Shorty Creek potential validated by South32

Freegold Ventures 22 March 2019 Update
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Freegold Ventures

Shorty Creek potential validated by South32

Exploration update

Metals & mining

22 March 2019

Price

C$0.06

Market cap

C$12m

C$1.3256/US$

Net cash (US$m) at end September 2018

0.3

Shares in issue (000s)

188,954

Free float

86.3%

Code

FVL

Primary exchange

TSX

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

9.1

(14.3)

(29.4)

Rel (local)

6.3

(24.0)

(31.8)

52-week high/low

C$0.1

C$0.0

Business description

Freegold Ventures’ focus is on copper and gold exploration near Fairbanks, Alaska. It holds both the Golden Summit project (on which a PEA was completed in January 2016) and the Shorty Creek copper–gold porphyry project, where potential by-products include gold, silver, cobalt and tungsten.

Next event

Q4 results

April 2019

Analyst

Charles Gibson

+44 (0)20 3077 5724

Freegold Ventures is a research client of Edison Investment Research Limited

Freegold Ventures has granted South32 (an A$19.0bn market cap major demerged from BHP in 2015) an option to earn up to a 70% interest in Shorty Creek by investing US$30m, of which at least US$10m will be in the form of exploration expenditure. Freegold will remain the operator. However, South32’s (time deferred) option effectively represents a validation of the exploration potential at Shorty Creek and (significantly) allows it to be further explored and validated with no further share dilution to Freegold investors.

Year end

Revenue (US$m)

PBT*
(US$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/16

0.0

(1.0)

(0.7)

0.0

N/A

N/A

12/17

0.0

(0.6)

(0.4)

0.0

N/A

N/A

12/18e

0.0

(0.9)

(0.5)

0.0

N/A

N/A

12/19e

0.0

(0.9)

(0.5)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Shorty Creek valuation alone 6.8–9.6 US cents/share

South32’s commitment of US$30m for a 70% interest in Shorty Creek implies a valuation for the project currently of c US$12.9m, or 6.8 US cents (9.0 Canadian cents) per share. In our recent report Gold stars and black holes, published in January 2019, Edison calculated an average in-situ value for copper resources of US$22.50 per tonne of contained metal. When applied to our estimate of 0.8Mt of contained copper metal at Hill 1835 (see our note Freegold Ventures: Boldly going, published on 20 August 2018), this implies a potential value for Shorty Creek of c US$18.1m, or US$0.096/share (assuming that the resources can be brought to NI 43-101 standards). South32’s implied pre-resource valuation of the project of US$12.9m represents a 29.0% discount to Edison’s resource-stage valuation. However, the exploration programme at Shorty Creek will also be focusing on the outlying areas of the project with the intention of proving up its district scale potential – in which case its ultimate in-situ resource could to far exceed our (order of magnitude) estimate based on drilling to date.

Valuation: 13.1c + 6.8–9.6c for Shorty Creek + upside

In the wake of Freegold’s C$1.2m October fund-raising, we estimate a value to Freegold of 13.1 US cents per share from the development of the Golden Summit project (see our note, Freegold Ventures: Boldly going, published on 20 August 2018). Like Shorty Creek however, Golden Summit is wide open in terms of the geological opportunity that it represents and successful exploration has the potential to increase this valuation materially (eg by 43.5%, to US$0.188/share, if Freegold is able to double its oxide resource to 1.2Moz, thereby supporting a doubling in early-stage production rates).

Shorty Creek option detail

Freegold has granted South32 a four-year option to earn a 70% interest in Shorty Creek for a US$30m commitment. To maintain the option in good standing, South32 is required to contribute minimum expenditures of US$2m in years one and two and US$3m in years three and four (an aggregate investment of US$10m). Freegold will act as the operator during the four-year option period. The year one commitment of US$2m is guaranteed and, subsequently, South32 may elect to exercise its option at any time thereafter by committing US$30m less expenditures to date. If South32 elects to withdraw during the four-year option, the option shall lapse and South32 shall have no further interest in, or claim over, the property.

Provided that all the exploration data and information has been made available by 31 December of each year of the option agreement, South32 will decide within 30 days whether to fund the next tranche of investment. Hypothetically, therefore, South32 could expend US$10m (5.3 US cents, or 7.0 Canadian cents per Freegold share) during the option phase of the project and then decide not to exercise its option and have no claim over the property. At an absolute minimum, it will expend US$2m (1.1 US cents, or 1.4 Canadian cents per Freegold share) and have no claim over the property.

After the subscription funding US$30m has been expended, South32 and Freegold will contribute additional funding pro-rata to their shareholdings (ie in the ratio 70:30).

Recent Shorty Creek exploration

In January, Freegold announced the results of two holes at Hill 1835 (just one of the targets at Shorty Creek). Both intersected broad, consistent copper porphyry mineralisation as well as continuing to define and validate it as a new copper porphyry with significant size potential. Hole SC 18-01 recorded a mineralised interval of 442.2m at a copper equivalent (CuE) grade of 0.42%, including 121.15m at 0.80% CuE. Hole SC 18-02 recorded a mineralised interval of 442.4m at a copper equivalent grade of 0.44%, including 126m at 0.54% CuE.

The results compare to those of earlier drill holes completed by Freegold at Hill 1835, as shown in the Exhibit below:

Exhibit 1: Hill 1835 drill intercept summary

Hole number

From (m)

To (m)

Interval (m)

CuE (%)

Cu (%)

SC15-03

91.4

0.81

0.55

SC16-01

434.5

0.64

0.36

SC16-02

409.5

0.49

0.29

SC17-01

83.0

443.0

360.0

0.42

0.24

SC17-02

77.0

485.0

408.0

0.42

0.27

SC17-03

116.0

362.2

246.2

0.36

0.20

SC17-04

308.5

500.5

192.0

0.25

0.11

SC17-05

209.0

495.3

286.3

0.44

0.21

Averages

303.5

0.47*

0.27*

Source: Freegold Ventures, Edison Investment Research. Note: *Interval weighted.

Note that, in addition to all 10 drill holes encountering mineralisation, all 10 also ended in mineralisation.

Interpretation

In contrast to typical copper–gold mineralisation hitherto encountered in Alaska, Freegold believes that its drilling to date is consistent with having intersected the upper portions of buried porphyry mineralisation at Hill 1835. Regional scale structures often control clusters of porphyry systems, which manifest themselves as magnetic lows owing to magnetite-destructive alteration associated with mineralisation. Primary controls are structural features such as faults, shears, fractures and breccias. Secondary controls are often porous volcanic and/or sedimentary units, bedding plane contacts and unconformities. Breccias provide channel pathways for hydrothermal fluids originating from deeper porphyry copper systems and commonly carry elevated values of gold and silver. Significantly, multiple generations of veins and hydrothermal breccias are common. Evidence in support of this interpretation at Shorty Creek includes the long mineralised intersections, the fact that the project is known to encompass several porphyritic intrusives, which extend approximately 10km in diameter, and the presence of crackled (or crackle) zones, veins, stockworks, breccia pipes and elevated grades of tungsten again at Hill 1835. While virtually undocumented in Alaska to date, mineralised porphyry systems of this scale are not uncommon in large porphyry systems, such as Bingham District (Utah), the Central Mining District (New Mexico), Los Bronces (Chile) and Chuquicamata (also Chile).

Political background

US midterms generally showed Democrat gains, with one exception…

In general, midterm election results at the state level in 2018 tended to mirror results at a national level. Immediately prior to the elections, Republicans had complete control of 26 state governments (ie they controlled the state legislature as well as the governorship), while the Democrats had total control of eight and a further 16 were ‘hung’ in the sense that one party controlled the governorship while the other party had primacy in the legislature. After the midterms, the Republicans controlled 23 state governments, while the Democrats controlled 14 and 13 were ‘hung’.

…being Alaska, albeit still showing its traditional independent mindedness

In Alaska, Republicans won 23 of the 40 seats available in the 2018 elections, while the Democrats won 16 seats and one was taken by a Democratic-aligned independent. However, Republicans were not able to organise a majority in the House owing to defections from the party, with the result that Alaska’s political status stayed as ‘divided’ – as in 2017 to 2018. At the same time, Alaska was one of 36 states that held an election for governor in 2018. The governorship changed hands in eight of the states in which elections occurred, with all but one representing gains for the Democrats, with the single exception being Alaska, which shifted toward the Republicans.

While Republican-leaning politics should not be taken as a guarantee towards developing mining projects, it may reasonably be assumed that they are less constrained by bureaucracy and environmental considerations and certainly less openly hostile to the mining industry than some of their political counterparts. Within this context, it is notable the effect that the change in the presidency had in mobilising the share prices of some of Freegold’s fellow miners in Alaska in 2016, of which Northern Dynasty (which had a project that was otherwise moribund in environmental bureaucracy for many years) is an example:

Exhibit 2: Northern Dynasty share price (C$), January 2016-present

Source: Refinitiv.

Geological background

While not generally thought of as such, Alaska is located on the Pacific’s famed Ring of Fire, which is a nearly continuous series of oceanic trenches, volcanic arcs and volcanic belts that are a direct result of plate tectonics. In the case of Alaska, the breakup of Pangea c 200m years ago mobilised the North American plate, which consequently accreted various terranes onto it as it drifted westwards. The geology of Alaska is typical of that of the North American cordillera and hosts rocks from the Precambrian (ie the Earth’s earliest geological eon) to the present. Owing to the combination of accretion and volcanism, Alaska is, along with the rest of the Ring of Fire and its near neighbour, the Yukon, across the border in Canada, highly prospective and should be thought of in a similar manner to British Columbia, California, Mexico, Columbia, Ecuador, Peru, Chile, Indonesia, Papua New Guinea and the Philippines in terms of their potential mineral endowment and mining opportunities. As a result, historically, the Yukon is famed for the Klondike gold rush in the late nineteenth century around Dawson City, and has played host to White Gold’s recent success in the region as well as Victoria Gold’s Eagle project, while Alaska boasts major deposits such as Pebble, Red Dog, Fort Knox, Pogo, Kensington and Green’s Creek.

An idea of its geological prospectivity may be gained from the fact that Alaska polled third of the world’s mining destinations in the Best Practices Mineral Potential index of Fraser Institute’s annual survey of mining jurisdictions:

Exhibit 3: Fraser Institute’s Policy Mineral Potential index, 2018

Source: Fraser Institute

The Best Practices Mineral Potential index assumes jurisdictions’ policies are based on “best practices” and is designed to rank them based on which region’s geology either “encourages exploration investment” or is “not a deterrent to investment”. Since it assumes a “best practices” policy regime, the index therefore represents as closely as possible survey respondents’ assessment of a jurisdiction’s pure mineral potential.

Exhibit 4: Financial summary

US$000s

2016

2017

2018e

2019e

2020e

2021e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

0

0

0

0

0

0

Cost of Sales

0

0

0

0

0

0

Gross Profit

0

0

0

0

0

0

EBITDA

 

 

(967)

(636)

(915)

(781)

(781)

(781)

Operating Profit (before amort. and except.)

(978)

(645)

(923)

(790)

(790)

(790)

Intangible Amortisation

0

0

0

0

0

0

Exceptionals

14

318

0

0

0

0

Other

21

(16)

(2)

0

0

0

Operating Profit

(942)

(343)

(926)

(790)

(790)

(790)

Net Interest

8

5

(0)

(111)

(518)

(1,981)

Profit Before Tax (norm)

 

 

(970)

(641)

(924)

(901)

(1,307)

(2,770)

Profit Before Tax (FRS 3)

 

 

(935)

(339)

(926)

(901)

(1,307)

(2,770)

Tax

0

0

0

0

0

0

Profit After Tax (norm)

(949)

(657)

(926)

(901)

(1,307)

(2,770)

Profit After Tax (FRS 3)

(935)

(339)

(926)

(901)

(1,307)

(2,770)

Average Number of Shares Outstanding (m)

129.5

152.2

176.5

189.0

189.0

521.7

EPS - normalised (c)

 

 

(0.7)

(0.4)

(0.5)

(0.5)

(0.7)

(0.5)

EPS - normalised and fully diluted (c)

 

(0.7)

(0.4)

(0.4)

(0.4)

(0.5)

(0.5)

EPS - (IFRS) (c)

 

 

(0.7)

(0.2)

(0.5)

(0.5)

(0.7)

(0.5)

Dividend per share (c)

0.0

0.0

0.0

0.0

0.0

0.0

Gross Margin (%)

N/A

N/A

N/A

N/A

N/A

N/A

EBITDA Margin (%)

N/A

N/A

N/A

N/A

N/A

N/A

Operating Margin (before GW and except.) (%)

N/A

N/A

N/A

N/A

N/A

N/A

BALANCE SHEET

Fixed Assets

 

 

34,015

36,765

38,567

41,368

53,370

125,153

Intangible Assets

33,638

36,396

36,396

36,396

36,396

36,396

Tangible Assets

377

369

2,171

4,973

16,975

88,757

Investments

0

0

0

0

0

0

Current Assets

 

 

2,392

898

51

51

51

51

Stocks

0

0

0

0

0

0

Debtors

7

66

0

0

0

0

Cash

2,306

780

0

0

0

0

Other

79

51

51

51

51

51

Current Liabilities

 

 

(650)

(664)

(545)

(545)

(545)

(545)

Creditors

(650)

(664)

(545)

(545)

(545)

(545)

Short term borrowings

0

0

0

0

0

0

Long Term Liabilities

 

 

(835)

(221)

(1,242)

(4,944)

(18,253)

(62,459)

Long term borrowings

0

0

(1,012)

(4,705)

(18,005)

(62,201)

Other long term liabilities

(835)

(221)

(230)

(239)

(249)

(258)

Net Assets

 

 

34,922

36,778

36,832

35,931

34,624

62,201

CASH FLOW

Operating Cash Flow

 

 

(462)

(666)

(828)

(772)

(772)

(772)

Net Interest

8

5

(0)

(111)

(518)

(1,981)

Tax

0

0

0

0

0

0

Capex

(2,464)

(2,827)

(1,810)

(2,810)

(12,010)

(71,791)

Acquisitions/disposals

31

0

0

0

0

0

Financing

4,823

1,963

846

0

0

30,347

Dividends

0

0

0

0

0

0

Net Cash Flow

1,935

(1,525)

(1,792)

(3,693)

(13,300)

(44,196)

Opening net debt/(cash)

 

 

(371)

(2,306)

(780)

1,012

4,705

18,005

HP finance leases initiated

0

0

0

0

0

0

Other

(0)

0

0

0

0

0

Closing net debt/(cash)

 

 

(2,306)

(780)

1,012

4,705

18,005

62,201

Source: Freegold Ventures data, Edison Investment Research

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This report has been commissioned by Freegold Ventures and prepared and issued by Edison, in consideration of a fee payable by Freegold Ventures. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the Edison analyst at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

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New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document (nor will such persons be able to purchase shares in the placing).

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280 High Holborn

London, WC1V 7EE

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New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

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Level 4, Office 1205

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General disclaimer and copyright

This report has been commissioned by Freegold Ventures and prepared and issued by Edison, in consideration of a fee payable by Freegold Ventures. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the Edison analyst at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document (nor will such persons be able to purchase shares in the placing).

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a) (11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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Germany

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United Kingdom

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United States of America

Sydney +61 (0)2 8249 8342

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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