Background

Saskatchewan’s unique political history has had a profound dampening effect on capital formation throughout much of the Province’s modern history. In 1944 the Province elected the first Socialist government ever brought to office in any North American jurisdiction, setting in motion political and economic events that have shaped, and in some instances, profoundly hindered the Province’s economic development path. Although the Province’s population is relatively conservative by nature, polarization between left and right factions in urban and rural areas respectively, has often led to election results that run counter to the generally centrist popular sentiment. In fact, the left wing New Democratic Party and its predecessor, Co-operative Commonwealth Federation, have held the seat of power approximately 75% of the time since World War II with the right wing Conservatives 16% and Liberals 9%.

Although Saskatchewan is blessed with extraordinary natural resources, the inherent conflict between free market capitalism necessary for development and socialist economic philosophy has hindered progress. Until recently this led to suppressed economic activity, a stunted capital market system, and significantly slower growth in population and infrastructure relative to other resource rich provinces.

It is within this economic framework that 49 North was created in 2005, the year of the Province’s 100th anniversary. Founded as a limited partnership, the fund’s vision was to become the leading supplier of investment capital for Saskatchewan’s junior and intermediate resource sector and provide the underpinning of a resource capital market long overdue in one of the most resource rich jurisdictions in the world. Given the restrained nature of local capital formation, it was determined that tax incentives would be the most expedient way of spurring local participation. With this in mind, five successive limited partnerships were created using Canadian Exploration Expense flow-through deductions to encourage participation. This program has been very successful with all five partnerships having been rolled together and converted to the current corporate entity that is 49 North today. The change to corporate status in 2008 was designed to accommodate 49 North’s direct project development and merchant banking activities. The path of 49 North’s development since inception has been set to achieve a reasonable level of local participation through tax incentives with the ultimate goal being conversion to corporate status and the application of external equity partners to enhance operating scope and financial capacity. In addition to our flow through ventures we successfully completed our first regular equity raise, of over $12.2 million in June 2009.

With the significant shift to increasingly pragmatic resource development policies evident during later left wing administrations, and the strong mandate of the recently elected right wing Saskatchewan Party, the landscape for resource based economic development has never looked better. In this renewed climate of responsible resource policy and royalty structures, government has become highly supportive of capital market development. Given the current stage of the commodity cycle, 49 North represents an unparalleled opportunity for investors worldwide to participate in the advancement of early stage resource projects in one of the most promising undeveloped, sovereign risk free, resource domains in the world.