Daily Letter | 1 19 January 2014

Rahul Paul - Canaccord Genuity Corp. (Canada) 1.416.869.7289 [email protected] John Kratochwil - Canaccord Genuity Corp. (Canada) 1.416.869.6592 [email protected]

Metals and Mining -- Precious Metals and Minerals

JUNIOR PRODUCER Q4/13 SCORECARD: RECALIBRATING OUR PRICE DECK TO THE FORWARD CURVE For the junior precious metal producers, we have calibrated our forecasts to our updated forward curve price deck, consistent with the deck used for the senior producers. Please refer to the report 2014 Preview, Navigating YE Reporting (Tony Lesiak – 13 January, 2014) for a full discussion of our outlook on the price of gold and details on our revised methodology. Our revised price deck is summarized below. Since our last update in October 2013, the long-term forward gold price has declined 3%, from $1,439/oz to $1,391/oz. Curve pricing for major by-products copper and silver have also declined, approximately 4% and 9%, respectively (Figure 1). On the other hand, we have seen a year-to-date recovery in junior gold equity prices as highlighted by an 18% increase in the GDXJ (surprisingly outperforming the gold price which is up only 4%). We believe this reflects renewed investor interest in the space, capital inflows into the gold sector and likely increased levels of investor risk tolerance. While we have maintained the upper end of the range of target multiples for junior producers at 1.1x, we have increased the lower end of the range from 0.4x to 0.5x, reflecting increasing levels of investor risk tolerance for equities with operational/financial challenges. We remain positive on bullion longer term, but see the potential for significant volatility in the gold price over the next 12 months. While we see greater upside to gold equities relative to bullion, we continue to recommend investors stay defensive and choose quality over leverage. We favour companies with quality assets, strong balance sheets and relatively lower risk profiles – i.e., producers that could generate and grow free cash flow even in the current depressed gold price environment. Rating changes in this report include Argonaut Gold (BUY from Hold), Endeavour Mining (BUY from Speculative Buy), Fortuna Silver (BUY from Speculative Buy), and Sandstorm Gold (BUY from Speculative Buy). Target prices have been revised lower for most stocks under coverage with the exception of higher target prices for NGD, AR, AUQ, DGC and PAA. Canaccord Genuity Canadian Focus List Picks include B2Gold, Primero Mining and Fortuna Silver Mines. Our Q4/13 estimates have been updated to reflect actual metal prices during the quarter and pre-released operating results. In general, we are expecting a sequential and y/y decline in earnings (due to lower gold and silver prices). Our Q4/13 EPS estimates are notably below consensus for NGD, AUQ, EDV and PAA.

Figure 1: Metals prices estimates Q4/12A

Q3/13A

Q4/13A

Q4/13A % Change vs. Q4/12A

Q3/13A

2013A

2014E

2015E

2016E

2017E

2018E

Long

Gold (US$/oz)

$1,718

$1,330

$1,272

(26.0%)

(4.4%)

$1,413

$1,240

$1,247

$1,265

$1,295

$1,338

Term $1,391

Silver (US$/oz)

$32.58

$21.46

$20.80

(36.2%)

(3.0%)

$23.89

$20.26

$20.43

$20.68

$20.99

$21.24

$21.24

Copper (US$/lb)

$3.59

$3.21

$3.25

(9.5%)

1.2%

$3.33

$3.31

$3.28

$3.27

$3.25

$3.25

$3.25

Zinc (US$/lb)

$0.88

$0.84

$0.86

(2.1%)

2.5%

$0.87

$0.92

$0.94

$0.95

$0.96

$0.96

$0.96

Source: Bloomberg, Canaccord Genuity estimates

Canaccord Genuity is the global capital markets group of Canaccord Genuity Group Inc. (CF : TSX | CF. : LSE) The recommendations and opinions expressed in this research report accurately reflect the Investment Analyst’s personal, independent and objective views about any and all the Designated Investments and Relevant Issuers discussed herein. For important information,

please see the Important Disclosures section in the appendix of this document or visit Canaccord Genuity’s Online Disclosure Database.

Daily Letter | 2 19 January 2014

RATING AND TARGET PRICE REVISIONS Our target price and ratings revisions are highlighted in Figure 2. Our revised target prices are predicated on our forward curve derived NPV estimates. Figure 2: Rating and target price revisions

Price ANALYST1

Rating

Target

Currency

17-Jan-14

Previous

New

Previous

New

Dividend Yield

Total Implied Return

NAVPS @ Forward Curve

%

%

US$

Target Multiple

Current P/NAV

INTERMEDIATE PRODUCERS Osisko Mining

RP

C$

$6.47

HOLD

HOLD

$6.50

$6.50

0.5%

$6.82

0.90x

0.87x

New Gold

RP

C$

$6.38

HOLD

HOLD

$5.75

$7.00

9.7%

$6.85

0.95x

0.85x

Alamos Gold

RP

C$

$11.15

BUY

BUY

$20.00

$16.00

45.5%

$16.12

0.90x

0.63x

Argonaut Gold

RP

C$

$6.13

HOLD

BUY

$6.75

$8.00

30.5%

$7.50

1.00x

0.75x

AuRico Gold

RP

C$

$5.31

BUY

BUY

$6.25

$6.75

30.4%

$6.34

1.00x

0.76x

B2Gold

RP

C$

$2.74

BUY

BUY

$4.00

$3.50

27.7%

$2.98

1.10x

0.84x

Detour Gold

RP

C$

$6.18

SELL

SELL

$2.50

$4.25

(31.2%)

$8.72

0.60x

0.65x

Endeavour

RP

C$

$0.59

SPEC BUY

BUY

$1.70

$1.00

69.5%

$1.52

0.75x

0.35x

Galane Gold

RP

C$

$0.10

HOLD

HOLD

$0.15

$0.12

20.0%

$0.26

0.50x

0.35x

Golden Star

RP

C$

$0.59

SELL

SELL

$0.30

$0.30

(49.2%)

$0.71

0.70x

0.76x

Primero Mining

RP

C$

$5.99

BUY

BUY

$8.00

$7.50

25.2%

$6.73

1.05x

0.81x

Sandstorm Gold

RP

C$

$5.70

SPEC BUY

BUY

$7.50

$7.00

22.8%

$6.66

1.00x

0.78x

Alexco Resource

JK

C$

$1.85

SELL

SELL

$0.80

$0.80

(56.8%)

$1.10

0.65x

1.54x

Pan American Silver

RP

C$

$14.18

HOLD

HOLD

$11.50

$14.25

4.4%

$12.72

1.05x

1.02x

Fortuna Silver

JK

C$

$3.82

SPEC BUY

BUY

$5.25

$5.00

30.9%

$4.23

1.10x

0.83x

Santacruz Silver

JK

C$

$0.97

SPEC BUY

SPEC BUY

$3.00

$1.40

44.3%

$2.47

0.55x

0.36x

JUNIOR PRODUCERS 2.0% 3.3%

SILVER PRODUCERS 3.9%

Target multiple applied to operating NAV while current P/NAV is relative to total NAV 1 P = Rahul Paul, JK = John Kratochwil. Source: Bloomberg, Canaccord Genuity estimates

Similar to the approach we use for the senior/intermediate producers, we utilize a matrix of both quantitative and qualitative factors to derive our NPV target multiples. Each group of factors has been given a weighting to reflect our view of current average investor preferences/requirements following which we rank producers on the basis of their total scores for each of the deemed important factors. The companies with the best overall scores are given the best NPV target multiple with a sliding scale approach adopted for lower scoring companies. For details on the methodology please refer to the report Producer Providence; Initiating Coverage (Tony Lesiak – 23 October, 2013). While we have maintained the upper end of the range of target multiples for junior producers at 1.1x, we have increased the lower end of the range from 0.4x to 0.5x, reflecting increasing levels of investor risk tolerance for equities with operational/financial challenges. In general, this has led to an increase in multiples for the lower half of the group.

Daily Letter | 3 19 January 2014

RATINGS REVISIONS Argonaut Gold (AR:TSX) – Increased to BUY from HOLD, Target to C$8.00 from C$6.75 We are increasing our rating on Argonaut Gold to BUY from HOLD, reflecting a substantially improved risk profile heading into 2014 (following the de-risking of the Magino project through a pre-feasibility study late 2013). In addition, we expect the stock to outperform its peers in 2014 following several potential catalysts, including the successful ramp-up at La Colorada, expected receipt of the permits at San Antonio and potential resource growth at San Agustin pending exploration success. We see some operational risk associated with the La Colorada ramp-up in Q4/13 and Q1/14, so risk averse investors may want to wait until the release of Q4/13 results and 2014 guidance. Our NAVPS estimate has increased by approximately 5% reflecting an improved valuation for San Agustin, our target multiple has improved to 1.0x (from 0.85x) reflecting expected positive catalysts and an improved risk profile for the stock as we head into 2014 (La Colorada ramp-up advanced, San Antonio permits likely closer and Magino de-risked by the recent PFS).

Endeavour Mining (EDV:TSX) – Increased to BUY from SPECULATIVE BUY, Target to C$1.00 from C$1.70 In order to be consistent across our coverage universe (i.e., use of BUY ratings for producers with a positive outlook vs. SPECULATIVE BUY reserved for developers/significantly higher risk equities), we have revised our rating on Endeavour Mining to BUY from SPECULATIVE BUY. The change in target price is primarily the result of a lower gold price and risk adjusting our valuation of Hounde (25% risk discount reflecting the uncertainty regarding the timeline).

Fortuna Silver (FVL:TSX) - Increased to BUY from SPECULATIVE BUY, Target to C$5.00 from C$5.25 In order to be consistent across our coverage universe (i.e., use of BUY ratings for producers with a positive outlook vs. SPECULATIVE BUY reserved for developers/significantly higher risk equities), we have revised our rating on Fortuna Silver to BUY from SPECULATIVE BUY. The change in target price primarily reflects the lower gold price.

Sandstorm Gold (SSL:TSX) – Increased to BUY from SPECULATIVE BUY, Target to C$$7.00 from C$7.50 In order to be consistent across our coverage universe (i.e., use of BUY ratings for producers with a positive outlook vs. SPECULATIVE BUY reserved for developers/significantly higher risk equities), we have revised our rating on Sandstorm Gold to BUY from SPECULATIVE BUY. The change in target price primarily reflects the lower gold price.

Daily Letter | 4 19 January 2014

CANACCORD GENUITY COMMODITY/CURRENCY PRICING ASSUMPTIONS Since our last update in October 2013, the long term forward gold price has declined 3%, from $1,439/oz to $1,391/oz. Curve pricing for major by-products copper and silver have also declined, approximately 4% and 9% respectively.

Figure 3: Commodity price and currency forecast revisions

Gold (US$/oz)

Q2/13A

Q3/13A

Q4/13A

2013E

2014E

2015E

2016E

2017E

2018E

New

$1,632

$1,417

$1,330

$1,272

$1,413

$1,240

$1,247

$1,265

$1,295

$1,338

$1,391

Previous

$1,632

$1,417

$1,330

$1,307

$1,421

$1,318

$1,336

$1,357

$1,389

$1,439

$1,439

Change (%) Silver (US$/oz)

Gold/Silver ratio

Copper (US$/lb)

Zinc (US$/lb)

Lead (US$/lb)

CDN/USD Exchange

AUD/USD Exchange

EUR/USD Exchange

BRL/USD Exchange

2019E/

Q1/13A

Long term

0.0%

0.0%

0.0%

-2.7%

-0.6%

-5.9%

-6.7%

-6.8%

-6.8%

-7.1%

-3.4%

New

$30.10

$23.22

$21.46

$20.80

$23.89

$20.26

$20.43

$20.68

$20.99

$21.24

$21.24

Previous

$30.10

$23.22

$21.46

$21.97

$24.18

$22.13

$22.69

$23.00

$23.32

$23.32

$23.32

Change (%)

0.0%

0.0%

0.0%

-5.3%

-1.2%

-8.5%

-9.9%

-10.1%

-10.0%

-8.9%

-8.9%

New

54.2

61.0

62.0

61.1

59.1

61.2

61.0

61.2

61.7

63.0

65.5

Previous

54.2

61.0

62.0

59.5

58.8

59.5

58.9

59.0

59.6

61.7

61.7

Change (%)

0.0%

0.0%

0.0%

2.7%

0.6%

2.8%

3.6%

3.6%

3.6%

2.0%

6.1%

New

$3.60

$3.25

$3.21

$3.25

$3.33

$3.31

$3.28

$3.27

$3.25

$3.25

$3.25 $3.37

Previous

$3.60

$3.25

$3.21

$3.28

$3.33

$3.28

$3.30

$3.33

$3.35

$3.37

Change (%)

0.0%

0.0%

0.0%

-0.8%

-0.2%

1.0%

-0.5%

-2.0%

-3.1%

-3.6%

-3.6%

New

$0.92

$0.84

$0.84

$0.86

$0.87

$0.92

$0.94

$0.95

$0.96

$0.96

$0.96 $0.93

Previous

$0.92

$0.84

$0.84

$0.84

$0.86

$0.84

$0.87

$0.90

$0.93

$0.93

Change (%)

0.0%

0.0%

0.0%

2.4%

0.6%

9.5%

7.4%

5.6%

4.0%

3.2%

3.2%

New

$1.04

$0.93

$0.95

$0.96

$0.97

$0.99

$1.00

$1.01

$1.02

$1.02

$1.02

Previous

$1.04

$0.93

$0.95

$0.94

$0.97

$0.94

$0.96

$0.98

$1.00

$1.01

$1.01

Change (%)

0.0%

0.0%

0.0%

1.7%

0.4%

5.1%

4.2%

2.9%

1.9%

1.0%

1.0%

New

$0.99

$0.98

$0.96

$0.95

$0.97

$0.94

$0.93

$0.92

$0.92

$0.92

$0.92

Previous

$0.99

$0.98

$0.96

$0.96

$0.97

$0.95

$0.94

$0.93

$0.93

$0.93

$0.93

Change (%)

0.0%

0.0%

0.0%

-0.6%

-0.1%

-1.5%

-0.9%

-1.3%

-1.4%

-1.3%

-1.3%

New

$1.04

$0.99

$0.92

$0.93

$0.97

$0.88

$0.86

$0.83

$0.81

$0.80

$0.80

Previous

$1.04

$0.99

$0.92

$0.93

$0.97

$0.91

$0.87

$0.85

$0.84

$0.84

$0.84

Change (%)

0.0%

0.0%

0.0%

-0.7%

-0.2%

-3.0%

-1.4%

-2.7%

-2.7%

-4.4%

-4.4%

New

$1.32

$1.31

$1.33

$1.36

$1.33

$1.36

$1.36

$1.37

$1.39

$1.41

$1.41

Previous

$1.32

$1.31

$1.33

$1.35

$1.33

$1.35

$1.36

$1.38

$1.39

$1.39

$1.39

Change (%)

0.0%

0.0%

0.0%

0.7%

0.2%

0.3%

-0.1%

-0.1%

0.0%

1.6%

1.6%

New

$2.00

$2.07

$2.29

$2.28

$2.16

$2.49

$2.49

$2.49

$2.49

$2.49

$2.49

Previous

$2.00

$2.07

$2.29

$2.30

$2.16

$2.51

$2.51

$2.51

$2.51

$2.51

$2.51

Change (%)

0.0%

0.0%

0.0%

-1.1%

-0.3%

-0.6%

-0.6%

-0.6%

-0.6%

-0.6%

-0.6%

Source: Bloomberg, Canaccord Genuity estimates

Daily Letter | 5 19 January 2014

EPS AND CPFS REVISIONS In general, our EPS and CFPS estimates have declined in 2013 and 2014. This is due mainly to a decrease in the actual gold (-2.7%) and silver (-5.3%) prices observed in Q4/13 vs. our previously forecast prices, as well as lower than expected production and/or higher costs from some companies that already reported Q4/13 production. See Figure 4 for revised EPS and CFPS estimates. Figure 4: EPS and CFPS estimate revisions EPS Estimates 2013E

CFPS Estimates 2014E

2013E

2014E

Previous

New

% chg

Previous

New

% chg

Previous

New

% chg

Previous

New

% chg

Osisko Mining

$0.21

$0.20

-4.8%

$0.28

$0.19

-32.1%

$0.63

$0.60

-4.8%

$0.74

$0.60

-18.9%

New Gold

$0.11

$0.11

0.0%

$0.27

$0.16

-40.7%

$0.49

$0.48

-2.0%

$0.77

$0.61

-20.8%

Alamos Gold

$0.63

$0.54

-14.3%

$0.51

$0.09

-82.4%

$0.98

$0.94

-4.1%

$0.75

$0.53

-29.3%

Argonaut Gold

$0.22

$0.21

-4.5%

$0.21

$0.18

-14.3%

$0.38

$0.38

0.0%

$0.36

$0.45

25.0%

AuRico Gold

$0.11

$0.07

-36.4%

$0.05

$ (0.05)

NA

$0.34

$0.29

-14.7%

$0.45

$0.35

-22.2% -15.4%

INTERMEDIATE PRODUCERS

JUNIOR PRODUCERS

B2Gold

$0.13

$0.12

-7.7%

$0.16

$0.12

-25.0%

$0.25

$0.24

-4.0%

$0.26

$0.22

Detour Gold

$ (0.50)

$ (0.53)

NA

$0.01

$ (0.04)

NA

$ (0.12)

$ (0.16)

NA

$0.30

$0.29

-3.3%

Endeavour

$ (0.48)

$ (0.03)

NA

$ (0.05)

$ (0.16)

NA

$0.22

$0.19

-13.6%

$0.34

$0.18

-47.1%

Galane Gold

$ (0.14)

$ (0.23)

NA

$ (0.13)

$ (0.10)

NA

$0.06

$ (0.01)

NA

$0.00

$0.01

NA

Golden Star

$ (0.15)

$ (0.13)

NA

$ (0.09)

$ (0.08)

NA

$0.05

$0.10

100.0%

$0.05

$0.15

200.0%

Primero Mining

$0.36

$0.35

-2.8%

$0.50

$0.32

-36.0%

$0.63

$0.63

0.0%

$0.95

$0.76

-20.0%

Sandstorm Gold

$ (0.34)

$ (0.32)

NA

$0.18

$0.30

66.7%

$0.33

$0.35

6.1%

$0.43

$0.55

27.9%

Alexco Resource

$0.10

$0.11

10.0%

$ (0.13)

$ (0.10)

NA

$0.06

$0.07

16.7%

$ (0.10)

$ (0.08)

NA

Pan American Silver

$0.28

$0.24

-14.3%

$ (0.08)

$ (0.25)

NA

$0.88

$0.84

-4.5%

$0.93

$0.73

-21.5%

SILVER PRODUCERS

Fortuna Silver

$ (0.02)

$0.09

NA

$ (0.01)

$0.15

NA

$0.31

$0.34

9.7%

$0.34

$0.44

29.4%

Santacruz Silver

$ (0.02)

$ (0.03)

NA

$0.11

$ (0.01)

NA

$0.01

$ (0.02)

NA

$0.19

$0.05

-73.7%

Source: Canaccord Genuity estimates

Daily Letter | 6 19 January 2014

Q4/13 SCORECARD Figure 5 highlights the change in commodity prices and exchange rates from Q3/13 to Q4/13. While metal prices were lower during the quarter driving several sequential earnings declines, we expect to see sequential increases for Galane Gold, Detour Gold, Sandstorm Gold and Fortuna Silver driven largely by sequential increases in production relative to Q3/13 levels. Figure 5: Average quarterly metal prices and exchange rates (Q4/13 vs. Q3/13 Q3/13A

Q4/13A

% Change

Gold (US$/oz)

$1,330

$1,272

-4.39%

Silver (US$/oz)

$21.46

$20.80

-3.05%

Copper (US$/lb)

$3.21

$3.25

1.20%

Nickel (US$/lb)

$6.33

$6.31

-0.23%

Zinc (US$/lb)

$0.84

$0.86

2.55%

Lead (US$/lb)

$0.95

$0.96

0.64%

CDN/USD Exchange

$0.96

$0.95

-1.02%

AUD/USD Exchange

$0.92

$0.93

1.23%

EUR/USD Exchange

$1.33

$1.36

2.72%

CLP/USD Exchange

$507.00

$516.63

1.90%

BRL/USD Exchange

2.07

2.29

10.60%

COMMODITIES

EXCHANGE RATES

Source: Bloomberg, Canaccord Genuity estimates

Daily Letter | 7 19 January 2014

Figure 6: Q4/13E earnings scorecard SYMBOL-

Q4/13E

Cons.

EXCHANGE

CG EPS

EPS

Q4/12A

Q3/13A

Change from Q3/13A to Q4/13E ($)

(%)

Osisko Mining

OSK-T

$0.04

$0.06

$0.07

$0.05

($0.01)

-20.0%

New Gold

NGD-T

$0.02

$0.04

$0.11

$0.04

($0.02)

-50.0%

Alamos Gold

AGI-T

$0.05

$0.05

$0.33

$0.07

($0.02)

-28.6%

Argonaut Gold

AR-T

$0.04

$0.05

$0.19

$0.05

($0.01)

-20.0%

AuRico Gold

AUQ-T

$0.00

$0.02

$0.05

$0.00

($0.00)

NA

B2Gold

BTO-T

$0.02

$0.03

$0.04

$0.02

$0.01

0.0%

Detour Gold

DGC-T

($0.06)

($0.11)

($0.22)

($0.09)

$0.03

NA

Endeavour Mining

EDV-T

($0.02)

$0.00

$0.05

$0.00

($0.02)

NA

Galane Gold

GG-V

$0.03

$0.03

($0.04)

($0.04)

$0.07

NA

Golden Star

GSC-T

($0.02)

($0.02)

$0.00

$0.02

($0.04)

-200.0%

Pre-released Q4/13 operating results

Primero Mining

P-T

$0.00

$0.01

$0.05

$0.09

($0.09)

-100.0%

Pre-released Q4/13 operating results

Sandstorm Gold

SSL-T

$0.02

$0.02

$0.08

$0.01

$0.01

100.0%

Alexco Resource

AXR-T

($0.02)

($0.02)

($0.01)

$0.04

($0.05)

-150.0%

Pan American Silver

PAA-T

($0.03)

$0.05

$0.37

$0.08

($0.11)

-137.5%

Fortuna Silver

FVI-T

$0.04

$0.04

$0.06

($0.00)

$0.04

NA

Santacruz Silver

SCZ-V

($0.01)

($0.01)

$0.00

($0.01)

($0.00)

NA

Comments

INTERMEDIATE PRODUCERS

JUNIOR PRODUCERS

SILVER PRODUCERS

Source: Thomson Reuters, Canaccord Genuity estimates

Pre-released Q4/13 operating results Pre-released Q4/13 operating results

Daily Letter | 8 19 January 2014

Figure 7: Production and total cash cost summary Q4/13E

Q4/12A

Production

Total Cash Costs

(000 oz)

(US$/oz)

Osisko Mining

138

New Gold

106

Alamos¹ Argonaut Gold AuRico Gold¹

Q3/13A

Production

Total Cash Costs

(000 oz)

(US$/oz)

$721

102

$329

113

39

$642

35

$663

50

2013E

Production

Total Cash Costs

(000 oz)

(US$/oz)

$840

120

$254

94

68

$461

32

$587

$766

41

110

$665

Detour Gold

81

Endeavour Galane Gold

2014E

Production

Total Cash Costs

Production

Total Cash Costs

(000 oz)

(US$/oz)

(000 oz)

(US$/oz)

$726

476

$750

558

$711

$280

397

$381

424

$243

43

$491

190

$500

166

$694

27

$648

124

$639

171

$692

$645

49

$628

193

$682

212

$673

44

$658

99

$698

371

$723

409

$744

$1,053

NA

NA

24

$1,214

105

$1,090

445

$1,013

78

$934

20

$1,347

88

$929

316

$951

369

$952

16

$1,060

9

$1,619

10

$1,258

42

$1,333

48

$1,201

Golden Star¹

75

$1,109

88

$1,191

89

$1,027

331

$1,136

307

$1,063

Primero Mining¹

34

$660

26

$677

43

$516

143

$597

261

$608

Sandstorm Gold

9

$418

7

$410

10

$432

35

$424

61

$361

INTERMEDIATE PRODUCERS

JUNIOR PRODUCERS

B2Gold

SILVER PRODUCERS Alexco Resource

0

$-

596

$10.57

452

$12.28

1,408

$13.12

0

$-

Pan American Silver

6,404

$13.42

6,894

$9.28

6,695

$10.40

25,563

$11.79

23,817

$13.97

Fortuna Silver¹

1,459

$5.82

1,011

$8.85

1,105

$7.25

4,630

$6.74

6,146

$6.08

Santacruz Silver

0

$-

0

$-

0

$-

0

$-

586

$5.66

Source: Company reports, Canaccord Genuity estimates 1Q4/13 cash costs and/or production already reported

Daily Letter | 9 19 January 2014

UPCOMING POTENTIAL CATALYSTS Figure 8: Potential catalysts Company Alamos Gold

Potential Catalysts Analyst site visit to Mulatos and Esperanza (Jan 21–23) FY/2013 financial results (Feb 20, 2014) Transition from Escondida to Escondida Deep (Q2/14), then San Carlos (Q3/14) Forestry and operating permits at Kirazli (H1/14E) Turkey Ağı Dağı EIA - response and approval from government (H1/14E) Share buy-back program (ongoing - 2014E)

Alexco

Financing Decision To Fund Restart Of Operations Begin development of Flame and Moth Deposit (Q3/14E) Announce Commercial Production (Q2/14E)

Argonaut Gold

La Colorada hard rock mining ramp-up (Q4/13E – 2014E) Q4/13 Financial and operating results (Q1/14)

AuRico Gold

Potential receipt of permits at San Antonio (H1/14E) Operating results from Young Davidson (2014E) 2014 Operational Guidance (first week of February) 2013 Reserves and Resources (first week of March) Fourth Quarter and Annual Financial Results (March 3)

B2Gold Corp

Q4/13 and FY2013 production results (late Jan/early Feb) Announcement on future of Gramalote (Jan/Feb) New resource on Wolfshag zone at Otjikoto (Jan/Feb) Site visit to Otjikoto Jan 28-30) Masbate expansion study (early 2014E) Updated Masbate resource estimate (early 2014E) and reserve estimate (mid-2014E)

Detour Gold

Q4/13 and FY2013 operating results (Jan/Feb 2014E) Updated mine plan for Detour Lake (Q1/14E) Potential recapitalization (early 2014E)

Endeavour Mining

Analyst site visit (Feb 8 - 13) Commercial production (Q1/14E) and production ramp-up at Agbaou (H1/14)

Fortuna Silver

Meet San Jose throughput guidance of 2,000 tpd (Q2/14E) Begin mining from Trinidad North (Q4/14E) Step-out drill results from Trinidad North (ongoing)

Galane Gold

Underground mining at Tau (Mid 2014E)

Golden Star

Analyst site visit (Jan 24-27) Year-end Financials (Q1/14) Updated reserve and resource estimates (Q1/14)

Nevsun Resources

Ramp-up to full copper phase production (1H/14E) 2013 financial results (Mar 13, 2014)

New Gold

Potential M&A activity / possible acquisition (2014E) 2013 operating results, 2014 guidance and analyst day (early Feb 2014E) Rainy River & Blackwater permitting updates (2014E)

Osisko Mining

Response from Osisko on Goldcorp offer Q4/13 production and earnings results (Q1/14E)

Pan American Silver

Share buy-back - 5% of shrares outstanding (2014E) Commencement of La Colorada mine expansion (2014E to 2016E)

Source: Company reports, Canaccord Genuity estimates

Daily Letter | 10 19 January 2014

Figure 9: Potential catalysts, continued Company Primero Mining

Potential Catalysts Reserve/resource update (late Feb/early March 2014E) Completion of San Dimas expansion to 2,500 tpd (late Q1/14E) Decision on further expansion at San Dimas (mid-2014E) - we currently assume no further increase beyond 2500 tpd, an increase to 3,000 tpd could increase NAVPS estimate by approx $0.21/share (3% accretive) Quarterly operating results in 2014

Sandstorm Gold

Potential recapitalization of Colossus Minerals (2014E) Completion of Aurizona project throughput expansion (Q1/14E) Primero Mining (P:TSX, BUY) acquisition of Brigus Gold (BRD:TSX, HOLD) and Black Fox mine, potential expansions

Santacruz Silver

San Felipe PEA (Q1/14E) Commercial production at Rosario (Q3/14E) Financing decision to fund San Felipe (mid-2014E) First production San Felipe (He/15E)

Source: Company reports, Canaccord Genuity estimates

Daily Letter | 11 19 January 2014

Investment risks The typical risks associated with any mining investment include commodity and exchange rate risk, permitting, geographical, and technical (development/operating) risk. Further information on the methodologies used to derive our price targets, and the risks that could impede achievement of these targets, is available upon request. Disclosure information for all Canaccord Genuity research coverage can be found at http://disclosures.canaccordgenuity.com/EN/Pages/default.aspx.

Daily Letter | 12 19 January 2014

APPENDIX: IMPORTANT DISCLOSURES Analyst Certification:

Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research. Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of Canaccord Genuity Inc. and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Compendium Report:

If this report covers six or more subject companies, it is a compendium report and Canaccord Genuity and its affiliated companies hereby direct the reader to the specific disclosures related to the subject companies discussed in this report, which may be obtained at the following website (provided as a hyperlink if this report is being read electronically) http://disclosures.canaccordgenuity.com/EN/Pages/default.aspx; or by sending a request to Canaccord Genuity Corp. Research, Attn: Disclosures, P.O. Box 10337 Pacific Centre, 2200-609 Granville Street, Vancouver, BC, Canada V7Y 1H2; or by sending a request by email to [email protected]. The reader may also obtain a copy of Canaccord Genuity’s policies and procedures regarding the dissemination of research by following the steps outlined above.

Distribution of Ratings:

Coverage Universe

Global Stock Ratings (as of 31 December 2013)

Rating

#

Buy Speculative Buy Hold Sell

%

564 57.0% 47 4.7% 325 32.8% 50 5.1% 990 100.0% *Total includes stocks that are Under Review

Canaccord Genuity Ratings System:

IB Clients % 38.1% 42.6% 11.4% 6.0%

BUY: The stock is expected to generate risk-adjusted returns of over 10% during the next 12 months. HOLD: The stock is expected to generate risk-adjusted returns of 0-10% during the next 12 months. SELL: The stock is expected to generate negative risk-adjusted returns during the next 12 months. NOT RATED: Canaccord Genuity does not provide research coverage of the relevant issuer. “Risk-adjusted return” refers to the expected return in relation to the amount of risk associated with the designated investment or the relevant issuer.

Risk Qualifier:

SPECULATIVE: Stocks bear significantly higher risk that typically cannot be valued by normal fundamental criteria. Investments in the stock may result in material loss.

Canaccord Genuity Research Disclosures as of 19 January 2014 “Canaccord Genuity” is the business name used by certain wholly owned subsidiaries of Canaccord Genuity Group Inc., including Canaccord Genuity Inc., Canaccord Genuity Limited, Canaccord Genuity Corp., and Canaccord Genuity (Australia) Limited, an affiliated company that is 50%-owned by Canaccord Genuity Group Inc. The authoring analysts who are responsible for the preparation of this research are employed by Canaccord Genuity Corp. a Canadian broker-dealer with principal offices located in Vancouver, Calgary, Toronto, Montreal, or Canaccord Genuity Inc., a US broker-dealer with principal offices located in New York, Boston, San Francisco and Houston, or Canaccord Genuity Limited., a UK broker-dealer with principal offices located in London (UK) and Dublin (Ireland), or Canaccord Genuity (Australia) Limited, an Australian broker-dealer with principal offices located in Sydney and Melbourne. The authoring analysts who are responsible for the preparation of this research have received (or will receive) compensation based upon (among other factors) the Corporate Finance/Investment Banking revenues and general profits of Canaccord Genuity. However, such authoring analysts have not received, and will not receive, compensation that is directly based upon or linked to one or more specific Corporate Finance/Investment Banking activities, or to recommendations contained in the research. Canaccord Genuity and its affiliated companies may have a Corporate Finance/Investment Banking or other

Daily Letter | 13 19 January 2014

relationship with the issuer that is the subject of this research and may trade in any of the designated investments mentioned herein either for their own account or the accounts of their customers, in good faith or in the normal course of market making. Accordingly, Canaccord Genuity or their affiliated companies, principals or employees (other than the authoring analyst(s) who prepared this research) may at any time have a long or short position in any such designated investments, related designated investments or in options, futures or other derivative instruments based thereon. Some regulators require that a firm must establish, implement and make available a policy for managing conflicts of interest arising as a result of publication or distribution of research. This research has been prepared in accordance with Canaccord Genuity’s policy on managing conflicts of interest, and information barriers or firewalls have been used where appropriate. Canaccord Genuity’s policy is available upon request. The information contained in this research has been compiled by Canaccord Genuity from sources believed to be reliable, but (with the exception of the information about Canaccord Genuity) no representation or warranty, express or implied, is made by Canaccord Genuity, its affiliated companies or any other person as to its fairness, accuracy, completeness or correctness. Canaccord Genuity has not independently verified the facts, assumptions, and estimates contained herein. All estimates, opinions and other information contained in this research constitute Canaccord Genuity’s judgement as of the date of this research, are subject to change without notice and are provided in good faith but without legal responsibility or liability. Canaccord Genuity’s salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desk that reflect opinions that are contrary to the opinions expressed in this research. Canaccord Genuity’s affiliates, principal trading desk, and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research. This research is provided for information purposes only and does not constitute an offer or solicitation to buy or sell any designated investments discussed herein in any jurisdiction where such offer or solicitation would be prohibited. As a result, the designated investments discussed in this research may not be eligible for sale in some jurisdictions. This research is not, and under no circumstances should be construed as, a solicitation to act as a securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. This material is prepared for general circulation to clients and does not have regard to the investment objectives, financial situation or particular needs of any particular person. Investors should obtain advice based on their own individual circumstances before making an investment decision. To the fullest extent permitted by law, none of Canaccord Genuity, its affiliated companies or any other person accepts any liability whatsoever for any direct or consequential loss arising from or relating to any use of the information contained in this research.

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This research has been approved by Canaccord Genuity Corp., which accepts sole responsibility for this research and its dissemination in Canada. Canadian clients wishing to effect transactions in any designated investment discussed should do so through a qualified salesperson of Canaccord Genuity Corp. in their particular province or territory.

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Canaccord Genuity Inc., a US registered broker-dealer, accepts responsibility for this research and its dissemination in the United States. This research is intended for distribution in the United States only to certain US institutional investors. US clients wishing to effect transactions in any designated investment discussed should do so through a qualified salesperson of Canaccord Genuity Inc. Analysts employed outside the US, as specifically indicated elsewhere in this report, are not registered as research analysts with FINRA. These analysts may not be associated persons of Canaccord Genuity Inc. and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

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This research is distributed in the United Kingdom and elsewhere Europe, as third party research by Canaccord Genuity Limited, which is authorized and regulated by the Financial Conduct Authority. This research is for distribution only to persons who are Eligible Counterparties or Professional Clients only and is exempt from the general restrictions in section 21 of the Financial Services and Markets Act 2000 on the communication of invitations or inducements to engage in investment activity on the grounds that it is being distributed in the United Kingdom only to persons of a kind described in Article 19(5) (Investment Professionals) and 49(2) (High Net Worth companies, unincorporated associations etc) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended). It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. This material is not for distribution in the United Kingdom or elsewhere in Europe to retail clients, as defined under the rules of the Financial Conduct Authority.

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This research is sent to you by Canaccord Genuity Wealth (International) Limited (CGWI) for information purposes and is not to be construed as a solicitation or an offer to purchase or sell investments or related financial instruments. This research has been produced by an affiliate of CGWI for circulation to its institutional clients and also CGWI. Its contents have been approved by CGWI and we are providing it to you

Daily Letter | 14 19 January 2014

on the basis that we believe it to be of interest to you. This statement should be read in conjunction with your client agreement, CGWI's current terms of business and the other disclosures and disclaimers contained within this research. If you are in any doubt, you should consult your financial adviser. CGWI is licensed and regulated by the Guernsey Financial Services Commission, the Jersey Financial Services Commission and the Isle of Man Financial Supervision Commission. CGWI is registered in Guernsey and is a wholly owned subsidiary of Canaccord Genuity Group Inc.

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This research is distributed in Australia by Canaccord Genuity (Australia) Limited ABN 19 075 071 466 holder of AFS Licence No 234666. To the extent that this research contains any advice, this is limited to general advice only. Recipients should take into account their own personal circumstances before making an investment decision. Clients wishing to effect any transactions in any financial products discussed in the research should do so through a qualified representative of Canaccord Genuity (Australia) Limited. Canaccord Genuity Wealth Management is a division of Canaccord Genuity (Australia) Limited.

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This research is distributed pursuant to 32C of the Financial Advisers under an arrangement between each of the Canaccord Genuity entities that publish research and Canaccord Genuity Singapore Pte. Ltd who are an exempt financial adviser under section 23(1)(d) of the Financial Advisers Act. This research is only intended for persons who fall within the definition of accredited investor, expert investor or institutional investor as defined under section 4A of the Securities and Futures Act It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. Recipients of this report can contact Canaccord Genuity Singapore Pte. Ltd. (Contact Person: Tom Gunnersen’s tel # is +852 3919 2561) in respect of any matters arising from, or in connection with, the [analyses or report].

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This research is distributed in Hong Kong by Canaccord Genuity (Hong Kong) Limited who is licensed by the Securities and Futures Commission. This research is only intended for persons who fall within the definition of professional investor as defined in the Securities and Futures Ordinance. It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. Recipients of this report can contact Canaccord Genuity (Hong Kong). Ltd. (Contact Person: Tom Gunnersen’s tel # is +852 3919 2561) in respect of any matters arising from, or in connection with, the research. Additional information is available on request. Copyright © Canaccord Genuity Corp. 2014. – Member IIROC/Canadian Investor Protection Fund Copyright © Canaccord Genuity Limited 2014. – Member LSE, authorized and regulated by the Financial Conduct Authority. Copyright © Canaccord Genuity Inc. 2014. – Member FINRA/SIPC Copyright © Canaccord Genuity (Australia) Limited 2014. – Participant of ASX Group, Chi-x Australia and of the NSX. Authorized and regulated by ASIC. All rights reserved. All material presented in this document, unless specifically indicated otherwise, is under copyright to Canaccord Genuity Corp., Canaccord Genuity Limited, Canaccord Genuity Inc. or Canaccord Genuity Group Inc. None of the material, nor its content, nor any copy of it, may be altered in any way, or transmitted to or distributed to any other party, without the prior express written permission of the entities listed above.