RE ROYALTIES LTD. · This document does not constitute an offer to sell securities of RER or any...

CONFIDENTIAL: Full details of the offering can be found in the Offering Memorandum.

This document is for information purposes only.

RE ROYALTIES LTD.RENEWABLE ENERGY ROYALTIES

June 2018

Investing in a Cleaner Future

2CONFIDENTIAL: Full details of the offering can be found in the Offering Memorandum.


DISCLAIMER

This document contains confidential and proprietary information belonging to RE Royalties Ltd. (collectively “RER” or the

“Company”). The recipient may not photocopy or otherwise reproduce this document or disclose its contents to anyone

other than their authorised representatives without RER’s prior written consent.

This document and the information herein are supplied by RER for use by interested parties to determine the viability of

RER’s proposed business opportunity. This document does not constitute an offer to sell securities of RER or any other

entity and it is not soliciting an offer to buy any such securities. This document is not, nor is it intended to be, an offering

memorandum. While information in this document derived from third parties is obtained from sources which the Company

believes to be reliable, such information is not guaranteed as to its accuracy or completeness. This document may contain

product names, trade names, trademarks and service marks of the Company and of other organizations, all of which are

properties of the respective owners. No representation, warranty or undertaking, expressed or implied, is or will be made

and no responsibility or liability is or will be accepted by the Company or any of its affiliates or associates or their respective

directors, officers, employees, partners, agents, shareholders or advisors as to, or in relation to, the accuracy or

completeness of the information contained herein. Any party reviewing this document should not construe its content as

legal, tax, or investment advice.

This document and the information herein are subject to change at any time without notice. This document includes

projections that are forward-looking and not based on actual operating performance. The forward-looking statements

contained in this presentation constitute management’s current estimates as of the date of this presentation with respect to

the matters covered herein. We expect that these forward-looking statements will change as new information is received and

that actual results will vary, possibly in material ways. While we may elect to update this forward-looking information at any

time, we do not undertake to do so. This document is not to be used for public listing in any country.



WHY WE DO IT

We believe in creating a lasting positive

environmental impact while providing

shareholders with enhanced returns

The market for renewables is

very large and continues

to grow exponentially

We focus on renewable energy

project owner/operators who are

underserved by traditional debt or

equity capital markets



HOW WE DO IT

We are the first to take the

royalty financing model,

well proven in other industries,

and apply it to the

renewable energy sector

Royalty financing provides renewable

energy operators and developers with

financial flexibility to grow without resorting

to either dilution or to asset sales



WHY INVEST

Our returns are fueled by a

simple concept:

THE POWER OF

COMPOUNDING

We allow investors to directly

invest into a portfolio of

renewable energy projects and

earn strong capital returns over the short-to-medium term

and above-market yield over the

long term



PUBLIC LISTING & FINANCING OVERVIEW

Going Public

via RTO(proposed)

• Reverse takeover with Baetis Ventures Ltd. (BATS.P), a TSX-V CPC

• Baetis shareholders will own 8% of combined entity (pre-financing basis)

• RER shareholders will own 92% of combined entity (pre-financing basis)

• Listing on TSX-Venture with the name RE Royalties Ltd.

$10m Equity

Financing

• Issuance of 10 million new common shares at $1.00/share• Post RTO and Financing share float: 27m shares

• Financing may be increased depending on interest

Terms and

Conditions

• Eligibility for RRSP, TFSA, RESP, RRIF

• No hold period upon completion of RTO

Timelines• End June: Shareholder approval

• End July: Financing completion and TSX-V approval

• Mid August: Listing of shares on TSX-V

Management

& Board

• Bernard Tan (CEO), Peter Leighton (COO), Luqman Khan (CFO)

• Marchand Snyman (Chair), Rene Carrier, Stephen Cheeseman,

Gord Fretwell, Jill Leversage, Paul Larkin



5 PILLARS OF A HIGH QUALITY INVESTMENT

Clean

Energy

Stable

Yield

Strong

Returns

High

Growth

• First royalty company in the renewable energy sector

• Investment in proven renewable energy technologies

• Meet growing demand for environmentally sustainable investments

• ~20%+ equity returns (with conservative leverage)

• Re-investment of funds to grow portfolio and compound returns

• Low operating costs

• Predictable, secure cash flows backed by investment grade off-takers

• Based on gross revenues from operational or shovel-ready projects

• Long-live assets

Risk

Mitigation

• Large growing market for renewable energy

• Small to mid-size companies underserved by traditional financiers

• Deep pipeline of projects and strong demand

• Diversified global portfolio from multiple resources

• Secured and collateralized against assets

• Stable jurisdictions



ADVANTAGES OF A ROYALTY COMPANY

Royalty Company Developer Operator

Dividends Yes No Yes

Dividend Rate 8% to 12%

(once model fully deployed)

Nil 4% to 6%

Payout Ratio 30% of free cash flow (FCF) None 60% to 80% of FCF

Reinvestment High

New royalty streams

High

But exposed to development risk

Low to Moderate

In development projects

Operating costs Low

Corporate and transaction

High

Project development costs

Moderate

Manage operating assets

Acquisition /

development capital

Low

Smaller sized investments

High

Construction capital

High

Acquisition capital

Sustaining capital None Yes Yes

Construction capital None Yes Yes

Scalability and

Growth

Highly Flexible

Deals tailored to capital available

Moderate to High

Uneven growth due to project

timeline and capital availability

Low

Uneven growth via acquisition

Technology

diversification

High

Broad based

Low

1 to 2 types

Moderate

2 to 3 types

Jurisdiction

diversification

High

Globally focused

Low

1 to 2 countries

Moderate

2 to 3 countries

Economic Interest Top-line Bottom-line Bottom-line



ACHIEVEMENTS TO DATE

Pioneer in royalty finance for the renewable energy sector

Ownership of royalties from 11 different projects globally

Canada: 1% gross revenue on an operational wind farm (102MW)

USA: 1.2% gross revenue and 10% equity on 4 advanced stage solar projects (332MW)

Europe: 1.2% gross revenue on 3 hydro, 2 solar and 1 wind, all fully operational (39MW)

Average royalty life on transactions completed – 20 years

Average internal rate of return on transactions to date – 34%



LARGE PIPELINE FOR GROWTH

Target 1 Target 2 Target 3 Target 4 Target 5 Target 6

Deal Size $5-15m $30m $6m $10m $20-30m $20-30m

Type Solar portfolio Solar Hydro, Wind

portfolio

Wind Solar

portfolio

Hydro

portfolio

Project

Status

Operational In Construction Operational In Construction Operational &

In Construction

Operational

Location Europe North America Europe North America Asia North America

PPA * / Tariffs Yes Yes Yes Yes Yes Yes

Royalty Life 20 years 20 years 20 years 30 years 20 years 20 years

Reason for

royalty sale

Acquisition

funding

Construction

financing

Acquisition

funding

Development

of asset

pipeline

Need

construction

capital

Repayment of

debt

Status LOI signed,

detailed due

diligence

complete

Negotiating

LOI, detailed

due diligence

underway

LOI signed,

detailed due

diligence

underway

Negotiating

LOI, detailed

due diligence

underway

Due diligence

underway

Due diligence

underway

• PPA = power purchase agreements

Management has identified and in discussion for an additional $100m in potential royalty acquisition opportunities.

As we grow our royalty investment base, we will have access to larger pool and size of acquisition opportunities.



INVESTMENT CRITERIA

1) Strong Protection of Capital

Projects provide sufficient collateral to secure and cover our investment.

Transaction structured to maximize security.

Projects with long-term operational performance and profitability.

2) Near Term Visibility of Cash Flows

Projects have a very clear path to cash flow

Projects generate sufficient margins to service our long-term royalties

Operational assets with long-term power purchase agreements from

credit-worthy counterparties

Shovel ready assets with long-term power purchase agreements

3) Enhanced Risk Adjusted Returns

Generate risk-adjusted internal rates of returns above our long-term financial targets.



CAPITAL STRUCTURE & USE OF PROCEEDS

Common Shares Total

Current RER Shareholders (2) 15,716,420

Current Baetis Shareholders (2) 1,333,333

Financing (10m shares @ $1.00) 10,000,000

CPC Finder Fees (3) 200,000

Post RTO/Financing Shares (1) 27,249,753

Stock Options

Exercisable @ $0.80 1,180,000

Warrants

2-Yr Exercisable @ $0.50 2,000,000

2-Yr Exercisable @ $0.30 (4) 66,667

Total 2,066,667

Use of Proceeds $

New Royalty Acquisitions $ 8,500,000

Finder Fees (@ 6%) 600,000

Bridge Loan repayment (5) 500,000

Working capital 400,000

$ 10,000,000

NOTES & ASSUMPTIONS:

1) Management and Board will own ~23% of the company

2) 7.9 million of common shares are subject to TSX-V escrow

conditions.

3) Condition of reverse takeover with Baetis Ventures

4) Agent warrants from Baetis’ IPO after 3-to-1 roll-back

5) RER currently has a $500k bridge loan which is expected to

be retired in August 2018.



5-YEAR FINANCIAL FORECAST

Note: The pro-forma financial information presented constitutes forward looking information (refer to Disclaimer) and is based on information available to the Company. The pro-forma information is based on certain

assumptions such as the successful completion of the proposed acquisition, availability of capital at the proposed terms, re-investment returns, performance of our investee’s projects and other factors, many of which

may be beyond the Company’s control. Actual results may be materially different from the information presented. Please refer to Filing Statement for additional details.

Notes and Key Assumptions

• Financing assumptions:

• Equity:

• Completion of $10m equity financing in 2018

• $20m in 2019, $30m in 2020, $40m in 2021, $50m in 2022

• Debt:

• Green bonds: $50m in 2019, $50m in 2021, $80m in 2022

• Interest rate of 5%

• Investment, distribution and cost assumptions:

• Dividends commencing in 2019 and increasing by $0.01/year onwards

• Average IRR of royalty re-investment of 13%

• Average inflation rate of 2.1%

• 6% commission on financing

• 27% effective corporate tax rate

2018 2019 2020 2021 2022

Revenues (C$ 000's) 1,955 3,361 7,307 9,813 16,965

EBITDA (C$ 000's) 951 1,829 5,293 7,753 14,856

Net Income (Pre-tax) (C$ 000's) 951 1,829 2,793 5,253 9,856

Shares Outstanding (MM's) 21.4 34.7 51.8 71.7 94

Pre-Tax EPS (C$) 0.04 0.05 0.05 0.07 0.11

Dividend Per Share (C$) 0.00 0.01 0.02 0.03 0.04

Annual Rev Growth % 72% 117% 34% 73%

Annual Net Income Growth % 92% 53% 88% 88%

Annual EPS & Div. Growth % 41% 18% 40% 41%

Assets (C$ 000's) 10,094 79,805 108,821 197,789 327,787

Liabilities (C$ 000's) 0 50,000 50,000 100,000 180,000



FINANCIAL VALUATION METRICS

Note: The pro-forma financial information presented constitutes forward looking information (refer to Disclaimer) and is based on information available to the Company. The pro-forma information is based on certain

assumptions such as the successful completion of the proposed acquisition, availability of capital at the proposed terms, re-investment returns, performance of our investee’s projects and other factors, many of which

may be beyond the Company’s control. Actual results may be materially different from the information presented. Please refer to Filing Statement for additional details.

PRO-FORMA

Free Cash Flow: $ 2.42Per Share (NPV @9% discount rate)

Dividend Discount: $ 2.05Model Per Share (@9% discount rate)

Avg Forward P/E: 18x

Avg P/Cash Flow: 21x

Avg EV/EBITDA: 16x



MANAGEMENT TEAM

Experience

Bernard Tan

Chief Executive Officer

Director

• Founder of RE Royalties

• Former Chief Financial Officer of Hunter Dickinson Inc. (HDI)

• Managed diverse teams in the strategic development and execution of new opportunities for HDI

• Provided financial oversight and governance on HDI’s portfolio of companies (up to $2bn)

• Former CFO of TSX publicly listed entity

• 15+ years experience in corporate finance in resource and technology

• Recipient of Young Mining Leader award from Canadian Institute of Mining, Metallurgy & Petroleum

• Chartered Accountant, MBA (Finance) from McGill, and BComm from UBC

Peter Leighton

Chief Operating Officer

• Co-founder of RE Royalties

• Experienced renewable energy executive with 20+ years of experience in mergers & acquisitions and

project development in the energy sector

• Former President and Chief Operating Officer of Finavera, where he delivered $750 million worth of wind

energy projects from the embryonic stages of development through to commercial operation

• Former Chief Operating Officer of Accenture’s Business Services for Utilities

• Director of Clean Energy B.C. (from 2010 to 2016)

• Director of Health Shared Services of British Columbia

• BSc from Queens, MBA from University of British Columbia

Luqman Khan

Chief Financial Officer

• Financial reporting executive with over 20 years of professional experience in accountancy and business

management.

• Current CFO of a publicly listed TSX-V mineral resource company.

• Chartered professional accountant (CPA, CGA).

• Previously with Ernst and Young in their assurance practice.



BOARD OF DIRECTORS

Experience

Marchand Snyman

Chairman & Director

(Independent)

• Co-founder of RER

• Director and Chief Operating Officer of Hunter Dickinson Inc.

• 20+ years of senior executive experience in global corporate finance, M&A, financing and divestiture activities.

• Chartered Accountant (South Africa)

Stephen Cheeseman

Director (Independent)

• President of Chinook Power, where he identified and developed the 142MW Quality Wind Project.

• Current director of Clean Energy B.C.

• Winner of Canada Clean16 award for his dedication and contribution to sustainability and clean capitalism.

Rene Carrier


• President of Euro-American Capital Corporation, a private investment company. Currently serves as an independent

director on various publicly traded companies.

• Founding director of International Royalty Corp. ("IRC") from 2003 until sale of IRC in 2010 for $700 million

Gord Fretwell


• Formerly a partner in a large Vancouver law firm, Mr. Fretwell has, is currently a partner for a boutique law firm in

Vancouver practicing primarily in the areas of corporate and securities law.

• Founding director of International Royalty Corp. ("IRC") from 2003 until sale of IRC in 2010 for $700 million

Jill Leversage


• 30 years of senior investment banking executive and private equity experience

• Former Managing Director, Corporate & Investment Banking for TD Securities, a global investment bank

• Former Managing Director at Highland West Capital Ltd., a private equity and merchant bank

• Director on various public and private company boards.

• Chartered Business Valuator and a Fellow of the Institute of Chartered Accountants of BC.

Paul Larkin


• President of the New Dawn Group, an investment and financial consulting firm, primarily involved in corporate

finance, merchant banking and administrative management of public companies.

• Founding director, chairman of the audit and special purpose committees of US Geothermal Inc., a successful

NYSE publicly listed renewable energy company.

• Experienced director on various publicly traded companies.



SUMMARY

CONFIDENTIAL: NOT FOR DISTRIBUTION

FOR DISCUSSION PURPOSES ONLY

A HIGH VALUE GROWTH AND

INVESTMENT INCOME OPPORTUNITY

1. Growth with long-term recurring cash flows

2. Strong risk adjusted return on equity

3. Proven royalty business model

4. Predictable and sustainable distribution

5. Capital preservation

6. Early mover advantage

7. Portfolio diversification to reduce risk

8. Experienced management team



Email: [email protected]

Email: [email protected]

15th Floor – 1040 West Georgia St.

Vancouver, B.C. Canada

V6E 4H1

Tel: (1) 778-374-2000

THANK YOU

Please get in touch with us at:



APPENDIX 1

A PARADIGM SHIFT IS HAPPENING

Sources: Bloomberg New Energy Finance, UN Environment, UNEP-Frankfurt School of

Finance & Management

THE RENEWABLES MARKET IS VERY LARGE AND

CONTINUES TO GROW

WHILE COSTS FOR PRODUCING RENEWABLE ENERGY

CONTINUE TO DECLINE

“Global investment in renewable energy edged up 2% in 2017 to $279.8

billion, taking cumulative investment since 2010 to $2.2 trillion, and since

2004 to $2.9 trillion. The latest rise in capital outlays took place in a

context of further falls in the costs of wind and solar that made it possible

to buy megawatts of equipment more cheaply than ever before.”

“A record 157 gigawatts of renewable power were commissioned in 2017,

up from 143GW in 2016 and far out-stripping the 70GW of net fossil fuel

generating capacity added last year. Solar alone accounted for 98GW, or

38% of the net new power capacity coming on stream during 2017.”

“In 2017, costs continued to fall for solar, in particular. The benchmark

levelized cost of electricity for a utility-scale photovoltaic project dropped

to $86 per megawatt-hour, down 15% on a year earlier and 72% since

2009. Some of this was due to a fall in capital costs, some to

improvements in efficiency.”



APPENDIX 1

A PARADIGM SHIFT IS HAPPENING

Sources: Bloomberg New Energy Finance, UN Environment, UNEP-Frankfurt School of Finance & Management

“Investor Survey shows awareness and interest in

sustainable investing continuing to climb steadily –

75% of individual investors and

86% of Millennials are interested in

sustainable investing”- Morgan Stanley Investor Survey

DESPITE THE DEMAND, ACCESS AND

AVAILABILITY FOR INDIVIDUAL INVESTORS

HAVE BEEN LIMITED

89% of investments are made by institutions- Bloomberg New Energy Finance

“In 2017, some $5.7 billion of new investment was raised by

62 clean energy companies and funds on 27 stock markets.

This was the smallest dollar total

since 2012.”

“The NEX, which tracks the performance of 105 mainly clean

energy and energy efficiency stocks,

performed better than the S&P 500 and only slightly less well than the Nasdaq in 2017.”

- UNEP-Frankfurt School of Finance & Management

PUBLIC EQUITY MARKETS HAVE NOT KEPT UP WITH DEMAND



APPENDIX 2

COMPLETED TRANSACTIONSTransaction 1 Transaction 2 Transaction 3

Deal Size $ 1,200,000 $ 3,800,000 $ 1,300,000

Date Closed March 2016 January 2017 February 2018

Location Canada Europe USA

Type 102 MW wind farm 39MW solar, wind, hydro portfolio 332 MW solar portfolio

Project Status Operational Operational Pre-shovel ready

PPA / Tariffs Yes Yes Offer

Royalty Life 20 years 20 years 20 years

Deal Structure Royalty monetization Royalty based participation loan

3-Year Term, 5% interest p.a.

Gross revenue royalty plus

10% equity interest

Royalty % <1% gross revenue royalty 1.2% gross revenue royalty 1.2% gross revenue royalty

10% equity interest

Reason for

royalty sale

Monetizing royalty

to develop new project

Acquisition and

growth capital

Final stage development capital &

refundable deposits

Security Senior secured Senior secured

Sub-ordinated at certain projects

Royalty is first ranking

Royalty / Yr $ 101,000 $ 340,000 $ 300,000

Cash Fl / Life $ 2,130,000 $ 6,900,000 $ 10,300,000

# of Royalties 1 6 4



APPENDIX 3

HOW WE DO IT – A VALUE DRIVEN BUSINESS MODEL

• Royalty business models have been operating successfully for many years in a diverse group of industries such as oil & gas (Prairie Sky), mining (Franco-Nevada), consumer services (Diversified), industrial products (Alaris), agriculture (Input) and restaurants (A&W, Keg).

Proven Business

Model

• Our royalties are revenue based, payable irrespective of underlying profitability. No further capital outlay or operating expenditure incurred by us once royalties are acquired.

Revenue Based

• Our royalties are supported by long-term power purchase agreements or feed-in-tariffs from strong credit-worthy counterparties, providing long-term, predictable cash flows.

• Focus on jurisdictions with strong legal and clean energy frameworks.

Long-Term Cash Flows

• We acquire royalties on operational renewable energy projects or shovel-ready projects. Projects must be long life assets and have a history of operations and revenues. Shovel-ready projects must have permits secured and financing available.

Asset Focus



• Our focus is on public and private operators and developers, where access to capital is constrained and challenging. A royalty financing solution provides a non-dilutive and flexible funding solution that is tailored for each investee’s needs.

Strong Value Proposition

• We focus on commercially proven renewable energy technologies: Solar, Wind, Hydro, Geothermal

• We have a global focus and we transact only in major currencies: USD, CAD, EUR, YEN, GBP

Diversified to Reduce Risk

• Our royalties are secured either through claim on title, inter-creditor agreements, cross-collateralization across an investee’s asset base, general security agreement and corporate guarantees. We maintain step-in rights and require periodic reporting from our investees.

Risk Mitigation

• Emergence and growth of the renewable sector creates opportunity for royalty financing. There is currently not any comparable business model in the renewable energy financing space, allowing for minimal competition, premium project selection and higher margins.

Industry Leader

APPENDIX 3

HOW WE DO IT – A VALUE DRIVEN BUSINESS MODEL



APPENDIX 4

ROYALTY COMPANIES VALUATION

P/CF Comparables

Symbol 2012 2013 2014 2015 2016 2017 Avg.

Wheaton Precious Metals WPM 17.6x 14.2x 18.4x 12.6x 14.4x 14.0x 15.2x

Franco Nevada FNV 26.5x 24.7x 29.2x 30.6x 22.5x 23.0x 26.1x

Royal Gold RGLD 29.8x 20.3x 21.2x 14.0x 15.5x 20.2x 20.2x

Osisko Gold Royalties OR 6.1x 41.2x 25.6x 30.4x 25.8x

Labrador Iron Ore Royalty LIF 42.8x 18.1x 10.5x 10.2x 18.8x 10.4x 18.5x

Sandstorm Gold SSL 22.5x 13.1x 11.4x 10.9x 14.7x 18.9x 15.3x

Pizza Pizza Royalty PZA 16.8x 15.7x 16.3x 15.4x 20.0x 18.1x 17.0x

Boston Pizza Royalties BPF.UN 24.0x 17.1x 17.6x 13.0x 16.4x 18.9x 17.9x

A&W Revenue Royalties AW.UN 15.9x 14.4x 16.0x 15.1x 19.8x 15.6x 16.1x

Alaris Royalty AD 18.8x 18.2x 21.7x 14.3x 11.9x 11.3x 16.0x

Average 23.9x 17.3x 16.8x 17.7x 18.0x 18.1x 18.8x

RE ROYALTIES LTD. · This document does not constitute an offer to sell securities of RER or any...

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