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Denver Gold Forum September 14-17, 2014 CORPORATE PRESENTATION W W W . R O M A R C O . C O M

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Page 1: CORPORATE PRESENTATION...2014/09/14  · Haile Milestones and Status Report! Milestone / Activity Status 4 State Permits! Draft EIS ! Comment Period ! Final EIS ! Equipment ! Engineering

Denver Gold Forum September 14-17, 2014

CORPORATE PRESENTATION

W W W . R O M A R C O . C O M

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 The  informa-on  in  this  document  has  been  prepared  as  of  August  20,  2014.  Certain  statements  contained  in  this  document  cons-tute  “forward-­‐looking  statements”  within  the  meaning  of  the  United  States  Private  Securi-es  Li-ga-on  Reform  Act  of  1995  and  forward  looking  informa-on  under  the  provisions  of  Canadian  provincial  securi-es  laws.  When  used  in  this  document,  the  words  “an-cipate”,  “expect”,  “es-mate”,  “forecast”,  “will”,  “planned”,  and  similar  expressions  are  intended  to  iden-fy  forward-­‐looking  statements  or  informa-on.    Specifically,  this  presenta-on  contains  forward  looking  statements  regarding  the  results  and  projec-ons  contained  in  the  March  13,  2012  technical  report  of  the    Haile  Gold  project,  including  the  expected  mine  life,  recovery,  capital  costs,  cash  opera-ng  costs  and  other  costs  and  an-cipated  produc-on  of  the  described  open  pit  mine,  the  projected  internal  rate  of  return,  the  projected  payback  period,  the  availability  of  capital  for  development,  sensi-vity  to  metal  prices,  ore  grade,  the  reserve  and  resource  es-mates  on  the  project,  the  financial  analysis,  the  -ming  for  comple-on  of  the  revised  feasibility  study  on  the    Haile  Gold    project,    the  -ming  and  amount  of  future  produc-on,  the  -ming  of  construc-on  of  the  proposed  mine  and  process  facili-es,  capital  and  opera-ng  expenditures,  the  -ming  of  the  receipt    of  permits,  rights  and  authoriza-ons,  communica-ons  with  local  stakeholders  and  community  rela-ons,  availability  of  financing  and  any  and  all  other  -ming,  development,  opera-onal,  financial,  economic,  legal,  regulatory  and  poli-cal  factors  that  may  influence  future  events  or  condi-ons  and  expected  drilling  ac-vi-es.    In  addi-on,  this  presenta-on  also  contains  updated  resource  es-mates  contained  in  the  March  13,  2012  technical  reports.    Scien-fic  and  technical  informa-on  referred  herein  has  been  extracted  from  and  are  hereby  qualified  in  their  en-rety  by  reference  to  the  aforemen-oned  technical  reports  (“Technical  Reports”).    Joshua  Snider,  P.E.,  Thomas  L.  Drielick,  P.E.,  Lee  “Pat”  Gochnour,  M.M.S.A.,  John  Marek,  P.E.  and  Derek  Wi]wer,  P.E.  are  responsible  for  preparing  the  Technical  Reports.    Each  of  the  above  referenced  persons  is  a  “qualified  person”  as  defined  in  Na-onal  Instrument  43-­‐101  —  Standards  of  Disclosure  for  Mineral  Projects.    Such  forward-­‐looking  statements  are  based  on  a  number  of  material  factors  and  assump-ons,  including,  but  not  limited  in  any  manner,  those  disclosed  in  any  another  of  Romarco’s  public  filings,  and  include  the  ul-mate  determina-on  of  mineral  reserves  and  resources,  availability  and  final  receipt  of  required  approvals,  licenses  and  permits,  sufficient  working  capital  to  develop  and  operate  the  proposed  mine,  access  to  adequate  services  and  supplies,  economic  condi-ons,  commodity  prices,  foreign  currency  exchange  rates,  interest  rates,  access  to  capital  and  debt  markets  and  associated  cost  of  funds,  availability  of  a  qualified  work  force,  lack  of  social  opposi-on  and  legal  challenges,  and  the  ul-mate  ability  to  mine,  process  and  sell  mineral  products  on  economically  favorable  terms.  While  Romarco  considers  these  assump-ons  to  be  reasonable  based  on  informa-on  currently  available  to  it,  they  may  prove  to  be  incorrect.  Actual  results  may  vary  from  such  forward-­‐looking  informa-on  for  a  variety  of  reasons,  including  but  not  limited  to  risks  and  uncertain-es  disclosed  in  other  Romarco  filings  at  www.sedar.com.  Forward-­‐looking  statements  are  based  upon  management’s  beliefs,  es-mate  and  opinions  on  the  date  the  statements  are  made  and,  other  than  as  required  by  law,  Romarco  does  not  intend,  and  undertakes  no  obliga-on  to  update  any  forward-­‐looking  informa-on  to  reflect,  among  other  things,  new  informa-on  or  future  events      Cau-onary  Note  to  United  States  Investors  Concerning  Es-mates  of  Measured,  Indicated  and  Inferred  Resources:  Certain  tables  may  use  the  terms  “Measured”,  “Indicated”  and  “Inferred”  Resources.  United  States  investors  are  advised  that  while  such  terms  are  recognized  and  required  by  Canadian  regula-ons,  however,  the  United  States  Securi-es  and  Exchange  Commission  does  not  recognize  them.  “Inferred  Mineral  Resources”  have  a  great  amount  of  uncertainty  as  to  their  existence,  and  as  to  their  economic  and  legal  feasibility.  It  cannot  be  assumed  that  all  or  any  part  of  an  Inferred  Mineral  Resource  will  ever  be  upgraded  to  a  higher  category.  Under  Canadian  rules,  es-mates  of  Inferred  Mineral  Resources  may  not  form  the  basis  of  feasibility  or  other  economic  studies.  United  States  investors  are  cau-oned  not  to  assume  that  all  or  any  part  of  Measured  or  Indicated  Mineral  Resources  will  ever  be  converted  into  Mineral  Reserves.  United  States  investors  are  also  cau-oned  not  to  assume  that  all  or  any  part  of  a  Mineral  Resource  is  economically  or  legally  mineable.    All  figures  are  US$  unless  otherwise  indicated     

Cautionary Statement

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Proven gold mine development, finance, permitting and operations experience

Romarco has the team in place to bring Haile into production

Experienced Board of Directors Strong Management & Technical Team

Leendert Krol, Chairman §  Former Newmont

Diane R. Garrett §  Former Dayton Mining, US Global Investors

James R. Arnold §  Former Freeport, Gold Fields – Richards Award Winner

Don MacDonald §  CFO KGHM International (formerly QuadraFNX), former

NovaGold, DeBeers, Dayton Mining

John Marsden §  Consultant, former Freeport – Richards Award Winner

Patrick Michaels §  Portfolio Manager – Zuri-invest, Switzerland

Gary A. Sugar §  Former RBC Capital Markets

Robert van Doorn §  Former Mundoro, Rio Narcea, Morgan Stanley

Diane R. Garrett, Ph.D., President & CEO §  Former Dayton Mining, US Global Investors

James R. Arnold, Sr. VP & COO §  Former Freeport, Gold Fields – Richards Award Winner

Stan Rideout, Sr. VP & CFO §  Former Phelps Dodge

David Thomas, VP & General Manager

James Berry, Chief Geologist & Regional Exploration Manager §  Former Barrick Brent Anderson, Mine Manager §  Former Quadra, Freeport Mike Gleason, Director of Project Development §  Former Freeport Jim Wickens, Process Manager §  Former Barrick

Johnny Pappas, Director of Environmental Affairs §  Former Freeport

Ramona Schneider, Environmental Manager §  Former Kinross Dan Symons, Vice President, Investor Relations §  Former Renmark Financial

Joe Romagnolo, Vice President, Controller §  Former Centenario Copper, The Molson Companies Limited

STRONG BOARD, MANAGEMENT & TECHNICAL TEAM

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Van Eck

Blackrock

Sun Valley Gold

Franklin Investments

Tocqueville

Oppenheimer

Colonial First State

Norges

JP Morgan

Fidelity

TD

Baker Steel

Mackenzie

CPP

Gabelli

70% Institutional Ownership

4  

TOP

15 S

HA

REH

OLD

ERS

OF OUR SHARES ARE INSTITUTIONALLY

OWNED

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Haile Gold Mine Checks all the Right Boxes ü  Location

ü  Infrastructure

ü  Private Land

ü No royalty

ü  Low operating cost

ü  Low capital cost

ü High grade

ü World class orebody

ü Operating team in place

ü  80% detailed engineering complete

ü  Solid cash position

ü  Strong institutional shareholder base

Permits (4 State Permits Received)

Project Financing

Construction

Production

CAROLINA SLATE BELT

Tennessee

Kentucky Virginia

North Carolina

Georgia

South Carolina

Buzzard

Elm

Hickory

Bayberry

Locust

Russell Mine

Reed Mine Howie Mine

Brewer Mine

Ridgeway Mine Dorn Mine

Bante Mine Tathom Mine

Columbia Mine

Magruder Mine

Haile Mine

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2010 Reserves §  Calculated at $950 gold

§  2 million ounces @ 2.06 g/t gold

$320 million (1) §  One of lowest capital cost gold projects in industry

$379/oz (2)

($347/oz first 5 years)

§  One of lowest operating cost gold projects in industry

2.06 g/t §  One of highest grade open-pit gold projects in industry

* NOTE: As per March 19, 2012 Technical Report (1)  As reported in Q1 MD&A April 30, 2014

(2)  Approximately within Feasibility Study sensitivities of +/- 20% as reported in Q1 MD&A April 30, 2014

INTRODUCTION TO THE

HAILE GOLD MINE PROJECT

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2011 Resources

§  Calculated at $1,200 gold §  4 mm ounces (M&I) @ 1.77 g/t gold §  0.8 mm ounces (Inferred) @ 1.24 g/t gold

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AERIAL OF HAILE

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HAILE GOLD MINE – Mining History

§  First  Gold  rush  before  California  §  Carolinas  led  US  Gold  produc7on  un7l  1848  

§  Second  US  Mint  in  Charlo<e,  NC  §  Original  49’ers  came  from  East  Coast  §  Significant  gold  produc7on  in  80s-­‐90s  §  Mining  part  of  local  history/community    

§  500  ac7ve  mines  in  South  Carolina  today  

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Local Community – Town of Kershaw

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10  Located in Mining Friendly Jurisdiction u Romarco continues to build strong local

relationships and support

u High local unemployment u Romarco buys and hires locally

u 94 employees u  80% local workforce

Ongoing  Community  Involvement  

Strong  Community  Support  

§  Strong  State  and  local  support  for  Haile  ê Drill  permits  received  in  <2  weeks  (650  holes)  

ê No  Federal,  State  or  local  opposi-on  to  date  ê  State  offered  tax  incen-ves  

• $3M  in  annual  savings  • Tax  reduc-on  from  10%  to  4%  

§  PermiOng  ê  Federal  (404)  -­‐  SUBMITTED  

• Wetlands  ê  State  (South  Carolina)    

• Mining  /  opera-ng  permit  –  SUBMITTED  - Water  treatment  permit  - Storm  water  permit  - Air  permit  

• Water  (401)  –  SUBMITTED  

Awards  

From  le(  to  right:  

•  2010  OUTSTANDING  BUSINESS  AWARD  presented  to  HAILE  GOLD  MINE  by  Kershaw  Chamber  of  Commerce  

•  2011  CITIZEN  OF  THE  YEAR  presented  to  DIANE  GARRETT  by  Kershaw  Chamber  of  Commerce  

•  2011  COMMUNITY  CITIZENSHIP  AWARD  presented  to  DAVID  THOMAS  by  Mining  Associa:on  of  South  Carolina    

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COMMUNITY SUPPORT

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STATE PRISON Our Closest Neighbor

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HAILE GOLD MINE PERMITTING

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ALL

BA

SELI

NE

STU

DIE

S R

EVEA

L No threatened or endangered species

No historical sites

No protected fish or wildlife

No impact on local water supplies

No impact on recreation areas

No impact on traffic patterns

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•  404 Wetlands Permit only •  USACE is sole deciding

regulatory body •  All other agencies are

cooperating or commenting agencies only – EPA, US Fish and Wildlife, Catawba Nation, DHEC, SCDNR etc.

ü  Air Quality Permit ü  NPDES Permit ü  Dam Permit ü  Stormwater Construction

Permit •  401 Water Quality

Certification •  Mine Operating Permit •  Others

Federal – USACE* State – DHEC**

* US Army Corps of Engineers���** South Carolina Department of Health and Environmental Control

HGM PERMITTING

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Typical Palustrine Emergent Wetland

WETLANDS AT HAILE PROPERTY

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Typical Palustrine Forested Wetland (inundated)

Non-Relatively Permanent Waters

(intermittent stream channel)

Duckwood (location of Tailings Facility)

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•  Strong balance sheet with approximately $30.5M in cash and no debt(1)

•  Well defined project schedules and clear development milestones

Haile Milestones and Status Report

Milestone / Activity Status

4 State Permits P

Draft EIS P

Comment Period P

Final EIS P

Equipment P

Engineering P

Operating Team P

Power LOI P

Financing

(1) As at July 30, 2014

Project Schedule for EIS

2014 2015 2016

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Final EIS (July 24, 2014)

Remaining State Permits

Record of Decision (EIS) Nov.  2014  

Financing Arranged

Mobilize Equipment    Dec.        2014  

Construction                        

Production

Exploration

CLEAR PLAN TO BRING HAILE INTO PRODUCTION

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2 0 0 8 RESOURCE GROWTH

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PLAN VIEW

CHAMPION SMALL SOUTH PIT LEDBETTER SNAKE

HAILE LONG SECTION

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PLAN VIEW

2 0 0 9

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RESOURCE GROWTH

CHAMPION SMALL SOUTH PIT LEDBETTER SNAKE

HAILE LONG SECTION

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PLAN VIEW

2 0 1 0

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HORSESHOE

CHAMPION SMALL SOUTH PIT LEDBETTER SNAKE

HAILE LONG SECTION

RESOURCE GROWTH

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RESOURCE GROWTH At year end 2011 2 0 1 1

2010 GOLD MINERALIZATION

2011 GOLD MINERALIZATION GROWTH

HAILE LONG SECTION

PLAN VIEW

HORSESHOE

PALOMINO

MUSTANG

CHAMPION SMALL SOUTH PIT LEDBETTER SNAKE

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HORSESHOE

PALOMINO

MUSTANG

CHAMPION SMALL SOUTH PIT LEDBETTER SNAKE

3.5 km

274 m

610 m

DEP

TH

(m

)

HAILE GOLD MINE FEASIBILITY STUDY HIGHLIGHTS

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u  Feasibility Study does not include deep mineralization: Ø  Horseshoe, Mustang, Palomino and Snake Deep deposits

117  m  of  5.5  g/t  *  

70.1  m  of  5.5  g/t  *  

62.5  m  of  9.6  g/t  *  

*  Discovery  hole  at  zone  

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RESOURCES & RESERVES

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OPEN PIT & UNDERGROUND MEASURED + INDICATED RESOURCES AT US$1200 GOLD (1)

METRIC TONNES (000’S)

g/t CONTAINED oz Au (000’s)

MEASURED 36,894 1.79 2,125

INDICATED 34,277 1.74 1,914

MEASURED + INDICATED 71,171 1.77 4,039

INFERRED 20,125 1.24 801

RESERVES AT US$950 GOLD (1)

METRIC TONNES (000’S)

g/t CONTAINED oz Au (000’s)

PROVEN RESERVE 19,592 2.19 1,382

PROBABLE RESERVE 10,917 1.82 636

PROVEN & PROBABLE RESERVE

30,509 2.06 2,018

(1)  From March 13, 2012 Technical Report

2011

2010

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PLANT SITE – DESIGNED FOR EXPANSION

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CRUSHER

SAG BALL MILL

FLOT FINE GRIND

CARBON STRIP

REFINERY

CIL

CN DESTRUCT

MINE SHOP

MILL SHOP

REAGENT

WATER TREATMENT

ADMIN

HAILE GOLD MINE

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Clear Plan to Bring Haile Into Production

Design  Overflow  &  Process  Descrip7on  

§  Conven7onal  opera7on  §  Simple  flowsheet  §  Off-­‐the-­‐shelf  

technology  §  Ability  to  expand  

project  scale  to  include  addi7onal  resource  discoveries  

Design  Overflow   Process  Descrip7on  

§ Robust  “Simple”  Flowsheet   Crush  Æ  Grind  Æ  Flota7on  

§ Proven  Technologies   Regrind  Flot  Con  Æ  Leach  Con  

§ Flexible,  Expandable   Leach  Flot  Tail  Æ  Recover  both  

§ Non-­‐Refractory   CN  Detox  Æ  Tail  Storage  Facility  

§ Off-­‐The-­‐Shelf  Technology   Standard  Carbon  Elu7ons,  EW  

§ No  Long  Lead  Time  Units  Remaining  

§  Approx.  80%  detailed  engineering  complete  §  Opera7ng  team  in  place  

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Near Term, Low Cost Gold Producer  •  Strong  project  economics  with  robust  IRR  and  NPV  at  conserva-ve  gold  prices  ($950  Au)  •  High  grade,  low  cash  cost  opera-on  •  Manageable,  low  cost  capital  requirements  

•  Posi-ve  feasibility  study  does  not  include  •  Horseshoe  zone  •  Snake  Deep  •  West  Ledbe]er  •  West  South  Pit  •  601  •  Inferred  resources  within  US$950  Pit  •  Palomino  zone  

•  7000  tpd  plant  designed  for  14,000  tpd  expansion  

Summary  of  Haile  Feasibility  Study  (US$950  Gold)  

2  P  Gold  Reserves  (‘000  oz)   2,018  Recovery  Rate  (%)   83.7  Net  Recoverable  Gold  (‘000  oz)   1,681  

Annual  Mill  Throughput  (‘000  t)   2,555  

Daily  Mill  Throughput  (tpd)   7,000  Mine  Life  (years)   13.25  Overall  Strip  Ra-o  (waste:ore)   7.2:1  Average  Feed  Grade  to  Mill  (LOM)  (g/t)   2.06  Average  Produc-on  (year  1)  (‘000  oz)   172  

Average  Produc-on  (years  1  -­‐  5)  (‘000  oz)   150  

Cash  Costs  (year  1-­‐5)  (US$/oz)   347  Cash  Costs  (LOM)  (US$/oz)   379  Ini-al  Capital  Expenditures  (US$M)   275.5  Sustaining  Capital  Expenditures  (US$M)   119.2  Net  Present  Value  (5%  discount)  

Pre-­‐Tax  (US$M)   279  Internal  Rate  of  Return  

Pre-­‐Tax  (%)   19.6  

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NPV & IRR Sensitivity to Gold Price

(1) As per February 2011 Feasibility Study included in March 13, 2012 Technical Report filed on March 19, 2012 on sedar.com – based on capital costs of $275 million not updated capital cost of $320 million from December 31, 2011 MD&A

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EQUIPMENT ~ 1/3

CONSTRUCTION ~ 1/3

OTHER ~ 1/3

TOTAL PROJECT $320M

•  +75% of equipment is priced /locked in

•  Mills, haul trucks, shovels, loaders delivered in SC

•  Updated commodity pricing •  $30 million in contingency •  $17 million for inflation

Component of CAPEX $320 million Capital Costs

CAPITAL COSTS BREAKDOWN

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EQUIPMENT IN SOUTH CAROLINA

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FINANCING ALTERNATIVES

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u  Funding Strategy u  Total Project Financing Required = $360-400 million

Ø  $320 (project)+bonding + mitigation + working capital u  Targeting 40-60% debt

Ø  Independent Engineer technical audit completed (recently refreshed)

Ø  Targeting debt commitment Q3 2014 u  Balance in equity

Ø  Upon receipt of permits or when markets present themselves u  Other Options: (lower on the list)

Ø  High yield debt Ø  Convertible debt Ø  Strategic Investor Ø  Royalty Ø  Forward Sale

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FINANCING

u Project Financing Mandate announced July 15, 2014

Ø Lenders: Caterpillar Financial

Macquarie Bank

Société Générale

Ø US$200M senior secured project finance

Ø No hedging requirement

Ø Targeting commitment letter in Q3 2014

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TARGET PRICE BMO $1.30

Clarus $1.25

Cormark $1.25

Euro Pacific Canada $1.25

RBC $1.25

Paradigm $1.20

NBF $1.15

Desjardins $1.10

ANALYST COVERAGE

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(1) As at close on August 29, 2014 (2) Includes 28.5m “in-the-money” options at an average strike price of C$0.65 as of June 30, 2014

Capitalization Summary

CAPITAL STRUCTURE

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Exchange/ Symbol TSX:R

Share Price(1) C$0.84

Shares Outstanding (Basic) 660.4M

FD Shares Outstanding (TSM)(2) 699.7M

Market Capitalization(1) C$554.74

52 Week High / Low(1) C$0.99 / C$0.35

Cash Balance (July 30, 2014) ~US$30.5M

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REGIONAL EXPLORATION

u Current Regional Targets

u  1 in North Carolina

u  3 in South Carolina

u  High Priority list of 11 target areas

pending acquisition

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CAROLINA SLATE BELT

Tennessee

Kentucky Virginia

North Carolina

Georgia

South Carolina

Buzzard

Hickory

Bayberry

Locust Haile Mine

REGIONAL EXPLORATION - NORTH CAROLINA

•  Hickory  –  •  Historical  produc-on  during  

1800s  •  Romarco  has  conducted  Phase  

1  &  2  drilling  (40  holes)  –  May,  2012  

•  HKDH-­‐11-­‐2          3.4m  of  3.3  g/t  •  HKDH-­‐11-­‐3          10.7m  of  4.5  g/t  •  HKDH-­‐12-­‐2          13m  of  3.0  g/t  •  Currently  evalua-ng  

surrounding  proper-es  •  Currently  evalua-ng  proper-es  

and  surface  sampling  throughout  the  Carolina  Terrane  in  North  and  South  Carolina  

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CAROLINA SLATE BELT

Tennessee

Kentucky Virginia

North Carolina

Georgia

South Carolina

Buzzard

Hickory

Bayberry

Locust Haile Mine

REGIONAL EXPLORATION – SOUTH CAROLINA

•  Bayberry – Completed Phase 2 Drill Program (March, 2013)

•  Historical Production during the 1800’s and 1900’s •  Similar host rocks, alteration and mineralization as observed

at Haile •  Romarco has drilled 38 holes (2011, 2012, 2013) •  Approximately 15,800 meters drilled •  RC-2033 13.7m of 2.3 g/t

•  Loblolly – Completed Phase 1 Drill Program (April, 2013)

•  Historic Production during the 1800’s •  Similar host rocks, alteration and mineralization as observed

at Haile •  Romarco has drilled 16 holes ( Nov. 2012 – April, 2013) •  Approximately 8,300 meters drilled

•  Locust – drill ready •  Small historical oxide resource (pre 43-101) •  34 RC and 27 core holes have historically been drilled on

the property •  Historical Reported, highlighted intercepts include:

•  18.3 meters of 3.3 g/t •  65.5 meters of 3.1 g/t •  14.6 meters of 3.2 g/t •  43.9 meters of 2.0 g/t

•  No Drilling by Romarco to date

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W W W . R O M A R C O . C O M

70 University Avenue Suite 1410 Toronto, Ontario M5J 2M4 Tel: 416.367.5500 Fax: 416.367.5505 Email: [email protected]

Dan Symons Vice President, Investor Relations [email protected]

CONTACT INFORMATION