Lascaux Resource Capital LLC

Fees and Compensation
General

Lascaux typically receives compensation from fees based on a percentage of assets under
management, carried interest allocations and certain other fees or expenses related to
transactions, all in accordance with the relevant Governing Documents. In certain
circumstances, the fees payable to Lascaux may be negotiable. All investors and

prospective investors should review the Governing Documents of the Fund in
conjunction with this brochure for complete information on the fees and compensation
payable with respect to the Fund.

Management Fee

Lascaux receives from the Fund an investment management fee that is payable quarterly
in advance. During the investment period, the fee is generally equal to 2% per annum of
the Fund’s aggregate capital commitments. Commencing after the end of the investment
period, on April 27, 2017, the quarterly installment of the management fee will be one
quarter of an annual budget agreed upon by the Limited Partners’ Advisory Committee.
Lascaux may elect to defer or waive all or any portion of any management fees payable
by the Fund. The management fee is calculated and paid in accordance with the Fund’s
Governing Documents.

Carried Interest

A related person of Lascaux, as General Partner of a Fund, will typically receive certain
allocations calculated and charged based on a share of cumulative net profits of the Fund.
The Fund is generally subject to a 20% carried interest allocation, although investors who
participated in the Fund’s initial close will pay only 15%. The carried interest allocation
is generally subject to a 8% cumulative annual preferred rate of return as well as a
“clawback” provision and is calculated and distributed in accordance with the Fund’s
Governing Documents. The limited partners receive all net profits until the cumulative
annual preferred rate of return is distributed. Once the cumulative annual preferred rate
of return has been distributed, the net profits are shared 75% with the General Partner and
25% with the Limited Partner until the General Partner has “caught up” to its 20% share
of cumulative net profits. Thereafter, the net profit is allocated according to the carried
interest allocations.

Other Fees and Expenses

In addition to the fees payable to Lascaux, the Fund may incur certain charges related to
its investment activities, including (but not limited to), third-party legal, auditing,
consulting and accounting fees and expenses (including costs of reports to the Partners,
financial statements, and tax returns); expenses of meetings and costs associated with an
advisory committee and of investors (excluding travel expenses); all expenses associated
with the discovery, diligence, acquisition, holding and disposition of its proposed or
actual portfolio investments, including third-party legal, auditing, consulting and
accounting fees and expenses, travel, insurance, indemnification and other expenses; all
extraordinary expenses (such as litigation); interest on and fees and expenses arising out
of all permitted borrowings made by the Fund; a portion of third-party expenses relating
to unconsummated transactions; all expenses of liquidating the Fund; and any taxes, fees
or other governmental charges levied against the Fund and all expenses incurred in
connection with any tax audit, investigation, settlement or review of the Fund. In
addition, the Fund will bear offering and organizational expenses that are not reimbursed
by Lascaux, as set forth in the Governing Documents.

Other Compensation

From time to time, in connection with investments made by the Fund, Lascaux or its
affiliates or supervised persons may receive a fee or cash compensation from a Portfolio
Company or a proposed Portfolio Company, as well as a director’s fee, a monitoring fee,
or a consulting fee. In addition, Lascaux or a related party may receive a placement fee,
finder’s fee, closing fee or investment banking fee in connection with an investment by
an investor in the Fund or with an investment in a Portfolio Company. To the extent that
Lascaux receives any such compensation, all of such fees will be shared with the Fund
through offsets against the management fee. Investors are requested to refer to the
Governing Documents of the Fund for complete information on the additional
compensation received by Lascaux or its affiliates or supervised persons in connection
with the Fund’s investments.

Performance-Based Fees and Side-by-Side Management
As described in the Fees and Compensation section above, Lascaux and its related
person are entitled to be paid performance-based compensation by the Fund in the form
of carried interest. Lascaux has designed a compensation structure that aligns the
interests of its employees with those of the investors in the Fund. Performance based
compensation may create an incentive for Lascaux to recommend investments that may
be riskier or more speculative than those that would be recommended under a different
fee arrangement. Please refer to the Governing Documents of the Fund for complete
information on the performance-based fee arrangements of the Fund.

Types of Clients
Types of Clients and Investment Vehicles

Lascaux serves as investment manager to the Fund, which operates as a pooled
investment vehicle, as described in the Advisory Business section above. Investors in
the Fund are financially sophisticated individuals and institutional investors. Investors
must be “qualified purchasers” pursuant to Section 3(c)(7) of the Investment Company
Act of 1940.

The General Partner has established a Feeder Fund (“Feeder Fund”) to address certain tax
or regulatory requirements. The Feeder Fund is a limited partner of the Fund and
interests in such Feeder Fund are held by the investors who elected to participate in the
Fund through the Feeder Fund. In November 2013 Lascaux Resource Capital Offshore
Fund I LP was formed as the feeder fund to the Fund. In addition, Lascaux intends to
form special purpose vehicles (collectively, “SPVs”) formed for the purpose of
facilitating certain investments by one or more investors, including the Fund; form other
investment vehicles to invest in parallel with a the Fund for select investors in order to
comply with securities laws or to address tax, legal or regulatory issues (collectively,
“Parallel Funds”); or form one or more investment vehicles for the purpose of managing
co-investments (“Co-Investment Funds”). Investors and prospective investors are
requested to refer to the Governing Documents of the Fund for complete details on any

Feeder Fund, Parallel Fund or Co-Investment Fund established to invest in or alongside
the Fund and the Fund’s ability to make investments through SPVs.

Minimum Investment Requirements

In general, the minimum investment commitment required of an investor to participate in
the Fund is $5,000,000. However, the General Partner of the Fund has discretion to waive
the minimum investment commitment.

Side Letters

The Fund may enter into agreements (‘Side Letters”) with certain limited partners
whereby such limited partner may be subject to terms and conditions that are more
advantageous than those set forth in Governing Documents. The modifications of the
terms and conditions are solely at the discretion of the Fund and may, among other
things, be based on the size of the limited partner’s investment in the Fund, an agreement
by a limited partner to maintain such investment in the Fund for a significant period of
time, or other similar commitment by a limited partner to the Fund.

Methods of Analysis, Investment Strategies and Risk of Loss
Methods of Analysis and Investment Strategies

Lascaux seeks to provide investors a superior risk-adjusted return on capital by targeting
smaller mining companies - a growing yet underserved portion of the mining sector -
with financing to either refinance existing debt, expand production of existing assets, or
to put an asset into production. The strategy is focused on investment sizes below the
target market of the traditional project finance banks, and seeks to provide companies a
non-dilutive alternative to meet their capital requirements.

The strategy aims to have performance dominantly driven on the upside by long mineral
commodity exposure, while having downside protection from (1) the underlying real
asset value of the Portfolio Company’s assets, as well as (2) owning puts against the
mineral commodities the Fund is long. The Principals believe that this strategy provides
investors with an opportunity for portfolio diversification coupled with performance that
should be uncorrelated to stock and bonds, as well as providing some measure of
inflation protection.

Lascaux’s core investment structure is the pre-paid forward with attached marketing
rights (“Pre-Paid Forward Agreement” or “PFA”). With the PFA, the Fund pre-
purchases future production at a discount to the prevailing forward price and material
deliveries amortize the capital investment. In addition, 100% marketing rights typically
associated with the PFA both enhance the yield as well as provide important security
features. The Fund generally receives a senior secured or substantially similar interest in
the mineral property and assets of the company, and will typically get corporate
guarantees and step-in rights as appropriate to permit the removal of management if
necessary. Each investment also may carry up-front fees, some cash interest, and some

amount of equity warrants, options or other yield enhancements.

Upon closing of each PFA, the Fund will be long the units pre-purchased and will
therefore have a long commodity price exposure. To protect against falling commodity
price, the Fund will purchase puts on the material to be delivered under the PFA. These
puts will always have a strike that is in-the-money (above) as to the implied purchase
price of the material, but out-of-the-money (below) as to the forward price of the
material at the time of the closing of each PFA. If the asset under the PFA produces at
the required rate and only put strikes are realized, the PFA is designed to target a mid-
to-high teens rate of return.

Lascaux expects that most of the Fund’s investment opportunities will be sourced
through the extensive network of its Principals. Once identified, Lascaux will evaluate
the viability of an investment from a deal perspective utilizing the industry expertise of
its Principals in the metals and mining space. Lascaux also uses a proprietary calculation
and modeling program for the evaluation of each potential transaction prior to entering
due diligence. Next, Lascaux conducts independent and proprietary due diligence and
extensive research again with the help of its network.

Lascaux will require during due diligence a reserve study, a detailed economic analysis
of production and construction costs, mining permits, local land use agreements and
many other considerations before making an investment. Each transaction is expected to
have a loan to value of approximately 25-35% as per the evaluation of Lascaux.

Certain Material Risks
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