20120313 goldandsilverforecastupdate (1)

Please see important disclosures on pages 28 and 29.

March 13, 2012

METALS AND MINING SECTOR UPDATE

COMMODITY PRICE FORECAST UPDATE AND CORRESPONDING TARGET ADJUSTMENTS In this report, we are updating our gold and silver

price forecasts, including a more bullish outlook on the longer-term outlook for both. We last updated our price forecasts in September 2011, since which time prices for both have moved decidedly lower.

Our revised gold and silver forecasts are as follows: US$1,700/oz and US$34/oz for 2012; US$1,900/oz and US$38/oz for 2013; US$2,000/oz and US$40/oz for 2014; US$1,900/oz and US$38/oz for 2015; and US$1,300/oz and US$26/oz for 2016 onward.

In the first section of the report, we take a macro outlook on gold and provide supporting quantitative and technical analysis to our forecasts. For silver, we have decided to adopt a simple approach and assumed the metal trades at a 50-to-1 ratio to gold, noting that the average has approximated 60-to-1 over the last decade, but has regressed to 46-to-1 since 2011.

In the case of our equity analysis, our price revisions have had favourable impacts on several names we cover. A summary of our revised 12-month targets is provided in the right-hand table and expanded upon in Appendix A.

Where applicable, we have adjusted our models for recent company or project updates and inflationary factors on our cost assumptions. We have also adopted a more conservative approach to our in situ valuations for resources, given the market depreciation seen for nearly all companies in recent months. Descriptions are provided for each affected company and, where applicable, any changes to our valuation.

At this point, we are leaving Eco Oro Minerals Corp. (TSX-EOM; formerly Greystar Resources Inc.) UNDER REVIEW. We remain RESTRICTED on Minera IRL Ltd. (TSX-IRL) and maintain our TENDER TO OFFER recommendation for Minefinders Corporation Ltd. (TSX-MFL).

Sector: METALS AND MINING

Analyst: PETER CAMPBELL, P.ENG e-mail: [email protected] Tel: (416) 304-3963 Fax: (416) 214-0177

Analyst: RYAN WALKER, M.SC e-mail: [email protected] Tel: (416) 304-2194 Fax: (416) 214-0177

Analyst: STUART MCDOUGALL, B.SC e-mail: [email protected] Tel: (416) 304-2176 Fax: (416) 214-0177

Associate: GREG DOYLE e-mail: [email protected] Tel: (416) 304-2171 Fax: (416) 214-0177

Associate: SPENCER LANGLEY e-mail: [email protected] Tel: (416) 304-3894 Fax: (416) 214-0177

Strategist: DAVID BEASLEY, CFA, CMT e-mail: [email protected] Tel: (416) 304-0600 Fax: (416) 214-0177

COVERAGE TICKER RECOMMEND TARGET

Apogee Silver Ltd. RW TSXV:APE SPEC BUY $1.25Atacama Pacific Gold Corp. RW TSXV:ATM SPEC BUY $9.50Carpathian Gold Inc. SM/GD TSX:CPN SPEC BUY $1.50Centamin Plc. SM/GD TSX:CEE BUY $3.00Eco Oro Minerals Corp. SM/GD TSX:EOM UNDER REVIEW UNDER REVIEWFirst Majestic Silver Corp. SM/GD TSX:FR BUY $30.00Goldgroup Mining Inc. RW TSX:GGA SPEC BUY $4.00Guyana Goldfields Inc. SM/GD TSX:GUY SPEC BUY $11.50Levon Resources Ltd. SM/GD TSX:LVN SPEC BUY $3.00Minefinders Corporation Ltd. SM/GD TSX:MFL TENDER TO OFFER TENDER TO OFFERMinera IRL Ltd. SM/GD TSX:IRL RESTRICTED RESTRICTEDNew Gold Inc. SM/GD TSX:NGD BUY $18.50Pershimco Resources Inc. RW TSXV:PRO SPEC BUY $2.00Probe Mines Ltd. PC/SL TSXV:PRB SPEC BUY $4.75Rio Novo Gold Inc. RW TSX:RN SPEC BUY $2.00Sandspring Resources Ltd. SM/GD TSXV:SSP SPEC BUY $5.75Scorpio Gold Corp. SM/GD TSXV:SGN SPEC BUY $1.75SEMAFO Inc. SM/GD TSX:SMF BUY $11.50SilverCrest Mines Inc. SM/GD TSXV:SVL SPEC BUY $6.50Sulliden Gold Corp. RW TSX:SUE SPEC BUY $4.75Timmins Gold Corp. SM/GD TSX:TMM SPEC BUY $4.50Trelawney Mining & Exploration Ltd. PC/SL TSXV:TRR SPEC BUY $4.00Volta Resources Inc. SM/GD TSX:VTR SPEC BUY $5.00

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The information contained in this report was obtained from sources we believe to be reliable. We do not represent that such information is accurate or complete and it should not be relied on as such. Any opinions expressed herein reflect our judgment at this date and are subject to change. Jennings Capital Inc. and/or employees from time to time may hold shares, options or warrants on any issue included in this report and may buy or sell such securities. This report is not to be construed as an offer to sell or solicitation to buy securities. Member – CIPF. Jennings Capital (USA) Inc. is a member of SIPC.

TABLE OF CONTENTS GOLD PRICE FORECAST 3 COMPANY UPDATES Apogee Silver Ltd. 8

Atacama Pacific Gold Corp. 9

Carpathian Gold Inc. 10

Centamin Plc. 11

First Majestic Silver Corp. 12

Goldgroup Mining Inc. 13

Guyana Goldfields Inc. 14

Levon Resources Ltd. 15

New Gold Inc. 16

Pershimco Resources Inc. 17

Probe Mines Ltd. 18

Rio Novo Gold Inc. 19

Scorpio Gold Corp. 20

SEMAFO Inc. 21

SilverCrest Mines Inc. 22

Sulliden Gold Corp. 23

Timmins Gold Corp. 24

Trelawney Mining & Exploration Ltd. 25

Volta Resources Inc. 26

APPENDIX A: REVISED PRICE DECK & VALUATION METRICS 27 DISCLOSURES 29

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GOLD PRICE FORECASTS

PREAMBLE Though we have not endeavoured to build a complete global macroeconomic model for the price of gold, we believe that there are two primary concepts we can rely upon to provide reasonable forecasts for the purpose of our equity valuation models. The first is the positive relationship between the growth of the US dollar money supply and gold priced in US dollars, while the second is the long-term technical trend and support levels for the commodity as a trading vehicle.

1) The gold price and US$ money supply (M1)

Intuitively, since gold is denominated in US dollars, an increase in the money stock is dilutive and thus should be offset by an increase in the price of the asset. Although the velocity of money has been declining over the past several years and excess bank reserves have climbed, we believe that the gold market may nevertheless ‘price in’ increases in the money supply, much like equities discount the impact of exogenous events before they are realized in the operating results. Therefore, we see M1 as the relevant measure of the monetary base and an important determinant of the gold price.

Exhibit 1: Size of US Money Stock and the Price of Gold are Highly Correlated

Exhibit 2: Gold has followed the Growth of the US Money Supply

Source: Bloomberg, Jennings Capital Inc.

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Accepting then that the price of gold is largely driven by the changes in the money supply, we consider the drivers of the size of monetary base to infer its trend and influence on gold. That being the case, we believe that prevailing weakness in the macroeconomic environment should lead to further growth in the US monetary base under the scenarios presented in Exhibit 3 below.

Exhibit 3: Monetary and Fiscal Stimulus Should Lead to Higher Gold Prices

With that in mind, we look at US economic growth and budget deficit forecasts as indicators of likely future expansion in the monetary supply and, correspondingly, the price of gold. Growth in GDP for the G10 nations over the next three years is expected to be well below 2%, while US GDP growth was just 1.7% in 2011 and is only estimated to increase to 2.20% in 20121. In the case of deficit and debt forecasts, we cite the current US Congressional Budget Office projections, which expects annual operating budget deficits of US$0.5-US$1.1 trillion and total debt of US$18.25 trillion by 20212 (76.7% of projected GDP). Given these trends and considering the relationships between these factors and the price of gold, we believe it reasonable to view gold as being in a secular bull market.

Next, we review trend analysis to form our actual price projections.

2) Trend Analysis and Forecasts

In 2002, gold ended a 20-year bottoming process, when it broke out of a multi-year resistance zone of US$330/oz. We cite this year as the first uptrend movement and, accordingly, use it as our starting point to establish long-term trend and regression lines for forecasting short-, medium and long-term price assumptions.

1 Bloomberg survey data 2 Congressional Budget Office: Budget and Economic Outlook 2011-2021

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Exhibit 4: Price Chart Basis for Long-Run Trend Analysis


FORECASTS Short Term (2012): US$1,700/oz Although gold has clearly held a strong uptrend since 2008, we believe the unresolved global debt crisis will continue to foster volatility in the gold price over the remainder of 2012. Prices are likely to retest the lower trading range, before making new highs, with the volatility being centered on a key 2011 level of US$1,700/oz. This is the average of the upper and lower bounds, as well as the average closing price for the year-to-date. That said, we see potential for a return to strength in Q3, owing to seasonality and trading cycles.

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Exhibit 5: Uptrend Channel Intact – Expect Volatility but Average Price ~US$1,700/oz


Medium Term (2013 – 2015): US$1,900/oz; US$2,000/oz; US$1,900/oz Referring to Exhibit 4, one sees multiple trend lines and their intersection with future time periods. Generally speaking, as a trend progresses and begins to fade, the price should break nearby trend lines and test lower levels of support over time. The projected trend lines on spot gold provide a likely path for the price to take over the next 10+ years of the secular bull market.

For 2013 – 2015, we see good support on the steepest trend line for gold breaking above US$1,900/oz in 2013. For simplicity, we assume an annual average price of US$1,900/oz for 2013, rising to US$2,000/oz for 2014, before returning to the regression line, at US$1,900/oz, by 2015. Given the steep positive trajectories of these trends, we believe these medium term forecasts could prove conservative.

Similarly, although we have multiple trend projections well above our long-run assumption over the years following 2015, we introduce our long run price beginning in 2016 as discussed below.

Long Term (2016 Onward): US$1,300/oz Referring to Exhibit 4 once gain, a long-term projection for gold can be made from the trend lines formed by connecting gold’s inflection point in 2005 with its major correction in 2008. The trend suggests a range of US$1,400-US$1,500/oz in 2016, however, looking further out, the lowest trend channel from the end of the bear market points to an average of US$1,300/oz at the start of 2021.

In Exhibit 6 below, we provide a bar chart that shows multiple long-term trend lines that further support the case for a price of US$1,300/oz or higher. The lowest trend starts near the end of the bear market, prior to the breakout, and arrives at US$1,300/oz in 2016. The next projection starts with the beginning of the bull market in 2005 and arrives at US$1,500/oz in 2016. Finally, the 5-year moving average, which has contained the downside volatility over the course of the bull market, is currently at the US$1,400/oz level. As a final case, we also cite the three-year trailing daily average, which was US$1,300/oz, as of March 1. Therefore, we believe that US$1,300/oz is an appropriate long-term price, with the upside scenarios offsetting the forecast risk.

Range of short term volatility scenarios

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Exhibit 6: Annual Gold Price Range (20 years) – Several Levels of Long-Run Support Above US$1,300/oz

Source: Bloomberg

CONCLUSION Our technical analysis suggests that 2012 will be marked by further volatility, capping our near-term forecast at US$1,700/oz. Starting in 2013, our analysis forecasts a continuation of the uptrend into sustainable prices of US$1,900/oz and US$2,000/oz for the following three years. Our long-term annual average represents the low end of our projections, at US$1,300/oz.

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Recommendation: SPECULATIVE BUY Revised 12-Month Target: C$1.25

APOGEE SILVER LTD. 2 Risk Rating: ABOVE AVERAGE (TSXV-APE C$0.165) Analyst: Ryan Walker Apogee Silver Ltd. is a Canadian-based junior exploration and development company focused on the 100%-owned Pulacayo-Paca Ag-Pb-Zn project in Bolivia. The project centres on the formerly producing Pulacayo deposit - historically Bolivia’s second largest silver mine, which produced some 678mm oz silver, 200,000 tons zinc and 200,000 tons lead between 1883 and 1959. In May, Apogee was granted an environmental licence allowing underground exploration and trial mining of up to 200 tpd at Pulacayo.

Contained silver nearly doubled; overlying oxides yet to come: In mid-October 2011, Apogee updated Pulacayo’s resource estimate with Indicated resources totalling 5.96mm tonnes at 153.14 g/t Ag, 0.91% Pb and 2.04% Zn (29.3mm oz Ag, 119.6mm lbs Pb & 268mm lbs Zn), and 5.42mm tonnes of Inferred resources at 150.61 g/t Ag, 0.83% Pb and 2.07% Zn (26.2mm oz Ag, 99.2mm lbs Pb & 247mm lbs Zn). The new estimate represents a 76% increase in total contained silver (at 71% higher grade) from an October 2009 estimate. The deposit remains open, with historic workings extending over a strike length of ~2.7 km and to a depth of ~1 km. To date, Apogee has systematically drilled along just ~1.3 km of the known strike extent and to a vertical depth of ~550 metres.

Oxide potential: In late January, Apogee reported results from the first 21 drill holes to test overlying oxide Ag-Pb-Zn mineralization at Pulacayo. In all, the holes delivered a weighted average grade of 86.8 g/t Ag over an average core length of 5.96 metres. APE envisages the oxide mineralization as potentially amenable to lower cost open-pit mining and heap-leach recovery. Metallurgical test work has indicated silver dissolution of 77%-81%. Assay results from another 24 holes are pending, with a resource estimate expected by June 2012. In the boardroom, Stan Bharti, Marilia Bento and Maurice Colson recently resigned from the board; Bharti remains a strategic advisor to the board and Bento as VP Corporate Development and board advisor. Mr. Chantal Lavoie, currently CEO of Crocodile Gold, has been appointed to the board. The changes are aimed at reducing the number of non-independent directors.

We reiterate our SPECULATIVE BUY recommendation and C$1.25/share target price. We continue to value APE shares on a blended EV/oz and conceptual DCF basis. Under the EV/oz case, we ascribe US$2.50/oz of silver to APE’s existing silver resources (and assumed 25% near-term resource growth), with US$0.01/lb for contained lead and zinc resources, to arrive at a valuation of C$0.98/share. We have updated our conceptual DCF model of Pulacayo to include our new metal price deck and determined the net present value (at a 5% discount) to be C$1.74/share, net of 15% increases in both capex and opex assumptions. Averaging the two methodologies, we arrive at a rounded target price of C$1.25/share.

Potential Share Price Catalysts: Underground mining development and limited custom toll milling – Q4/11

NI 43-101 resource estimate including overlying oxide mineralization – H1/12

Results of a Feasibility study for larger-scale mining – H2/12

Commissioning of the Pulacayo pilot concentrator and tailings storage facility – Q4/12

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ATACAMA PACIFIC GOLD CORP.2 Risk Rating: ABOVE AVERAGE (TSXV-ATM C$3.61) Analyst: Ryan Walker

Atacama Pacific Gold Corp. is a Canadian-based junior precious metals exploration and development company focused on exploring the 100%-owned Cerro Maricunga oxide-associated gold deposit in northern Chile’s prolific Maricunga Mineral Belt. The property is situated 20 km south of the La Copia silver-gold mine and 30 km northwest of the Lobo Marte project, both owned by Kinross Gold (TSX-K; Not Rated).

Large and growing oxide gold resource in Chilean mining country: Cerro Maricunga hosts Indicated resources of 92.8mm tonnes at 0.54 g/t gold (1.62mm oz), with another 116.7mm tonnes at 0.52 g/t (1.95mm oz) classified as Inferred resources. The resource is contained in the Lynx, Phoenix and Crux zones, which all remain open at depth. The Lynx zone is limited to the northwest by a volcanic complex, as is the Crux zone to the southeast. In all, oxide-associated gold mineralization has been traced over more than 2.5 km of strike, widths of up to 400 metres, and to depths exceeding 500 metres.

Heap leachable with quick leach kinetics: Cerro Maricunga’s fine-grained gold mineralization is associated with black-banded quartz veining and finely disseminated iron oxides hosted by intrusive subvolcanics and related breccias emplaced along a north-westerly striking structure. Recent column tests confirm previous results, indicating gold recoveries of 77% to 86% at un-optimized, but moderate to low sodium cyanide consumption (<1 kg/t). The tests also indicated little drop off in gold recovery at a coarser crush size (80% at 19 mm versus 77% at 100 mm), and decreased sodium cyanide consumption at increased crush size, implying the potential for improved project economics.

Grade boost? ATM also notes that a pair of recent diamond drill holes that twinned earlier reverse-circulation holes returned 21% and 40% higher grades over similar intervals. It is important to note that existing resources employ ~77% reverse-circulation drill results. A modest increase in deposit-wide grade from the current 0.53 g/t results in a dramatic boost to our conceptual project 5%NAV estimate at the proposed 50,000-90,000 tonne per day processing rate.

We maintain our SPECULATIVE BUY rating and target price of C$9.50/share. With the deposit remaining open to expansion and definitive economic studies not yet available to aid in development of a robust cash flow model, we currently value ATM shares on a blended EV/oz and conceptual DCF basis. We value Cerro Maricunga’s existing 3.65mm oz total resource (and assume the ultimate delineation of 5mm ounces) at US$100/oz. We also include ATM’s cash (net of a planned US$24mm 2012 drill program). We have also incorporated our new metal price deck into our conceptual model of Cerro Maricunga’s cash flows and determined the NPV5% to be C$9.42/share, net of 10% increases in our capex and opex assumptions. We average the above two methodologies to arrive at a rounded target price of C$9.50/share.

Potential Share Price Catalysts: Further results from metallurgical test work – throughout 2012

Results of a Preliminary Economic Assessment – Q2/12

Results from ongoing 42,000-metre drill program – through Q2/12

NI 43-101 resource estimate – Q3/12

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Recommendation: SPECULATIVE BUY 12-Month Target: C$1.50

CARPATHIAN GOLD INC.2,3 Risk Rating: ABOVE AVERAGE (TSX-CPN C$0.49) Analyst: Stuart McDougall

Carpathian Gold Inc. is an emerging junior gold producer, exploration and development company. The Company’s two principal assets are Riacho dos Machados (RDM), in Brazil, and Rovina Valley, in Romania.

In April 2011, Carpathian announced a positive feasibility study on RDM, confirming its potential to produce an average of 93,400 oz per year, at a cash cost of US$558/oz. The Company has since secured the necessary permits and project funding to initiate development activities, with production scheduled to begin in mid-2013.

Proven and Probable Reserves of 21.0 million tonnes grading 1.24 g/t gold are sufficient to support operations for eight years, giving management considerable time to test for mineralized extensions along strike and to test the project’s potential to eventually support an underground operation.

Rovina Valley currently hosts total resources of 370.7 million tonnes averaging 0.59 g/t gold and 0.18% copper, for nearly 7.0 million oz contained gold and 1.44 billion lbs contained copper. Resources are spread among three proximal porphyry bodies that a March 2010 Preliminary Economic Assessment concluded could support annual production of nearly 200,000 oz gold and 50 million lbs copper over 19 years.

Drilling has since focused on the Ciresata underground deposit, given that the estimated resources for that deposit were all categorized as Inferred material and hence, ineligible for inclusion in a Prefeasibility Study currently underway. Reported results have not only added to the Company’s confidence levels, they have also extended the deposit nearly 300 metres deeper, intersecting up to 716 metres averaging 1.14 g/t gold and 0.16% copper in the deposit’s core.

We are maintaining our SPECULATIVE BUY recommendation and target price of C$1.50/share. Benefits arising from our higher gold price assumptions, particularly our increased long-term price, were offset by equity dilution related to a recent bought deal financing and modeling adjustments for RDM and Rovina Valley, both for cost inflation and timeline adjustments. Jennings Capital Inc. acted as an agent in the financing.

Discount US$ Million US$/Share US$/Share

Riacho dos Machados 5.0% $334 $0.56 Unadjusted NAV $1.28Rovina Valley 8.0% $500 $0.84 Target Multiple 1.00xCorporate 5.0% ($78) ($0.13) Unadjusted Valuation $1.28

Unadjusted NAV $756 $1.28 Adjustments $0.18Est. Cash & Equivalents (Dec. 31/11) $90 $0.15 Total Valuation $1.46Est. Options & Warrants (Dec. 31/11) $18 $0.03 USD:CAD 1.00

Adjusted NAV $864 $1.46

Current Share Price C$0.49 12‐Month Target C$1.50P/Adjusted NAV 0.34x Implied Return 206%

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Recommendation: BUY 12-Month Target: C$3.00

Previous 12-Month Target: C$3.25 CENTAMIN PLC.3 Risk Rating: ABOVE AVERAGE (TSX-CEE C$1.34) Analyst: Stuart McDougall

Centamin Plc. is a mid-tier gold production, exploration and development company focused on East Africa. The Company’s flagship operation is the Sukari open-pit gold mine in Egypt. A recent acquisition provides blue-sky exploration in the prospective Tigray region of northern Ethiopia.

In 2011, Centamin produced over 200,000 oz, at a cash cost of US$556/oz. Management has guided for production of 250,000 oz in 2012, at a relatively flat cash cost of US$550/oz. We expect production to grow to nearly 350,000 oz in 2013, while cash costs decline to an estimated US$480/oz, reflecting the expected completion of the Stage IV mill expansion in mid-year and greater contributions from the higher-grading underground mine. Among the key unique investment highlights we like about the story are:

Long mine life – Reserves of 9.1 million oz are sufficient to support planned production rates for 25 years, providing a solid platform for expansion elsewhere in Egypt or other regions of Africa;

Strong growth profile – We see annual production rates doubling by 2013, when the Phase IV mill expansion comes on stream, with only a 12% increase in cash costs, providing considerable margin growth from current price levels; and

Exploration upside – Sukari itself has room to grow, particularly at depth, and the surrounding regional targets still remain largely untested. Furthermore, the Company recently extended its portfolio to the prospective Tigray province of northern Ethiopia by taking over Sheba Exploration Plc.

Despite recent events at Sukari, for which we have adjusted our model, we remain of the view that CEE provides good value for investors with a longer-term view, particularly at the currently depressed price levels. The Company’s large reserve base, anti-hedging policy and strong balance sheet all bode well for pushing Sukari’s annual production beyond 500,000 oz, even if the goal line has been pushed back because of geopolitical and labour events over the past year. We are also encouraged by management’s prompt attention to the current labour unrest, but are cognizant of the further uncertainty it adds to the story.

That said, we are maintaining our BUY recommendation, but are reducing our target to C$3.00/share from C$3.25/share. Our higher gold price assumptions were essentially offset by increased cost assumptions for Sukari, extending the development timeline for the Stage IV expansion and reducing our multiple to 1.25x from 1.75x.


Sukari 5.0% $2,297 $2.08 Unadjusted NAV $2.32Exploration Upside In Situ $268 $0.24 Target Multiple 1.25x

Unadjusted NAV $2,565 $2.32 Unadjusted Valuation $2.90Cash & Equivalents (Dec. 31/11) $195 $0.18 Adjustments $0.19Options & Warrants (Dec. 31/11) $20 $0.02 Total Valuation $3.09

Adjusted NAV $2,779 $2.51 USD:CAD 1.00


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Recommendation: BUY Revised 12-Month Target: C$30.00 Previous 12-Month Target: C$23.50 FIRST MAJESTIC SILVER CORP.3 Risk Rating: ABOVE AVERAGE (TSX-FR C$18.38) Analyst: Stuart McDougall

First Majestic Silver Corp. is a mid-tier silver production, development, and exploration company focused on Mexico. The Company operates three mines, La Encantada, La Parrilla, and San Martin, and is quickly advancing the Del Toro project to production. A fifth project, La Luz, is an historic producer, putting it an advanced stage of exploration and the next in line for development. First Majestic owns all of its projects outright and follows a non-hedging policy, providing investors with full exposure to silver prices.

In 2011, First Majestic produced 7.2 million oz silver, at an average total cash cost of US$8.24/oz silver, net of credits. This marked the eighth consecutive year of expanded production and translated into a 146% increase in annual cash flow, to US$1.55/share. Production is expected to increase again in 2012, to between 8.2 and 8.7 million oz silver, and further still in 2013 and 2014, with management projecting annual production of 16.0 million oz by 2014. A recent decision to expand Del Toro to 4,000 tonnes per day should continue the upward trend into 2015.

In January, we toured three of the Company’s operations and were considerably impressed with each. In fact, if not for some lingering relics, we would be hard-pressed to cite any as being historic producers. In short, we commend management’s efforts to modernize and expand the operations and fully expect near-term expansion of the Company’s reserves and resources of 286.2 million oz, in addition to the noted production growth.

In summary, we continue to view First Majestic as one of the best and purest silver plays, providing operating cash flow, near-term production growth and longer-term exploration upside. These positive attributes, in turn, are backed by a solid balance sheet, with cash of US$91 million, working capital of US$110 million and debt of US$15 million as of December 31.

We continue to recommend purchase as a BUY and are raising our target to C$30.00/share from C$23.50/share, reflecting our revised price deck, net of adjustments to our in situ valuations to reflect the general pullback in the space. That said, based on our recent site visit, we see considerable upside arising from pending mine plan and resource updates scheduled for completion in 2012.


La Encantada 5.0% $625 $5.71 Unadjusted NAV $14.45La Parrilla 5.0% $471 $4.30 Target Multiple 2.00xSan Martin 5.0% $236 $2.15 Unadjusted Valuation $28.90Del Toro 5.0% $217 $1.98 Adjustments $1.21La Luz In Situ $164 $1.50 Total Valuation $30.11Corporate 5.0% ($131) ($1.19) USD:CAD 1.00

Unadjusted NAV $1,582 $14.45Cash & Equivalents (Dec. 31/11) $91 $0.83Options & Warrants (Dec. 31/11) $41 $0.37

Adjusted NAV $1,715 $15.66


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Previous 12-Month Target: C$3.75 GOLDGROUP MINING INC.2,3 Risk Rating: ABOVE AVERAGE (TSX-GGA C$1.15) Analyst: Ryan Walker

Goldgroup Mining Inc. is a junior gold exploration and development company focused on advancing into production the 100%-owned flagship Caballo Blanco project in Mexico. Goldgroup also owns 50% of the San Jose de Gracia gold project and 100% of the small producing Cerro Colorado gold mine in Mexico.

We have updated our model to reflect our new price deck, and pushed out the start date of production at Caballo Blanco to the beginning of Q3/13 from late Q4/12 to reflect increased uncertainty on permit timing following recent negative media comments by the Governor of Veracruz, Mexico. We have also reduced our NAV multiple to 1.0x from 1.25x previously to reflect general multiple contraction and the abovementioned increase uncertainty of permit timing.

We continue to model the proposed Caballo Blanco run-of-mine operation as a more standard crush and agglomerate operation as we await the results of large-scale column tests on run-of-mine sized material. We expect these metallurgical test results to be included as part of a Preliminary Economic Assessment later this quarter. We continue to see excellent exploration upside at both Caballo Blanco and the San Jose de Gracia project elsewhere in Mexico. We continue to value the latter on an in situ basis, as we expect a substantial drilling effort will be required to fully appreciate that deposit.

Plans for 2012 call for 30,000 m of drilling focussed in and around the La Paila zone (home to existing resources at Caballo Blanco), with 10,000 of those metres dedicated to satellite targets in the Northern zone.

We continue to recommend purchase of Goldgroup Mining shares as a SPECULATIVE BUY and increase our target to C$4.00/share from C$3.75/share.


Cerro Colorado 5% $62 $0.44 Unadjusted NAV $3.52Caballo Blanco 5% $445 $3.14 Target Multiple 1.00xSan José de Gracia in situ $56 $0.39 Unadjusted Valuation $3.52Corporate 5% ($64) ($0.45) Adjustments $0.37

Unadjusted NAV $498 $3.52 Total Valuation $3.89Cash, ITM Options & Warrants $52 $0.37 USD:CAD 1.00

Adjusted NAV $550 $3.89 C$3.89

Current Share Price C$1.15 Target C$4.00P/Adjusted NAV 0.30x Implied Return 248%

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Previous 12-Month Target: C$18.00 GUYANA GOLDFIELDS INC.3 Risk Rating: ABOVE AVERAGE (TSX-GUY C$4.83) Analyst: Stuart McDougall

Guyana Goldfields Inc. is a junior gold exploration and development company set to become Guyana’s next major producer, focused entirely on developing its advanced Aurora and nearby Aranka projects in the country’s Cuyuni greenstone belt.

In February, Guyana released a positive feasibility study on the Aurora project, confirming its amenability to combined open pit and underground mining techniques. At the base-case gold price assumption of US$1,300/oz, the project generated an after-tax NPV of US$432 million and an IRR of 12.7%, or US$1,164 million and 23.6%, at a gold price of US$1,775/oz. Development activities are scheduled to begin in H2/12, followed by open-pit production in mid-2014. In the meantime, management is reviewing several optimization opportunities, such as the use of contract miners and alternative power sources.

Subsequent to the study’s release, GUY announced a new discovery at Aranka. The so-called N1 prospect was discovered five kilometres northwest of the Sulphur Rose deposit, where total resources of 14.2 million tonnes grading 1.21 g/t gold, for 567,000 oz contained gold, have been outlined. Highlights from the first two holes included 20.0 metres grading 4.35 g/t gold, including 3.0 metres at 6.42 g/t and 1.0 metres grading 53.22 g/t.

Two rigs are still testing the zone’s extension along strike, with a third now being mobilized to facilitate the program. At this point, the zone measures 400 metres along strike and over 100 metres vertically, averaging 14.4 metres in estimated true-thickness, putting it a comparable size factor to Sulphur Rose. Moreover, mineralization is said to be similar between the two, and several similar-sized anomalies are known to occur along the estimated 10-kilometre long corridor.

We are maintaining our SPECULATIVE BUY recommendation, but are reducing our target to C$11.50/share from C$18.00/share. The reduction reflects a lower multiple and modeling updates for higher-than-expected costs and lower underground grades noted in the feasibility study. `

Discount C$ Million C$/Share C$/Share

Aurora 5.0% $754 $8.35 Unadjusted NAV $8.64Aranka In Situ $57 $0.63 Target Multiple 1.25xCorporate 5.0% ($30) ($0.34) Unadjusted Valuation $10.80

Unadjusted NAV $780 $8.64 Adjustments $0.78Cash & Equivalents (Feb. 29/12) $29 $0.32 Total Valuation $11.58Options & Warrants (Feb. 29/12) $42 $0.46 USD:CAD n/a



15



LEVON RESOURCES LTD.2 Risk Rating: ABOVE AVERAGE (TSXV-LVN C$0.84) Analyst: Stuart McDougall

Levon Resources Ltd. is a junior development company focused on expanding and advancing its Cordero silver-gold-zinc-lead project in Chihuahua State, northern Mexico. The Company holds 100% interests in nearly all of the 20,000 hectares encompassing the project, except for a small 15-hectare block, though negotiations with the underlying landholder are underway.

In June 2011, Levon announced an independent maiden resource estimate for the Pozo de Plata, Cordero Flesic Dome and Cordero Porphyry. Applying a net smelter return cut-off value of US$15/tonne, Independent Mining Consultants Inc. estimated total resources at 236.2 million tonnes averaging 34.5 g/t silver, 0.05 g/t gold, 0.75% zinc and 0.63% lead, for a contained 262.3 million oz silver, 560,000 oz gold, 3.9 billion lbs zinc and 2.4 billion lbs lead. Two-thirds is categorized as an Indicated Resource and the remainder as an Inferred Resource, providing good confidence levels in the overall resource. The deposit also remains open for expansion with further drilling, and this objective, along with upgrading the existing resource and testing five other intrusive centres, is the current focus of a Phase 4, 130,000-metre drill program. Permits for some of the targets are still pending, but are expected in the next two months.

More recently, in January, Levon released a positive Preliminary Economic Assessment for a proposed open-pit, conventional milling and flotation operation at Cordero. Consultants M3 Engineering & Technology estimated the base-case NPV at US$422.4 million, discounted at 5%, or US$293.5 million, discounted at 7%. The metal prices assumed in the calculation were: US$25.15/oz silver; US$1,385/oz gold; US$0.91/lb zinc; and US$0.96/lb lead, against initial capex of US$646.8 million and unit operating costs of US$13.82/tonne processed. Estimated recoveries and throughput rates put the project’ average annual production potential at 131 million oz silver, 190,000 oz gold, 1,373 million lbs zinc and 1,033 lbs lead, over 15 years.

We continue to value Levon on a metal-multiple basis, using US$2.50/oz of silver in the ground, based on the NI 43-101 resource estimate at an NSR cut-off of US$15/tonne. Accordingly, our target of C$3.00/share remains unchanged, though we would note that drilling is ongoing with two rigs turning and third on its way. Drilling is limited to existing roads, but an application for an expanded environmental permit has been submitted to cover all planned drill results.


Codero In Situ $656 $3.05 Unadjusted NAV $3.05Unadjusted NAV $656 $3.05 Target Multiple 1.00xEst. Cash & Equivalents (Dec. 31/11) n/a n/a Unadjusted Valuation $3.05Est. Options & Warrants (Dec. 31/11) n/a n/a Adjustments $0.00

Adjusted NAV $656 $3.05 Total Valuation $3.05USD:CAD n/a


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Recommendation: BUY 12-Month Target: C$18.50 NEW GOLD INC.3 Risk Rating: ABOVE AVERAGE (TSX-NGD C$10.06) Analyst: Stuart McDougall

New Gold Inc. is a growing mid-tier gold producer with three operating mines in Australia, Brazil and Mexico. The Company also produces appreciable by-product silver and copper, and is quickly advancing the New Afton underground copper-gold-silver deposit in British Columbia, where commercial operations are scheduled to begin in mid-year. NGD also owns a 30% interest in the El Morro copper-gold project in Chile and a 100%-interest in the earlier-staged Blackwater gold project in central British Columbia.

In 2011, NGD produced over 387,000 oz gold, at a total cash cost of US$446/oz sold, net of by-product credits from sales of 2.0 million oz silver and 15.3 million lbs copper. Production is expected to increase to 405,000-445,000 oz gold in 2012, whereas total cash costs are forecast to decline to US$410-US$430/oz, net of credits from 1.9-2.1 million oz silver and 42-49 million lbs copper (valued at US$30/oz and US$3.50/lb). We expect gold and copper production to expand even further in 2013, reflecting a full year’s worth of commercial production at New Afton.

In our view, New Gold remains a go-to name in the mid-tier space for its exceptional track record, solid operating performance and growing production profile. The El Morro and Blackwater development projects are icing on the cake, with the latter expected to vault the Company to nearly 1.0 million oz of annual gold production by 2017. Furthermore, based on our modelling and metal price assumptions, New Gold should be able to achieve that milestone with little need for further equity dilution, if any.

We are maintaining our BUY recommendation and target of C$18.50/share, based on the continued use of a 1.75x multiple to our unadjusted NAV, plus cash and options/warrants at par. Against our higher price deck, we have updated our model for various factors, including Q4/11 financials and year-end reserve and resource updates, particularly the expansion of Blackwater since our last update in September 2011.


Mesquite 5.0% $972 $2.03 Unadjusted NAV $10.00Cerro San Pedro 5.0% $819 $1.71 Target Multiple 1.75xPeak Mines 5.0% $501 $1.04 Unadjusted Valuation $17.50New Afton 5.0% $1,087 $2.27 Adjustments $0.89El Morro 5.0% $688 $1.43 Total Valuation $18.39Blackwater In Situ $1,184 $2.47 USD:CAD 1.00Corporate 5.0% ($453) ($0.94)

Unadjusted NAV $4,798 $10.00Cash & Equivalents (Dec. 31/11) $310 $0.65Options & Warrants (Dec. 31/11) $117 $0.24



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PERSHIMCO RESOURCES INC.2,3 Risk Rating: ABOVE AVERAGE (TSXV-PRO C$1.40) Analyst: Ryan Walker

Pershimco Resources Inc. is a junior gold exploration company focused on the 100%-owned flagship Cerro Quema gold-copper project in Panama. Pershimco also owns the Courville gold project near Val-d'Or, Québec, where Osisko Mining Corp. (TSX-OSK; Not Rated) can earn an initial 51% interest by funding US$20mm of exploration over five years, and increase that to 70% for another US$19mm over two subsequent years, or by completing a feasibility study.

Cerro Quema hosts existing Indicated oxide gold resources totalling 7.2mm tonnes grading 1.1 g/t gold (256k oz) in the La Pava deposit. The company is currently drilling on the nearby Quema target to bring a historic resource there into NI 43-101 compliance. The company has also been successfully extending outwards oxide gold mineralization in both areas. Recent drilling south of the main La Pava target recently returned highlight holes PRH11021, which cut 45 m of 2.01 g/t gold and hole PRH11022, which encountered 43 m at 2.08 g/t gold; both intervals begin at surface. Deeper drilling has also encountered encouraging underlying copper-gold sulphide mineralization. We continue to see excellent exploration potential at Cerro Quema, with efforts to date focussed on the western 4-km portion of the 17-km-long Cerro Quema gold-copper trend, which hosts the La Pava and Quema deposits, and the La Pava Norte, Filo Chontal, Mesita, and Cerro Idalda targets. Importantly, the favourable alteration that hosts these deposits and targets extends east from Quema for approximately 8 km.

Valuation: We continue to value Pershimco’s shares on an EV/oz gold basis, with the existing La Pava Indicated resource (256,000 oz) and historic Quema resource (104,000 oz) valued at US$150/oz. In all, we assume Pershimco will be successful in demonstrating the potential for a total of at least 2mm ounces of oxide gold in the relative near term; we value those additional potential ounces at US$150/oz to arrive at a target price of C$2.00/share. We ascribe a premium per-oz valuation relative to the comps to reflect the potential for low capex and opex owing to Cerro Quema’s at-surface oxide gold mineralization, substantial exploration potential (beyond the abovementioned 2mm oz), ease of access to the project, and pre-existing permitting (up to 5,000 tpd). We do not currently include any value for copper-gold sulphide mineralization immediately below the oxide gold resources. We have also incorporated Pershimco’s recently completed C$30mm bought deal financing and the associated dilution. Jennings Capital Inc. acted as an agent in that financing.

We continue to recommend purchase of Pershimco Resources shares as a SPECULATIVE BUY and maintain our C$2.00/share target price.

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Revised Recommendation: SPECULATIVE BUY 12-Month Target: C$4.75

PROBE MINES LIMITED2,3 Risk Rating: ABOVE AVERAGE (TSXV-PRB $1.77) Analyst: Peter Campbell

Probe Mines Limited is a Canadian-based junior exploration company whose main asset is the Borden Lake gold discovery located near Chapleau, Ontario. The deposit remains open along strike and at depth. The Company has a significant land package that is highly prospective for look-alike deposits. Probe has two other assets that could potentially be liquidated to help fund activities at Borden Lake: The Black Creek chromite deposit and a 5% NSR on a portion of Agnico Eagle’s (TSX-AEM; Not Rated) Goldex Mine.

Probe Mines is one of our 2012 Top Picks for three reasons: Our gold comps for Exploration & Development companies are trading at an EV/oz of US$62, as

compared to Probe, which is currently trading at US$23/oz. This alone ought to be compelling enough to qualify it as a Top Pick. We believe Probe’s resource is a “premium-quality” resource that ought to demand a premium valuation:

Borden Lake is located in a politically safe and mining friendly jurisdiction (Chapleau, Ontario); and

Borden Lake is well situated, just 9 km from Chapleau and 1 km off Hwy 101.

In March 2012, we expect Probe to deliver an updated resource estimate on its Borden Lake deposit. The Company reports that the deposit remains open in all directions. With step-out and infill drilling completed in 2011, we believe that Probe is set to deliver up to 2 million more ounces at Borden Lake, bringing the total resource up to approximately 6 million ounces. The potential for a significant increase in the total resource size further underscores the valuation gap identified above.

Perhaps more significantly, we believe there is a reasonable expectation for another significant discovery on the project. The deposit at Borden Lake consists of a broad zone of mineralization that lies within a package of Temiskaming-age metasediments. Gold there is found within a stratigraphic horizon referred to as the Borden Lake Horizon. Pyrite, and somewhat surprisingly pyrrhotite, is associated with the gold mineralization. In the Borden Lake Horizon, the Borden Lake gold deposit appears as a weak AEM anomaly (“Airborne Electro-Magnetic”) largely due to the associated pyrite and pyrrhotite. The belt is interpreted to have been folded along a northwest-southeast axis with the Borden Lake deposit situated along the southern limb. Probe’s land position covers the southern limb, large portions of the northern limb and the all-important “nose” or “hinge” of the fold axis. AEM anomalies, similar in response to those found coincident with the Borden Lake deposit, have been detected along the northern limb and especially in the fold-hinge area. We believe that further discoveries are waiting to be made in the Borden Lake horizon, especially in the fold-hinge area. While assays from initial drilling in the fold hinge area did not deliver a new discovery, we are very encouraged by the confluence of geology, structure and geophysics and believe this to be one of the best untested geological targets we have ever seen

We continue to value Probe using an in situ valuation of US$100 EV/oz for Borden Lake based on 3.05 million oz of NI 43-101 Indicated and Inferred Resources at a 0.50 g/t Au cut-off. We continue to include cash in our valuation because we believe additional exploration spending is likely to be accretive to our valuation. Probe spent approximately US$4 million to delineate 4 million oz (at a 0.30 g/t Au cut-off), or approximately US$1/oz. We have discounted Cash, Options and Warrants at 8%, for a value of C$0.58 per fully diluted share. Accordingly, we have maintained our 12-month target price for Probe Mines of C$4.75/share, SPECULATIVE BUY recommendation, and ABOVE AVERAGE risk rating.

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RIO NOVO GOLD INC. Risk Rating: ABOVE AVERAGE (TSX-RN C$0.65) Analyst: Ryan Walker

Rio Novo Gold Inc. is a junior gold exploration and development company focused on the 100%-owned Almas and Guarantã gold projects in Brazil. The Company also owns the Toldafira gold project in Colombia.

Almas: Rio Novo expects to deliver a Preliminary Economic Assessment at Almas in March 2012. In November 2011, the Company restarted work toward a Feasibility Study following drilling success at the Vira Saia target ~4 km north of the existing Paiol Pit. Recent infill drilling (21 holes) there yielded a weighted average grade of 1.31 g/t gold over an average interval of 13.5 m. By comparison, the nearby Paiol deposit hosts potentially open-pittable Measured and Indicated resources totalling 13.9mm tonnes at 0.98 g/t gold (437,989 oz). So far, Rio Novo has completed 187 diamond drill holes (for +25,000 m) at Vira Saia to outline mineralization over 650 m of strike, with vein widths of up to 30 m, and to depths exceeding 200m. RN notes that initial metallurgical test work on Vira Saia samples suggests gold recovery similar to those at Paiol under the same proposed gravity/carbon-in-leach process flow sheet. RN was awarded a Licenca de Instalacao (Construction License) at Almas Late last year. It allows for construction, subject to approval of engineering design documents, archaeological inspection, fauna and flora rescue plans, and other environmental preconditions, which will be addressed in the Feasibility Study due in Q3/12. It also allows RN to apply to the Departamento Nacional de Producao Mineral (DNPM) for reinstatement of the mining concession for the Paiol mine.

Toldafira: To date, some 3,314 samples have been collected from surface and some 14 km of underground workings at Toldafira. The results outline both high-grade sheeted vein zones and stockworks over a 650m-by-700m area. The project is home to Inferred resources of 12.4mm tonnes at 2.38 g/t gold (949k oz). RN plans an initial 3,000-metre drill program in H1/12, pending permitting, followed by a planned 5,000-metre follow-up program later in the year in anticipation of an updated resource estimate in H2/12. We maintain our SPECULATIVE BUY recommendation and C$2.00/share target price. We have incorporated our updated metal price deck into our conceptual DCF analysis of the Almas project, yielding a NPV5% of $0.75/share, net of a 25% increase in our capex assumption and 15% increase in opex assumptions. We also include US$100/oz for existing NI 43-101 ounces at Almas (~380k total underground ounces), Guarantã (369k total oz), and Toldafira (~950k oz inferred) for a total of ~$170mm, or C$1.23/share. To that we add half of the company’s cash of US$28mm, or C$0.10/share, to arrive at a target price of C$2.00/share.

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SCORPIO GOLD CORP.2,3 Risk Rating: ABOVE AVERAGE (TSXV-SGN C$1.03) Analyst: Stuart McDougall

Scorpio Gold Corp. is an emerging junior gold producer, involved in the acquisition and development of gold properties in North America. The Company’s principal asset is the historic Mineral Ridge, a fully permitted open-pit, heap-leach gold mine located in Nevada.

In June 2010, SGN announced the first ever NI 43-101 compliant resource on Mineral Ridge and has since extended the two main zones beyond the pit limits in two follow-up phases of drilling. Measured and Indicated Resources were estimated at 4.70 million tons grading 0.047 oz/ton gold, for 221,000 oz contained gold. An additional 3.79 million tons grading 0.036 oz/ton gold was categorized as an Inferred Resource, providing another 136,000 oz contained gold.

In August 2010, SGN awarded a crushing contract for re-stacking the leach pad with old material. A project debt facility was secured two months later, followed by a contract mining agreement in May 2011. The debt facility has since been restructured under more favourable terms and whittled down to under C$6.0 million, with expectations for full repayment in mid-2012.

Reactivation of the leach pad began in February 2011, followed by the first shipment of loaded carbon to an outside refiner in late April. The first sale of doré occurred in late June, and regular shipments and full-scale mining rates are now underway. Management expects to declare commercial operations as of January 1, 2012 and produce approximately 60,000 oz in 2012, rising to approximately 80,000 oz in 2013. Over the same period, cash costs are projected to fall from US$680/oz to approximately US$630/oz, providing good potential for beats to our own estimates.

Beyond rebuilding and restarting the mine, SGN has been carrying out an aggressive exploration program, in preparation for an upcoming reserve and resource update. We continue to conservatively look for an additional 250,000 oz from that update, noting that actual mining grades to date have been nearly twice the resource grade.

We are maintaining our SPECULATIVE BUY recommendation and target of C$1.75/share. Owing to Mineral Ridge’s relatively short mine life, which is itself a reflection of current resources and permitting restrictions on the existing pad, our higher long-term gold price assumption has no affect on our valuation. That being said, the Company has already begun base-line studies in anticipation of continued exploration success and eventual expansion of the mine life, offering further upside from our valuation. Otherwise, we have increased our multiple to 1.25x from 1.00x in order to account for re-rating potential as the company enters commercial operations, offset by the application of more conservative in-situ multiples to resources and anticipated resources, similar to the way we are treating other companies under coverage. `


Mineral Ridge 5.0% $131 $1.01 Unadjusted NAV $1.31Exploration Upside In Situ $39 $0.30 Target Multiple 1.25x

Unadjusted NAV $169 $1.31 Unadjusted Valuation $1.64Est. Cash & Equivalents (Dec. 31/11) $12 $0.09 Adjustments $0.18Est. Options & Warrants (Dec. 31/11) $11 $0.09 Total Valuation $1.82

Adjusted NAV $193 $1.49 USD:CAD n/a


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Recommendation: BUY Revised 12-Month Target: C$11.50

Previous 12-Month Target: C$15.00 SEMAFO INC.3 Risk Rating: ABOVE AVERAGE (TSX-SMF C$5.98) Analyst: Stuart McDougall

SEMAFO Inc. is a mid-tier gold production, exploration and development company focused on West Africa. The Company currently operates a mine in each of Burkina Faso, Niger, and Guinea.

In 2011, SMF produced 250,100 oz gold from its three mines, including 187,800 oz from the flagship Mana mine, in Burkina Faso. Cash costs are scheduled for release with year-end financial estimates on March 14. Management had advised for US$595-US$645/oz in 2011, prompting us to maintain our expectations for US$647/oz in the final quarter. For 2012, production is expected to remain flat, with guidance for between 235,000 and 260,000 oz, but cash costs are forecast to rise considerably, to US$700-US$750/oz, partly reflecting inflationary pressures on fuel and consumables. We have adjusted our model accordingly.

On the exploration front, SMF has budgeted US$45 million for 2012, of which US$36 million has been allocated for Mana. The remainder will be split between the Samira Hill and Kiniero mines, in Niger and Guinea, respectively, and represents a meaningful increase from 2011 expenditures.

Going forward, SMF expects to install a new crushing and milling facility at the Mana mine by H2/14. Although details are still being ironed out, the plan is to erect a facility with capacity to treat 6,000 tonnes per day from the Fobiri-Fofina-Yaho deposits, thus potentially increasing total mine output by 120,000 oz per year.

We are maintaining our BUY recommendation and lowering our target to C$11.50/share from C$15.00/share, reflecting our new price deck, net of modeling adjustments for guidance, a reduction of our multiple and more conservative in-situ valuations for resources.


Mana 5.0% $1,415 $5.01 Unadjusted NAV $6.06Samira Hill 5.0% $256 $0.91 Target Multiple 1.75xKiniero 5.0% $172 $0.61 Unadjusted Valuation $10.61Corporate 5.0% ($131) ($0.46) Adjustments $0.86

Unadjusted NAV $1,712 $6.06 Total Valuation $11.47Est. Cash & Equivalents (Dec. 31/11) $244 $0.86 USD:CAD 1.00Est. Options & Warrants (Dec. 31/11) $0 $0.00GoviEx Interest $19 $0.07



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Previous 12-Month Target: C$5.00 SILVERCREST MINES INC.2,3 Risk Rating: ABOVE AVERAGE (TSXV-SVL C$2.62) Analyst: Stuart McDougall

SilverCrest Mines is a newly emerging, well-financed junior gold and silver producer focused on Mexico. The Company operates the high-grade Santa Elena heap-leach mine in Sonora State and is advancing two other projects, the satellite Cruz de Mayo silver deposit and the standalone La Joya silver-copper-gold skarn discovery in Durango State.

Recently, SilverCrest announced an initial resource estimate for La Joya, incorporating 5,753 metres of its own drilling completed since the early 2011 acquisition, as well as an independently verified historic database, for 21,473 metres in all. Inferred Resources were estimated at 57.94 million tonnes grading 28.0 g/t silver, 0.18g/t gold, and 0.21% copper, for a contained 51.3 million oz silver, 270.3 million lb copper and 333,400 oz gold.

SilverCrest has already completed 14 of a planned 80-hole, Phase II drill program, with assays results on the first ten holes expected shortly. The initial holes were collared north of the known zone, while drill roads are developed to its south, in preparation for the arrival of two more rigs. Notably, surface sampling and mapping, along with core logging of historic holes, suggest good potential for the projected southern extension.

SilverCrest has also begun an underground development program at Santa Elena, as part of a proposed switch to a larger milling operation. Combined with the development of Cruz de Mayo, the Company expects the development program to push annual production rates to over 5.0 million oz silver-equivalent by the end of 2013 (assuming a 55:1 Ag-Au ratio). Capex is estimated at US$84 million, including a 25% contingency, and cash costs are projected at US$9.70/oz silver-equivalent over the life-of-mine.

Going forward, we expect SVL to release Q4/11 financial results by month’s end, followed by an updated mine plan and resource estimate for Santa Elena in Q2/12 and an updated resource update for La Joya in H2/12. In the meantime, we expect a steady flow of drill results from both projects, noting that six to ten planned deep holes at Santa Elena are scheduled for inclusion in the next reserve and resource update.

SVL is our TOP PICK, given its excellent transition to producer status, strong growth potential at Santa Elena and blue-sky upside at La Joya. We are maintaining our SPECULATIVE BUY recommendation and raising our target to C$6.50/share from C$5.00/share, reflecting our new price deck, net of minor modeling adjustments and less aggressive in-situ resource valuations. `


Santa Elena 5.0% $244 $2.46 Unadjusted NAV $4.78Cruz de Mayo In Situ $54 $0.54 Target Multiple 1.25xLa Joya In Situ $188 $1.90 Unadjusted Valuation $6.00Corporate 5.0% ($12) ($0.12) Adjustments $0.43

Unadjusted NAV $474 $4.78 Total Valuation $6.43Est. Cash & Equivalents (Dec. 31/11) $30 $0.30 USD:CAD 1.00Est. Options & Warrants (Dec. 31/11) $13 $0.13



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Previous 12-Month Target: C$4.50 SULLIDEN GOLD CORP. 2,3 Risk Rating: ABOVE AVERAGE (TSX-SUE C$1.42) Analyst: Ryan Walker Sulliden Gold Corporation Ltd. is a junior gold exploration and development company focused on exploring and advancing into production the 100%-owned Shahuindo gold-silver project in northern Peru.

Substantial Exploration Upside: Sulliden is in the midst of a 70,000-metre drill program at Shahuindo where oxide resources total 2.2 million ounces gold and 30.3 million oz silver. Drilling continues in and around the existing resource, and in the North Corridor - a large geochemical and geophysical anomaly some 2 km to the north. Limited drilling there returned a highlight oxide intersection of 53.8 metres grading 0.85 g/t gold and 71.4 g/t silver earlier this year. Multiple additional nearby targets remain virtually undrilled. The deposit’s underlying sulphides have also emerged as an important exploration target, delivering an updated Inferred resource totalling 1.2 million ounces of gold and 36 million ounces of silver, based on limited drilling. Deeper drilling to gain a better understanding of the sulphides is ongoing as part of the 2012 drill program.

Looking ahead, an updated resource estimate based on all drilling to the end of 2011 and an associated Feasibility Study solely focused on Shahuindo’s oxides are expected during Q2/12. Submission of the project’s Environmental Impact Assessment is expected during H2/12. Drill plans in 2012 call for continued drilling on the 3.8-km-long Central Corridor (home to existing resources), which remains open in all directions. Drilling will also focus on several adjacent targets, including the 1.6-km North-West and 800-metre South-East extension geochemical and geophysical targets. Drilling will also continue in the North Corridor.

We continue to recommend purchase of Sulliden Gold shares as a SPECULATIVE BUY and increase our target share price to C$4.75/share from C$4.50/share. Our target price now reflects the application of a 1.25x NAV multiple versus 1.50x previously to account for general multiple contraction and recent social unrest surrounding the Minas Congas project, also in the district. We have also incorporated our new price deck, and increased our Shahuindo capex assumption by 15% and opex assumptions by 5%.


Shahuindo 5% $840 $2.95 Unadjusted NAV $3.53Shahuindo Sulphides In Situ $166 $0.58 Target Multiple 1.25x

Unadjusted NAV $1,006 $3.53 Unadjusted Valuation $4.41Cash $73 $0.25 Adjustments $0.32ITM Options & Warrants $20 $0.07 Total Valuation $4.73

Adjusted NAV $1,099 $3.85 USD:CAD 1.01

Current Share Price $1.42 12‐Month Target $4.75P/Adjusted NAV 0.37x Implied Return 235%

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Previous 12-Month Target: C$4.25 TIMMINS GOLD CORP.3 Risk Rating: ABOVE AVERAGE (TSX-TMM C$2.60) Analyst: Stuart McDougall

Timmins Gold Corp. is a junior gold producer, explorer and developer focused on Mexico. The Company’s flagship asset, San Francisco, in Sonora State, began heap-leach production in December 2008, followed by commercial operations in April 2010.

In November 2011, Timmins announced the completion of an updated mine plan and production schedule, whereby daily crushing rates would be pushed to 32,000 tonnes from 18,000 tonnes. Accordingly, annual production rates are expected to increase to 131,000 oz per year over the 2012-2016 period, at an average cash cost of US$633/oz. Capital costs for the expansion are projected at US$28 million, with US$19.0 million budgeted for 2012 and US$3.0 million in each of the following three years.

The new mine plan is based on a September 2011 reserve and resource update for the San Francisco and nearby La Chicharra deposits. Combined Proven and Probable Reserves were estimated at 72.39 million tonnes grading 0.57 g/t gold, for 1.33 million oz contained gold, representing an increase of 500,000 oz gold, net of depletion. Importantly, Inferred Resources increased nearly five-fold to 73.7 million tonnes grading 0.42 g/t gold, for 1.0 million oz contained gold, offering excellent potential for expanding the mine life with further drilling.

Going forward, TMM plans to release another reserve and resource by the end of Q1/12. The update is incorporating over 100,000 metres of drilling completed between July and December, the results for which were excluded from the current estimate.

We have updated our model for the new mine plan, our new price deck and recently announced Q4/11 operational results.

The effect of the increased metal prices was partially offset by upward adjustments in our capital and operating costs in conjunction with the expansion.

We are maintaining our SPECULTIVE BUY recommendation and raising our target to C$4.50/share from C$4.25/share, reflecting our new price deck and the increased production projections, net of increases in our capital and operating cost assumptions relative to our last update. We have also reduced our multiple to recognize the fact that our model now incorporates some of the noted upside.


San Francisco 5.0% $420 $2.82 Unadjusted NAV $3.49Exploration Upside In Situ $101 $0.67 Target Multiple 1.25x

Unadjusted NAV $521 $3.49 Unadjusted Valuation $4.36Est. Cash & Equivalents (Dec. 31/11) $12 $0.08 Adjustments $0.18Est. Options & Warrants (Dec. 31/11) $14 $0.10 Total Valuation $4.54

Adjusted NAV $547 $3.67 USD:CAD 1.00


25


Revised Recommendation: SPECULATIVE BUY 12-Month Target: C$4.00

TRELAWNEY MINING AND EXPLORATION INC.2,3 Risk Rating: ABOVE AVERAGE (TSXV-TRR $2.48) Analyst: Peter Campbell

Trelawney Mining and Exploration Inc. is a Canadian-based junior development company focused on expanding and advancing its Coté Lake gold project located between Timmins and Sudbury, Ontario. Coté Lake, a significant grass roots discovery, is currently the subject of intense infill and exploration drilling by the Company.

On February 24, 2012, Trelawney announced an updated resource estimate for its Coté Lake deposit, increasing from 4.2 mm oz Au grading 1.0 g/t Au to 6.9 mm oz Au grading 0.9 g/t Au (combined resources @ 0.3 g/t Au cut-off grade). Tonnes have increased 82% to 239.0 mt (was 131.0 mt) and contained ounces have increased 63% to 6.0 mm (was 4.2 mm). However, the deposit grade has declined from 1.0 g/t Au to 0.9 g/t. At least part of this decline is due to the use of a lower capping grade (20 g/t Au) that was applied to approximately half the deposit. The updated resource is based on 65,866 metres of drilling, 180% more than the amount of drilling that was used to estimate the previous resource. The resource update is in line with our estimate – within 5% of our estimate for total contained gold ounces – which was 205.2 mt grading 1.1 g/t Au for 7.2 mm oz Au. The variance with our estimate is almost entirely due to grade which is a function of our method of resource estimation (sectional polygons) as compared to the more precise method used by Trelawney (block modelling). With the updated resource being reported at a variety of cut-off grades, the Coté Lake deposit may be starting to look better at the higher 0.5 g/t cut-off grade (e.g. 180 mt @ 1.05 g/t for 6.07 mm oz Au). This gets the deposit back over the psychological threshold of 1 g/t Au average grade. We believe that the Coté Lake deposit remains one of the best, undeveloped gold deposits, especially given its superior location (i.e. half way between Timmins and Sudbury).

Drilling continues on Trelawney's property with a total of 11 diamond drill rigs: 8 on in-fill drilling at Coté Lake

1 on step-out drilling at Coté Lake

2 on condemnation drilling for future engineering studies on Coté Lake and regional work

We continue to value Trelawney using an in situ valuation of US$100 EV/oz for Coté Lake and US$50 EV/oz for “exploration upside” to Trelawney’s other assets (i.e. Chester 1, 2, 3, and Jerome). Accordingly, we have maintained our 12-month target price for Trelawney Mining of C$4.00/share, SPECULATIVE BUY recommendation, and ABOVE AVERAGE risk rating.

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Recommendation: SPECULATIVE BUY Revised 12-Month Target: C$5.00 Previous 12-Month Target: C$4.00 VOLTA RESOURCES INC.3 Risk Rating: ABOVE AVERAGE (TSX-VTR $1.34) Analyst: Stuart McDougall

Volta Resources Inc. is a junior gold exploration and development company, engaged in the acquisition and exploration of gold prospects in West Africa. The Company’s flagship project is the advanced Kiaka gold deposit, in Burkina Faso.

In June, 2011, Volta announced that it had more than doubled the size of the Kiaka deposit, while increasing confidence levels over the previous, maiden resource announced a year earlier. SRK Consulting Ltd. estimated Measured and Indicated Resources at 90.3 million tonnes grading 1.04 g/t gold, for 3.0 million oz contained gold, or 118% more than before. Moreover, approximately one-third was categorized as measured, versus none before. Inferred Resources were estimated at 38.5 million tonnes grading 1.0 g/t, for 1.3 million oz contained gold, or 163% higher. Mineralization remained open in several directions for expansion with further drilling, a fact that has been consistently borne out by subsequent infill and delineation drilling.

More recently, in February, Volta announced the discovery of a high-grade zone approximately 700 metres southwest of the Kiaka Central Area. The zone returned multiple one-metre intercepts exceeding 10 g/t gold, but also wide widths of disseminated high-grade mineralization. Among the more speculator intersections was 25.0 metres grading 9.22 g/t, including 10 metres at 16.64 g/t, and 25.0 metres grading 5.15 g/t, including 12.0 metres grading 10.43 g/t. The zone starts nearly at surface and remains open in all directions, prompting the Company make it a priority target for an ongoing 50,000-metre drill program.

Also in February, the Company announced that it had increased its landholdings in the vicinity of Kiaka project by over 800%, by means of a permit exchange with Randgold Resources. Going forward, Volta expects to complete an updated resource estimate in the next few weeks, followed by a prefeasibility study in mid-April.

Volta also provides investors with exposure to the Gaoua copper-gold project in southwestern Burkina Faso, the Nassara project located in southern Burkina Faso, and the Toufe prospect on the Titao 1 permit, in northwestern Burkina Faso.

We are maintaining our SPECULTIVE BUY recommendation and raising our target to C$5.00/share from C$4.00/share, reflecting our new price deck, net of increased cost assumptions and more conservative metal recovery assumptions in our Kiaka model. We have also applied more conservative in situ multiples to Gaoua’s inferred resources.


Kiaka 5% $577 $3.49 Unadjusted NAV $4.74Gaoua In Situ $106 $0.64 Target Multiple 1.00xExploration Upside In Situ $100 $0.61 Unadjusted Valuation $4.74

Unadjusted NAV $783 $4.74 Adjustments $0.34Est. Cash & Equivalents (Dec. 31/11) $43 $0.26 Total Valuation $5.08Est. Options & Warrants Dec. 31/11) $13 $0.08 USD:CAD n/a


Current Share Price $1.34 12‐Month Target $5.00P/Adj. NAV 0.26x Implied Return 273%

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APPENDIX A – REVISED COMMODITY PRICE FORECASTS AND CORRESPONDING VALUATION METRICS

(Revised) (Previous) (Revised) (Previous) (Revised) (Previous) (Revised) (Previous) (Revised) (Previous)

COMMODITYGold ‐ (US$/oz) $1,700 $2,000 $1,900 $1,800 $2,000 $1,500 $1,900 $1,100 $1,300 $1,100Silver ‐ (US$/oz) $34.00 $50.00 $38.00 $40.00 $40.00 $30.00 $38.00 $20.00 $26.00 $20.00

PRICE IROR P/NAV SHARES O/S MARKET CAP EV(C$/sh) (Revised) (Previous) (%) (Revised) (Previous) (x) (MM) (C$MM) (US$MM)

PRODUCERSCentamin Plc. SM/GD TSX:CEE $1.34 $3.00 $3.25 124% $2.51 $1.91 0.5x 1,096 $1,469 $1,267First Majestic Silver Corp. SM/GD TSX:FR $18.38 $30.00 $23.50 63% $15.66 $12.25 1.2x 105 $1,930 $1,839Goldgroup Mining Inc. RW TSX:GGA $1.15 $4.00 $3.75 248% $3.89 $3.09 0.3x 129 $148 $118New Gold Inc. SM/GD TSX:NGD $10.06 $18.50 $18.50 84% $10.89 $11.08 0.9x 461 $4,638 $4,446Scorpio Gold Corp. SM/GD TSXV:SGN $1.03 $1.75 $1.75 70% $1.49 $1.63 0.7x 113 $116 $109SEMAFO Inc. SM/GD TSX:SMF $5.98 $11.50 $15.00 92% $6.99 $7.90 0.9x 273 $1,633 $1,411SilverCrest Mines Inc. SM/GD TSXV:SVL $2.62 $6.50 $5.00 148% $5.21 $3.50 0.5x 87 $228 $197Timmins Gold Corp. SM/GD TSX:TMM $2.60 $4.50 $4.25 73% $3.67 $2.89 0.7x 142 $369 $379

DEVELOPERSApogee Silver Ltd. RW TSXV:APE $0.17 $1.25 $1.25 658% $1.36 $1.18 0.1x 295 $49 $33Atacama Pacific Gold Corp. RW TSXV:ATM $3.61 $9.50 $9.50 163% $9.58 $9.62 0.4x 48 $173 $127Carpathian Gold Inc. SM/GD TSX:CPN $0.49 $1.50 $1.50 206% $1.46 $1.54 0.3x 554 $271 $211Guyana Goldfields Inc. SM/GD TSX:GUY $4.83 $11.50 $18.00 138% $9.42 $10.74 0.5x 84 $406 $370Levon Resources Ltd. SM/GD TSX:LVN $0.84 $3.00 $3.00 257% $3.05 $3.05 0.3x 199 $167 $103Pershimco Resources Inc. RW TSXV:PRO $1.40 $2.00 $2.00 43% $1.94 $1.95 0.7x 140 $196 $185Probe Mines Ltd. PC/SL TSXV:PRB $1.77 $4.75 $4.75 168% $4.73 $4.73 0.4x 65 $115 $94Rio Novo Gold Inc. RW TSX:RN $0.65 $2.00 $2.00 208% $2.08 $1.93 0.3x 113 $73 $36Sulliden Gold Corp. RW TSX:SUE $1.42 $4.75 $4.50 235% $3.85 $3.11 0.4x 243 $345 $271Trelawney Mining & Exploration Ltd. PC/SL TSXV:TRR $2.48 $4.00 $4.00 61% $3.97 $0.00 0.6x 177 $439 $355Volta Resources Inc. SM/GD TSX:VTR $1.34 $5.00 $4.00 273% $5.08 $3.90 0.3x 155 $208 $156SM = Stuart McDougall; GD = Greg Doyle; RW = Ryan Walker; PC = Peter Campbell; SL = Spencer Langley

(Revised) (Previous) (Revised) (Previous) (Revised) (Previous) (Revised) (Previous) (Revised) (Previous) (Revised) (Previous)

PRODUCERSCentamin Plc. $0.16 $0.29 $0.27 $0.37 $0.43 $0.24 $0.22 $0.36 $0.35 $0.44 $0.51 $0.31First Majestic Silver Corp. $0.94 $1.70 $1.27 $1.64 $1.98 $0.60 $1.38 $2.35 $1.66 $2.73 $2.68 $1.43Goldgroup Mining Inc. $0.05 $0.09 $0.19 $0.48 $0.65 $0.42 $0.06 $0.10 $0.21 $0.56 $0.72 $0.52New Gold Inc. $0.43 $0.87 $0.74 $0.97 $0.77 $0.69 $0.74 $1.22 $1.28 $1.51 $1.32 $1.31Scorpio Gold Corp. $0.21 $0.26 $0.42 $0.28 $0.36 $0.11 $0.30 $0.41 $0.51 $0.48 $0.43 $0.23SEMAFO Inc. $0.44 $0.92 $0.61 $0.64 $0.62 $0.34 $0.65 $1.28 $0.90 $0.90 $0.86 $0.50SilverCrest Mines Inc. $0.25 $0.38 $0.30 $0.56 $0.90 $0.37 $0.30 $0.50 $0.30 $0.68 $1.03 $0.49Timmins Gold Corp. $0.50 $0.55 $0.72 $0.48 $0.76 $0.36 $0.63 $0.66 $0.84 $0.57 $0.87 $0.44

DEVELOPERSApogee Silver Ltd. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐Atacama Pacific Gold Corp. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐Carpathian Gold Inc. ‐ ‐ $0.04 $0.12 $0.11 $0.07 ‐ ‐ $0.07 $0.17 $0.17 $0.11Guyana Goldfields Inc. ‐ ‐ ‐ ‐ $0.42 $1.52 ‐ ‐ ‐ ‐ $0.71 $2.51Levon Resources Ltd. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐Pershimco Resources Inc. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐Probe Mines Ltd. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐Rio Novo Gold Inc. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐Sulliden Gold Corp. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐Trelawney Mining & Exploration Ltd. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐Volta Resources Inc. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

2014 CFPS2012 EPS 2013 EPS 2014 EPS 2012 CFPS 2013 CFPS

LT2012 2013 2014 2015

COVERAGE TICKERTARGET ADJ. NAV

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Jennings Capital Inc. Research Disclosures I, Peter Campbell, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report. I, Stuart McDougall, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report. I, Ryan Walker, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report.

U.S. Client Disclosures

This research report was prepared by Jennings Capital Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund and a Participating Organization of the Toronto Stock Exchange and the TSX Venture Exchange. Jennings Capital Inc. is an affiliate of Jennings Capital (USA) Inc. Jennings Capital (USA) Inc. accepts responsibility for the contents of this research report, subject to the terms and limitations as set out above. Jennings Capital (USA) Inc. is a registered broker-dealer with the Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority (FINRA). THE FIRM THAT PREPARED THIS REPORT MAY NOT BE SUBJECT TO U.S. RULES WITH REGARD TO THE PREPARATION OF RESEARCH REPORTS AND THE INDEPENDENCE OF ANALYSTS. This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein. Any transaction in these securities by U.S. persons must be effected through either Westminster Securities Corporation, a U.S. broker-dealer registered with the Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority (FINRA) and the New York Stock Exchange Inc. or through Jennings Capital (USA) Inc., A U.S. broker-dealer registered with the Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority (FINRA). U.S. Persons This research report was prepared by an affiliate of Jennings Capital (USA) Inc. or other person that may not be registered as a broker-dealer in the United States. The firm that prepared this report may not be subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. Subject to the limitations on liability described above, Jennings Capital (USA) Inc. takes responsibility for the content of this research report in accordance with Rule 15a-6 under the U.S. Securities Exchange Act of 1934, as amended. All transactions by U.S. persons in securities discussed in this report must be performed through Jennings Capital (USA) Inc.

U.K. Client Disclosures

This research report was prepared by Jennings Capital Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund and a Participating Organization of the Toronto Stock Exchange and the TSX Venture Exchange. JENNINGS CAPITAL IS NOT SUBJECT TO U.K. RULES WITH REGARD TO THE PREPARATION OF RESEARCH REPORTS AND THE INDEPENDENCE OF ANALYSTS.

The contents hereof are intended solely for the use of, and may only be issued or passed onto persons described in part VI of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001. This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein.

Stock Ratings

Speculative Buy: The stock is expected to provide a total return in excess of 10% over the current trading price over the next 12 months; however, there is material event risk associated with the investment.

Buy: The stock is expected to provide a total return in excess of 10% over the current trading price over the next 12 months.

Hold: The stock is expected to provide a total return of 0% to 10% over the current trading price over the next 12 months.

Sell: The stock is expected to provide a negative total return over the next 12 months.

Risk Ratings

Low/Average Risk — Stocks with less volatility than the market as a whole, with solid balance sheets and dependable earnings.

Above Average Risk — Stocks with more volatility than the market. Financial leverage is considerable but not threatening, earnings are more erratic, or other quality concerns regarding accounting, management track record, and similar issues.

Speculative — Stocks of unproven companies or ones with very high financial leverage, suspicious accounting, or with other significant quality concerns. A speculative risk rating implies at least the possibility of financial distress leading to a restructuring.

29

Distribution Ratings: Out of approximately 78 stocks in the Jennings Capital Inc. coverage universe, the ratings distribution is as follows:

BUY 44%SPECULATIVE BUY 49%HOLD 1%SELL 0%TENDER TO OFFER 1%UNDER REVIEW 3%RESTRICTED 3%

Revised Monthly Security Abbreviations: NVS (non-voting shares); RVS (restricted voting shares); RS (restricted shares); SVS (subordinate voting shares); MV (multiple voting shares). Quarterly Recommendation Hierarchy: Is a ranking distribution identifying the percentage of total, number, and the investment banking relationship (%) for all recommendation categories that can be found on the Jennings Capital Inc. website (www.JenningsCapital.com). Analyst Stock Holdings: Equity Research analysts, associates and members of their households are permitted to invest in securities covered by them. No Jennings Capital Inc. analyst, associate or employee involved in the preparation of an analyst report is permitted to effect a trade in the security of an issuer whereby there is an outstanding recommendation for a period of 30 calendar days before and 5 calendar days after issuance of the research report Compensation: The compensation of the analyst and/or associate who prepared this research report is based upon in part, the overall revenues and profitability of Jennings Capital Inc. Analysts are compensated on a salary and bonus system. Some factors affecting compensation including the productivity and quality of research, support to institutional, retail and investment bankers, net revenues to the equity and investment banking revenue as well as compensation levels for analysts at competing brokerage dealers. Analysts are not directly compensated for specific Investment Banking transactions. Jennings Capital Inc. Relationships: Jennings Capital Inc. may receive or seek compensation for investment banking services from all issuers under research coverage within the next 3 months. Jennings Capital Inc. or its officers, employees or affiliates may execute transactions in securities mentioned in this report that may not be consistent with the report’s conclusions. Of the companies included in this report, the following Important Disclosures apply.

Company Name Ticker/Exchange DisclosureApogee Silver Ltd. TSXV‐APE 2Atacama Pacific Gold Corporation TSXV‐ATM 2Carpathian Gold Inc. TSX‐CPN 2,3Centamin Plc. TSX‐CEE 3Eco Oro Minerals Corp. TSX‐EOM 3First Majestic Silver Corp. TSX‐FR 3Goldgroup Mining Inc. TSX‐GGA 2,3Guyana Goldfields Inc. TSX‐GUY 3Levon Resources Ltd. TSX‐LVN 2Minefinders Corporation Ltd. TSX‐MFL 3Minera IRL Ltd. TSX‐IRL 2,3,7New Gold Inc. TSX‐NGD 3Pershimco Resources Inc. TSXV‐PRO 3Probe Mines Limited TSXV‐PRB 2,3Rio Novo Gold Inc. TSX‐RNSandspring Resources Ltd. TSXV‐SSP 3Scorpio Gold Corp. TSXV‐SGN 3SEMAFO Inc. TSX‐SMF 3SilverCrest Mines Inc. TSXV‐SVL 2,3Sulliden Gold Corporation Ltd. TSX‐SUE 2,3Timmins Gold Corporation TSX‐TMM 3Trelawney Mining and Exploration Inc. TSXV‐TRR 2,3Volta Resources Inc. TSX‐VTR 2,3

1 The Analyst or a member of the Analyst’s household has a financial interest in the securities of this Company.

2 Jennings Capital Inc., Jennings Capital (USA) Inc. and/or any of their affiliates has managed or co‐managed an offering of securities or has been engaged for a fee by

this Company in the last 12 months.

3 The Analyst has had an onsite visit with this Company. (The extent to which the Analyst has viewed the material operations of this Company is available on request.)

4 The Analyst has been compensated for travel expenses incurred as a result of an onsite visit with this Company.

5 Jennings Capital Inc. or Jennings Capital (USA) Inc. is a market maker for the securities of the subject issuer.

6 Jennings Capital Inc. or Jennings Capital (USA) Inc. beneficially owns more than 1% of any class of common equity of this Company.

7 Jennings Capital Inc. is restricted on this company at the time of publication.

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