welcome to the big league de grey mining limitedprecious

5 October 2021

Raising Target Price

De Grey Mining LimitedPrecious Metals - Developer/Explorer

Canaccord Genuity is the global capital markets group of Canaccord Genuity Group Inc. (CF : TSX)The recommendations and opinions expressed in this research report accurately reflect the research analyst's personal, independent and objectiveviews about any and all the companies and securities that are the subject of this report discussed herein.

RatingSPECULATIVE BUYunchanged

Price TargetA$1.90↑from A$1.75

DEG-ASXPriceA$1.01

Market Data52-Week Range (A$) : 0.80 - 1.67Avg Daily Vol (M) : 6.5Market Cap (A$M) : 1,298.9Shares Out. (M) : 1,292.4Net Debt (Cash) (A$M) : (70.9)Enterprise Value (A$M) : 1,225Cash (A$M) : 70.9Long-Term Debt (A$) : 0.0NAV /Shr (A$) : 1.90NAV /Shr (5%) (A$) : 2.69Net Cash (A$M) : 70.9Major Shareholders: DGO Gold 16%, Van Eck

6%

FYE Jun 2020A 2021E 2022E 2023EGold Production(000oz) 0 0 0 0

All inSustaining Cost(Gold) (US$ /oz)

0 0 0 0

1.8

1.6

1.4

1.2

1

0.8

0.6

Nov-

20

Dec

-20

Jan-2

1

Feb-2

1

Mar

-21

Apr-

21

May

-21

Jun-2

1

Jul-

21

Aug-2

1

Sep

-21

Oct

-21

DEGS&P/ASX 300 (rebased)

Source: FactSet

Priced intraday 5 October 2021

Tim McCormack | Analyst | Canaccord Genuity (Australia) Ltd. | [email protected] | +61.8.9268.4810Tyson Kestel | Associate Analyst | Canaccord Genuity (Australia) Ltd. | [email protected] | 08 9263 1156

Welcome to the big leagueKey outcomes from the Scoping Study. DEG has released an impressive ScopingStudy (SS) on its Mallina Gold Project (MGP), with majority of the key outcomeseclipsing our expectations. Headline production is set to average 427kozpa (CGe378kozpa) over an initial 10-year ‘evaluation’ period (based on 70% Measured andIndicated Resources), with higher production for the first 5 years expected to average473kozpa. Importantly, forecast total capex (including contingency and pre-strip) of A$893m (CGe A$900m) and AISC’s of A$1224/oz (CGe A$1228/oz) were in line with ourexpectations, which clearly points to an improved outlook for cashflow. Key takeawaysfrom the SS, as well as CG assumptions, are outlined below.

Scoping Study outcomes and Canaccord assumptions

Source: Company reports, Canaccord Genuity estimates

Real potential for improved economics as the project evolves. We note theproject has plenty of scope to improve on the outcomes shown in the SS. Two aspectsthat are easy to point to are: i) the 800koz of largely Inferred (90%) material within theStudy pit shells that was omitted from the plan due to lack of drill density; and ii) theconsiderable intersections (173m @ 1.6g/t Au from 366m, 174m @ 1.5g/t Au from271m and 121m @ 1.1g/t Au from 146m) that are being reported outside the currentDiucon and Eagle Resource which we believe point to a significant increase in the sizeand scale of the existing 1.45Moz Resource. Beyond this, DEG’s new exploration effortacross the Greater Hemi region has high potential to result in new discoveries in ourview. A PFS is currently underway scheduled for completion in 2H’CY22.

Top 5 Australian gold project in the making. Delivering on the SS would see DEG’sMGP become a top 5 production asset in the Australian gold space behind Boddington,Fosterville, Tanami and KCGM. Compounding our positive view on the developmentmerit of the project is its location just ~70km from Port Hedland. This places the MGPproximal to significant established infrastructure including two highways, two gaspipelines, a 220kV power line ~30km north of Hemi and an international airport atPort Hedland. We expect the MGP’s favourable location to present ongoing capital andoperational savings as DEG moves the project forward through to PFS and beyond.

Model updates. We have remodelled our LOM to reflect the SS metrics, with keychanges being an increase in production, feed grade and recoveries, as well as lowersustaining capex, largely offset by higher strip. In anticipation of further increases in theexisting Resource as well as further conversion and inclusion of Inferred Resources inthe mining inventory, we model a 15-year LOM for a total inventory of 6.9Moz.

Valuation and recommendation. On incorporating of the above our PT increasesto $1.90 (previously $1.75). We note our EBITDA and FCF forecasts over the 10-yearperiod have increased on average by 10% and 15%, respectively. Our valuation is basedon an NPV10% for the MGP, net of corporate adjustments, and diluted for future equityrequirements to fund ongoing exploration and studies through FY22E-24E. SPEC BUY.

For important information, please see the Important Disclosures beginning on page 6 of this document.

2

FINANCIAL SUMMARYDe Grey Mining ASX:DEGAnalyst : Tim McCormack Rating:

Date: 5/10/2021 Target Price: A$1.90Year End: June

Market Information Company Description

Share Price A$ 1.03

Market Capitalisation A$m 1,331.2

12 Month Hi A$ 1.67

12 Month Lo A$ 0.80

Average daily turnover (3 month) m 6.479

Issued Capital m 1292.4 Profit & Loss (A$m) 2020a 2021e 2022e 2023e

Options m 8.7 Revenue 0.0 0.0 0.0 0.0

Fully Diluted m 1301.2 Other Income 0.4 0.2 0.0 0.0

Operating Costs including royalties -2.6 0.0 0.0 0.0

Valuation A$m A$/share Corporate, O'heads -1.4 -5.2 -2.0 -8.0

Hemi NPV @ 10% 1,935.0 1.38 Exploration (Expensed/WO) 0.0 0.0 0.0 0.0

Exploration & Projects 600.0 0.43 EBITDA -3.6 -5.0 -2.0 -8.0

Corporate (41.4) (0.03) Dep'n -0.3 0.2 0.0 0.0

Hedging (flat forward) - - Net Interest 0.0 0.5 1.0 1.0

Cash & Bullion 70.9 0.05 Tax 0.0 0.0 0.0 0.0

Future Equity Raised 100.0 0.07 NPAT (reported) -3.9 -4.3 -1.0 -7.0

Debt - - Abnormals 0.0 0.0 0.0 0.0

Unpaid Capital (ITM options) 1.8 0.00 NPAT -3.9 -4.3 -1.0 -7.0

TOTAL NAV 2,666.4 1.91

Price:NAV 0.54x EBITDA Margin nm nm nm nm

NAV at Spot US$1,769/oz, AUDUSD $0.73 1.82 EV/EBITDA -351.6x -251.9x -630.1x -157.5x

Target Price (1.00 x NAV) 1.90 EPS nm nm nm nm

EPS Growth nm nm nm nm

PER nm nm nm nm

Dividend Per Share $0.00 $0.00 $0.00 $0.00

Assumptions 2020a 2021e 2022e 2023e Dividend Yield NA NA NA NA

Gold Price (US$/oz) 1,563 1,851 1,789 1,802

AUD:USD 0.67 0.75 0.75 0.75 Cash Flow (A$m) 2020a 2021e 2022e 2023e

Gold Price (A$/oz) 2,328 2,476 2,386 2,402 Cash Receipts 0.4 0.0 0.0 0.0

Cash paid to suppliers & employees -2.8 -4.7 -2.0 -8.0

Sensitivity Tax Paid 0.0 0.0 0.0 0.0

Net Interest 0.1 0.4 1.0 1.0

Other (Expl.& Eval) -14.7 0.3 0.0 0.0

Operating Cash Flow -17.1 -4.0 -1.0 -7.0

Plant & Equipment -0.8 -6.8 0.0 0.0

Capex 0.0 0.0 0.0 0.0

Exploration& Evaluation 0.0 -50.6 -50.0 -50.0

Other -10.1 0.0 0.0 0.0

Investing Cash Flow -11.0 -57.3 -50.0 -50.0

Debt Drawdown (repayment) 0.0 0.0 0.0 0.0

Share capital 58.8 108.9 100.0 0.0

Dividends 0.0 0.0 0.0 0.0

Financing Expenses -3.1 -4.5 0.0 0.0

Others -0.5 -0.3 0.0 0.0

Financing Cash Flow 55.2 104.1 100.0 0.0

Opening Cash 1.3 28.2 70.9 120.0

Increase / (Decrease) in cash 27.2 42.8 49.0 -57.0

FX Impact 0.0 0.0 0.0 0.0

Closing Cash 28.5 70.9 120.0 63.0

Op. Cashflow/Share -$0.01 $0.00 $0.00 -$0.01

Production Metrics 2020a 2021e 2022e 2023e P/CF -70.8x -336.1x -1456.6x -204.1x

EV/FCF -44.9x -20.6x -24.7x -22.1x

Gold production (koz) 0 0 0 0 FCF Yield -2% -5% -4% -4%

AISC (A$/oz) 0 0 0 0

Balance Sheet (A$m) 2020a 2021e 2022e 2023e

Cash + S/Term Deposits 28.2 70.9 120.0 63.0

Reserves & Resources Mt Grade Moz Other current assets 0.5 1.3 1.4 1.5

Resources Current Assets 28.7 72.2 121.4 64.4

Measured 5 1.7 0.3 Mine Properties, Plant & Equip. 1.5 19.2 19.2 19.2

Indicated 80 1.4 3.6 Exploration & Develop. 48.9 84.1 134.1 184.1

Inferred 145 1.1 5.1 Other Non-current Assets 0.7 10.2 10.2 10.2

Total 230 1.2 9.0 Payables 2.9 0.0 0.1 0.1

Short Term Debt 0.0 0.0 0.0 0.0

Reserves Long Term Debt 0.0 0.0 0.0 0.0

Proved 0.0 0.0 0.0 Other Liabilities 1.2 6.4 6.5 6.5

Probable 0.0 0.0 0.0 Net Assets 75.2 179.3 278.3 271.3

Reserves 0.0 0.0 0.0 Shareholders Funds 130.7 239.6 339.6 339.6

Reserves 0.9 0.9 0.9 0.9

Major shareholders Retained Earnings -56.3 -61.1 -62.1 -69.1

DGO Gold Limited 16% Total Equity 75.2 179.3 278.3 271.3

Jupiter Asset Management 6%

Van Eck 5% Debt/Equity 0% 0% 0% 0%

Invesco 5% Net Debt/EBITDA 1.7x 17.9x 122.1x 9.0x

Directors and Management 3% Net Interest Cover nm nm nm nm

ROE -5% -2% 0% -3%

ROIC -7% -4% -1% -3%

Source: Factset, Company reports & Canaccord Genuity estimates Book Value/share $0.06 $0.14 $0.20 $0.20

SPEC BUY

DEG is primary focus is the 100% owned Mallina Gold Project (MGP) in the Pilbara region of WA.

The recent Hemi discovery is an intrusion-hosted form of gold mineralisation which has not been

previously encountered in the Pilbara and with an aggressive exploration effort underway, the

company should grow its existing 9.0Moz Resource considerably over the next 12 months.

$1.00

$1.20

$1.40

$1.60

$1.80

$2.00

$2.20

$2.40

$2.60

-15% -10% -5% 0% 5% 10% 15%

Gold Price US$ Exchange Rate

De Grey Mining LimitedRaising Target Price

Speculative Buy unchanged Target Price A$1.90 from A$1.75 | 5 October 2021 Precious Metals - Developer/Explorer 2

3

Clear upside to existing Resource, economics to improve as project evolves. In highlighting the ~800koz (~90% Inferred) of Resources that are omitted from the plan due to lack of drill density, as well as the considerable intersections reported outside the current Diucon/Eagle Resource (Figure 1), we see significant scope for project economics to improve over time. This should, in our view, be driven by further increases in the existing Resource as well as further conversion of Inferred Resources which could grow the mining inventory and potentially improve

strip ratios. As detailed in our note Asset scale that has few peers, an observation of the current Hemi Resource is the relationship with higher grades in the Indicated (2.8Moz @ 1.3g/t) vs Inferred category (4Moz @ 1.0g/t). With a significant objective to continue converting Inferred to Indicated Resources as part of the FY22 drill program, we highlight the potential for additional higher-grade ounces to be delineated on conversion and included in future studies noting that 100% of the 1.45Moz Diucon/Eagle Resource is currently Inferred.

Noting the clear upside to Hemi’s existing Resource (Dicuon/Eagle extensions, Figure 1), we see this as potentially providing DEG with significant optionality with respect to its Regional deposits, which account for ~20% of production over the initial SS evaluation period. We expect that with further conversion of Resources at Hemi, as well as ongoing growth, that Regional ounces will be displaced from the current profile to allow for more economic ounces to be incorporated. Furthermore, we believe this could allow for the optimisation of the Regional deposits (new pit designs, higher cut-off grades), potentially resulting in higher overall feed grades

and lower costs (reduced transport costs and lower strip) thereby bolstering the production profile, potential mine life and overall economics of the project.

Capex and opex. Figure 2 details the SS’s capital cost estimate for the MGP, which totals A$893m (CGe A$900m), inclusive of contingency and pre-strip. We note that

the capital cost of the plant represents the average capital cost of the comminution flowsheet and the various oxidation process options (POX, Albion, BIOX) currently being considered by the company. The range of plant costs that encompass each of these options is within +/- 5% of the average capital cost shown in Figure 2. In our view, this provides a good degree of comfort that we will not see significant changes in capex as each of the oxidation process routes are effectively captured in this capital cost estimate.

Figure 2: Scoping Study capex estimates Figure 3: Scoping Study opex estimates

Source: Company reports


A$/t ore + waste calculating by dividing the A$/t ore cost by the LOM strip of 4.8

The location of the project and its potential benefits are not to be understated. Hemi

is located ~70km southwest of Port Hedland and we believe the project will continue to benefit significantly from the extensive infrastructure nearby. In our view, this will assist in keeping initial construction costs down as well as operating costs given the ease of access to gas, power, railways and major highways.

Area Cost Estimate (A$m)

Site Development 9

Processing Plant 371

Infrastructure - Process 31

Construction 125

Owners Costs 27

Power & Distribution 34

Tailings stoage Facility 31

Infrastructure - General 41

Contingency - 25% 167

Subtotal 835

Pre-strip 58

TOTAL 893

Mining A$/t ore

Mobilisation, establishment and demobilisation 0.05 0.23

Monthly fees 0.23 1.11

Drill and blast 0.81 3.87

Load and haul – ore and waste 3.15 15.10

Clear and grub, topsoil, waste emplacement shaping 0.03 0.14

Primary crusher loading and rehandle 0.10 0.49

TOTAL 4.36 20.94

Processing A$/t ore

Power 7.62

Maintenance, spares and consumables 1.38

Operating consumables 11.13

Labour 2.65

Other 3.02

TOTAL 25.90

A$/t ore + waste

Figure 1: Diucon cross section




https://canaccordgenuity.bluematrix.com/sellside/EmailDocViewer?encrypt=c5c12fb0-84e9-4d1c-9fdb-0e2bfa906263&mime=PDF&co=Canaccordgenuity&[email protected]&source=libraryView&htmlToPdf=true

4

Metallurgical work progressing, DEG expects decision on process route in 2H’CY22. DEG has reiterated that all three oxidation processes (POX, Albion and BIOX) are still under consideration with metallurgical test work and trade off studies

ongoing. We did not expect a final decision on the oxidation process at this point in time given the relatively early nature of the project, as well as the potential for it to evolve in the near term (project scale, new discoveries/new zones of mineralisation etc). The company has flagged the preferred oxidation process will be determined during the PFS, due 2H’CY22.

Multiple targets, high potential for new discovery. DEG’s new exploration

effort across the Greater Hemi region has high potential to result in new discoveries

in our view. DEG has flagged the increasing ability of its geological team to

recognise highly prospective altered intrusion (signature for lack a better term) in

early aircore drilling and rapidly deploy RC followed by diamond rigs, resulting in the

accelerated discovery and drill out of several deposits. As a reminder, the Diucon

and Eagle deposits were discovered below an area of relatively weak aircore

geochemistry results. Early geological recognition of similarly prospective rocks in

aircore however led to DEG undertaking an RC/Diamond program that culminated in

a 1.5Moz Resource being defined in <6 months. Since initial discovery, DEG has

now defined four +1Moz deposits within Hemi in ~18 months representing a

discovery rate of ~450koz a month.

In our view, this provides good comfort in management’s ability to successfully identify prospective intrusions and we see strong potential for further discoveries across Greater Hemi and the broader ~1,500km2 MGP landholding noting that Hemi’s Resource footprint covers an area spanning just ~7km2.

Figure 4: De Grey tenure (inclusive of Farno JV)


Sensitivity analysis and financial metrics

Figures 5 and 6 demonstrate the impact and sensitivity of our valuation against key inputs. Our valuation is most sensitive to changes in grade, with a 10% increase to our base case grade profile resulting in an 18% increase in our valuation (+$0.34/share) to $2.24/share.



5

Figure 5: Valuation sensitivity to USD gold price and FX Figure 6: Valuation sensitivity to throughput and grade

Source: Canaccord Genuity estimates Source: Canaccord Genuity estimates

Capex increases at a flat rate of A$90/t, all other inputs & assumptions remain constant.

Figures 7-10 highlight the changes to key financial metrics under our revised

assumptions for the MGP. We note that our EBITDA and FCF forecasts over the 10-year period have increased on average by 10% and 15%, respectively.

Figure 7: CG modelled production and AISC Figure 8: CG modelled C1 and AISC vs gold price

Source: Canaccord Genuity estimates


Figure 9: CG modelled EBITDA Figure 10: CG modelled FCF, annual and cumulative



1.90 $1,758 $1,600 $1,700 $1,800 $1,900 $2,000 $2,100

$0.73 1.84 1.54 1.73 1.92 2.11 2.29 2.48

$0.72 1.87 1.57 1.76 1.95 2.14 2.33 2.52

$0.74 1.78 1.49 1.67 1.85 2.04 2.22 2.41

$0.76 1.69 1.41 1.59 1.77 1.95 2.13 2.31

$0.78 1.61 1.33 1.51 1.68 1.86 2.03 2.21

$0.80 1.53 1.26 1.43 1.61 1.78 1.95 2.12

$0.82 1.46 1.20 1.36 1.53 1.70 1.86 2.03

AU

D/U

SD

Gold Price (US$/oz)

1.90 -30% -20% -10% 0% 10% 20% 30%

-30% 0.75 0.79 0.82 0.86 0.90 0.94 0.97

-20% 0.99 1.06 1.14 1.21 1.28 1.35 1.42

-10% 1.23 1.34 1.45 1.55 1.66 1.76 1.87

0% 1.48 1.62 1.76 1.90 2.04 2.18 2.32

10% 1.72 1.89 2.07 2.24 2.42 2.59 2.77

20% 1.96 2.17 2.38 2.59 2.80 3.01 3.22

30% 2.20 2.45 2.69 2.93 3.18 3.42 3.67 Go

ld g

rad

e (

g/t

)

Throughput (Mtpa)

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ld P

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Prod - Old Prod - New AISC - New AISC - Old

0

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EBITDA - Old EBITDA - New

-3,500

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FCF - Old FCF - New Cum FCF - New Cum FCF - Old



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) therecommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent andobjective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoringanalyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, relatedto the specific recommendations or views expressed by the authoring analyst in the research, and (iii) to the best of the authoringanalyst’s knowledge, she/he is not in receipt of material non-public information about the issuer.

Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associatedpersons of Canaccord Genuity LLC and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions oncommunications with a subject company, public appearances and trading securities held by a research analyst account.

Sector Coverage

Individuals identified as “Sector Coverage” cover a subject company’s industry in the identified jurisdiction, but are not authoringanalysts of the report.

Investment RecommendationDate and time of first dissemination: October 04, 2021, 23:09 ETDate and time of production: October 04, 2021, 23:09 ETTarget Price / Valuation Methodology:

De Grey Mining Limited - DEG

We have based our valuation for DEG on a DCF analysis (forward curve NPV10%) for the MGP, assuming a standalone developmentscenario. We see good potential for DEG to delineate a 10Moz Resource at Hemi within 12 months, building on the existing 2.2MozResource which, in our view, should underpin a +375kozpa production scenario. Our valuation conservatively assumes first goldproduction in FY25, allowing 24 months from the Hemi maiden Resource (mid 2021) to complete infill drilling and Feasibility Studiesfollowed by 18 months for project construction and commissioning.

Risks to achieving Target Price / Valuation:

De Grey Mining Limited - DEG

Financing risks

As a pre-production company with no material income, DEG is reliant on equity and debt markets to fund development of its assetsand progress its regional exploration pipeline. Total development and working capital requirements are subject to completion offeasibility studies. There are no guarantees that studies will result in a positive investment decision for the MGP. Further, we can makeno assurances that accessing these markets will be done without further dilution to shareholders.

Exploration risks

Exploration is subject to a number of risks and can require a high rate of capital expenditure. Risks can also be associated withconversion of inferred Resources and lack of accuracy in the interpretation of geochemical, geophysical, drilling and other data. Noassurances can be given that exploration will delineate further mineral Resources nor that the company will be able to convert thecurrent mineral Resource into minable Reserves.

Operating risks

If/when in production, the company will be subject to risks such as plant/equipment breakdowns, metallurgical (meeting designrecoveries within a complex flowsheet), materials handling and other technical issues. An increase in operating costs could reducethe profitability and free cash generation from the operating assets considerably and negatively impact valuation. Further, theactual characteristics of an ore deposit may differ significantly from initial interpretations which can also materially impact forecastproduction from original expectations.

Commodity price and currency fluctuations

As with any mining company, DEG is directly exposed to commodity price and currency fluctuations. Commodity price fluctuations aredriven by many macroeconomic forces including inflationary pressures, interest rates and supply and demand factors. These factorscould reduce the profitability, costing and prospective outlook for the business.



Distribution of Ratings:

Global Stock Ratings (as of 10/04/21)Rating Coverage Universe IB Clients

# % %Buy 634 67.09% 45.27%Hold 146 15.45% 28.08%Sell 7 0.74% 42.86%Speculative Buy 152 16.08% 59.21%

945* 100.0%*Total includes stocks that are Under Review

Canaccord Genuity Ratings System

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 orthe relevant issuer.

Risk Qualifier

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

12-Month Recommendation History (as of date same as the Global Stock Ratings table)

A list of all the recommendations on any issuer under coverage that was disseminated during the preceding 12-month periodmay be obtained at the following website (provided as a hyperlink if this report is being read electronically) http://disclosures-mar.canaccordgenuity.com/EN/Pages/default.aspx

Required Company-Specific Disclosures (as of date of this publication)

Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for InvestmentBanking services from De Grey Mining Limited in the next three months.

An analyst has visited the material operations of De Grey Mining Limited. Full payment was received for the related travel costs.

De Grey Mining Limited Rating History as of 10/04/2021

AUD2.00

AUD1.50

AUD1.00

AUD0.50

AUD0.00Jan 17Apr 17Jul 17Oct 17Jan 18Apr 18Jul 18Oct 18Jan 19Apr 19Jul 19Oct 19Jan 20Apr 20Jul 20Oct 20Jan 21Apr 21Jul 21Oct 21

I:SB:AUD1.4009/01/2020

SB:AUD1.5011/23/2020

SB:AUD1.3501/19/2021

SB:AUD1.5003/23/2021

SB:AUD1.3504/15/2021

SB:AUD1.6005/11/2021

SB:AUD1.7507/29/2021

Closing Price Price Target

Buy (B); Speculative Buy (SB); Sell (S); Hold (H); Suspended (SU); Under Review (UR); Restricted (RE); Not Rated (NR)

Required Company-Specific Disclosures (as of date of this publication)

Past performance

In line with Article 44(4)(b), MiFID II Delegated Regulation, we disclose price performance for the preceding five years or thewhole period for which the financial instrument has been offered or investment service provided where less than five years. Pleasenote price history refers to actual past performance, and that past performance is not a reliable indicator of future price and/orperformance.



http://disclosures-mar.canaccordgenuity.com/EN/Pages/default.aspx

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Online Disclosures

Up-to-date disclosures 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 requestby email to [email protected]. The reader may also obtain a copy of Canaccord Genuity’s policies and procedures regarding thedissemination of research by following the steps outlined above.

General Disclaimers

See “Required Company-Specific Disclosures” above for any of the following disclosures required as to companies referred to inthis report: manager or co-manager roles; 1% or other ownership; compensation for certain services; types of client relationships;research analyst conflicts; managed/co-managed public offerings in prior periods; directorships; market making in equity securitiesand related derivatives. For reports identified above as compendium reports, the foregoing required company-specific disclosurescan be found in a hyperlink located in the section labeled, “Compendium Reports.” “Canaccord Genuity” is the business name usedby certain wholly owned subsidiaries of Canaccord Genuity Group Inc., including Canaccord Genuity LLC, Canaccord Genuity Limited,Canaccord Genuity Corp., and Canaccord Genuity (Australia) Limited, an affiliated company that is 80%-owned by Canaccord GenuityGroup Inc.

The authoring analysts who are responsible for the preparation of this research are employed by Canaccord Genuity Corp. a Canadianbroker-dealer with principal offices located in Vancouver, Calgary, Toronto, Montreal, or Canaccord Genuity LLC, a US broker-dealerwith principal offices located in New York, Boston, San Francisco and Houston, or Canaccord Genuity Limited., a UK broker-dealer withprincipal offices located in London (UK) and Dublin (Ireland), or Canaccord Genuity (Australia) Limited, an Australian broker-dealerwith principal offices located in Sydney and Melbourne.

The authoring analysts who are responsible for the preparation of this research have received (or will receive) compensationbased upon (among other factors) the Investment Banking revenues and general profits of Canaccord Genuity. However, suchauthoring analysts have not received, and will not receive, compensation that is directly based upon or linked to one or more specificInvestment Banking activities, or to recommendations contained in the research.

Some regulators require that a firm must establish, implement and make available a policy for managing conflicts of interest arisingas a result of publication or distribution of research. This research has been prepared in accordance with Canaccord Genuity’s policyon managing conflicts of interest, and information barriers or firewalls have been used where appropriate. Canaccord Genuity’s policyis available upon request.

The information contained in this research has been compiled by Canaccord Genuity from sources believed to be reliable, but (withthe exception of the information about Canaccord Genuity) no representation or warranty, express or implied, is made by CanaccordGenuity, its affiliated companies or any other person as to its fairness, accuracy, completeness or correctness. Canaccord Genuityhas not independently verified the facts, assumptions, and estimates contained herein. All estimates, opinions and other informationcontained in this research constitute Canaccord Genuity’s judgement as of the date of this research, are subject to change withoutnotice and are provided in good faith but without legal responsibility or liability.

From time to time, Canaccord Genuity salespeople, traders, and other professionals provide oral or written market commentary ortrading strategies to our clients and our principal trading desk that reflect opinions that are contrary to the opinions expressed in thisresearch. Canaccord Genuity’s affiliates, principal trading desk, and investing businesses also from time to time make investmentdecisions 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 designatedinvestments discussed herein in any jurisdiction where such offer or solicitation would be prohibited. As a result, the designatedinvestments discussed in this research may not be eligible for sale in some jurisdictions. This research is not, and under nocircumstances should be construed as, a solicitation to act as a securities broker or dealer in any jurisdiction by any person orcompany that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. This material isprepared for general circulation to clients and does not have regard to the investment objectives, financial situation or particularneeds of any particular person. Investors should obtain advice based on their own individual circumstances before making aninvestment decision. To the fullest extent permitted by law, none of Canaccord Genuity, its affiliated companies or any other personaccepts any liability whatsoever for any direct or consequential loss arising from or relating to any use of the information contained inthis research.

Research Distribution Policy

Canaccord Genuity research is posted on the Canaccord Genuity Research Portal and will be available simultaneously for access byall of Canaccord Genuity’s customers who are entitled to receive the firm's research. In addition research may be distributed by thefirm’s sales and trading personnel via email, instant message or other electronic means. Customers entitled to receive research mayalso receive it via third party vendors. Until such time as research is made available to Canaccord Genuity’s customers as describedabove, Authoring Analysts will not discuss the contents of their research with Sales and Trading or Investment Banking employeeswithout prior compliance consent.

For further information about the proprietary model(s) associated with the covered issuer(s) in this research report, clients shouldcontact their local sales representative.

Short-Term Trade Ideas

Research Analysts may, from time to time, discuss “short-term trade ideas” in research reports. A short-term trade idea offers anear-term view on how a security may trade, based on market and trading events or catalysts, and the resulting trading opportunitythat may be available. Any such trading strategies are distinct from and do not affect the analysts' fundamental equity rating for



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such stocks. A short-term trade idea may differ from the price targets and recommendations in our published research reports thatreflect the research analyst's views of the longer-term (i.e. one-year or greater) prospects of the subject company, as a result of thediffering time horizons, methodologies and/or other factors. It is possible, for example, that a subject company's common equity thatis considered a long-term ‘Hold' or 'Sell' might present a short-term buying opportunity as a result of temporary selling pressure inthe market or for other reasons described in the research report; conversely, a subject company's stock rated a long-term 'Buy' or“Speculative Buy’ could be considered susceptible to a downward price correction, or other factors may exist that lead the researchanalyst to suggest a sale over the short-term. Short-term trade ideas are not ratings, nor are they part of any ratings system, andthe firm does not intend, and does not undertake any obligation, to maintain or update short-term trade ideas. Short-term tradeideas are not suitable for all investors and are not tailored to individual investor circumstances and objectives, and investors shouldmake their own independent decisions regarding any securities or strategies discussed herein. Please contact your salesperson formore information regarding Canaccord Genuity’s research.

For Canadian Residents:

This research has been approved by Canaccord Genuity Corp., which accepts sole responsibility for this research and its disseminationin Canada. Canaccord Genuity Corp. is registered and regulated by the Investment Industry Regulatory Organization of Canada(IIROC) and is a Member of the Canadian Investor Protection Fund. Canadian clients wishing to effect transactions in any designatedinvestment discussed should do so through a qualified salesperson of Canaccord Genuity Corp. in their particular province or territory.

For United States Persons:

Canaccord Genuity LLC, a US registered broker-dealer, accepts responsibility for this research and its dissemination in the UnitedStates. This research is intended for distribution in the United States only to certain US institutional investors. US clients wishing toeffect transactions in any designated investment discussed should do so through a qualified salesperson of Canaccord Genuity LLC.Analysts employed outside the US, as specifically indicated elsewhere in this report, are not registered as research analysts withFINRA. These analysts may not be associated persons of Canaccord Genuity LLC and therefore may not be subject to the FINRA Rule2241 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by aresearch analyst account.

For United Kingdom and European Residents:

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 EligibleCounterparties or Professional Clients only and is exempt from the general restrictions in section 21 of the Financial Services andMarkets Act 2000 on the communication of invitations or inducements to engage in investment activity on the grounds that it is beingdistributed in the United Kingdom only to persons of a kind described in Article 19(5) (Investment Professionals) and 49(2) (High NetWorth 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 isnot for distribution in the United Kingdom or elsewhere in Europe to retail clients, as defined under the rules of the Financial ConductAuthority.

For Jersey, Guernsey and Isle of Man Residents:

This research is sent to you by Canaccord Genuity Wealth (International) Limited (CGWI) for information purposes and is not tobe construed as a solicitation or an offer to purchase or sell investments or related financial instruments. This research has beenproduced by an affiliate of CGWI for circulation to its institutional clients and also CGWI. Its contents have been approved by CGWIand we are providing it to you on the basis that we believe it to be of interest to you. This statement should be read in conjunctionwith your client agreement, CGWI's current terms of business and the other disclosures and disclaimers contained within thisresearch. 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 theIsle of Man Financial Supervision Commission. CGWI is registered in Guernsey and is a wholly owned subsidiary of Canaccord GenuityGroup Inc.

For Australian Residents:

This research is distributed in Australia by Canaccord Genuity (Australia) Limited ABN 19 075 071 466 holder of AFS Licence No234666. To the extent that this research contains any advice, this is limited to general advice only. Recipients should take intoaccount their own personal circumstances before making an investment decision. Clients wishing to effect any transactions in anyfinancial products discussed in the research should do so through a qualified representative of Canaccord Genuity (Australia) Limitedor its Wealth Management affiliated company, Canaccord Genuity Financial Limited ABN 69 008 896 311 holder of AFS Licence No239052.

For Hong Kong Residents:

This research is distributed in Hong Kong by Canaccord Genuity (Hong Kong) Limited which is licensed by the Securities and FuturesCommission. This research is only intended for persons who fall within the definition of professional investor as defined in theSecurities and Futures Ordinance. It is not intended to be distributed or passed on, directly or indirectly, to any other class ofpersons. Recipients of this report can contact Canaccord Genuity (Hong Kong) Limited. (Contact Tel: +852 3919 2561) in respect ofany matters arising from, or in connection with, this research.

Additional information is available on request.

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Copyright © Canaccord Genuity Limited. 2021 – Member LSE, authorized and regulated by the Financial Conduct Authority.



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All rights reserved. All material presented in this document, unless specifically indicated otherwise, is under copyright to CanaccordGenuity Corp., Canaccord Genuity Limited, Canaccord Genuity LLC or Canaccord Genuity Group Inc. None of the material, nor itscontent, nor any copy of it, may be altered in any way, or transmitted to or distributed to any other party, without the prior expresswritten permission of the entities listed above.

None of the material, nor its content, nor any copy of it, may be altered in any way, reproduced, or distributed to anyother party including by way of any form of social media, without the prior express written permission of the entitieslisted above.



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