investors at no additional costs. And, if the price of the commodity rises, it expands their profit margins even more seeing that the royalty is a fixed cost." (Proactive)

In order to hold your “Apple” over the years and enjoy its growth, you have to hold something similar in the first place or at least it must be something healthy and beautiful. You have to be sure that it is not rotten and it can grow.

You already know My Vision:

My Vision for TNR Gold and Strategy: Share Buyback, Potential Valuations, and Shotgun Gold Project Spinout

“We are building The Green Energy Metals Royalty and Gold Company. Our business model provides the unique entry point into the creation of supply chains for critical materials like energy metals which are powering Tesla Energy rEVolution and Gold industry which is providing the ultimate hedge during this part of the economic cycle. Our shareholders are participating in the building of The Green Energy Metals Royalty and Gold Company. In our portfolio, we have a unique combination of assets providing exposure to different parts of mining cycle: starting with the power of blue sky discovery and including partnerships with industry leaders like McEwen Mining, Ganfeng Lithium and Lundin Mining as operators on the projects that will potentially generate royalty cashflows to contribute significant value for our shareholders.”

Kirill Klip, Executive Chairman TNR Gold Corp.

A lot of our investors have been asking me recently, what is my personal Vision for TNR Gold, what is the future of our Company and what are my personal goals to achieve for TNR Gold.

Our Company has reached major milestones this year after the full repayment of the investment loan and all recent developments in the marketplace.

I would like to share with you my personal Vision for TNR Gold’s future.

The Company is of the view that the recent market prices of its Shares do not properly reflect the underlying value of the Shares. I personally believe that the current market price is grossly undervaluing the intrinsic value of TNR Gold’s assets.

We demonstrate our commitment to maximising shareholder value and fair valuation of our Company and all assets in the TNR Gold portfolio. TNR Gold has announced and is conducting the share buyback program under approved by TSX Venture NCIB rules.

Insiders resumed their buying in the market when we were allowed to do so.

After much effort, our Company is in a strong financial position now. The recent corporate and market developments confirm the success of our corporate strategy and provide us with the opportunity to build real shareholder value reflecting the true magnitude of our assets.

The Company is experiencing a coming-of-age moment and we have generated a lot of interest among industry insiders in our Company and portfolio of TNR Gold’s assets. Our shareholders have been extremely patient with the Company, and they deserve correct, fair, and maximised valuations.

We are aiming to realise much higher potential valuations of our assets for all our shareholders and stakeholders. Below you can find my personal basic aspirational goals and estimations for the appropriate potential market valuations of TNR Gold’s assets and potential share price representations of such values.

Potential Valuations of TNR Gold Corp.

Valuations

Market-Based*

Base Case**

Positive Case***

Mariana Lithium NSR

USD$9M

USD$22M

USD$54M

Los Azules Copper NSR

USD$30M

USD$39M

USD$59M

Shotgun Gold Project

USD$10M

USD$21M

USD$35M

Total Assets Valuation

USD$49M

CAD$64M

USD$82M

CAD$107M

USD$148M

CAD$194M

Potential Share Price

CAD$0.29

CAD$0.48

CAD$0.87

*Mariana Lithium NSR valuation – based on LRC transaction. Los Azules Copper – Rob McEwen’s estimation of 1.25% NSR valuation of USD$100M based on the Osisko Gold Royalties transaction. Shotgun Gold 700,000 oz AU @ USD$15/oz.

** Mariana Lithium NSR valuation – 20,000T LiCl*USD$40,000/T*0.45%NSR*6. Los Azules Copper NSR valuation – 182,000T*USD$10,000/T*0.36%NSR*6. Shotgun Gold 700,000 oz AU @ USD$30/oz

*** Mariana Lithium NSR valuation – 40,000T LiCl*USD$50,000/T*0.45%NSR*6. Los Azules Copper NSR valuation – 182,000T*USD$15,000/T*0.36%NSR*6. Shotgun Gold 700,000 oz AU@USD$50/oz

The CAD$1M payable to TNR Gold by Ganfeng for 1% Mariana Lithium NSR buyback and exercising of options and warrants will provide the financing for TNR Gold’s working capital.

We do not need to finance TNR Gold by diluting the holdings of our shareholders.

NPR Royalty on Batidero I and II properties of the Josemaria Copper-Gold Project provides additional growth potential for TNR Gold’s Royalty Portfolio." Read more

This month analysts of Fundamental Research Corp have published their independent report on TNR Gold:

Fundamental Research Corp.: "TNR Gold Corp. – Royalties in Major Lithium and Copper Projects – Initiating Coverage

Today, You have a lot of reference points to reach your own conclusions about the potential valuation of TNR Gold, but still, the FUD of Mr. Market is very hard to ignore, particularly when even some of the very promising IPOs in the Lithium Universe were down 40% this year and are still down 32% YTD.

First of all, TNR Gold was up 75% in July this year and is still up a healthy 25% YTD. Nobody knows the future, but we are working hard to make My Vision a reality for all TNR Gold shareholders and we are on the right path. Independent research provides us with a very nice milestone to reach on our way.

Warren Buffett holding a stake in our Company can address all the FUD at once, but we are still too small for his kind attention. NOVAGOLD's stake in TNR Gold can show that we are on the right track already.

Second, what if you learn that insiders of Royalty companies personally bought and are holding shares in TNR Gold? Can they believe in My Vision as well and know, maybe even better than me, the true potential value of the assets of our Company? I can not tell you so now, but we should definitely ask around.

Now we can wait for the signs and when you receive any offers from "Mr. Market" to sell your shares at 8, 10 or even 15 cents - you already know where to look and what questions to ask.

Why Royalty pros do like the TNR Gold assets so much? Do they believe in our Company CEO's Vision as well? Or maybe they even know better than him the true value of TNR Gold assets? Why should I sell my shares now? Should I hold my shares and enjoy the ride with the management holding the largest stake in this Company?

And third, a lot of words will stay the same - words. Only actions and personal stake can show you what insiders really think about their Company. I came to this Company 16 years ago, we did all the heavy lifting already, and now we are here to protect our garden and grow our dream for all TNR Gold shareholders. Our Team at TNR Gold holds the largest stake in the Company, we know what to do and our strategy is working.

"Another promising royalty name is TNR Gold Corp (TSX-V:TNR, OTC:TRRXF), a green energy metals royalty and gold company.

TNR holds a 1.5% net smelter return (NSR) royalty on the Mariana Lithium Project in Argentina, which is 100% owned by Ganfeng Lithium. Construction of a 20,000 tons-per-annum lithium chloride plant at Mariana has already begun.

As well, TNR Gold holds a 0.4% NSR Royalty on the Los Azules copper, gold and silver project, also in Argentina, being developed by McEwen Mining, which the company called the world’s nineth largest undeveloped copper project.

The company also holds a 7% net profits royalty (NPR) on the Batidero I and II properties of the Josemaria Project in Argentina, which is being developed by Lundin Mining.

Finally, TNR provides significant exposure to the gold sector through its 90% holding in the Shotgun Gold porphyry project in Alaska, near the Donlin Gold project that is being developed by Barrick Gold and Novagold Resources." (Proactive)

Our 7-step Action Plan has been activated:

1. We have achieved industry validation of our Royalty holdings after the transaction with Lithium Royalty Corp.

2. We have repaid our investment loan and now TNR Gold is on a solid financial footing. The company is buying back its shares now.

3. Industry insiders are holding stakes in TNR Gold.

4. Our assets are attracting a lot of interest in the industry, now it is time to protect our Company. TNR Gold has adopted the Shareholder Rights Plan.

5. Now it is time to tell our Story and any higher offers from "Mr. Market" will show that we are on the right track to maximising the shareholder value.

6. Potential announcement of stakes in our Company by the industry insiders and their intentions will provide TNR Gold with more recognition and a wider investment audience.

7. "Warren Buffett" in mining who shares My Vision and will be buying a stake in TNR Gold can address all the FUD of "Mr Market."

Learn more about our strategy: TNR Gold - AmeriGold - Shotgun Gold.

“The Company’s strategy with the Shotgun Gold Project is to attract a partnership with one of the major gold mining companies. TNR is actively introducing the project to interested parties. We may be at the beginning of a great discovery. There is a clear path on how to move this project forward using the geological and geophysical research currently available to target drilling to expand the resource and form the basis of a preliminary economic analysis. The next step is to acquire a partner who shares our vision and recognizes the growth potential and value to be added to the Shotgun project over time.”

You can find all the details about TNR Gold on our website and on the links below on my blog. Do your own research. Stay safe and prosper. Join the rEVolution.

This article is for information only and provides publicly available information and my personal Vision and valuation matrix of TNR Gold. I am the largest individual shareholder of our Company. Nothing in this blog post constitutes investment advice, offer or solicitation of the sale of any securities. Please carefully read all our Legal Disclaimers and conduct your own due diligence as always.

Thank you for your support of TNR Gold!

Tesla Nicola rEVolution and Gold.

TNR Gold Investor Presentation - Building The Green Energy Metals Royalty and Gold Company from Kirill Klip

Please visit the TNR Gold website for all updated presentations.

Please read my legal disclaimer. There is NO investment advice on any Kirill Klip feeds and blogs. Always consult a qualified financial adviser before any investment decisions.

Do Your Own Research.