Investment Portfolio

Eros builds a strategic portfolio of investments made out of selected resource companies. The Company’s expertise in the resource sector supports the selection of these investments.

JOINT VENTURES

Denison Join Venture - Saskatchewan

HATCHET AND MURPHY JV, Uranium

Denison Joint Venture Hatchet Lake and Murphy Lake - Eros holds 29.85% and 21.04% interests in the joint ventures respectively, located in the shallow, eastern portion of the Athabasca basin of Saskatchewan. The target is unconformity-type uranium deposits similar to the nearby McLean Lake mine.

Denison Mines Corp. (“Denison”) is the operator of the joint ventures. Eros believes in the potential of the area and intends to defend its interests in the properties.

The Hatchet Lake property is located just 17 km north of the McClean Lake uranium mill owned by AREVADenison-OURD. Access to the property is by winter road or aircraft.

The Murphy Lake property is located approximately 20 km north of the McClean Lake uranium mill.

Highway 905 crosses the property but access to most of the targets is by winter road or aircraft. The Hatchet Lake property is considered prospective for uranium as well as base and precious metals.

Historic drill holes have reported U, Ni, Co, Cu, Au and Ag enrichment. The proposed ground geophysical program will cover areas prospective for the above metals. Historic holes on the property have reported: 4.9% Ni, 6.1% Co over 5 metres, 5.9% Cu over 2 metres, 21.5 g/t Au over 1 metre, 19.6 g/t Ag, 3.3% Pb, 0.27%, Zn over 9.6 metres

OTHER INVESTMENTS

Golden Triangle Properties - British Columbia

In 2016, the Company purchased a 5% minor investment interest in certain properties in the Golden Triangle area of northwest BC, near the past producing Snip mine. The purchase of these rights included a minor share position in SnipGold Corp. These SnipGold Corp. shares were sold for more than the cost of the total acquisition

Flaxcombe Heavy Oil Field - Saskatchewan

The Company has invested in heavy oil production in the Flaxcombe Field in the Kindersley area of Saskatchewan by funding the drilling of three wells by Westcore, a related party in which the Company also holds a significant equity position.

Eros receives 90% of revenue from the wells until pay back of expenditure is received. Eros also has a right of first refusal to participate in drilling further wells with Westcore. The wells were drilled, completed and brought online in 2017. In early 2018, the Company agreed to lease 415 hectares of land near its Flaxcombe wells from a third party, for a 2-year period with an option to extend the lease for an additional 2 years.

The Company also acquired 2-d and 3-d seismic data for the region and had it analysed in order to help identify potential drilling targets. These activities helped decrease the Company’s future tax liability. The heavy oil market in Canada has suffered from poor economics and 2018 and 2019 due principally to ongoing delays in the development of pipeline capacity to tide water on the west coast of Canada.

The impact of this has severely limited takeaway capacity in the heavy oil regions of western Canada, which has had direct downward pressure on the realized price that Eros and Westcore receive for the heavy oil it produces.

As a result of this downward pressure, the wells drilled in 2017 were no longer economic to produce in the fall of 2018 and 2019 to date, and Westcore made the decision to take the wells offline. Eros has recorded an impairment loss to bring the carrying value of the properties to nil at December 31, 2018.

The Company also impaired the value of the additional lease and seismic data acquired in 2018 to nil as at December 31, 2018. Both Eros and Westcore believe the wells will return to profitability in 2019 and production will be re-initiated, but the timing of this remains uncertain.