News Releases

Orefinders 2018 Annual Shareholder Letter from the CEO

May 6, 2018

Orefinders 2018 Annual Shareholder Letter from the CEO

 Dated April 24, 2018 and sent to shareholders as a part of Orefinders Annual Report mailing.

Dear Orefinders Shareholder,

The last 12 months have been an eventful time for our Company and we are pleased to offer this update along with our Annual Report mailings. For those able to attend in person, our Annual Meeting will be held at our head office in Toronto (Suite 2500 – 120 Adelaide Street West) on May 24, 2018 at 10AM ET. We encourage all shareholders to join us, where we will present Orefinders’ progress over the last 12 months and answer any questions. For those unable to attend, please refer to the update below and we welcome you to contact us to discuss further.

Orefinders has announced four major catalysts for value creation since the start of 2018. While each milestone was announced in quick succession, the respective planning required lengthy lead times. Despite the mining and metals markets being relatively soft, in particular the gold equity market, we strive to be an active management team focused on delivering value on a per share basis. Our management team and board of directors are also significant shareholders in the company where we think and act like owners when making decisions on behalf of all shareholders.

Below you will find a summary of our recent activity and our plans going forward. Within this mailing you will also find the proxy voting instructions for various management items, including shareholder approval for Power Ore Inc., our battery metals spin off transaction. Management is strongly recommending that this motion be approved, and we appreciate you taking the time to vote.

  1. Power Ore Spin Off

 Orefinders is vending two of the nine properties acquired during the Knight transaction to its spin off company, Power Ore Inc. (“Power Ore”). Orefinders and its shareholders will become significant shareholders vis-à-vis a court approved plan of arrangement for which we are seeking shareholder approval at this year’s Annual Shareholder Meeting and through the proxy vote contained within this mailing.

Power Ore is fully and independently financed with $1,000,000 in private placement subscriptions and has received preliminary approvals from the TSX Venture for a new and independent listing in May 2018.

Orefinders will be vending its Mann Mine (silver-cobalt asset) and MacMurchy property (nickel) to Power Ore in exchange for 11 million shares or about 36% of Power Ore common shares with the remainder being held by investors in the private placement.  Of these 11 million shares, 5.5 million will remain with Orefinders corporately and the remaining 5.5 million shares will be distributed directly to Orefinders’ shareholders at a ratio of 1 share of Power Ore for each 16.4 shares of Orefinders held.

Post listing, Power Ore will look to acquire a series of advanced stage former producing cobalt and nickel battery metals assets with established resources to grow its portfolio and create further value for its shareholders.  After the successful listing of Power Ore on the TSXV, we would encourage Orefinders and Power Ore shareholders to retain their shares as we are hoping for an increase in value upon listing, as well as future value creating opportunities.

Management sees the Power Ore transaction as an opportunity for Orefinders and its shareholders to unlock value in a non-core asset and to provide a free share dividend to its shareholders.  Management sees no downside in this transaction and strongly encourages Orefinders’ shareholders to support this motion by voting ‘Yes’ to the Arrangement resolution.

  1. Mirado Preliminary Economic Assessment

What’s been accomplished over the last 12 months

This PEA’s economics indicate an after-tax internal rate of return (“IRR”) for the project of 158% and a pre-tax undiscounted Net Present Value (“NPV”) of $30.8 million and an  after-tax NPV of $20.5 million at a 5% discount rate.  Payback on capital is reported at 7 months. Assumptions used include an average gold price of US$1,300 per ounce.  The Mirado Project is considered economically viable with the current Mineral Resource Estimate of 559,000 tonnes at an average grade of 2.61 g/t gold for 46,900 ounces of Indicated Mineral Resource and additional Inferred Mineral Resource of 382,000 tonnes at an average grade of 2.66 g/t gold for 32,700 ounces, based on a cut-off grade of 1.0 g/t gold.

Course of Action over the next 12 months

Securing a tolling milling contract with one of the regional mills and completing permitting.

  1. McGarry Mine and Property Acquisition

What’s been accomplished over the last 3 months

Orefinders signed a definitive agreement to acquire the McGarry property, located near Virginiatown, Ontario within the Abitibi Greenstone Belt which spans 2.4km on one of the world’s most prolific gold structures, the Cadillac Larder-Lake Break.  The property encompasses 681 hectares and is comprised of 46 Patented Mining Claims and 5 Mining Licenses of Occupation.

McGarry hosts a NI43-101 indicated resource of 123,000 oz grading 7.7g/t gold (uncut or 112,000 ounces with grades top-cut to 51.4 gpt), and an inferred resource of 30,000 oz. grading 5.3 g/t (uncut or 29,000 ounces with grades top-cut to 51.4 gpt) as per the McGarry resource estimate from 2009. McGarry also has a NI 43-101 Preliminary Economic Assessment, published in 2011, based on the 2009 resource estimate.

McGarry is located east of and immediately adjacent to the Kerr-Addison Mine, which was one of Canada largest gold mines, producing over 12,000,000 ounces of gold over a 58-year period ending in 1996. Adjacent to the west of McGarry is Bonterra Resources’ Bear Lake deposit and Cheminis mine. Bear Lake hosts a historic estimate of 3,750,000 tonnes grading 5.7 g/t (683,000 oz) (inferred) and the Cheminis Deposit contains a historic estimate of indicated resources of 335,000 tonnes at 4.1 g/t (43,800 oz) and inferred resources of 1,391,000 tonnes at 5.2 g/t (233,400 oz).

On site infrastructure at McGarry includes a head frame, shaft compartments, extensive underground workings and stopes, hoist, offices, and fully functional core shack all refurbished over the last ten years.  McGarry is easily accessible with the Trans-Canada Highway running directly through the property.

Course of Action over the next 6 months

Data compilation and the creation of a new geological model.

  1. Knight Project Consolidation

What’s been accomplished over the last 6 months

Orefinders acquired and consolidated a nine property land package from three separate owners in the Abitibi’s Shining Tree district of Ontario. All of the patented leases and mining claims comprising these acquisitions are 100% owned by Orefinders and are adjacent to Tahoe Resources Inc.’s 4 million ounce Juby Gold Project. The properties include former producers in the Minto Mine, Tyrenite Mine, Duggan Mine, Mann Mines, and the MacMurchy, Fawcett, and Corona claims.

Course of Action over the next 6 months

Data compilation and the creation of a new geological model.

  1. Exploration Moneyball – Proprietary Data Analytics

During PDAC 2018 Orefinders announced its ‘Exploration Moneyball’ Program which is a proprietary methodology which utilizes existing data, knowledge of geologic formations and incorporates the use of advanced analytics to improve its chances of exploration and development success. Orefinders is calling this technology platform Exploration Moneyball, and it will process large amounts of private and public geologic data to assist the Company in making data driven decisions in a cost-efficient way.

Orefinders plans to use this platform to develop its existing projects as well as to evaluate new opportunities.

We have received strong encouragement from our shareholders and we are looking forward to hearing from our shareholders vis-à-vis this proxy vote. As always, please do not hesitate to contact me or anyone on the Orefinders team.  Thank you for continued support.

Stephen Stewart

Chief Executive Officer

Orefinders Resources Inc.