To: Public

From: Peter Bell

Date: June 21, 2024

RE: Audio note on 10 slide deck

MP3 file:

https://drive.google.com/file/d/1AvFG9qCavSKo16Z-7z3vOPqjTm6uyU1z/view?usp=drive_link

PDF of 10 Slide Deck:

https://drive.google.com/file/d/1lPJtXiYLeuAzj8IwkBJ1RB37o1V0ecZM/view

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I shared this PDF which is called “10 slide deck for Captain Duff’ on our company data room. As background, this is a pitch deck template from a guy named Guy Kawasaki. He outlines how people should do presentation decks and it's a really useful template that I've used before. I made a first version in March 2023 and updated it in June 2024. There is a bunch of stuff that I kept the same and some small differences, but this is my first time recording an audio note detailing my thinking on these slides.

The first slide is the title page: provide your company name, plus your name, title, address, email, and cell number. I did all that. I even added a date and a QR code to our disclaimers.

The second slide says to describe a problem or opportunity: describe the pain that you're alleviating or the pleasure you're providing. The goal is to change the pulse rate of the investors. I don't know if this will do it, but I say there is an ongoing crisis in Canadian public markets for junior mining stocks. And some of these pubco are caught by a chicken-and-egg problem where no funding meets no field work. These are the same lines that I had in the 2023 and my thinking is that there is an ongoing crisis in the Canadian public markets for junior mining stocks. I don't really know the extent of it, or why it is what it is, or all of the manifestations of it, but my experience of it as an investor and as a Promoter is such that we keep getting more of the same.

I've recently saw some content from the BC RoundUp conference back in 1986 or so when a famous promoter, Robert Dickinson if I recall correctly, was quoted as talking about how this year 1986 was starting off better than last year and how last year 1985 was really, really bad. It's amazing to go back 40 years ago and find people saying some of the exact same things I’ve heard for a decade already myself in some circles. From a meta level, I like to think about situations like that in terms of bagholder quotes. What would a bagholder say and how do I not say that thing? Or do that thing. It doesn't always work out, but that's some of the perspective I like to try to bring to it.

If this industry niche has these systemic problems, then there are going to be a bunch of examples of companies that could be “stranded capital” type scenarios or “failure to launch” scenarios -- there are all kinds of different things that can go wrong and be the source of the reason why there's nothing getting done of any material consequence. I refer to that as a chicken-and-egg problem: which happens first, funding or work? The right answer is probably promotion, based on what seems to work.

That's what I was thinking about when I wrote this slide and that’s why it’s more focused on the pain rather than the pleasure. I haven't gone on about the pleasure of finding a billion dollars of metal for a thousand bucks or something like that because that's not realistic. And there are a bunch of rules for corporate disclosure around how we can describe the upside in a stock promotion scenario like this for a public company. I choose to focus on the pain side rather than the pleasure side. If I was going to add to this slide, then I would add something as a sweetener at the end somehow. This slide doesn't say anything about Kermode -- there's no hand-to-wallet reflex on this slide yet. This is just academic content. I say these two points about an ongoing crisis and an opportunity to fix broken public companies, but I don't say how to fix it so there's something missing in terms of a hook. When I went to edit this slide in June, I thought about jamming those two points into one and trying to articulate what that hook might be. It's not there right now. It starts to get difficult to make small changes that actually benefit a document like this the more you work on it and I was not able to do that yet. But talking about it now helps.

The next slide is slide number three on the value proposition: explain the value of the pain you alleviate or the value of the pleasure you provide. I wrote, what's the delta in market cap between a broken shell versus a healthy pubco? $2 million versus $20 million? This is me trying to talk about 10 bagger upside without getting into grade, tonnage, and 43-101 disclosure. That's complicated. The primary value of the pleasure is, theoretically, is this fundamental aspect of mining exploration where you find metal for a fraction of what it's worth. As soon as you get specific with numbers on the details of that work,it gets very complicated. Talking about a hypothetical shell pubco, in general, is a much easier way to talk about potential upside. And when I wrote this slide back in March 2023, the $2 million versus $20 million seemed reasonable but maybe it's $0.2M two hundred thousand dollar shell and a $200M two hundred million dollar company as the upside scénario? Maybe those numbers have spread further apart since then. My slide says $2M two million fixed up into a $20M twentyy million market cap, but maybe it's $200M two hundred million now? And then I raise this other point on the slide, asking if we can capture this Delta by using different strategy than our competition? Meant to be a leading question or obvious question, but I don't know the answer.

Will people reading this understand that I am trying to explain something by asking questions? Note that all the stuff on this slide has a question mark at the end. That's a bit difficult when the slide's goal is to explain the value of the pleasure you provide. But this is it with regards to the specific speculative opportunity, the pleasure that we are attempting to provide is using a different strategy than our competition. There's a lot of these TSXV companies facing similar circumstance, maybe better or worse. But there are mechanisms on the TSXV that people aren't using very often in the junior mining business.

Maybe it's easier to just say we're gonna find a bunch of metal and that's worth something? I don't know. I'm trying to pitch this to the smartest audience that I can think of. And that audience is not primarily concerned with the valuation of the metal in the ground. It's usually more associated with corporate governance and whether something is “investable”. That means different things to different people, but that's why we get into these broken public companies where the viability of them is in question -- have they been doing anything significant? Why is this company public? This ongoing question, I've been asking since I started as CEO making these recordings talking about the content I was putting out there.

Talking about $2 million as a starting point for a busted shell and $20 million for a healthy one -- that seems like a small amount of money and it probably is small in the grand scheme of capital markets. I hate to think the bigger the lie, the easier it is for people to believe it, but maybe there’s a reason to change those numbers in my slide to a Delta between a broken shell at $0.2M versus $200M! The shell valuations have changed since I first wrote this slide in March 2023. Where are we now? Are we lower? Yes, a lot of the deals are lower. There are others that are higher, whether that’s because cream rises to the top or they did the right kind of marketing. But then we’re not talking about 100x return -- it is a one thousand times increase from $0.2M to $200 million dollars. People might say big percentage, but small magnitude because even $200M is a small amount of money in capital markets. Maybe so, but I think that’s bullish. We know it won't be a thousand times return for any individual buyer because you're talking market cap there, so there's dilution that factors in and complicates things. Also, if you study the history of hundred bagger stocks, the patterns are such that those stocks have huge draw-downs. This means that even in a great stock that goes one hundred to one returns, there could be people who lost money on the stock! It depends when they bought and sold, which depends on their temperament and their ability to snatch defeat from the jaws of Victory.

Slide number four asks about the underlying magic: Describe the technology secret sauce or magic behind your product, the less text and the more diagram schematics and flowcharts the better. If you have a prototype or demo, this is the time to transition to it. If a picture is worth, a thousand words, a prototype is worth one thousand pictures. You can see how this Guy Kawasaki pitch deck template is geared towards technology Venture Capital. The mining exploration Venture Capital world is pretty niche and unusual. For me, the concept of a prototype for us are high grade rocks. If he says a prototype is worth a thousand words, then I say recoverable metal is worth a thousand pictures. Shoutout Chester Millar and his focus on recoverable metal as being something that really matters. The magic behind the Kermode scenario right now is this shares for services with prospectors on their best ground. That's a few keywords strung together that describe basically what we're doing, but there's a lot more to it than that.

There are three crews doing that as on the map. The fox with the hammer in his mouth is Aurum Vena, which is Milo by Cherryville, BC. Then, 911 Exploration Corp. is Justin Deveault and Justin McNutt on Vancouver Island And Gold Range Company LLC is Robert Carrington and his brother down in Nevada. Lots more to say about each of those guys and the different specific recipe we're using with them at each project, but some of the basic parameters are to prioritize high-grade metal at surface in places we can drive to with projects they control cleanly without a bunch of complicated counterparties in jurisdictions that are likely to be realistic about permitting. That’s some of the key phrasing that I like to put out there, but the devil is in the details. We've done +150 YouTube videos with 911 Exploration, we've done maybe 10 with Milo, and we've done zero with Carrington. But Carrington has done two conceptual estimates on live projects we have with him, whereas the other guys haven’t done any. And then Milo's done backyard gravity test work. He hasn't poured dore yet, but he has collected high-grade samples and put them through a jaw, hammer, shaker table. I think the head grade was nine grams gold per tonne and there was three or four grams per tonne in the tails -- so we’re only talking about getting half the gold. Maybe that's all of the gravity recoverable gold, or maybe we can improve? This gets into a whole bunch of technical stuff that is really important and out approach to it can be funny. I laughed when I first saw that half the gold was going to the tailings. I asked, can we improve on that Milo? And the answer is yes, of course. The fun part of working with guys like Milo is that they already ask that kind of intrinsic, obvious question themselves and have answered it. I don't even have to ask him that question because he's already working on it! It's his equipment in his backyard with material from his project -- it’s his passion. That is like a microcosm for situations where we try to work with people who want to show the world what they can do! We want to give those people a chance to do something that they haven't done before. With Carrington, the property option deal terms look very different from our other deals in Canada because we wanted to meet him on his turn. We wanted to show him that we can find creative ways to protect his interests in a way that gives Kermode an opportunity for a big win.

All our deals are designed to treat the property vendors with respect. We don't want to overpay for things, but we also don't want to be so cheap that we're squeezing ourselves out of good opportunities! We have these ongoing relationships with the people who option projects to us because we work with them on field work. We can't afford to be too close with any of our partners at any time because we are building these deals are them. At some point, the deal may grow up where budgets increase and significant amounts of funding up appear that allow other people to come in and replace the current crews to carry the exploration forward, but right now our prospecting crews are absolutely essential because they know their projects better than anyone else and they have the passion to work their own ground. It's my job as CEO of the public company to be the conductor with these different musicians on the stage ready to go.

The next slide five is about the business model: Explain who has your money temporarily in their pockets and how you're going to get it into yours? I wrote, “aggressive options on bullish properties from vendors who can do exploration work on shares for service bases.” And “Unleash the prospectors on their own properties and work to find partners.” This line of thinking is what I was referring to just before on slide four. One important detail to consider is that’s an ongoing process. There are lots of times we could have stopped searching for new projects and said, “We're done. We got it now. We got the best project ever.” Wait a second, what would a bagholder say? I've literally heard people say “best project in the world” and that always gives me pause. Bullish is as bullish does, but baggy is as baggy does too.

Who has your money temporarily in their pockets? To address this question specifically is really difficult because there’s a basic question: what business are you referring to? Are you referring to trying to sell projects to bigger companies that need new discoveries for development potential in the mining business? Or are you talking about the stock promotion business of selling stock to investors: trying to find people to fund the company and buy shares in the aftermarket? If we start saying investors have our money in their pockets and we're going to get their money into our pockets, that's not a story that I like the sound of very much. I don't think those kinds of deals work out the best, in my experience.

I've been facing this question lately because we have this pile of rocks and I see as a litmus test for our entire mining exploration business model: can we find high-grade, dig it up, stack it up, and figure out something productive to do with it. I've been saying since day one of becoming CEO that I want to get high-grade samples into the hands of people who know what to do with them. We've been doing that in 2024 more than ever before and we continue to do more of that, but is it enough? Maybe we need to turn up the volume and contact bigger companies more aggressively?

We've issued a press release saying we have 10 tonnes with specific gravity around 3.3, but we don't have assays on any of the 10 tonnes yet. We have assays of a chip across the spot where it was dug out of and that was 4.4 meters of 4.4% copper. We've selected the material in the stockpile to be more rich in sulphides than that chip sample of 4.4% copper, but we don't know what the stockpile contains. We've had some crazy grades around that area, so we're super interested to like get this in the hands of somebody who can work it! There are not many people I know who can take 10 tonnes of rock.

And don't call it ore! That word implies there's an economic viability of recovery. We don't have any ore and I don't know anything about any ore in any of our projects, but we recently wrote a news release that described historical production from one of the projects and we referred to the tonnage of ore but they asked us to remove that word from the description of the historical activity in the news release! Fine. I'm happy to do anything here at this point to figure out what the rules are for corporate disclosure and follow the rules. I think it's a little murky at times with some of this stuff in Canada and internationally. The mining business is a global business and there are a lot of really important details that get lost in the shuffle by people who are very fast dealing. I move pretty quickly on things myself, so I want to make sure we're not making any mistakes.

One of the most important mistakes is to forget to ring the cash register. What does that mean in our business? Again, it's this question about the business model -- what is it? We've dug 10 tonnes of high-grade material; can we find somebody to take any of it? Is the only person that's going to take any of it going to charge us for lab test work, or is there somebody who's smart enough to take it from us and work with it? We want someone who’s going to ask us where we got it and how much more we can get -- those are the conversations I'm trying to have! I think the best way to seed those conversations is by giving away specimen high-grade samples. And doing it at scale with significant tonnage because it's easy to grab 100 grams of something special, but 10 tonnes is a different story. There's a whole bunch of logistical questions that come into it around how do we get it to the person. Is it international business? What does the government have to say about it? The reality is that the exploration business is a pretty creative business that has a whole bunch of unique challenges depending on local conditions. There’s a reflexive relationship between the local conditions and your approach to them, too.

Again, to think about who are the people who have our money temporarily in our pocket and how are we going to go about getting it out of them? Well, you have to understand that aggressive options on bullish properties with prospecting field work is leading to the word Discovery. I didn't put the word Discovery in here because Discovery isn't a business model. That may be a controversial thing to say. I’m sure I've heard promoters say this company is financing Discovery and that creates value, but what does that mean? Is that correct?

Who has your money in their pocket and how do you get it? Discovery may seem like an answer, but it's not a complete answer. It's really the start of an answer because it's not the discovery itself that generates value. Maybe in some theoretical sense there's a value associated with the metal deposit and the process of discovery allows you to make better and better estimates about the value of the deposit. Is Mister Market able to wake up to what you're doing and assign some value to it? Mister Market is prone to manic moods, so I don't really expect that we should rely on him for his rationality among the junior mining stocks. I think markets are better at pricing securities when the markets are more liquid. The Canadian juniors are very illiquid and prone to wild pricing action.

Who has your money in their pockets? It's a little scary to answer this slide with the content I have there now. It doesn't say Discovery! It doesn't say selling a project to a major! It doesn't say mining the market to fund lifestyle for management. Should any of those be listed on there? Again. My answers to these slides are not perfect, but the text I have up there now is the best answer to this slide I’ve got so far.

Again, slide number five about the business model -- this is really what we're doing right now with this 10 tonnes of rock. We press released this at the end of May and here we are at the end of June -- have we been able to move any of that yet? Do we have any interest from anyone anywhere in any amount of that material, or what? And how do we find somebody who's going to say they want that rock and they want to talk about the future of the project. To me, that's the heart of the mining exploration and development business model. From this perspective, who has our money in their pockets? Well, there could be a few people. It could be somebody that gets this 10 tonnes of material and says, “Great. How much more can you get me? I want to buy it from you.” That would be like an offtake agreement from a metal trader. Or there’s someone who gets the 10 tonnes and says, “Wow, you've got a bunch of copper there. We need to put that into inventory in our project development pipeline.” That’s like a buyout from a mining company. Or it could be just retail investors who say, “Oh, this company's valued at less than one million market cap right now? Wait a second.” Those people are just playing the stock. All three of those are in play. Two of those are directly related to the company balance sheet -- whomever may be buying material or buying the project. The third group, the shareholders, is indirectly related to company’s financial health and performance because the investor sentiment is related to the company’s working capital and access to capital. These companies run on risk capital with equity financing, which means that there are investors who have money in their pockets who are going to be financing the company at some point. But is that the business model? Are they the customers? If the business model of the company is to find people who want to fund drilling and then do resource estimates, then that's not the business model I'm interested in pursuing at this point.

Slide six is about the go-to-market plan: explain how you're going to reach your customer without breaking the bank. Go viral, by the way, is total bullshit? How are you going to reach your customer without breaking the bank? This is the business model topic again. I don't know if I captured it with my text. When I wrote this slide, it felt kind of like a toss away because I see these blocks of repeating text on the slide. Whenever I see repeated text like that, it always makes me think that better be important text! In this case, the text on this slide that I repeat is important. Who are the priority customers? Shareholders, Prospectors, Community -- will they make money? I think that stuff is important. I think that's appropriate phrasing for the kind of conversations we're having. I think all these people care about making money. I think there are other things they care about as well, but I think it helps to start with this point that a mining discovery can be win-win-win. I don't feel like this provides the most authentic answer to how I really feel about this, but in terms of a talking point and content to show on a screen for people to read while I talk to them -- this is something I am comfortable with.

But this slide is missing the story about the 10 tonnes! It's funny because I made this slide on June 11th and the news release about the ten tonnes was at the end of May. That news was out when I was editing this slide deck, but I didn't capture how the 10 tonnes serves as a litmus test for our business model or my approach to the exploration business. That is the primary go-to-market plan for me: moving rocks. Getting into conversations with people where we send them 20 kilograms for testing, for example. We don't have a lot of rocks, but we have a few types of really specific rocks that I think are good rocks where people want them. The best way forward in my opinion is to reach those potential customers. Make products of different types and get it into the hands of people who matter. We don't need to convince a million different customers to buy our rocks -- there may be only one customer! But that one customer who buys the whole project is not on this slide -- they are not the shareholder, not the community, and not the prospectors. How do you reach your customer when you only have one of them? If you can only sell your product once, then that changes how you approach the selling process. This mining exploration business is very different kind of concept than like a lot of tech VC conversations which are based on capturing economies of scale around products or software as a service.

How are you going to reach your customer without breaking the bank? Shares for services to finance the exploration field work that will generate stockpiles of select samples that can be sent out to people who can test and can work with the rocks. That's how we do it. One of the hardest parts is finding the people to send the rocks to! In the past, the biggest challenge was finding the prospectors to work with and which of their projects are top priorities. Now that we've started to have some success finding rocks that are unique, this bigger question has come up: Who do we send them to? I've been surprised how hard that's been. Maybe that's because a lot of that work has been on my shoulders and I'm doing it by using social networking. Maybe it's appropriate to get a lot more focused on moving this rock and setting up commissions for somebody who has a relevant professional skill set? Metals trading is certainly a professional arena with a whole bunch of people who are doing some really serious business! Be careful before signing contracts for offtake with all kinds of covenants and clauses. We get in over our head very quickly. We've focused on creative deals with prospectors who typically don't do a lot of deals with public companies. When we start working with people who are experts in dealing with other public companies or experts in producing rocks, we get into a competitive context that the current team is not experienced with. There's a huge need to build out the team. That’s probably the biggest challenge right now for a go-to-market plan. What do we need to move these rocks? Am I able to do it on my own? How much help do I need and where do I find it? What skill set is appropriate and what temperament? What personality and what location? What kind of compensation structure is appropriate for whomever is able to come in and help with finding partners.

My thinking is the barrier to entry in this business is very low. I saw a picture from somebody driving through rural Zambia in Africa where there's a big picture saying, “WE BUY COPPER” and a phone number. That's the real bush league of metal production. I see that as a meaningful example of competition in the copper business. When metals prices go high with these macro cycles, I believe that an important factor for success is speed off the mark. A lot of these mining scenarios are not fast. Oil and gas or some energy plays like ISR uranium can start relatively simply with the flick of a switch. But mining typically has huge lead times and huge capex. When the global economy is doing weird things and metals prices are making new all-time highs with huge amounts of volatility where the inter-market plumbing isn't working the way it normally does, these are like flashing lights screaming at us to hurry up and give Mister Market some copper! He’s screaming to bring him material. That material will come from lots of different places around the world and I think companies with a sanitized view of the world are missing out on the approach of Ray Dalio focused on hyper-realism. I'm not convinced that all of the stuff I hear from other mining companies is realistic at at all, so I'm trying to focus on that first and foremost. When you apply that thinking to this 10 tonnes of material and ask what do we do with it? How do we actually find companies who will take this stuff from us and deal fairly with us? We don’t want to send it someone who will take it and lie to us about , then go try to stake the claims after we drop the ground. There are all kinds of stories about bad things happening to small companies who try to play with big ones. I'm not pinning my hopes and dreams on some bigger company appearing magically, but I do believe that at the end of the day there is a go-to-market plan where we reach customers without breaking the bank by doing our prospecting work. I choose to believe that this stuff can work. I chose to believe that we have these institutions like the TSX Venture in Canada and this legacy of the mining exploration business in Canada for a reason. Sometimes it's harder than others and maybe that's part of how the industry grows when it comes out of bad times. Again, it's an idea from the first slide about this crisis in the junior mining business and this opportunity to do things differently.

Other companies may try to name the major mining company who's going to buy their project as their primary customer, but I can’t do that yet. I didn't put any of them on this slide on purpose. They may be our one special customer someday, but they're not our customer today! We're working towards having some relationships with them, but they don’t seem to want to talk to us very much. So we are running towards the opportunity to compete with these bigger companies on a global basis in the market for opportunities. I believe we have meaningful opportunities for mining exploration. We do not have any relationships with any of them, so that's a theoretical topic and that's why I've phrased this slide more about people that we actually deal with right now like shareholders, prospectors, and communities. We're already reaching all those people because of the ways we’ve designed our deals. Could we do more for our shareholders? Yes. More for our prospectors? Yes. More for Community? Yes, of course! We could increased the amount of effort that we put into all these things in terms of customer service, but we have to operate within our budgets. I believe that the most important thing is to set the table the right way or build the foundation the right way. A lot of the ways that we've designed these deals is very much meant to put these three groups in a place of power and respect. It’s important to try and build the deal with some integrity around that because the deal doesn't have to be public! None of these mining exploration companies have to be public. When a company is making a profit, someone will want to buy a piece at some price but it’s different with these risk companies that don't make money and just incur losses after losses for their entire existence.

Rather than just focusing on that insular community of junior mining investors, I tried to think a little different here in terms of the go-to-market plan. I don't know if it's working here yet -- I don't know what I'd say about this slide if I had to speak to a group of people. I’d probably emphasize the 10 tonnes again because I do feel that's a litmus test. Would I put that on this slide or keep the slide kind of as it is? Is there's a way to talk about what's on this slide now with the priority customers story and win-win win scenarios, and connect that to the story about the 10 tonnes? That's a good riff and I would like to do that, but then you’re introducing a new customer -- the person who's going to buy the project! How does that new customer compare to the other three? It seems to me that other exploration companies treat those bigger companies as the main priority customer because they run their exploration company as if it was a division of the bigger company, doing the same kind of exploration work that the big company would do. I’m not convinced that’s the right way to go because you’re trying to satisfy someone who might care about you someday -- what about the people you are impacting today?

Slide number seven is about competitive analysis: provide a competitive view of a complete view of the competitive landscape saying that you're more passionate is utterly meaningless.

I wrote a rhetorical question: Discoveries are made by the majors? I wrote, “No.” but that’s a bold statement. It’s probably best to cite work by MinEx Consulting on discovery rates of Tier 1 deposits to answer that question in a useful way. But I wanted to emphasize what Sig Muessig said in his Exploration Canons speech: “decisions and actions of individuals, not their end, not their organizations lead to the discovery hole.” The slide goes on to say there is huge competition for good shareholders and light competition for great prospectors. I think this gives an opportunity for us to creative big incentives for both at the same time.

I have a hard time explaining what this means in this moment, but I do believe there's a way to straddle that world where we treating prospectors really well and treating shareholders really well, too. Someone could say, “Oh Peter, how can you dare say that? All the share issuance you've been doing for field work or property deals -- you call that treating shareholders well? Are you crazy?” That's a complicated conversation that gets into the upside-down nature of the mining exploration business. In a bad year, you lose a half a million and in a good year you lose five million dollars? These companies generate losses. The more exploration work they do, the more losses they incur; the more exploration work they do, the more metal they find in theory. The whole process of generating resource estimates and “salable material” to advance a project is all tied into making losses. The mining exploration business is supposed to function like the research and development arm of the mining business, but I think that's a mess. There are lots of topics here that I don’t understand, but I do believe there's huge competition for good shareholders and light competition for great prospectors. That's been my experience and it’s why my goal is to find ways to treat each of them really well. With the financings that Kermode has done while I am CEO, we try to treat shareholders well in a few ways. For one, I believe that warrants are appropriate for people who finance the company. I believe financings done at the money or at a premium are appropriate, too. Although we can't offer discounts because we've been financing below five cents and TSX Venture does not allow discounts to market price when below five cents. There's a whole bunch of stuff around financings that we can talk about related to how we treat shareholders. For example, printing shares for property deals or exploration work may trigger some people to get upset, but if you compare the quality of projects that we have now against the quality of projects the company had before I got involved then it’s striking. There's been a significant change, and I think it's been a change for the better. I was a shareholder of the deal back when it didn't have anything and I didn't like it. I'm still a shareholder now that it’s got a lot of things and I like it a lot more. I’m biased because I was involved in choosing the projects but there have been major changes and that's why I tried to focus on good shareholders and great prospectors.

Who's not on this slide? The bigger companies or whoever's going to buy the project. I didn't list them in the competitive landscape because they're there somewhere else. I don't know how to describe this in a simple sentence or two, other than to say that they are like sharks lurking in the deep. Or a monster vampire squid. The reality is probably simpler than that -- I don't think they're not really present in our business hardly at all. Maybe I’m missing it, but I just see them touch down once every few years and buy a deal. These big companies have a lot of their deals happening amongst themselves with spin outs, consolidations, and reorganizations. Do they even need these nanocap Canadian exploration companies over the next market cycle? Where are they for our competitive landscape? I don’t see them as directly in competition with us. It is absolutely important for us to have a sense of the heartbeat pace of play among the bigger companies, but the real direct competitive landscape is the other public companies that are doing mining exploration on a similar scale as us. Of course, there's broader competition for investor’s money and attention from other public companies in other lines of businesses and there's a whole macro conversation about who is speculating in risk assets when, where, why, and how.

But I think it’s helpful to focus on other public mining exploration companies, so this slide talks about the competition for great shareholders and the competition for great prospectors. The thing about good shareholders is so important for these companies that are funded by equity financing. It’s so important to have good shareholders when the entire company runs off risk capital. And especially because there are not many of these great shareholders, yet all the companies need them.

I say there is light competition for great prospectors because most of the companies don't even work with prospectors. Most of these companies originate their own project ideas in my experience, and even if they get a project from prospectors they'll typically replace the prospector with a Professional Geologist immediately! I don't want the scientists doing the field work -- I want to see the bush guys leading the charge for early stage exploration work. That's where I define our competitive landscape -- really companies that are doing small annual, spend on early stage projects. Pound for pound -- who's finding more metal in better jurisdictions, faster, for less dilution overall, with a more aggressive work plan, and better momentum? What next?

There's a bunch of stuff on this slide and I don't know exactly how I'd summarize it. Providing a complete review of the landscape is pretty complicated thing to do at the best of times because the mining business has so many twists and turns, but I got this slide to include the word discovery to focus our attention. This question: Are discoveries made by the majors? And that word: Discovery. When I think about competition, I go to that word -- Discovery -- because we are competing with other companies to make a discovery. What's a discovery? That gets complicated and I’m happy for somebody to put their name on a discovery instead of myself. At this point, I do not have the ego trip required to say this is the Peter Bell Project. I feel that a lot of discoveries with the capital D are an ego trip. I’ve seen it with companies that go into production without an economic study and say something about being in production, but it doesn't stick. Or one-hole-wonder exploration stories. There are legal rules on how a company announces production in the NI 43-101 rules: if a company makes a production decision then they have to say in the MD&A that they're going into production or are in production. You don't need to issue an economic study to put something into production. That's a little nuanced detail that I think is important for the to understand the competitive landscape around new producers, but the exploration business is even more chaotic because there’s no language in NI 43-101 rules about when you can say you’ve made a Discovery!

I like to think about how far we can get a project before we have to make that kind of announcement, whether it’s putting something into production in an MD&A or calling it a Discovery. How far can you push a project along if you weren't going to do all the things that companies normally do in the mining exploration business? We have some idea of the different types of juniors and the things that they do, but what aren't they doing? Some diagrams and statistics describing representative examples of the mining exploration business would be useful to flesh out the competitive landscape. Show a few different juniors, what they do, what we do, and how we compare. I don't have the depth of understanding required to pull that out of my brain at this moment and I haven't spent the time and effort required to develop that content, but that is a fun topic to talk about more.

Slide eight is about the management team: describe the key members, your management team board directors Board of advisors, as well as your major investors. It's okay if you have a less than perfect team. If your team was perfect, you wouldn't be pitching. Seriously, eh!

I put the first person as the CFO Matthew Anderson. The next person is myself, Peter Bell, as CEO and director. Then I've got secretary and director, Maxime Lepine. And then I've got independent, directors Tek Manhas and Roger Lewis. I didn't put any shareholder names down there. Our property vendors and prospector crews are pretty major shareholders. I don't have the total number of shares added up all between them. I would guess that the group of three crews, Gold Range, Aurum Vena, and 911 Exploration, are probably the single largest block of stock anywhere that I know of. It's probably between 10-20 percent of the total shares at this time. They do not act in concert. I think they're bullish on me as CEO and I think they like the job the board is doing representing their interests. There are other private shareholders, including one guy who's dead now who was one of the largest shareholders alongside myself. I’m grateful to him for his support and feel compelled to maintain high standards to honour his memory.

A lot of the shares that our partners got for property deals or shares for services for exploration work have been sold into the market. A lot of that stock has come back out and the stock has traded fairly heavily on a regular basis for years. The largest name on the NOBO list is CDS, right? There's a whole bunch of details that I don't know anything about and a bunch of details that are hard to show on a 10 slide deck.

The CFO Matthew Anderson is a new hire this year. He's with Malaspina Consultants Inc, which is a group that does back office work in Vancouver for a bunch of public companies. I'm really grateful for the opportunity to work with them. That's the first time that Kermode had a back office group on the CFO side to help since I become CEO. We've had two CFOs before and they were both independent practitioners, so it's interesting to work with someone who has a bigger team around them and responsibility for more public companies. Maybe that’s like growing up for Kermode to some degree.

It's my first time as a CEO. I've been CEO since August 2021. The Secretary and Director Maxime Lepine. Max is a logger. He’s somebody I've known for 20 years plus. He’s an entrepreneur. It's his first time as a corporate secretary and director of a public company. He does the corporate secretary role, which requires working pretty closely with myself to prepare and process all the paperwork. There's a lot! And then the independent directors named Tek Manhas and Roger Lewis are noteworthy. Tek is from Duncan on Vancouver Island and he's the chair of the audit committee. He's a retired sales guy and local politician. I believe he’s won a seat in the municipal election for District of North Cowichan twice. He's a local institution in Duncan and the south island. He’s somebody that I have respect for and am grateful the opportunity to work with him. He told me once that he bought shares in Kermode years ago off of a radio advertisement, if I recall correctly. It's his first time on the board of a public company as well. He reached out to me and connected in person during my first year on the job as CEO back in 2021. And then he joined the board in 2023. Roger Lewis also joined the board in 2023. Roger is a logger as well who works with Maxime at a logging company in Squamish First Nation. Roger is an entrepreneur and it’s his first time on the board of a public company board of directors. I would love to be able to showcase all of these guys to investors more, but I think that is already happening to some degree with social media. All these guys are pretty active online in terms of social media posting related to natural resource business opportunities. You can debate how much LinkedIn really matters, but I think it matters quite a lot. All these guys are active there and I think that gives people a way to track them. You don’t have to ask me what these guys are like, you can actually track them down and look for yourself. A LinkedIn profile may be a curated representation of what someone is like, but it does provide a simple way to dig in for yourself.

Slide nine is about financial projections: provide a three-year forecast containing not only dollars but key metrics such as customers and conversion rate. Do a bottom up, not top down analysis. You're not going to get one percent of the people in China. It’s funny for Guy Kawasaki to joke that, “you're not going to get one percent of the people in China.” It's kind of like a junior mining investor saying, “you're not going to sell your project to BHP.” Let's be realistic. Maybe you will, but let's not start there because it’s long odds.

My version of financial projections is a little funny. I'm happy to put this one up on a slide and talk over it because the best prediction of the future is the present. I'm not satisfied with the details of this slide because I think it’s unrealistic to project out the current state for the next three years, but it is a useful place to start. Can we just run the scenario of what it looks like if we maintain this current approach? Can we even maintain it and what does that look like? That's where the key items for me are working capital, exploration spending per month, and then equity funding needs or market cap.

There's a bunch of details in this that I would love to unpack with some help. I think it's an interesting exercise to go through this. I do believe it's an unusual pitch to look three years out for a junior mining company in terms of cash flow. The only times I ever hear about that is, “we'll be in production in three years.” Are you in production right now? What is the likelihood of accomplishing your goal? I don’t have experience with that stuff yet, so I focused on having these small working capital positions to keep the company lean and mean -- focus the share, issuance on shares for services to fund exploration. I picked $40,000 a month of work but that’s probably high. Maybe $25,000 is a better number based on our ongoing experience with this strategy. It’s possible to compare the annualized amount of exploration work against market cap to get some estimate of expected dilution.

And this 25% dilution rate for overhead spending is rule of thumb that I think is a useful place to start. How much dilution should the company be targeting on an annual basis and what should it be doing with that money? This hundred thousand dollars is meant to cover the real hard expenses of being a public company. I’ve heard that you could do it for $50,000 but that’s very aggressive. Start with one hundred thousand dollars in annual cash spending and compare that with the current $400,000 market cap.

There’s a lot of dilution in this projection because you've got 25% dilution from the cash financing and additional dilution from the exploration work. If it’s $25,000 per month in exploration spending, then that’s $300,000 per year. Compared with $400,000 market cap, that’s 75% dilution. Combined with the 25% dilution for the equity funding needs, that’s 100% total dilution per year. One thing that is not in here is share count: to maintain the market cap at $400,000 while doubling the share count every year requires the share price to halve. This kind of strategy actually runs at the limit of what is possible on the TSX Venture exchange, which has a minimum share price of $0.005 a half penny. In contrast, the Australian Securities Exchange doesn’t have the same rule on minimum financing price and some of the companies there have much larger numbers of shares than the Canadian companies.

One thing that I don't have in this slide is market cap and share price numbers for future years because that's one of the prohibited representations from the BC Securities Act. They don't want us to make any representation as to what the share price is going to be in the future. For the sake of this slide deck, I want to provide a good financial projection but I cannot risk making inappropriate disclosure. I am not a university professor here, I am the CEO of a public company and that bears a huge amount of responsibility for accurate disclosure. There is a bunch of information or different versions of these projections that I would like to include, but cannot do because of the regulatory requirements. This framework for the financial projections allows you to change the assumption of the market cap in future years, but that gets into forward-looking statements that are prohibited for me. For example, it would be a useful exercise to consider what happens if the share price just stays the same and the market cap increases at the same rate of share issuance. But any of these scenarios depend on assumptions about whether the exploration spending is productive and whether the market supports the work we are doing. I have not seen many people who can do that kind of modelling very well as analysts or investors, but I think these kinds of calculations can get us into the ballpark to understand likely outcomes.

It’s worth mentioning that the projections I have here are not even the bullish scenario. The bullish scenario is something like spending $40,000 on exploration in the first year, then doing $1M in year 2 and $5M in year 3. That’s the typical “bullish scénario” for a mining exploration company where they make a discovery and spend a bunch of money drilling it! You can look at the examples of other public companies -- the ones where the stock went up and the company got sold -- and you can do these financial projections based on their actual performance. What does success looks like? I would love to dig into this one deeper and do a better job explaining what kind of projections we are talking about here.

I think the scénario we have here is ultra bullish because we are talking about a huge amount of prospecting work with high-quality partners working on their own high-quality projects. I believe this is a great way to set a foundation for someone else to make a Discovery -- or what the industry would recognize as a Discovery. I don't know if the industry would get excited about any of the work that these guys ever do on any of these projects, but I believe that they could help move these projects in the right direction quickly. You may need some famous geologists to write the paper on it later, but if these guys can do the prep work on exploration targets then that’s money well spent. I think the best projects always deserve more prospecting. Mister Market may not be as bullish as I am on the value of the prospecting we've been doing at Kermode, but I get to see very closely up how all the work gets done and I am impressed by the productivity of the work. I compare it with what I see other companies doing and what I know other service providers charge. I don't have a huge amount of industry experience, but I have some experience as an investor and I think that perspective is absolutely essential to leadership for mining exploration companies.

Is this some kind of “evergreen” business model where the company continues to do ongoing prospecting even longer than these financial projections? Would it be a good idea to maintain this approach for 10 years or more? Kermode was a public company for 25 years before I got involved with it as CEO and from what I can tell it had a pretty similar strategy for most of those 25 years, which was to keep pretty quiet. The former management may not have been willing to put that down as their financial projections -- their projections may have been a plan to get really busy and make a discovery and everybody's going to make a bunch of money but that wasn't the reality. Let's let's go with the reality as it is right now and do projections based on that.

There's a whole bunch of stuff to unpack in this slide. As I talk about it now, I don't know if it's helpful the way it is. I think that it's not problematic in terms of the type of disclosure -- I don't think there's anything offside in here. I think this slide could quickly become offside if I start putting share counts and market caps for future years. I think investors would benefit from detailed discussion of those parameters, but I'm not comfortable putting that stuff in a slide deck without careful legal review! One of the challenges of this 10 slide deck template is that the questions are so simple that it can be hard to answer them directly. I have to come up with some complicated answer to do it within the letter of the law, but that’s not entirely satisfactory within the spirit of the pitch deck template. Maybe I need to restate the question or find some other way to explore this topic. There's a lot of meat on the bone here and I just don't know how to get at it.

One thing that I would point out about this slide is that it really focuses on some of the main important things, which is the amount of exploration work getting done and the amount of financings that are happening. I think that those are key things. Overhead corporate spending is tied in with that, too. Market cap, total exploration, and corporate spending are three numbers that I think about for all exploration companies and they are building blocks for these kinds of projections.

Slide 10 is about the current status and timeline: explain the current status of your product. What the next version looks like, and how you'll use the money you're trying to raise.

This is an important slide with so much nuance. There is so much detail we could provide, yet the audience typically wants to make an impulsive decision based on type 1 thinking. You have to have the depth of understanding from type 2 thinking, but you have to present it in a way that's going to stimulate somebody's hand-to-wallet reflex. I kept it basically the same as the prior version from March 2023 because I think we are still in the build-out phase.

The current product, “KLM 1.0” has a weak working capital position and is testing the concept of partnerships with prospectors to do work unde rshares for services agreements. This is what we had back in March 2023. And it's what we have today. We're still doing the same thing. We're still in this testing phase. I think that the results are showing progress and that it deserves to be maintained, but we'll see what Mister Market says! Then I tried to say “Product KLM 2.0” will require better funding to allow for better work with more, better prospecting partners. That's what I that's what I want to do -- I want to do more projects with more better partners in more places. Maybe I'm wrong and that that strategy is inappropriate -- maybe it would be better to focus and pick one thing. But I believe the risk in any of these one things is so high that it's better for us to attempt to do as many projects as possible while maintaining high standards for all of them. I think it’s important to be as aggressive as possible in all aspects. We want to push the projects we have as far as we can, but also bring on new ones and build new teams who can run in parallel. Can the stock take it? Do the guys want the paper? If we get five crews doing shares-for-services and they're tripping over each other to sell, then it will be difficult to maintain a strong bid in the market. There can be negative feedback loops from this stuff, but maybe there's also potential for positive feedback in scenarios where the share price is going up. Imagine a scénario where the prospectors have this wealth effect and decide they are not going to sell stock because they don't need additional cash to maintain their work programs; there could be less selling in a rising market while we maintain our fundamental rate of activity. There is a version of the world where KLM 2.0 is doing more work with better partners on better projects and I think better funding is a big part of that. I talk to investors who don't want to pay auditor fees and I get it -- I want to pay for assay fees or something that's going to generate a news release and potentially move the stock! But there are these hard cash costs to running a public company. I think better funding in the primary market to kind of cover these hard expenses is important and that's why I built the financial projections around these costs. Start with the basics of the costs to maintain our current approach. And then let’s consider better funding in the aftermarket, too. I think better funding in the secondary market would have a big impact because that’s where you get a potential positive feedback loop as share price goes up and prospectors feel like they don't have to sell as much. As there's less paper coming out, it is easier for the uptrend to continue as work continues. I haven’t seen any other deals achieve that kind of virtuous circle, but that’s mainly because I’ve never seen any other companies use shares-for-services to finance exploration work as aggressively as Kermode has done.

The current status is what we're doing right now. The next version is about better funding. One thing I don’t have in this slide is to describe how we’re going to use the money we’re trying to raise. The short answer is that we're trying to raise money in the primary market to fund corporate expenses, like auditor fees. And then we're also trying to raise money for the secondary market to bring bids into the trading market. That bidding and buying in the secondary market will directly finance prospecting work when you’re buying shares from them and putting cash into the prospector's pocket. Sometimes you're buying from other people who are in the market and there is an indirect purchase off the prospectors. On any given day, the prospectors might sell a bunch of stock and that gets eaten up by algorithmic traders on the ATS or various market players. You may not be part of that trading when you buy stock on another day, but if the prospectors sold it at the bid at a penny and a half and then you buy it in the market at two cents, then some market makers is picking up a half penny in margin. That indirectly helps the prospectors by encouraging market maker to play in the stock. There's an ecosystem effect that is a little hard for me to articulate in a few words on a slide, which is why it's not up on that slide. But there is a very clear answer as to how we’ll use the money we’re trying to raise.

And this ties in to the financial projections slide, too. Imagine trying to raise a million dollars at a $400,000 market cap. Talking about more than 100% dilution at one time? Believe it or not, I try to minimize the dilution at any time. Rather than doing a deal with 100% dilution in an instant, I try to talk about 25% dilution against market cap for corporate expenses. We do get up past 100% dilution in that project, but the timing is different. When a company does 100% dilution on a financing, all those shares get printed that day and they're all free trading four months later. Plus there are warrants. When a company does 100% dilution by shares for services to exploration service providers, it’s more of a drip strategy. You only print shares after the work gets done on a monthly or quarterly basis. Each round of share issuance has a four month old. And there are no warrants. There are big differences between incurring 100% dilution on an annualized basis from one financing versus including 100% dilution from shares for services, over a year. Understanding that stuff is intrinsic to understanding Kermode and the strategy we have now.

And we can get really specific about use of proceeds with the prospectors, too. For example, some of the prospectors will post online about what they are doing with the money they got from selling shares. If they sold fifteen thousand dollars worth of stock, then they could post online that they are using half for taxes and the other half is to buy a new drill. There are a lot of different conversations that that are happening on an ongoing basis organically because we have this over-arching strategy to turn our partners loose. We want them to talk about the deal and their role in it in a transparent way; they cannot do investor relations work, but they can representing their own business interests. We're working with people that we want to continue to work with and that we recommend other people work with. It easier for me to recommend them to other people when they are already representing themselves professionally. And these online communities are important because they are typically the place where we are finding these opportunities in the first place! The community of stakeholders around Kermode is very small, so it’s important to recognize that transparent communication is essential for trust.

And then slide number 11 is a cautionary note and a link. I'd like to change that link to a Bitly instead. Now it's just a hyperlink and that link won’t work if you don't have internet or if the deck gets printed on paper. I would change that to a short link that points to relevant disclaimers.

I'm going to turn this off now. Thanks very much. I hope the recording works okay. This is my first time using the new recording app on the Google Pixel. I used the one on the older Pixel a bunch and it worked pretty well. I'm grateful for the opportunity to use this new phone. I can see the grammar is a little off depending on how I speak -- if I stop to think then the computer has a hard time tracking my sentences. I'll edit the text like I did with all the other recordings I’ve done like this since I became CEO. I'll make the text available and I'll make the recording available to you. Sorry if there's any background noise. Sorry for taking so long to walk myself through all this stuff, but I wanted to do an explanation of what that 10 Slide Deck is all about and why I made it the way I did. Hopefully some of this content was interesting to you. I am keen to do more if anybody listening is a marketing expert or knows someone who can help me out then please reach out! Thanks, goodbye.

EOM.