Canadian Mining Eye

Q1 2013

The Canadian Mining Eye tracks Canadian mining sector performance of 100 TSX and TSXV mid-tier and junior companies with market capitalizations, in Q1 2013, broadly falling between $2.5b and $250m. These companies trade on the TSX and TSXV, albeit some of them are headquartered outside Canada. Movements and analysis of the index are reported quarterly. To receive copies of the Canadian Mining Eye, please contact Stephanie Dimou on +1 416 943 5438 or email stephanie.dimou@ca.ey.com. All company information is sourced from publicly available sources, including company websites and regulatory announcements. Contact us Jay Patel Canadian Mining & Metals Transactions Leader +1 416 943 3861 jay.patel@ca.ey.com Bruce Sprague Canadian Mining & Metals Leader +1 604 891 8415 bruce.f.sprague@ca.ey.com

Headwinds continue
Canadian mining equities continued to significantly underperform in the quarter given concerns around global economic growth and as a result commodity prices. The Canadian Mining Eye index plunged deeper and closed 13% down in Q1 2013, and 33% down in the past 12 months. Gold prices witnessed a historic fall in April with concerns that the Cyprus Government and a few other European countries might sell their gold reserves to raise cash. With close to two-thirds of the constituents of the Canadian Mining Eye index owning gold and/or silver assets the direction of precious metals prices remain important. While major banks predict further decline in gold prices, some observers argue that the fundamentals for well-supported gold prices remain unchanged. This uncertainty over the direction of metals prices, has turned investors risk averse, leading to a challenging market for capital access. Canadian companies have therefore focused on capital management practices like seeking to dispose non-core assets and delay or defer projects to withstand these turbulent times. Some do see buying opportunities where their own share prices have, on a relative comparison, declined less than those of their competitors. However, the flight to low cost assets remains the focus of many Canadian miners.

Q1 2013 Mining Eye in review

Mining Eye index and S&P/TSX Composite index performance over Q1 2013
Source: Ernst & Young, Thomson Datastream

Canadian Mining Eye index and S&P/TSX Composite index performance over Q1 2013
Source: Ernst & Young, Thomson Datastream.
900

Canadian Mining Eye index and peers over Q1 2013

Source: Ernst & Young, Thomson Datastream.
Mining Eye index and peers over Q1 2013
Source: Ernst & Young, Thomson Datastream

900

850

850

Index value

800

800 Index value

750

750

700

700

650

650

600

600

Mining Eye
Mining Eye S&P/TSX Composite (rebased)

FTSE AIM Basic Resources (rebased) S&P/TSX Composite Metals & Mining (rebased)

FTSE All Share Mining (rebased) S&P/ASX 300 Metals & Mining (rebased)

Canadian Mining Eye index and S&P/TSX Composite index performance, last 12 months
Mining EyeErnst index and S&P/TSX Composite index performance, last 12 months Source: & Young, Thomson Datastream.
Source: Ernst & Young, Thomson Datastream

Canadian Mining Eye index and peers, last 12 months

Source: Ernst & Young, Thomson Datastream.
Mining Eye index and peers, last 12 months
Source: Ernst & Young, Thomson Datastream

1,200 1,200 1,100 1,100 1,000 Index value 1,000 Index value

900

900

800

800

700

700

600

600

Mining Eye Mining Eye S&P/TSX Composite (rebased) FTSE All Share Mining (rebased) S&P/ASX 300 Metals & Mining (rebased)

FTSE AIM Basic Resources (rebased) S&P/TSX Composite Metals & Mining (rebased)

2 | Canadian Mining Eye Q1 2013

The Mining Eye index lost 13% over Q1 2013 a fall that compares with 17% over Q4 2012 and 22% in 2012. This was a significant underperformance compared to the 3% gain by the S&P/TSX Composite index in the first quarter. A significant downward movement in commodity prices impacted the severity of the fall. The LMEX index fell 6% in Q1 2013. We see that the majors are also becoming contagious to the downward movement and following the juniors in terms of decline. The majors declined 7% in Q4 2012, and witnessed an even deeper 11% fall in Q1 2013. On 12 and 15 April, gold prices plunged just over $200 and were down a total of 19% by 15 April. By 25 April, the drop since 1 January had reduced to 13%, but the nearterm outlook remains uncertain, with strong demand for physical gold contradicting ETF activity. Some companies unhedged their position in gold, taking advantage of the price drops. For example, Teranga Gold unwound its out-of-the-money hedges, and Crocodile Gold unwound its gold swaps to pay off its outstanding debt. Financing conditions on the global equity markets are proving to be persistently challenging, giving little grounds for any certainty over the short term. Globally, IPO volumes in the sector have been muted, indicating the extent of negative investor sentiment. Torontos

exchanges had only a couple of small floats that made it through to the TSX-Venture Exchange in April.1 Deal execution has also become challenging in the current environment. Asanko (fka Keegan), which owns the Essase gold project in Ghana, and PMI Gold, which owns the Obotan gold project in Ghana, intended to merge their neighboring assets in December. This fell through months later as PMIs shareholders were unlikely to approve the transaction. Valuation gaps such as this, from shareholders perspective, will keep deal execution difficult in Fertilizer minerals -37% the near term. Technology minerals -32%
Gold -17% Many Canadian Coal and consumable fuels companies -17% operate Silver -14% in an international arena and in Diversified metals and mining -11% emerging markets where Royalty and streaming -11%risks are Base metals -3% more pronounced and somewhat Platinum group metals 4% Uranium 11% Diamonds 17%

difficult to predict and measure. This can become especially challenging from a cash flow perspective as shareholders become more and more risk averse putting pressure on companies to reduce capital spend on new projects and investments. It is important for management to effectively manage these risks and negotiate effectively, as best as possible. The Senegal Government recently increased its production royalty rate for Teranga Gold from 3% to 5% in exchange for its right to take an additional 25% stake in any deposit that Teranga may develop.

Share price movement over Q1 2013 group Chart 5. Share price movement over Q1 2013by bycommodity commodity group

Diamonds Uranium Platinum group metals Base metals Royalty and streaming Diversied metals and mining Silver Coal and consumable fuels Gold Technology minerals Fertilizer minerals
40% -40% 30% -30% 20% -20% 10% -10%

0%

10% 10%

20% 20%

30% 30%

1 Excludes reverse takeovers, secondary listings, market graduations and qualifying transactions. 2 We noted valuation gap challenges in our report Mergers, acquisitions and capital raising in mining and metals:

2012 trends, 2013 outlook, published on 18 February 2013.

Canadian Mining Eye Q1 2013 | 3

Optimizing for long-term growth

The first quarter of 2013 saw a healthy mix of strategies in the mining sector focused on sustainable long-term growth despite constrained access to capital markets and capital cost escalations. Mining companies are responding creatively by successfully attracting alternative sources of financing and optimizing capital by focusing limited resources on core assets. In Q1 2013, we saw examples of the following: Strategic acquisitions Non-traditional financing Non-core asset disposals Capital recycling

Coeur dAlene Mines announced the acquisition of Orko Silver to diversify its portfolio and gain control of Orkos undeveloped silver deposits in Mexico. Coeur dAlene Mines expects this strategic move to help in geopolitical diversification and improving its long-term growth profile. However, the stock price has fallen since the deal was announced due to a concern whether the deal is accretive, as some analysts expect capex and project execution over the next three years will determine the eventual outcome.3 We saw both Alamos Gold and Hecla Mining battle to acquire Aurizon Mines in Q1 2013. Alamos Gold made a hostile takeover bid early in the first quarter, followed by a friendly takeover offer made by Hecla Mining at the end of the quarter. Aurizon rejected the Alamos offer following a drop in Alamos market capitalization, which was larger than the increase in Aurizons market capitalization. The deal was ultimately felt to be financially inadequate. Hecla was seen as the more attractive offer until the company saw its market capitalization decrease by an amount close to the implied premium paid for Aurizon, again signaling a dilutive transaction.

Non-traditional financing
A number of companies were looking out for more innovative forms of financing to avoid equity dilution. Junior companies are actively seeking a variety of sources of financing to raise capital, and we saw a trend of equipment financing, private equity and Chinese investments in Q1 2013. Northern Graphite entered into an equipment financing agreement with Caterpillar Financial Services to buy a mobile mining fleet and natural gas-powered generators. Metals streaming offered some companies an alternative financing option. For example, Silver Wheaton acquired a gold stream from a subsidiary of Vale S.A. Silver Wheaton in turn paid Vale a cash consideration of US$1.9b and 10 million warrants for 10 years. The company expects the deal to significantly enhance its production and growth profile. Prior to the First Quantum bid, Inmet Mining entered into financing deals with Franco-Nevada, in which Inmet agreed to sell precious metal streams to raise capital for its development project in Panama. Sino-Canada Fund, managed on behalf of private investors from China, has invested in Northern Freegold Resources, a precious metals exploration company. Sino Canada Funds long-term strategy is to invest in the Canadian natural resources sector.

Strategic mergers and acquisitions

A number of companies entered into mergers and acquisitions to sustain growth and expanded inorganically. B2Gold completed its merger with CGA Mining to leverage production capacity and expand its business by gaining access to CGAs Masbate mine in the Philippines. Both companies view the merger to be accretive and to add value to their shareholders. However, some analysts view the current decline in share price as a buying opportunity given the combined companys strong fundamentals.

3 Source: Deutsche Bank, Markets Research, dated 21 February 2013.

4 | Canadian Mining Eye Q1 2013

Non-core asset disposals

Some companies announced disposal of non-core assets in order to raise cash and focus strategically on their core business. For example, North American Palladium disposed its non-core gold division to Maudore Minerals to strengthen its cash position and focus on the expansion of its core palladium mine business. Lake Shore Gold sold its Mexican properties to Revolution Resources to focus on its Canadian assets.

Outlook
Canadian mining and metals companies and their global counterparts face a variety of challenges going forward in 2013. Economic growth in demand centres like the US, Europe and Japan is expected to remain weak with high unemployment throughout 2013. Growth centres like BRIC and other emerging countries are also witnessing growth slowdown. The sharp decline in equity fundraising witnessed in Q1 2013 is also likely to continue in the near term. So far this year, we have seen weakening of metals prices largely due to an uncertain global economic outlook. The plunge in the gold price in April not only shocked investors globally but also made the situation more uncertain for the mining sector. But opportunities will always exist for those willing to take a long-term view of the sector. Its about balancing cost reduction and operational efficiency efforts with strategic transactions. Exploration stage companies exposed to current capital constraints are pursuing unique, creative financing arrangements and thinking about how they can advance to the next stage in their growth agenda including consolidation between juniors with cash and those with property, mergers of equals, and streaming deals that sell off a royalty interest from a non-strategic asset for up-front financing. Its all about diversifying sources and types of funding to spread risk, drive efficiency, and limit exposure or loss of control to any one single party. Capital optimization is at the top of the boardroom agenda for the majors on the other end of the spectrum. These companies shareholders have become increasingly frustrated by weakening share prices and lower profitability in the face of huge planned capital spending. Majors are now facing increased pressure to rethink capital allocation decisions and reduce capital expenditures. Majors are expected to focus on cost rationalization, consolidation of core assets and capital management to fund the ongoing projects, remain cash flow positive and maintain profitability. Companies at this stage are well on their way to a new chapter of price-moderated margin growth as they try to balance the desire to build and maximize shareholder returns.

Capital recycling
Companies also looked at divestment as a means to raise capital. Turquoise Hill, which is focused on copper, gold and coal mines in the Asia-Pacific region, sold its 50% stake in Altynalmas Gold, a Kazakhstan-based company developing the Kyzyl gold project, to strengthen its cash position. Ivanplats sold a previously announced 15% stake in the Kamoa copper project to the Government of the Democractic Republic of the Congo. Kamoa is one of the worlds largest undeveloped copper deposits, and its indicated mineral resources in January 2013 increased 115% over the previous estimate from September 2011.

Canadian Mining Eye Q1 2013 | 5

Winners in Q1 2013
Canadian Mining Eye index and S&P/TSX Composite index since 2008
Mining Eye index S&P/TSX Composite index since 2008 Source: Ernst & and Young, Thomson Datastream. Source: Ernst & Young, Thomson Datastream
1,600

1,400

1,200

Index value

1,000

800

600

400

200

0 2008

2009

2010

2011

2012

2013

Mining Eye

S&P/TSX Composite (rebased)

Top 25 - TSX Mining

There were few share price winners in Q1 2013, with fewer than onequarter of the 100 Mining Eye Index constituents realizing a net gain, amid an overall negative sentiment and challenging market conditions witnessed during the quarter. Imperial Metals share price gained 24% this quarter on the back of strong Q4 2012 operating results and higher-than-expected copper production guidance of 58.5 million lbs. for 2013, mainly due to higher recoveries and planned grades from its Mt. Polley property. Further, commencement of production from the companys developing stage property Red Chris (copper/gold) in northwest British Columbia is expected to remain on schedule and start in 2014 following the announcement of an agreement with BC Hydro for the construction of a transmission line to supply power to the property. Altius Minerals share price closed the quarter up by 23% following a series of positive developments during the period, including encouraging feasibility study results for Alderons Kami Iron Ore property in western Labrador, the discontinuance of the CDN$20.6m lawsuit against them by BAE Newplan Group, and a buyback of

approximately 5% of its outstanding shares by 28 March 2013. Centamin appreciated 22% in Q1 2013 owing to the resumption of normal operations in late December 2012 at its principal asset, the Sukari gold mine, which was closed due to shortage of fuel and working capital. Earlier, Egyptian General Petroleum had stopped fuel supplies to the mine when Centamin failed to pay US$65m for past deliveries. The company also resumed export of gold in December 2012 from the mine following the revocation of export restrictions placed by customs. Based on these positive developments, Centamin provided guidance of a 22% increase in gold production for 2013 from the Sukari gold mine. The share price of Katanga Mining, a producer of refined copper and cobalt, gained 22% during the quarter as the market responded positively to its announcement of meeting the conditions required for the drawdown of a US$515.5m senior secured debt facility between Katanga and the Glencore Group (lender). The funds will be used to finance the phase 4 expansion program, which commenced in Q3 2011 at its copper-cobalt mine complex in the Democratic Republic of the Congo, enabling Katanga to both

increase total processing capacity as well as upgrade the quality of copper produced. In December 2012, the company announced the successful production of the first copper cathodes from the new facilities as part of the phase 4 expansion program. Uranium Ones share price gained 19% largely in response to the announcement of a transaction in which Russias JSC Atomredmetzoloto and its affiliate, Effective Energy N.V., collectively known as ARMZ, would acquire the remaining 48.6% stake in Uranium One to take the company private. ARMZ, a Russian uranium producer holding a 51.4% stake in Uranium One, offered CDN$2.86 per share to the minority shareholders, valuing the company at CDN$2.8b around 19% higher than Uranium Ones market value on the announcement date. The transaction is expected to close in the second quarter of 2013.

6 | Canadian Mining Eye Q1 2013

Fallers in Q1 2013
Canadian Mining Eye index, gold, copper and LME Index over Q1 2013
Mining Eye index, gold, copper and LME Index over Q1 2013 Source: Ernst & Young, Thomson Datastream. Source: Ernst & Young, Thomson Datastream
900

850

800 Index value

750

700

650

600

Mining Eye

LMEX Index (rebased)

Gold (rebased)

Copper (rebased)

A large majority of the 100 Mining Eye index companies witnessed a net share price decline over the quarter, primarily due to weakening of commodity and metal prices. Operational issues, weaker-thanexpected operating performance and financial results, and downbeat management guidance caused sharp downward price movements for many companies. Thirty-five Mining Eye constituents suffered a share price decline of more than 20% this quarter. Shares in San Gold lost 63% over the quarter following its lower-thanexpected Q4 2012 gold production (19,019 oz. vs. 27,084 oz. in Q3 2012 and 20,359 oz. in Q4 2011) and disappointing three-year production guidance. The updated mineral reserve and resource estimates were also downbeat, leading to a re-rating of the stock by most analysts. San Gold estimated a total expenditure of US$284m over 201317 to increase underground production at its Rice Lake complex in Manitoba, Canada. It also raised CDN$50m in Q1 2013 by issuing 8.0% convertible debentures to fund the development of the Rice Lake complex and other capital
4 General Moly news release, 20 March 2013.

expenditure. Analysts expect the company would have to raise more capital to fund its expenditure plan until 2016. Rainy River Resources, an exploration stage company owning a 100% stake in the Rainy River Gold project in northwestern Ontario, closed the quarter down 47%, continuing the slide that began after the announcement of CDN$75m follow-on issuance of shares in November 2012, which was revised to CDN$57.5m a day later by revising both the offering price and the number of shares following a sharp reaction by investors. Its only project, Rainy River Gold, is expected to commence production in 2016. A long gestation period with no revenue until 2016 and lack of visibility into the project made investors a little cautious about the company, especially amid the uncertain outlook for the mining sector. The share price of General Moly, a US-based development stage molybdenum mining company, plummeted 45% in Q1 2013. The company announced that it

suspended work on a US$665m term loan that was being negotiated with China Development Bank to finance the development of its Mt. Hope project in the US, following the detention of the chairman of Sichuan Hanlong Group, which was arranging the credit for General Moly.4 This development forced the company to look for an alternative financing partner and could significantly delay the development of the project. Mirabela Nickels share price plunged 43% over the quarter largely in response to lower-than-expected Q4 2012 nickel production and declining nickel and copper prices during Q1 2013. In February, the companys shares dropped further due to its announcement of a US$380m impairment charge in 2012 for its Santa Rita assets, resulting in a reported net loss of US$452.9m for FY 2012, as compared with a net loss of US$50.8m in FY 2011.

Canadian Mining Eye Q1 2013 | 7

Ins and outs of the TSX & TSXV mining universe

Admissions
Galway Gold was admitted to the TSXV in January in connection with a plan of arrangement among formerly listed Galway Resources Ltd., AUX Acquisition 2 S.r.l, AUX Canada Acquisition 2, Galway Metals and Galway Gold that closed on 20 December 2012. Galway Gold, a spinout from Galway Resources Ltd., focuses on the exploration of gold in the Vetas gold district of northeast Colombia. The companys market value at quarter end was CDN$34m. Coventry Resources joined the TSXV as it completed a reverse takeover. The company will also be dual-listed on the Australian Securities Exchange. Coventry is developing the Cameron gold project in Ontario, which is expected to commence around mid-2015. It has also identified a number of exploration targets and prospects around West Cedartree ground. Delta Gold joined the TSXV in February pursuant to a reverse merger with ADR Capital Corp. Delta Gold engages in the exploration of gold mineral properties. Its principal project includes the Imperial Project consisting of 373 unpatented lode claims, as well as 281 mill site claims on 5,721 acres of federal public lands located in the desert area of Imperial County in southeastern California. Trident Gold was admitted to the TSXV following the completion of a qualifying transaction with Andor Mining. Andor acquired all the issued and outstanding shares of Trident and amalgamated with it. Trident Gold focuses on gold exploration and holds a 100% stake in the Marquesa project, comprising an area of
8 | Canadian Mining Eye Q1 2013

Value of TSX & TSXV mining universe and as % of all TSX & TSXV, 2009-2013
Value of TSX& & Young TSXV mining universe as from % of allTSX TSX & TSXV, 2009-2013 Source: Ernst analysis of and data and TSXV Market Intelligence Group; market values as at quarter end.
Source: Ernst & Young analysis of data from TSX and TSXV Market Intelligence Group; market values as at quarter end

600,000

30%

500,000

25%

Mining market value CDN$m

400,000

20%

Mining as % of all TSX & TSXV

300,000

15%

200,000

10%

100,000

5%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 Mining Market Cap Mining as a % of all TSX & TSXV (RH scale)

0%

TSX & TSXV mining admissions and delistings since 2008

Source: TSX Ernst & Young analysis of data from TSX & TSXV Market Intelligence Group; includes placements, introductions & TSXV mining admissions and delistings since 2008 Source: Ernst & Youngexcludes analysis of data from TSX & TSXV Market Intelligence Group; includes and readmissions; transfers between TSX & placements, TSXV. introductions and readmissions; excludes transfers between TSX & TSXV
70

60

50 Number of companies

40

30

20

10

Admissions

Delistings

124,000 hectares in the city of Medellin, Colombia.

Market exits
Northland Resources, a producer of iron ore concentrate, delisted from the TSX in March 2013. Earlier, on 8 February, its three Swedish subsidiaries filed for corporate reorganization. Northland had a dual listing on the TSX and Oslo Bors. Rio Verde Minerals Development shares were delisted from the TSX pursuant to its merger with B&A Fertilizers.

Talison Lithium delisted from the TSX following its acquisition by Windfield Holdings Pty Ltd., an Australian subsidiary of Chengdu Tianqi Industry Group Co., Ltd., of China.

Changes to the Mining Eye index

During the quarter, CGA Mining, Talison Lithium and Northland Resources exited the index due to delisting and were replaced by San Gold, Midas Gold and Brigus Gold.

Fundraising in Q1 2013
Quarterly trend of funds raised on TSX & TSXV mining and all sectors
Quarterly trend of funds raised on TSX & TSXV - mining and all sectors Source: Ernst & Young analysis of TSX & TSXV Market Intelligence Group.
Source: Ernst & Young analysis of TSX & TSXV Market Intelligence Group

12,000

25,000

10,000

20,000

TSX & TSXV Mining funds raised CDN$m

8,000 15,000 6,000 10,000 4,000

TSX & TSXV total fund raised CDN$m

2,000

5,000

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Mining new issues CDN$m

Mining further issues CDN$m

TSX & TSXV total issues CDN$m

Equity funds raised by TSX- and TSXV-listed mining companies declined sharply in Q1 2013 to CDN$1.157m, compared with CDN$3.005m in Q4 2012 and CDN$3.155m in the same period a year ago. There were 415 financing deals with no IPOs during the period, compared with 489 financing deals in the same period a year ago, which included 14 IPOs. Fundraising across the TSX and TSXV slowed down sharply, with a fall of 33.7% q-o-q to CDN$9.836m, reflecting challenging market conditions. Fundraising by the mining sector accounted for 11.8% of total proceeds raised across the TSX and TSXV (Q4 2012: 20.3%). The largest issues are outlined below: Santacruz Silver Mining raised CDN$40.4m by way of equity issuance to finance property payments and further exploration of its San Felipe and Gavilanes silver projects in Mexico. Subsequent to the fundraising, the company added a fourth silver project to its portfolio by acquiring the 48,057-hectare El Gachi project near its existing San Felipe project.

Guyana Goldfields raised gross proceeds of CDN$100.0m through a follow-on issuance of common shares. It also raised CDN$5.6m via a private placement deal with the International Finance Corporation (IFC). The proceeds will be used to fund the development of its Aurora Gold project in Guyana and for exploration expenditures. NGEx Resources, a mineral exploration company with assets in Canada, Chile and Argentina, raised a total of CDN$34.0m equity financing via a private placement to fund its ongoing copper and gold projects in Chile and Argentina. MBAC Fertilizer, an integrated phosphate and potash fertilizers producer in Latin America, raised equity financing of CDN$34.5m through a secondary offering. The fundraising will enable the company to finance the completion of the Itafos phosphate and single super phosphate (SSP) project by mid-2013. The funds will also be used to finance the development of the Santana phosphate project in Brazil.

Platinum Group Metals raised gross proceeds of CDN$180.0m through the issuance of new equity. The proceeds will be used to partially fund its 63% obligation toward ongoing exploration and engineering work on the Waterberg project and its 74% share of phase 2 development costs at the Western Bushveld Joint Venture (WBJV) project 1 platinum mine in South Africa. Karnalyte Resources, a company engaged in exploration and development of potash and magnesium products, raised CDN$44.7m via a private placement deal with Indiabased Gujarat State Fertilizers & Chemicals Limited (GSFC), which picked-up a 19.98% stake in Karnalyte. The fundraising will enable the company to partially finance the construction of phase 1 of the Wynyard Carnallite project in Canada. GSFC earlier entered into an off-take agreement with Karnalyte for the purchase of 350,000 tonnes per year of potash from phase 1 of the project, increasing to 600,000 tonnes per year with the commencement of phase 2.

Canadian Mining Eye Q1 2013 | 9

Fundraising on the TSX and TSXV, 200913

Source: Ernst & Young analysis of TSX & TSXV market statistics.

Mining New issues No. of IPOs5 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 2012 2011 2010 2009 0 19 6 10 14 11 23 20 16 35 18 17 23 13 11 7 12 49 70 93 43 Proceeds CDN$m 0 347 9 11 23 30 107 107 119 661 67 491 93 11 4 3 4 391 362 1,312 23 Further issues6 No. of money raising issues 415 492 357 331 475 410 366 467 678 860 420 499 536 760 589 457 373 1,655 1,921 2,315 2,179 Proceeds CDN$m 1,157 2,658 2,984 1,125 3,132 1,934 2,160 2,696 5,322 7,249 1,985 4,059 3,144 3,336 9,556 4,280 4,612 9,899 12,112 16,437 21,784 Total issues Proceeds CDN$m 1,157 3,005 2,993 1,136 3,155 1,964 2,268 2,803 5,440 7,910 2,052 4,550 3,237 3,347 9,560 4,283 4,616 10,290 12,474 17,749 21,806 New issues Proceeds CDN$m 938 2,508 344 1,050 506 1,041 1,315 2,887 1,656 4,616 1,615 2,977 1,826 1,850 1,617 1,102 288 4,408 6,899 11,034 4,858

All TSX & TSXV Further issues Proceeds CDN$m 8,898 12,326 13,430 9,778 16,581 10,236 9,027 12,221 12,702 15,714 6,488 11,567 9,178 16,209 18,342 13,390 12,088 52,115 44,185 42,947 60,029 Total issues Proceeds CDN$m 9,836 14,834 13,774 10,828 17,087 11,276 10,342 15,107 14,358 20,330 8,103 14,545 11,003 18,059 19,960 14,492 12,376 56,523 51,084 53,981 64,887

Mining as % of all TSX & TSXV Total proceeds % 12% 20% 22% 10% 18% 17% 22% 19% 38% 39% 25% 31% 29% 19% 48% 30% 37% 18% 24% 33% 34%

5 6

Initial public offering (IPO) TSX and TSXV as primary exchanges of listing. Funds raised from follow-on issue of shares and private placements.

10 | Canadian Mining Eye Q1 2013

Index constituents selected at quarter end

Source: Ernst & Young, TSX & TSXV Market Intelligence Group.

Q1 2013 Tahoe Resources Uranium One First Majestic Silver AuRico Gold Coeur dAlene Mines Walter Energy Centerra Gold Alamos Gold HudBay Minerals Sherritt International Alacer Gold Stillwater Mining B2Gold China Gold International Resources Torex Gold Resources Ivanplats NovaGold Resources Pretium Resources Silver Standard Resources Dominion Diamond Argonaut Gold Katanga Mining Continental Gold Dundee Precious Metals Perseus Mining Sandstorm Gold SEMAFO Paladin Energy Capstone Mining Imperial Metals Gabriel Resources Rio Alto Mining Silvercorp Metals Endeavour Mining Nevsun Resources

MV (CDN$m) 2,649 2,513 2,340 2,312 2,225 2,222 2,201 2,109 1,723 1,707 1,492 1,475 1,400 1,351 1,330 1,299 1,260 1,243 1,197 1,187 1,186 1,144 1,113 1,064 1,008 1,006 934 921 919 899 897 891 871 849 846

Q1 2013 Seabridge Gold McEwen Mining Endeavour Silver Rubicon Minerals Thompson Creek Metals Company Centamin Premier Gold Mines Primero Mining Mag Silver Taseko Mines Aurizon Mines Banro Colossus Minerals Teranga Gold NGEx Resources Fortuna Silver Mines Rainy River Resources Golden Star Resources Denison Mines Anglo Pacific Group International Minerals Sprott Resource Kirkland Lake Gold Sabina Gold & Silver Coalspur Mines Romarco Minerals Mirabela Nickel Tanzanian Royalty Exploration Aurcana Belo Sun Mining Timmins Gold MBAC Fertilizer Lake Shore Gold Patagonia Gold Sierra Metals

MV (CDN$m) 815 806 780 733 695 687 626 620 610 578 564 561 559 555 539 520 496 482 478 478 473 466 461 460 455 450 438 437 434 431 430 419 407 406 394

Q1 2013 Copper Mountain Mining Lumina Copper SouthGobi Resources Mandalay Resources Mountain Province Diamonds General Moly Ivanhoe Australia Troy Resources Augusta Resource Luna Gold Paramount Gold and Silver Asanko Gold PMI Gold Copper Fox Metals Virginia Mines Orko Silver Duluth Metals Bear Creek Mining Northern Dynasty Minerals Guyana Goldfields Nevada Copper Altius Minerals North American Palladium Silvercrest Mines Lydian International San Gold Midas Gold Brigus Gold

MV (CDN$m) 387 386 373 367 366 364 357 352 350 341 339 336 330 330 326 321 310 305 299 298 282 275 272 269 265 265 257 254

Total universe MV CDN$m Top 25 MV CDN$m Total universe excl Top 25 MV CDN$m MV of Mining Eye constituents MV of Mining Eye constituents as a % of MV of Total universe excluding Top 25

400,360 283,907 116,453 78,736 68%

OceanaGold

836

Chesapeake Gold

392

Shading represents index entrants MV Market value. CGA Mining, Talison Lithium and Northland Resources exited the index during the quarter. Keegan Resources changed its name to Asanko Gold in February 2013. Harry Winston Diamond changed its name to Dominion Diamond in March 2013.

Canadian Mining Eye Q1 2013 | 11

Ernst & Youngs Global Mining & Metals Center

With a strong but volatile outlook for the sector, the global mining and metals industry is focused on future growth through expanded production, without losing sight of operational efficiency and cost optimization. The sector is also faced with the increased challenges of changing expectations in the maintenance of its social license to operate, skills shortages, effectively executing capital projects and meeting government revenue expectations. Ernst & Youngs Global Mining & Metals Center brings together a worldwide team of professionals to help you achieve your potential a team with deep technical experience in providing assurance, tax, transactions and advisory services to the mining and metals sector. The Center is where people and ideas come together to help mining and metals companies meet the issues of today and anticipate those of tomorrow. Ultimately it enables us to help you meet your goals and compete more effectively. Its how Ernst & Young makes a difference.

Ernst & Young Assurance | Tax | Transactions | Advisory

About Ernst & Young Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 167,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information, please visit www.ey.com.

Area contacts
Global Mining & Metals Leader Mike Elliott Tel: +61 2 9248 4588 michael.elliott@au.ey.com Oceania Scott Grimley Tel: +61 3 9655 2509 scott.grimley@au.ey.com China and Mongolia Peter Markey Tel: +86 21 2228 2616 peter.markey@cn.ey.com Japan Andrew Cowell Tel: +81 3 3503 3435 cowell-ndrw@shinnihon.or.jp Europe, Middle East, India and Africa Leader Mick Bardella Tel: +44 20 795 16486 mbardella@uk.ey.com Africa Wickus Botha Tel: +27 11 772 3386 wickus.botha@za.ey.com Commonwealth of Independent States Evgeni Khrustalev Tel: +7 495 648 9624 evgeni.khrustalev@ru.ey.com France and Luxemburg Christian Mion Tel: +33 1 46 93 65 47 christian.mion@fr.ey.com India Anjani Agrawal Tel: +91 982 061 4141 anjani.agrawal@in.ey.com

United Kingdom & Ireland Lee Downham Tel: +44 20 7951 2178 ldownham@uk.ey.com Americas and United States Leader Andy Miller Tel: +1 314 290 1205 andy.miller@ey.com Canada Bruce Sprague Tel: +1 604 891 8415 bruce.f.sprague@ca.ey.com South America and Brazil Leader Carlos Assis Tel: +55 21 3263 7212 carlos.assis@br.ey.com

Service line contacts

Global Advisory Leader Paul Mitchell Tel: +86 21 22282300 paul.mitchell@cn.ey.com Global Assurance Leader Tom Whelan Tel: +1 604 891 8381 tom.s.whelan@ca.ey.com Global IFRS Leader Tracey Waring Tel: +61 3 9288 8638 tracey.waring@au.ey.com Global Tax Leader Andy Miller Tel: +1 314 290 1205 andy.miller@ey.com Global Transactions Leader Lee Downham Tel: +44 20 7951 2178 ldownham@uk.ey.com

2013 EYGM Limited. All Rights Reserved. EYG no. ER0071 1073836

This publication contains information in summary form, current as of the date of publication, and is intended for general guidance only. It should not be regarded as comprehensive or a substitute for professional advice. Before taking any particular course of action, contact Ernst & Young or another professional advisor to discuss these matters in the context of your particular circumstances. We accept no responsibility for any loss or damage occasioned by your reliance on information contained in this publication.

www.ey.com/miningmetals
ED None