HNRC Outlines Key 2024 Highlights [PDF Download]

(Houston Natural Resources, 10.Jan.2024) — Houston Natural Resources Corp (OTC: HNRC) with a pending name, symbol and CUSIP change, to Cunningham Natural Resources Corp. (CNRC), outlined an investor presentation for 2024.

Cunningham is focused on traditional oil and gas opportunities and energy transition materials including mining opportunities in copper, lithium, gold, as well as other precious and rare earth metals. This investment focus will be global with sustainability at the core of the strategy.

Traditional Energy

• CNRC owns 100% of Cunningham Energy LLC. Cunningham Energy was founded in 2008 for the purpose of acquiring, exploring, and producing oil and gas in the Appalachian, Illinois, and Williston Basins. Cunningham Energy and its affiliates own interests in approximately 600 wells, 170 of which are re-works with a 98% successful completion rate. The company acquired 30,000 net acres in numerous transactions throughout the Appalachian Basin Acreage acquisition was completed over a 10-year time frame. They acquired and negotiated control of 965,000 net acres in Canada and negotiated a 75% Net Revenue Interest basis with estimated reserves of more than 500M barrels of oil. An independent engineering firm completed an updated evaluation of the oil & gas assets and leases of Cunningham Energy as of December 31st, 2022, is $352 million dollars, assuming a sixty-eight (68) well drilling program is completed (www.cunninghamenergy.com).
  
  
• CNRC has invested in HNR Acquisition Corp (HNRA). On 11 Feb. 2022, HNRA closed its IPO on the NYSE for $86,250,000. HNRA completed a business combination on 15 Nov. 2023 by purchasing all the equity interests in Pogo Resources, LLC and its subsidiary, LH Operating, LLC (collectively “LHO”). HNRA is now an independent oil and natural gas company focused on the acquisition, development, exploration and production of oil and gas properties in the Permian Basin. The Company’s assets include its interest in the Grayburg-Jackson oil field in the prolific Permian Basin in New Mexico. LHO had $20.3mn in revenues generating positive cash flow and $3.9mn of net income for the nine months ended 30 Sep. 2023. As of 30 Sep. 2023, total assets of LHO were $70.4mn (www.hnra-nyse.com)
  
  
• CNRC has acquired a 40% interest in Rhino Energy Pty Ltd. Rhino has a management team with global operational expertise having operated & non operated assets in 27 countries. The team has managed production of +1.7 million boepd. Rhino has assembled a truly world class team that has been involved in some of the most historic oil & gas projects globally over the last 30 years. Rhino is focused on building a material production base through acquisitions in countries and basins that we have a strong track record. Rhino has an initial investment in a Canadian junior energy company currently focused on the development of its interests in the Cold Lake and Wabasca areas of Alberta in Canada. (www.rhinoenergy.com.au)

Energy Transition

• CNRC has a 9% interest in Cunningham Mining Ltd (CML). CML has completed the acquisition of the Placer Claims known as the ‘Nugget Trap Placer Mine” in the British Columbia Mineral Title registry covering 573.7 acres and the accompanying permits and authorizations (“Property”) that is situated within the Skeena Mining Division of British Columbia, Canada in the area known as BC’s Golden Triangle. A recent independent assay, which includes data from a 25-pit test program, indicated an average of over Au 25.54 grams gold per cubic meter of pay dirt as well as meaningful amounts of silver. CML is in the process of permitting for a 15,000 cubic yard per annum pay dirt mining program with the British Columbia Ministry of Mines. CML is developing a unique gold backed token that would provide capital for mining the property (www.cunninghammining.com).
  
  
• CNRC is acquiring a 10% interest in Kharrouba Copper Company, Inc (KCC) with the potential to increase its position over time. Based on the investment being made by HNRC, KCC would have an enterprise value of about US$60mn. KCC is a Canadian company, with growing copper mining and processing operations in the Kingdom of Morocco. KCC commenced operations in 2017 and is currently in the expansion of its operations. Over the next 12-15 months, it plans a further expansion and an extensive drilling campaign to expand its reserve and resource base. KCC has also encountered cobalt in a number of its mines and plans to add cobalt exploration as part of its overall exploration program. KCC has a significant land position totaling some 78,826 acres all offering excellent potential for increasing KCC’s reserve base substantially. KCC’s operations are low cost and expect to generate healthy positive cash flows. Upon completion of the drilling program and updated resource estimate, US$21mn+ of projected annual free cash flow. Copper prices are set to soar more than 75% over the next two years amid mining supply disruptions and higher demand for the metal, fueled by the push for renewable energy. Rising demand driven by the green energy transition and a likely decline in the U.S. dollar in the second half of 2024 will push copper prices higher, according to a report by BMI, a Fitch Solutions research unit.

Proforma

Assumptions
Average $/BB $60.00
Average $/mcf $1.50
Average $/Cu pound $3.80
Initial Mining Program $6.6mn
Initial Drilling program $10mn

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