January 20, 2017

Report #2Cobalt-Copper-Nickel-Chromium-Molybdenum-Vanadium-Silver in Labrador, Canada

Cobalt Crunch TimeApparently, there is no shortage of lithium development projects worldwide, but there is a shortage of lithium processing capacities.

In case of the other battery-critical element, cobalt, there is a shortage of development projects especially in safe jurisdictions. Some 65% of global cobalt production comes from the “Democratic Republic” of the Congo, an extremely political unstable country with deeply-rooted corruption, where approximately 20% of the nation’s cobalt output originates from unregulated, illegal artisanal miners, of which an estimated 40,000 miners are children according to UNICEF. James West recently explained:

“Auto makers need cobalt that is not mined artisanally because the supply chain gets audited. So the hot commodity is to find non-Congolese cobalt sulphate and nickel sulphate.”

Andrew Miller from Benchmark said:

“In many ways, the cobalt industry has the most fragile supply structure of all battery raw materials.”

In 2014, Tesla pledged to use only North American resources for its

battery production at its Gigafactory and has also claimed to stop sourcing its cobalt from the Philippines due to environmental concerns, which will be a future issue for cobalt as demand rises.

The cobalt market has been gaining momentum both in price and global awareness about the precariously escalating supply-demand metrics. Cobalt is about to become the next “big thing”, a hype that has unique fundamental ingredients to outshine the lithium boom. MetalBulletin recently noted:

“Cobalt prices continued to surge this week as stocks remained in tight hands amid anticipations of further investor-fuelled price rises.”

No wonder that Tesla’s big kahuna, Elon Musk, has started to knock on cobalt doors in the Western World to offer offtake agreements. However, cobalt developers are in a much stronger negotiating position than mighty Musk has previously thought. This is somewhat in stark contrast to the lithium space and shows quite plainly that the cobalt boom will be different from lithium. It will be pivotal, for Tesla and all the others trying to jump on the bandwagon of global electrification. No cobalt, no Tesla?

Company Details

King‘s Bay Gold Corp.Suite 1450 – 789 West Pender StreetVancouver, B.C. V6C 1H2 CanadaPhone: +1 604 681 1568 Email: brad@kingsbayres.comwww.kingsbayres.com

Shares Issued & Outstanding: 40,806,423

Canadian Symbol (TSX.V): KBGCurrent Price: $0.11 CAD (01/19/2017)Market Capitalization: $5 million CAD

German Symbol / WKN: KGB1 / A2AN0E Current Price: €0.073 EUR (01/19/2017)Market Capitalization: €3 million EUR

Chart Canada (TSX.V)

Chart Germany (Frankfurt)

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he current battery of a Tesla Model S includes about 23 kg of cobalt, that´s up to 60% cobalt

by weight. Already today, battery usage accounts for almost half of total cobalt demand. By 2020, cobalt use in battery applications alone is expected to be greater than the entire world market for refined cobalt in 2015. About 97% of global cobalt supply comes as a by-product. According to CRU, 60% of current cobalt production comes from copper mining, 38% from nickel operations and only 2% from primary cobalt mines in Morocco and Uganda. Last year, Freeport McMoRan and Lundin sold its stakes in the Tenke Fungurume Mine in Congo, one of the world´s largest known cobalt deposits, to China Molybdenum.

James West recently spoke to Robert Friedland from Ivanhoe Mines Ltd., who had the following story to share:

“Elon came to me because we have a nickel sulphate and cobalt sulphate operation in Australia, not the Congo,” he said. “And Elon said ‘I’ve got the world’s biggest battery factory, so I want to buy your nickel and your cobalt at the current metal price for 10 years, because I’m the biggest buyer.’ “

So we told Elon Musk, you know, Elon, that’s interesting. We’ll think about it. And then two months later we went back to him and said “Elon, you’re totally screwed. The Germans are building a gigafactory twice as big as yours, the Chinese are building four of them bigger than yours, the Japanese are building two and the Koreans are building one. So unless you’re willing to pay to buy our cobalt and our nickel at whatever the price may be in the future, you’re not going to be able to build any batteries in your own gigafactory and your whole company is going out of business, and we’re going to make money shorting your stock.”

Researching cobalt projects around the world and particularly in North America, Rockstone has found the Lynx Lake Copper-Cobalt Project from King’s Bay Gold Corp. being one of the best early-stage projects, with a real chance

of making a significant discovery with a drill program. Generally, cobalt grades of 0.5% are considered world-class.

Although surface grades are not compar-able to resources, reserves or production grades, King’s Bay’s grab samples of 0.94% cobalt, 1.39% copper, 0.21% nickel, 0.23% vanadium, 0.39% molyb-denum, 0.0112% bismuth and 6.5

g/t silver are an indication of what the upcoming drill program may discover.

With so much interest being garnered in the cobalt sector the company has been feverishly working to advance its Lynx Lake Copper-Cobalt Property in Labrador. Below is a list of milestones that King’s Bay has completed in the first 20 days of 2017.

TReport #2 | King‘s Bay Gold Corp.

Surface sampling on the Lynx Lake Property returned high grades of cobalt and copper.

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On January 3, the company closed a financing with total proceeds of $938,753 CAD.

On January 11, the permit for an airborne electromagnetic (“EM”) geophysics survey was received.

On January 17, the company increased the Lynx Lake Copper-Cobalt Property land package from 20 to 240 km2 in order to adequately cover the geological structures and geophysical signatures of interest.

On January 19, the closing of the Lynx Lake Property acquisition was announced.

The next steps for King’s Bay will be the completion the airborne survey and evaluation of the data for high priority drilling targets in the spring. The company will be looking to expand its holdings in the cobalt sector through potential acquistions and or joint ventures.

Historical Timeline Lynx Lake Copper-Cobalt Property

This survey will be strategically placed within the newly expanded land area in order to explain some of the EM anom-alies that have been discovered during surficial reconnaissance. Government regional low resolution residual mag-netic surveys and preliminary handheld electromagnetic surveys done by local prospectors have shown strong conduct-ors beneath the overburden, and provide incentive to explore the area further for additional subsurface mineralization.

Prior to 2008, the property was deemed too remote and as such remained virtually unexplored. In 2008, the Department of Transportation constructed the new Trans-Labrador Highway, which now runs through the property, making it easily accessible. During blasting for road aggregate on the property in the same year, disseminated and massive sulphide mineralization was discovered.

In 2009, local prospectors sampled and assayed the aggregate quarry on the eastern portion of the property and assayed up to 0.94% cobalt, 1.39% copper, 0.21% nickel and 6.5 g/t silver.

Report #2 | King‘s Bay Gold Corp.

Above map shows the The Lynx Lake Property before it was expanded from 20 to 240 km2. The property benefits from proximity to the Trans-Labrador Highway (to the left of below picture) and a 3-phase power line running across the property (to the right of below pricture). The Trans-Labrador Highway goes directly to deep water ports.

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In 2014, regional low resolution magnetic surveys by the government and hand-held electromagnetic surveys by local prospectors revealed strong conductors beneath the overburden.

In 2015, the western portion of the property was grab sampled, yielding 0.57% cobalt, 1.03% copper, 0.1% nickel, 0.36% chromium, 0.39% molybdenum, 0.23% vanadium and 5 g/t silver.

Discovery Potential

Although the property has never been drilled before, the sampling assays in both the eastern and western part of the property (before it was expanded) indicate great possibility for a large body of mineralization at shallow depths. Thanks to excellent road accessibility to deep sea water ports, a power line that runs directly adjacent to the property and the proximity to the town of Happy Valley-Goose Bay, King’s Bay believes that it’s a perfect time now to explore this highly prospective property amid rising energy metal prices, first and foremost the battery-critical element cobalt.

King´s Bay will be exhibiting at the upcoming Vancouver Resource Investment Conference (booth #301) this Sunday and Monday as well as the AME Round Up which runs from January 30 to February 2 (booth #424). The Government of Newfoundland & Labrador has provided King´s Bay with an opportunity to participate within their booth. CEO Kevin Bottomley and Director Brad Hoeppner will be travelling to St. John´s for the Northern Exposure Conference (booth #201) which runs from January 24 to 26.

Rockstone is looking forward to King’s Bay’s upcoming geophysics and subsequent drill program as a massive cobalt-rich deposit may get discovered.

Previous Coverage

Report #1: “Potential for a Massive Discovery of Cobalt, Copper and High-Tech Metals” (October 27, 2016)

Report #2 | King‘s Bay Gold Corp.

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Disclaimer and Information on Forward Looking Statements:All statements in this report, other than statements of historical fact should be con-sidered forward-looking statements. Much of this report is comprised of statements of projection. Statements in this report that are forward looking include that King’s Bay Gold Corp. or any other company or market will perform as expected; that King’s Bay Gold Corp. will complete the recently announced transaction(s); that the company will acquire more projects; that King’s Bay Gold Corp. or its partner(s) can and will start exploring; that the company can raise sufficient funds for a transaction, exploration and corporate matters; that any of the mentioned plans, comparisons with other companies, regions or numbers are valid or economic. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in these forward-looking statements. Risks and uncer-tainties respecting gold and resource com-panies are generally disclosed in the annual financial or other filing documents of King’s Bay Gold Corp. and similar companies as filed with the relevant securities commissions, and should be reviewed by any reader of this report. In addition, with respect to King’s Bay Gold Corp., a number of risks relate to any statement of projection or forward state-ments, including among other risks: the re-ceipt of all necessary approvals and permits; the ability to conclude a transaction to start or continue exploration; uncertainty of future market regulations, capital expenditures and other costs; financings and additional capital requirements for exploration, development, construction, and operating of a facility; the receipt in a timely fashion of further per-mitting for its legislative, political, social or economic developments in the jurisdictions in which King’s Bay Gold Corp. carries on business; operating or technical difficulties in connection with production or development activities; the ability to keep key employees, joint-venture partner(s), and operations financed. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Rockstone and the author of this report do not undertake any obligation to update any statements made in this report.

Disclosure of Interest and Advisory Cautions: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Rockstone, its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including Rockstone’s report, especially if the investment involves a small, thinly-traded company that isn’t well known. The author of this report is paid by Zimtu Capital Corp., a TSX Venture Exchange listed investment company. Part of the author’s responsibilities at Zimtu Capital Corp. is to research and report on companies in which Zimtu Capital Corp. has an investment. So while the author of this report is not paid directly by King’s Bay Gold Corp., the author’s employer Zimtu Capital Corp. will benefit from appreciation of King’s Bay Gold Corp.’s stock price. The author also own shares of King’s Bay Gold Corp.., as well as shares of Zimtu Capital Corp., and thus would also benefit from volume and price appreciation of its stocks. Hence, multiple conflicts of interests exist. Therefore, the information provided herewithin should not be construed as a financial analysis or recommendation but as advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Rockstone and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. King’s Bay Gold Corp. has not reviewed all of the content of this report prior to publication. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect. Please read the entire Disclaimer carefully. If you do not agree to all of the Disclaimer, do not access this website or any of its pages including this report in form of a PDF. By using this website and/or report, and whether or not you actually read the Disclaimer, you are deemed to have accepted it. Information provided is educational and general in nature.

Analyst Profile & Contact

Stephan Bogner (Dipl. Kfm. FH)Mining Analyst Rockstone Research 8050 Zurich, Switzerland+41-44-5862323sb@rockstone-research.com

Stephan Bogner studied at the International School of Management (Dortmund, Germany), the European Business School (London)

and the University of Queensland (Brisbane, Australia). Under supervision of Prof. Dr. Hans J. Bocker, Stephan completed his diploma thesis (“Gold In A Macroeconomic Context With Special Consideration Of The Price Formation Process”) in 2002. A year later, he marketed and translated into German Ferdinand Lips‘ bestseller („Gold Wars“). After working in Dubai for 5 years, he now lives in Switzerland and is the CEO of Elementum International AG specialized in duty-free storage of gold and silver bullion in a high-security vaulting facility within the St. Gotthard Mountain Massif in central Switzerland.

Rockstone is a research house specialized in capital markets and publicly listed companies. The focus is set on exploration, development, and production of resource deposits. Through the publication of general geological basic knowledge, the individual research reports receive a background in order for the reader to be inspired to conduct further due diligence. All research from our house is being made accessible to private and institutional investors free of charge, whereas it is always to be construed as non-binding educational research and is addressed solely to a readership that is knowledgeable about the risks, experienced with stock markets, and acting on one’s own responsibility.

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Report #2 | King‘s Bay Gold Corp.