Mining & Metals. Rating and Target Price Changes. Figure 1: Key commodity price changes

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1 Australian Equity Research 15 January 2018 Canaccord Genuity (Australia) Ltd. Reg Spencer Analyst reg.spencer@canaccord.com.au Tim McCormack Analyst tim.mccormack@canaccord.com.au Patrick Chang, CFA Analyst patrick.chang@canaccord.com.au Larry Hill Analyst larry.hill@canaccord.com.au Q1'18 Commodity Price Update Gold & Base Metals: Updated forward curve pricing (as at 12 Jan'18) for gold sees an average 5% increase vs prior assumptions for LT (from 2023) to US$1,499/oz. Key changes to base metals include a slight uplift in copper and zinc pricing over the medium term with LT pricing unchanged US$3.00/lb and US$1.10/lb respectively. Currencies: Our FX assumptions remain unchanged with LT AUS:USD at Figure 1: Key commodity price changes Company Rating Price Target Base Metals - Developer/Explorer MOD-ASX Spec Buy A$0.06 A$0.10 RVR-ASX Spec Buy A$0.32 A$0.50 Base Metals - Producer AVB-ASX Buy A$0.09 A$0.17 A$0.16 FND-ASX Spec Buy A$0.24 A$0.35 IGO-ASX Sell A$4.99 A$3.30 A$3.20 MLX-ASX Buy A$1.18 A$1.45 A$1.35 OZL-ASX Sell A$8.94 A$8.10 A$7.30 SFR-ASX Hold A$7.32 A$6.80 A$6.50 WSA-ASX Sell A$3.40 A$3.00 Hold Precious Metals and Minerals EAR-ASX Spec Buy A$0.34 A$0.50 A$0.45 Precious Metals - Developer/Explorer DCN-ASX Spec Buy A$3.00 A$3.75 A$3.25 EMR-ASX Spec Buy A$0.04 A$0.08 GOR-ASX Spec Buy A$0.73 A$0.95 A$0.85 ORR-ASX Hold A$0.23 A$0.20 A$0.17 Precious Metals - Producer BDR-ASX Buy A$0.20 A$0.35 DRM-ASX Spec Buy A$0.30 A$0.35 A$0.30 EVN-ASX Hold A$2.73 A$2.50 A$2.35 MML-ASX Spec Buy A$0.50 A$0.75 A$0.65 NST-ASX Hold A$6.23 A$6.10 Buy A$5.75 OGC-ASX Buy A$3.20 A$4.40 PRU-ASX Buy A$0.44 A$0.75 Source: FastSet, Bloomberg Finance L.P., Canaccord Genuity Estimates Valuation and Ratings Changes: Updated gold prices have generally resulted in an 8.3% increase in valuations for gold producers (forward curve NPV5%). For base metals the average change has been 4%. Rating changes include: Northern Star Resources (NST:ASX) HOLD from BUY on valuation Saracen Mineral Holdings (SAR:ASX) HOLD from BUY on valuation St Barbara (SBM:ASX) SELL from HOLD on valuation Western Areas (WSA:ASX) SELL from HOLD on valuation Preferred exposures - Gold: OceanaGold (OGC:ASX) - trading at discount to peers with P/NAV of 0.72x vs 1.1x, with FCF improvement into 2018 on Haile ramp up. Perseus Mining (PRU:ASX) - Strongest production growth outlook among the ASX producers with +40% YoY from FY18, trading at significant discount to valuation. Resolute Mining (RSG:ASX) - Transitional 2018 expected with Syama UG coming on line, offers scaleable long life assets trading at a material discount to NAV. Dacian Gold (DCN:ASX) - moving to producer status in Q1'18, plant construction is on time and budget and we expect a rapid transition to FCF in FY19. Preferred exposures - Base Metals: Copper: Metals X (MLX:ASX) - Copper production at Nifty increasing to 40ktpa by mid-2018, which underpins significant FCF in FY19. Zinc: Red River Resources (RVR:ASX) - one of the few new zinc operations coming on line in 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 objective views about any and all the companies and securities that are the subject of this report discussed herein. For important information, please see the Important Disclosures beginning on page 8 of this document.

2 A$0.70 RRL-ASX Hold A$4.42 A$4.40 A$4.15 RSG-ASX Buy A$1.18 A$1.90 A$1.70 SAR-ASX Hold A$1.68 A$1.60 Buy A$1.50 SBM-ASX Sell A$3.88 A$3.00 Hold A$2.75 WGX-ASX Buy A$1.80 A$3.15 A$2.85 Priced as of close of business 15 January January

3 Gold Price ($/oz) AUD:USD Mining & Metals Q1 18 Commodities Price Deck Update Figure 2: Updated precious metals & currencies price deck key changes for Q4 17 Q4 /17 E E E E 2020E E 2022E 2025E LT Gold (US$/oz) New $1,286 $1,263 $1,334 $1,366 $1,403 $1,435 $1,467 $1,499 Previous $1,293 $1,265 $1,308 $1,334 $1,361 $1,385 $1,412 $1,433 Change (%) - 0.5% - 0.1% 2.0% 2.4% 3.1% 3.6% 3.9% 4.6% Silver (US$/oz) New $17.23 $17.09 $17.12 $17.70 $18.06 $18.42 $18.51 $18.51 Previous $17.23 $17.15 $17.24 $17.67 $18.02 $18.36 $18.45 $18.45 Change (%) 0.0% - 0.4% - 0.7% 0.1% 0.2% 0.3% 0.3% 0.3% Copper (US$/lb) New $2.90 $2.80 $3.00 $3.00 $3.00 $3.25 $3.50 $3.00 Previous $2.70 $2.75 $2.85 $2.95 $3.00 $3.25 $3.50 $3.00 Change (%) 7.4% 1.8% 5.3% 1.7% 0.0% 0.0% 0.0% 0.0% Zinc (US$/lb) New $1.34 $1.29 $1.50 $1.40 $1.35 $1.30 $1.20 $1.10 Previous $1.25 $1.29 $1.40 $1.40 $1.35 $1.30 $1.20 $1.10 Change (%) 7.2% 0.3% 7.1% 0.0% 0.0% 0.0% 0.0% 0.0% Nickel (US$/lb) New $5.23 $4.71 $5.00 $5.50 $6.00 $6.50 $7.00 $8.00 Previous $5.40 $4.71 $5.00 $5.50 $6.00 $6.50 $7.00 $8.00 Change (%) - 3.1% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% US /AUS Exchange New Previous Change (%) 2.2% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Source: Bloomberg, Factset, Canaccord Genuity estimates Precious Metals Metals Pricing Our forward curve pricing assumptions for precious metals are shown in Figure 3. Since our last update (25 Sep 17) the LT forward price for gold has increased by 4.6% to US$1,499/oz with nearer-term assumptions increasing on average by ~3% over Figure 3: Updated gold price & AUDUSD forward curve pricing $2,100 Canaccord Genuity Forecasts 1.00 $2,000 $1, $1,800 $1, $1,600 $1, $1, $1,300 $1, $1,100 $1, /14 01/15 01/16 01/17 01/18 01/19 01/20 01/21 01/22 01/23 USD Gold Price (LHS) AUD Gold Price (LHS) Spot US$ gold (LHS) AUD: USD (RHS) Source: Factset, Canaccord Genuity estimates 15 January

4 Valuation & Rating Changes Precious Metals Mining & Metals Valuation changes (gold producers NPV5%, developers NPV10%) based on updated forward curve pricing assumptions are shown in Figure 4 below. Figure 4: CGAu Precious metals coverage summary of ratings and targets COMPANY CODE ANALYST PRICE A$ MKT CAP A$m RATING NEW TP A$ OLD TP A$ % Chg PRODUCERS Beadell Resources Ltd BDR TM BUY % Doray Minerals DRM PC SPEC BUY % Evolution Mining Limited EVN RS HOLD % Medusa Mining MML PC SPEC BUY % Northern Star Resources NST TM HOLD % OceanaGold Corporation OGC RS BUY % Perseus Mining Limited PRU RS BUY % Regis Resources Limited RRL TM HOLD % Resolute Mining Limited RSG PC BUY % Saracen Mineral Holdings SAR PC HOLD % St. Barbara Limited SBM RS SELL % Westgold Resources WGX TM BUY % DEVELOPERS Dacian Gold DCN TM SPEC BUY % Echo Resources EAR TM SPEC BUY % Emerald Resources EMR PC SPEC BUY % Gold Road Resources GOR PC SPEC BUY % OreCorp Ltd ORR RS HOLD % Source: Factset, Canaccord Genuity Estimates RS Reg Spencer; TM Tim McCormack; PC Patrick Chang; LH - Larry Hill Consensus valuation vs CG estimates Updated valuations have resulted in an average gold producer P/NAV (market cap weighted) of 0.87x (versus Factset consensus 0.88x, Figure 5). Figure 5: CGAu P/NAV s vs Factset Consensus C OD E P R IC E M KT C A P C Ge N A V P / N A V F actset C o nsensus A$ A $ m A$ C o nsensus Val n M ultiple BDR $0.20 $215.9 $ x $ x DRM $0.30 $82.1 $ x $ x EVN $2.73 $4,594.0 $ x $ x MML $0.50 $96.6 $ x $ x NST $6.23 $3,738.2 $ x $ x OGC $3.33 $1,968.3 $ x $ x PRU $0.44 $454.6 $ x $ x RRL $4.42 $2,199.5 $ x $ x RSG $1.18 $849.0 $ x $ x SAR $1.68 $1,365.7 $ x $ x SBM $3.88 $1,546.0 $ x $ x WGX $1.81 $569.8 $ x $ x M / C ap weighted average Source: Factset, Canaccord Genuity estimates 0.98x 1.07x 15 January

5 Peer group valuations Mining & Metals Peer group valuations continue to show ASX intermediate producers as having the highest valuation multiples (owing to superior asset quality, balance sheet strength and/or FCF generation). Of the Intermediate peer group, we continue to highlight OGC trading at the largest discount to the peer group average, with the Mid-cap peer group, RSG and WGX offer the best valuation upside. Figure 6: Average peer group P/NAV s C o mpany Source: Canaccord Genuity estimates Intermediate (+500ko zpa) M id (+300ko zpa) Junio r (<300ko zpa) M / C ap (A $ m) P / NAV vs Avg Company M / C ap (A $ m) P / NAV vs Avg Company Implied gold prices & valuation sensitivity M / C ap (A $ m) P / N A V EVN $4, x 10% RSG $ x -38% BDR $ x -9% OGC $1, x -24% RRL $2, x 1% DRM $ x 40% NST $3, x 3% SAR $1, x 5% MML $ x 9% vs A vg SBM $1, x 30% PRU $ x -5% WGX $ x -42% A vg P / N A V 0.99x A vg P / N A V 1.00x A vg P / N A V 0.61x Estimates of implied gold prices (i.e. what gold price is required to derive a valuation equal to the current share price; Figure 7) shows SBM to be the most overvalued at US$1,458/oz), a 24% premium to spot gold prices. We estimate that gold producers currently trade on an average implied gold price (market cap weighted) of US$1,307/oz. The most undervalued on this measure are OGC (US$1,165/oz), and BDR (US$1,200/oz), which trade at a discount to spot of 17% and 33% respectively. Figure 7: CGAU gold producer and developers coverage implied gold prices & valuation sensitivity Spot US$ 1,341 US$ 1,250/ oz US$ 1,400/ oz Company C urrent Share P rice Implied Go ld P rice (US$ / o z) C G T arget P rice P / N A V P / N A Spo t A U D 0.70 Sp o t A U D 0.79 A U D A U D 0.70 Sp o t A U D 0.79 A U D A U D 0.70 Sp o t A U D 0.79 A U D PRODUCERS Beadell Resources Ltd $0.20 $1,200 $ x 0.67x $0.33 $0.29 $0.27 $0.27 $0.25 $0.23 $0.37 $0.35 $0.33 Doray M inerals Limited $0.30 $1,361 $ x 1.06x $0.46 $0.28 $0.19 $0.38 $0.21 $0.13 $0.51 $0.33 $0.24 Evolution Mining Limited $2.73 $1,355 $ x 1.22x $2.66 $2.23 $1.99 $2.44 $2.04 $1.81 $2.81 $2.36 $2.11 Medusa Mining Limited $0.50 $1,264 $ x 0.78x $0.74 $0.64 $0.59 $0.55 $0.47 $0.43 $0.86 $0.75 $0.69 Northern Star Resources $6.23 $1,446 $ x 1.18x $6.45 $5.30 $4.70 $5.75 $4.65 $4.15 $6.88 $5.60 $5.00 OceanaGold Corporation $3.33 $1,165 $ x 0.83x $4.51 $4.00 $3.72 $4.05 $3.58 $3.33 $4.84 $4.28 $3.98 Perseus Mining Limited $0.44 $1,236 $ x 0.72x $0.70 $0.61 $0.56 $0.55 $0.47 $0.43 $0.81 $0.70 $0.64 Regis Resources Limited $4.42 $1,420 $ x 1.17x $4.70 $3.77 $3.33 $4.16 $3.29 $2.88 $5.03 $4.01 $3.60 Resolute Mining Limited $1.18 $1,242 $ x 0.78x $1.89 $1.51 $1.32 $1.53 $1.18 $1.01 $2.12 $1.73 $1.53 Saracen Mineral Holdings $1.68 $1,458 $ x 1.24x $1.83 $1.36 $1.12 $1.56 $1.13 $0.91 $2.00 $1.51 $1.26 St. Barbara Limited $3.88 $1,380 $ x 1.39x $3.36 $2.80 $2.49 $3.04 $2.51 $2.23 $3.58 $2.99 $2.67 Westgold Resources $1.81 $1,158 $ x 0.68x $3.53 $2.65 $2.24 $3.02 $2.20 $1.82 $3.83 $2.93 $2.50 DEVELOPERS Dacian Gold Ltd $1.97 $1,260 $ x 0.60x $4.10 $3.30 $2.85 $3.55 $2.80 $2.45 $4.40 $3.50 $3.10 Echo Resources $0.33 $1,278 $ x 0.85x $0.53 $0.39 $0.32 $0.44 $0.31 $0.25 $0.58 $0.43 $0.36 Emerald Resources $0.04 $1,129 $ x 0.64x $0.08 $0.07 $0.07 $0.06 $0.06 $0.06 $0.08 $0.08 $0.07 Gold Road Resources $0.72 $1,316 $ x 0.97x $0.95 $0.74 $0.64 $0.83 $0.64 $0.54 $1.01 $0.81 $ January

6 COMPANY UPDATES: Beadell Resources (BDR:ASX Buy Target: A$0.35) Mining & Metals BDR flagged a delay in accessing high grade oxide ore at the end of 2017, which will see production come in slightly below the koz annual guidance range. We now expect to see 2017 production of ~130koz at an AISC of US$1,130/oz when the company releases its DecQ 17 report in the next couple of weeks, and our production assumptions increasing to +150koz at an AISC of <US$960/oz from 2018 remain unchanged. While disappointing to miss annual production guidance, BDR is well advanced on a mill upgrade (completion expected mid-2018), which should allow improved flexibility and predictability at the operation once implemented. As a result of the upgrade, BDR will be able to process a higher proportion of fresh material (+70% of the open pit Reserve) resulting in sustained production at +150kozpa for ~6 years based on the current Reserve (18.5Mt at 1.77g/t for 1.1Moz). Aggressive exploration with a view to growing the current Reserve base has returned numerous positive outcomes during the 2017 drilling program. We continue to see exploration as an important value driver going forward, and we expect BDR to follow up a number of in-mine, near mine and regional prospects during 2018 that represent potential additional ore sources. Oceana Gold Corporation (OGC:ASX Buy Target: A$4.40) We have revised our production estimates for 2018 with lower output at Didipio (- 25% due to accelerated processing of higher grade stockpiles during Q3 17) and Waihi (lower grades), offset by higher production at Macraes (higher grades from Coronation North). We now estimate Group production of 533koz in 2018, versus prior forecasts of 588koz. Production revisions offset higher gold price assumptions, with our A$4.40 target price unchanged. St Barbara Limited (SBM:ASX Sell Target $3.00)) SBM recently provided a DecQ production update (ahead of full quarterly report due 23 Jan 2018), with Group production of 99.5koz ahead of CGe of 95.8koz. The beat was led by another outperformance at Simberi (36.7koz vs CGe 30.7koz) on account of improved mined grades. Gwalia production was in line with our expectations at 63koz (Cge 65koz). As a result of the strong 1HFY18, SBM has lifted FY18 guidance to koz from koz, but given that the 1H was meant to be weaker on lower grades at Gwalia due to the stoping sequence, we anticipate that SBM could still beat upgraded guidance with stronger grades planned at Gwalia expected in the 2H. We move to a SELL rating on valuation. Perseus Mining (PRU:ASX BUY Target $0.75) PRU recently announced that it has commenced ore commissioning at the Sissingue development project in Cote d Ivoire. The project is expected to produce an average of ~70kozpa over an initial 5-year mine life, with AISC of <US$700/oz. First gold is expected in late Jan 18 with commercial production expected during Q1 18. Total capex for the project has been reported as being in line with budget at US$110m. We had few concerns that Sissingue would be delivered on time this is a relatively low risk development, which although modest in size, should be profitable. Sissingue (which along with improved output at Edikan) will help lift 15 January

7 group output ~49% from FY17 to FY18 and another +26% from FY18 to FY19 to 332koz, with cashflow important in contributing to expected development costs for the Yaoure development. BASE METALS KEY CHANGES Base Metals Since our last update (25 September 2017) we have made some minor adjustments to the short-term pricing for copper and zinc, but note that the LT (from 2023) price assumptions have remained unchanged at US$3.00/lb and US$1.10/lb, respectively. While we continue to forecast a strong recovery in nickel prices, we have tapered the forecast speed of the retracement. Our long-term price of US$8.00/lb remains unchanged. Valuation & Rating Changes Base Metals Figure 8: CGAu Base metals coverage summary of ratings and targets COMPANY CODE ANALYST PRICE A$ MKT CAP A$m RATING NEW TP A$ OLD TP A$ % Chg PRODUCERS Avanco Resources AVB PC BUY % Finders Resources FND LH SPEC BUY % Independence Group IGO TM SELL % Metals X MLX TM BUY % OZ Minerals OZL PC ,664 SELL % Sandfire Resources SFR PC ,142 HOLD % Western Areas WSA PC SELL % DEVELOPERS MOD Resources MOD LH 0.06 SPEC BUY % Red River Resources RVR LH SPEC BUY % Source: Factset, Canaccord Genuity Estimates RS Reg Spencer; TM Tim McCormack; PC Patrick Chang, LH Larry Hill BASE METALS COMPANY UPDATES Finders Resources (FND:ASX: A$0.23 SPEC BUY Target $0.35). Eastern Fields (EFDL) developments have extended its takeover offer to February 28, 2018 from Jan 19, 2018 at $0.23/share. We have adjusted our FY17 production estimates from 25.0kt to 23.4kt to reflect the interruption to the SXEW circuit that was encountered in September 2017 at Wetar and downtime associated the primary crusher during October In addition, we have refined our production estimates for FY18 at Wetar from 27.8kt to 25.2kt to reflect the ramp up of Wetar back to nameplate production as fresh ore is leached. The above have not impacted our target price, remaining $0.35/share. 15 January

8 Appendix: Important Disclosures Analyst Certification Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst s coverage universe and (ii) no part of the authoring analyst s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research. Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of Canaccord Genuity Inc. and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communications 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 authoring analysts of the report. Investment Recommendation Date and time of first dissemination: January 15, 2018, 16:56 ET Date and time of production: January 15, 2018, 16:56 ET Compendium Report This report covers six or more subject companies and therefore is a compendium report and Canaccord Genuity and its affiliated companies hereby direct the reader to the specific disclosures related to the subject companies discussed in this report, which may be obtained at the following website (provided as a hyperlink if this report is being read electronically) disclosures.canaccordgenuity.com/en/pages/default.aspx; or by sending a request to Canaccord Genuity Corp. Research, Attn: Disclosures, P.O. Box Pacific Centre, Granville Street, Vancouver, BC, Canada V7Y 1H2; or by sending a request by to disclosures@canaccordgenuity.com. The reader may also obtain a copy of Canaccord Genuity s policies and procedures regarding the dissemination of research by following the steps outlined above. Past performance In line with Article 44(4)(b), MiFID II Delegated Regulation, we disclose price performance for the preceding five years or the whole period for which the financial instrument has been offered or investment service provided where less than five years. Please note price history refers to actual past performance, and that past performance is not a reliable indicator of future price and/or performance. Distribution of Ratings: Global Stock Ratings (as of 01/15/18) Rating Coverage Universe IB Clients # % % Buy % 40.60% Hold % 29.02% Sell % 15.00% Speculative Buy % 66.67% 940* 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 or the relevant issuer. Risk Qualifier SPECULATIVE: Stocks bear significantly higher risk that typically cannot be valued by normal fundamental criteria. Investments in the stock may result in material loss. 15 January

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