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President's Message


April 12, 2016

Dear Shareholder:

The past year was difficult for First Point Minerals ("First Point", or "the Company"), as it was for other similar companies with advanced projects ready to move into the Pre-Feasibility Study ("PFS") phase of development. The exceptional weakness in the prices of many metals, including nickel, which prevailed throughout 2015 and which has continued into 2016 is hampering First Point's ability to move the Decar nickel project (the "Project") forward at as rapid a pace as the Project's attributes warrant. Nevertheless, a significant advance occurred in mid-November 2015, when the Company's shareholders approved a transaction that resulted in First Point re-acquiring 100% ownership of the Project.

In November 2009, First Point entered into an Option Agreement with affiliated companies of Cliffs Natural Resources Inc. ("Cliffs"), a major international producer of iron ore and coal, headquartered in Cleveland, Ohio. There were four stages of options provided for in the Option Agreement, pursuant to which Cliffs could ultimately acquire up to a 75% interest in the Project. Over a 46-month period ending in August 2013, Cliffs completed the activities needed to exercise the first and second-stage options, thereby earning a 60% interest in the Project by conducting exploration programs, environmental and other investigations and completing a Preliminary Economic Assessment ("PEA"). Cliffs' cumulative expenditures on these activities were in excess of US$22 million.

In September 2013, Cliffs gave notice of its intent to sole-fund preparation of a PFS, the completion of which would increase its interest in the Project to 65% and thereby preserve its ability to proceed with the fourth option to earn an additional 10% interest by sole-funding completion of a Bankable Feasibility Study. During the ensuing months, Cliffs made very little progress in advancing a PFS, largely because its management's attention was focused on issues unrelated to the Project, including a failed effort to prevent a hostile take-over of Cliffs.

The hostile investment group prevailed in a proxy battle and members of Cliffs' Board of Directors and senior management were replaced following Cliffs annual meeting in July 2013. Shortly thereafter, First Point was informed that Cliffs intended to focus on its US iron ore business and would put its "non-core" assets, including its 60% interest in the Project, up for sale. Over the following months, the Company's management engaged with representatives of Cliffs about terms for the sale and purchase of the 60% interest.

On September 8, 2015, the Company announced that it had signed a binding agreement with Cliffs to purchase the 60% interest in the Project for US$4.75 million, subject to the approval of the Company's disinterested minority shareholders at a shareholders' meeting called for November 16, 2015. To finance the purchase, the Company entered into an arm's-length loan agreement with one of its shareholders (the "Lender"), who loaned First Point US $5.0 million for a five-year period at a 6.5% headline interest rate.

Concurrent with the transaction, Cliffs disposed of all of its 14,353,190 shares in the capital of the Company in a series of private transactions at a price of $0.0515 per share. Of the total number of shares disposed of by Cliffs in the private transactions, 8,953,190 shares, representing 8.5% of the Company's issued and outstanding shares, were purchased by Mr. Peter Bradshaw, First Point's founder and current Chairman.

Significant changes were made in First Point's executive management team during 2015. On July 1st, a number of cash preservation measures were implemented to reduce cash outlays. These measures included employee terminations, a 50% reduction in the salaries paid to the President & Chief Executive Officer and the Vice-president -- Exploration and the elimination of the salary paid to the Company's Chairman. In addition, the Chief Financial Officer and Corporate Secretary agreed to reductions of approximately 33% in their respective hourly fees.

By mid-November, it became apparent that further cost reductions were required, and effective December 1st, the President & CEO and Vice-president -- Exploration were terminated in accordance with the provisions of their respective employment agreements. On the same date, the Company's Chief Financial Officer Mr. Martin Turenne, was appointed as the Company's President & CEO.

The management changes and other cash preservation measures that have been implemented are expected to reduce the Company's annual expenditures to about $500,000, inclusive of property holding costs and interest on the US$5 million loan, but exclusive of severance payments.

At present, large inventories overhang the nickel market, and as these inventories are worked off, a process that is likely to take several years, nickel prices are expected to slowly recover. In the interim, the opportunities for the Company to improve its financial condition are limited by a lack of investor interest in base metal projects.

To the extent the Company's finances will permit such activities, Management intends to assess, with external consultants as needed, a number of PEA parameters. The goal is to identify where improvements in capital and operating costs and revenue enhancements can be realized, leading to a revised PEA that will show robust economics at long-term nickel prices, as forecast by metals analysts.

In addition, the Company will continue with efforts to identify a strategic partner who would be willing to advance the Project on a more expeditious basis, which may allow the Company to by-pass a revised PEA and proceed directly with the preparation of a PFS.

I would like to thank the shareholders for their continued support and to invite each of you to attend the Company's annual meeting, which will be held on May 12, 2016, in the Boardroom of Computershare Investor Services, Third Floor, 510 Burrard Street, in Vancouver, B.C. If you are unable to attend in person, please take a few minutes to complete and submit your Proxy or VIF form, as applicable

Yours very truly,
Martin Turenne, President & Chief Executive Officer


View the Presidents Letter from 2015

View the Presidents Letter from 2014

View the Presidents Letter from 2013