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Outcome Visualization Project as of Oct 22, 2021: Vanstar Mining Res Inc: Nelligan
Project:NelliganLocation:CanadaStage:4-Infill Drilling
Net Interest:20% TCUncapped NSR:0.0%Target Metals:Gold
OV Project ID:1000031OVP Posted:7/9/2021OVP Retired:
Current OV ID:1000084Current OV Confirmed:7/9/2021Visualizer:JK
Vanstar Mining Resources Inc (VSR-V)
ProfileSearchWeb SiteTreeForumSEDARQuoteIPV
Issued
57,600,458
Price
$0.390
Working Capital
$5,301,619
Key People: J. C. St. Amour (CEO), Martin Nicoletti (CFO)
Diluted
62,065,458
Insiders
1.0%
As of
6/30/2021
Visualized Outcome: Vanstar: Nelligan 30,000 tpd OP Scenario
The primary purpose of this OV is to visualize what the Nelligan deposit is worth if it never grows beyond the 43-101 resource estimate of inferred 96,990,000 tonnes at 1.02 g/t gold published on Oct 22, 2019 by IMAGOLD and is put into production as an open pit mine at 30,000 tpd. IAMGOLD is now vested for 75% and has the right to earn 80% by funding all costs through feasibility, and which point it has the right to purchase Vanstar's 20% interest based on an independent valuation which presumably will rely on the feasibility study IMG delivers. Vanstar would retain a 1.5% NSR if IMG purchases the asset. If IMG does not exercise this purchase option, it will carry Vanstar through production, and Vanstar must repay its share of CapEx with 80% of its share of cash flow. A likelier outcome is that IMG will make a friendly takeover bid for Vanstar that will include a spinout of other assets Vanstar has meanwhile acquired. It is not clear when IMG will deliver the first economic study; a 9,500 m drill program was initiated in July 2021 divided between infill drilling the established Renard zone and delineating the western extension to support an updated resource estimate by the end of 2021. The secondary purpose of this OV is to serve as a baseline for visualizing the impact an expansion of the resource, possibly a doubling, would have on the value. Overall this OV is intended to clarify the stage-adjusted fair speculative value range for Vanstar in per share terms reflecting its 20% net interest in Nelligan, so that speculators can distinguish between the fundamental value of Vanstar from the speculative upside of its other earlier stage exploration projects in Quebec.
Source Note: Deposit parameters are based on the 43-101 resource estimate produced by operator IAMGOLD on Oct 22, 2019. Mining scenario is based on Springpole PFS published by First Mining Gold on Jan 20, 2021 and cut off grade assumptions by IMG for Nelligan.
Visualized Outcome Summary: Vanstar: Nelligan 30,000 tpd OP Scenario
Deposit Scenario: 96,960,000 t @ 1.02 g/t Gold
Mining Scenario: Open Pit 30,000 tpd 8.9 yrs, CapEx $720.0 million, SustCapEx $75.0 million, OpEx $19.21/t (USD)
LOM Payable: 2.9 million oz gold
Economic Outcome (USD): Revenue Model at OV designated Metal Prices

Annual AverageLife of Mine (LOM)LOM Stats
Recoverable Revenue:$592,116,698$5,243,071,692$54/t ore Recoverable Value:
   Smelter/Transport Costs:($11,842,334)($104,861,434)2.0% of Recoverable Revenue
Gross Payable Revenue:$580,274,364$5,138,210,25898.0% of Recoverable Revenue
   Royalties:$0$00.0% of Gross Payable Revenue
Net Payable Revenue:$580,274,364$5,138,210,25898.0% of Recoverable Revenue
   Mining Cost:($78,949,500)($699,081,600)36% of OpEx - $7.21/t ore
   Processing Cost:($120,450,000)($1,066,560,000)55% of OpEx - $11.00/t ore
   Other Cost:($10,950,000)($96,960,000)5% of OpEx - $1.00/t ore
   Sustaining Cost:($8,333,333)($75,000,000)4% of OpEx - $0.77/t ore
Total Operating Cost:($218,682,833)($1,937,601,600)38% of Net Payable Revenue - OpEx - $19.98/t ore
Pre-Tax Cash Flow:$361,591,531$3,200,608,65862% of Net Payable Revenue - $33.01/t ore
   Taxes:($103,204,782)($942,631,290)29% of Pre-Tax Cash Flow - $9.72/t ore
After-Tax Cash Flow:$258,386,749$2,257,977,36844% of Net Payable Revenue - $23.29/t ore
Note: Concentrate transport costs, smelter treatment costs and retention are subtracted from recoverable revenue to get gross payable revenue to which the uncapped royalty rate for the project is applied. The annual average of LOM sustaining cost is expensed as an annual operating cost. Annual average figures reflect full production years.
Economic Outcome (USD): Royalty Model for 1% NSR at OV designated Metal Prices
Mine Life:9 yearsStartupNPV 5%NPV 10%NPV 15%
Annual Avg NSR:$5,802,744Now$38,763,548$30,055,271$23,868,488
LOM NSR:$51,382,1032024$33,485,411$22,580,970$15,693,918
Economic Outcome - Discount Rate: 8.0% - CAD AT NPV: $1.0 billion - Poor Speculative Value
Gross Rock Value (USD/t):$59Recoverable Rock Value:$54Payable Rock Value:$53
LOM Net Payable Revenue (USD):$5,138,210,258LOM PT Cash Flow (USD):$3,200,608,658LOM AT Cash Flow (USD):$2,257,977,368
USD Pre-Tax NPV:$1,399,954,472Pre-Tax IRR:48.7%Pre-Tax Payback:2.0
USD After-Tax NPV:$840,557,048After-Tax IRR:38.5%After-Tax Payback:2.0
CAD Fair Spec Value Low:$51,933,817CAD Fair Spec Value High:$103,867,634CAD Implied Project Value:$121,027,643
Price Target if Visualized Outcome delivered by Expl-Dev Cycle without dilution: CAD $3.35
Fair Speculative Value Stock Price Range: CAD $0.17 - $0.33
MSV (Market Cycle S Curve): Market Speculative Value represents the typical market pricing pattern of a new discovery as it moves through its exploration-development cycle. The irrational pricing behavior of the yellow channel contrasts with the fair speculative value of the blue channel as defined by the rational speculation model because during the pre-economic study stages there is great uncertainty about how big the discovery will turn out.
Fair Speculative Value Ladder
USD OV NPVCAD OV NPVExch RateDilutedNet Interest
$840,557,048$1,038,676,3441.235762,065,45820.00%
Project StageUncertainty RangeCAD FSV RangeCAD FSV per Share RangeCAD MSV per Share Range
Grassroots 0.5% - 1.0% $5,193,382 - $10,386,763 $0.02 - $0.03 $0.03 - $0.08
Target Drilling 1.0% - 2.5% $10,386,763 - $25,966,909 $0.03 - $0.08 $0.08 - $0.17
Discovery Delineation 2.5% - 5.0% $25,966,909 - $51,933,817 $0.08 - $0.17 $0.17 - $2.51
Infill & Metallurgy 5% - 10% $51,933,817 - $103,867,634 $0.17 - $0.33 $1.67 - $3.35
PEA 10% - 25% $103,867,634 - $259,669,086 $0.33 - $0.84 $0.84 - $2.51
Prefeasibility 25% - 50% $259,669,086 - $519,338,172 $0.84 - $1.67 $0.84 - $1.67
Permitting & Feasibility 50% - 75% $519,338,172 - $779,007,258 $1.67 - $2.51 $0.84 - $1.67
Construction 75% - 100% $779,007,258 - $1,038,676,344 $2.51 - $3.35 $1.67 - $2.51
Production 100% $1,038,676,344 $3.35 $3.35 - $4.18
Market Speculative Value Stock Price Range: CAD $1.67 - $3.35
Warning: while the market spec value (S-Curve) and fair spec value channels presented in project value terms track the evolving expected ultimate outcome value, when presented in stock price terms the expected stock prices are subject to dilution through future equity financings or project interest farmouts.
Alternative Metal Price Scenarios

Metal 1Metal 2Metal 3Metal 4

Gold


Spot:$1,792 /oz


OV Assigned:$1,792 /oz


Pessimistic:$1,300 /oz


Optimistic:$2,300 /oz


Fantasy:$3,000 /oz


Note: for Metal 1 pessimistic, optimistic and fantasy price scenarios, OV assigned prices are used for Metals 2-4
Economic Outcomes with Alternative Metal Price Scenarios

USD PT NPVUSD PT IRRUSD AT NPVUSD AT IRRAT Payback yrs
Spot:$1,399,954,47248.7%$840,557,04838.5%2.0
OV Assigned:$1,399,954,47248.7%$840,557,04838.5%2.0
Pessimistic:$488,756,17123.8%$262,369,92818.2%3.7
Optimistic:$2,339,656,63972.5%$1,427,139,11856.9%1.5
Fantasy:$3,635,286,967104.3%$2,235,112,48881.5%1.0
Fair Speculative Value for Alternative Metal Price Scenarios
Stage: Infill & Metallurgy - 5.0% - 10.0%

CAD AT NPVCAD Target PriceCAD FSV RangeCAD FSV per Share RangeCAD MSV per Share Range
Spot:$1,038,676,344$3.35$51,933,817 - $103,867,634$0.17 - $0.33$1.67 - $3.35
OV Assigned:$1,038,676,344$3.35$51,933,817 - $103,867,634$0.17 - $0.33$1.67 - $3.35
Pessimistic:$324,210,521$1.04$16,210,526 - $32,421,052$0.05 - $0.10$0.52 - $1.04
Optimistic:$1,763,515,808$5.68$88,175,790 - $176,351,581$0.28 - $0.57$2.84 - $5.68
Fantasy:$2,761,928,501$8.90$138,096,425 - $276,192,850$0.45 - $0.89$4.45 - $8.90
View Detailed Visualized Outcome (KRO Members Only)
Disclaimer: A visualized outcome is one of many possible outcomes for an exploration project as it moves through the 9 stages of the exploration-development cycle from grassroots to a producing mine with failure as an outcome at any point along the way. The range of possible outcomes for the physical nature of a deposit shrinks after delivery of an initial 43-101 resource estimate. While the nature of the deposit constrains the range of mining scenarios, the cost assumptions will vary as the project moves through the feasibility demonstration stages of the cycle, which affects the economic value of the final outcome. This economic value will also vary according to the prices of the metals targeted for extraction which may change during the years it takes for a project to become a mine. An outcome visualization is thus a compilation of best guess assumptions for the key variables that drive the discounted cash flow model, the basis for assigning an economic value to a mine. An OV is not intended as a prediction, but rather as a framework that allows the incorporation of new information generated by the exploration-development cycle for the project into a valuation model on an ongoing, dynamic basis.
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