Australian Gold Miners

Transcription

1 AUSTRALIA Gold price, various currencies, 1yr ago = 100 Australian equities in a global context Commodity view Bullion markets face a busy week, with the results of the Italian referendum to be digested and the ECB expected to announce additional monetary policy easing on Thursday. Both events might be positive but at present the Trump trade of a rising dollar and falling bond prices (Figs 8 and 9) dominate. Last week a pause in this trade saw gold stabilised, down a modest 0.7% to $1,175/oz while silver rose to $16.75/oz. Source: Bloomberg, Macquarie Research, December 2016 Silver price, USD and CAD, 1yr ago = 100 Source: Bloomberg, Macquarie Research, December 2016 Gold price, $/oz v 10yr TIPS, value Source: Bloomberg, Macquarie Research, December 2016 ETFs continue to see large outflows in Au 150t since the US election and the YTD increase down to 521t. Ag has also seen large outflows 416t but last week saw an inflow on one day sufficient to make the weekly total positive (Figs 6 & 7). Physical demand is an increasing concern. In India the government s demonetization of certain banknotes and war on black money has led to a lack of liquidity and the local industry expects gold purchases to suffer. Imports, which initially surged on the reforms, have fallen back (Fig 10). In China there were reports that the authorities were restricting gold imports due to concerns about it being a way of getting yuan out of the country. However, there has been no official confirmation. Equity themes and trading ideas Sentiment runs against Mt Morgans. DCN has been unable to complete its planned $150m capital raising to fund the construction of the Mt Morgans gold project. The company originally offered a $50m placement and $100m Accelerated Non-renounceable Rights Offer at $2.75/sh, a 7. discount to last close and a 5.6% discount to 5 day VWAP. The offer was subsequently repriced to $2.50/sh and has been scaled back to a $26m placement. The company has cited the deterioration of the gold price and excessive dilution as the reasons for the scale back. Project development and exploration to continue. DCN will use the funds from the placement to continue early development activities and continue exploration. The company has not made any change to its project timeline and plans first production in 3QFY18. How the expected $220m capex bill for Mt Morgans is funded has now become a key uncertainty. DCN is continuing its negotiations with a number of banks for the debt component of the funding. However, securing debt, completing the project funding package, and project timing are now uncertain. Sector investment thesis Continue buying quality good jurisdiction, cornerstone assets & mgmt teams. With futures fully pricing in a Dec rate hike, we continue to see strong inflation in the US with gradual rate hikes and recommend buying the dip. Australian Top Picks Int. producers: EVN, NST, OGC, RRL, SBM; Junior producers: AQG, PRU, BDR; 5 December 2016 Developers: GOR, DCN. Please refer to page 13 for important disclosures and analyst certification, or on our website

2 Fig 1 Macquarie global stock coverage and gold analysts Canada MG Michael Gray michael.gray@macquarie.com MS Michael Siperco michael.siperco@macquarie.com Australia BC Ben Crowley ben.crowley@macquarie.com HB Hayden Bairstow hayden.bairstow@macquarie.com South Africa JO James Oberholzer james.oberholzer@macquarie.com YC Yatish Chowthee yatish.chowthee@macquarie.com London PM Patrick Morton patrick.morton@macquarie.com AO Alon Olsha Alon.olsha@macquarie.com Source: FactSet, Macquarie Research, December 2016 Valuation Date Ticker Analyst Price Mkt Cap Rec. Target Target Return 12/2/2016 Local US$m Curr. Local to Target Barrick Gold ABX CN MS ,543 O CAD % Goldcorp G CN MS ,303 N CAD Fresnillo FRES LN PM ,026 N GBP Newcrest Mining NCM AU HB ,837 N AUD % Agnico Eagle Mines AEM CN MS ,050 O CAD % Randgold Resources RRS LN PM ,773 O GBP AngloGold Ashanti ANG SJ YC ,421 O ZAR Kinross Gold K CN MS ,128 N CAD Yamana Gold YRI CN MS ,945 N CAD % Gold Fields GFI SJ YC ,513 O ZAR % Sibanye Gold SGL SJ YC ,860 N ZAR Harmony Gold Mining Co HAR SJ YC N ZAR Seniors 6 Seniors 6 Franco-Nevada FNV CN MS ,326 O CAD Silver Wheaton SLW CN MG ,999 O CAD Royal Gold RGLD US MS ,476 O USD Osisko Gold Royalties OR CN MS ,053 O CAD Anglo Pacific Group APF LN AO O GBP AuRico Metals AMI CN MS O CAD Royalties/Streamers 58% Royalties/Streamers 6 Tahoe Resources THO CN MG ,956 O CAD % Detour Gold DGC CN MS ,158 O CAD Eldorado Gold ELD CN MS ,977 O CAD Evolution Mining EVN AU BC ,258 O AUD Northern Star Resources NST AU BC ,538 O AUD % Independence Group NL IGO AU HB ,866 O AUD Centamin CEY LN PM ,875 O GBP % B2Gold BTO CN MG ,307 O CAD OceanaGold Corporation OGC CN MG ,718 O CAD % Alamos Gold AGI CN MG ,636 O CAD % IAMGOLD Corp IMG CN MS ,667 N CAD % Regis Resources RRL AU BC ,041 O AUD % Semafo SMF CN MG O CAD % Centerra Gold CG CN MS ,476 O CAD Silver Standard Resources SSO CN MG ,154 O CAD % Torex Gold Resources TXG CN MG ,224 O CAD St Barbara SBM AU BC O AUD % Kirkland Lake Gold KLG CN MS O CAD % Alacer Gold AQG AU BC O AUD % Primero Mining P CN MG N CAD Intermediates 6 Intermediates 61% Saracen Mineral Holdings SAR AU BC N AUD Pan African Resources PAF LN PM O GBP Richmont Mines RIC CN MG O CAD Roxgold ROG CN MG O CAD % Teranga Gold TGZ CN MG O CAD % Beadell Resources BDR AU BC O AUD Doray Minerals DRM AU BC N AUD Perseus Mining PRU AU BC O AUD Medusa Mining MML AU BC N AUD % Juniors 61% Juniors 5 Producers 6 Producers 6 MAG Silver Corp MAG CN MG ,002 O CAD Gold Road Resources GOR AU BC O AUD Dacian Gold DCN AU BC O AUD Gold Standard Ventures GSV CN MG O CAD % Integra Gold ICG CN MG O CAD % Midas Gold MAX CN MG O CAD Pilot Gold PLG CN MG O CAD % Rye Patch Gold RPM CN MG O CAD ATAC Resources ATC CN MG O CAD % Eastmain Resources ER CN MG O CAD Pure Gold Mining PGM CN MG O CAD % Probe Metals PRB CN MG O CAD Explorers/Developers 8 Explorers/Developers 69% 5 December

3 Fig 2 Weekly, QTD and YTD global stock returns for Seniors, Royalties/Streamers and Intermediates SENIORS Weekly Return QTD Return YTD Return K CN ABX CN YRI CN ANG SJ RRS LN G CN HAR SJ AEM CN FRES LN NCM AU GFI SJ SGL SJ (1%) (1%) () () () () 7% ABX CN G CN NCM AU K CN RRS LN AEM CN FRES LN YRI CN ANG SJ HAR SJ GFI SJ SGL SJ (11%) (1) (1) (16%) (2) (2) (2) (26%) (26%) (27%) (3) (4) (4) (49%) ABX CN HAR SJ K CN FRES LN YRI CN AEM CN ANG SJ NCM AU RRS LN SGL SJ G CN GFI SJ 8 69% 59% % 41% 28% (6%) () () 6% 8% (6) (5) (4) (3) (2) (1) Royalties/Streamers AMI CN RGLD US OR CN SLW CN Weekly Return 1% APF LN AMI CN RGLD US OR CN QTD Return (7%) (7%) (11%) (16%) 19% APF LN RGLD US AMI CN SLW CN YTD Return 67% 56% % 9 FNV CN 1% FNV CN (18%) FNV CN 2 APF LN (8%) SLW CN (28%) OR CN () (1) (8%) (6%) () () 6% (4) (3) (2) (1) (2) INTERMEDIATES Weekly Return QTD Return YTD Return AQG AU DGC CN TXG CN ELD CN SMF CN THO CN IMG CN OGC CN BTO CN RRL AU KLG CN SSO CN CEY LN AGI CN CG CN SBM AU EVN AU P CN NST AU IGO AU () (9%) (1%) (1%) (1%) () 1 1 8% 6% 6% 1% 1 IGO AU IMG CN CG CN BTO CN OGC CN EVN AU CEY LN AQG AU NST AU AGI CN SSO CN RRL AU THO CN ELD CN KLG CN SMF CN SBM AU TXG CN DGC CN P CN (31%) (3) (41%) (4) (21%) (2) (2) (26%) (27%) (1) (1) (1) (1) (1) (1) (16%) (17%) (6%) (8%) 2 IMG CN BTO CN CEY LN SSO CN AGI CN IGO AU TXG CN SBM AU KLG CN OGC CN EVN AU DGC CN NST AU RRL AU SMF CN THO CN AQG AU CG CN ELD CN P CN (61%) (6%) % 86% % 5 51% 48% 47% 4 39% % 11% (1) (1) () (7) (6) (5) (4) (3) (2) (1) (10) (5) Source: FactSet, Macquarie Research, December December

4 Fig 3 Weekly, QTD and YTD global stock returns for Junior Producers and Explorers/Developers JUNIORS Weekly Return QTD Return YTD Return ROG CN 16% PRU AU 6% PAF LN 128% PRU AU 7% ROG CN (1) BDR AU 11 RIC CN 1% PAF LN (16%) RIC CN 98% () (2) ROG CN 96% PAF LN (1%) DRM AU (2) 8 () (26%) PRU AU 8 MML AU () MML AU (26%) 7 TGZ CN () TGZ CN (28%) TGZ CN 71% DRM AU () BDR AU (29%) MML AU 5 SAR AU (7%) RIC CN (3) SAR AU 48% BDR AU (1) SAR AU (38%) DRM AU (18%) (1) (1) () (5) (4) (3) (2) (1) 1 (4) (2) EXPLORERS & DEVELOPERS Weekly Return QTD Return YTD Return MAG CN 9% GOR AU DCN AU 25 ATC CN 7% GSV CN () GSV CN 236% ICG CN 7% MAG CN (1) MAX CN 20 GOR AU 7% ICG CN (18%) PRB CN 19 GSV CN RPM CN (19%) 137% (21%) RPM CN 9 MAX CN (21%) 89% RPM CN DCN AU (2) ICG CN 8 PLG CN (3) MAG CN 79% PGM CN PRB CN (31%) GOR AU 68% DCN AU ATC CN (3) PLG CN 67% ER CN (6%) PGM CN (39%) ER CN 4 PLG CN (7%) ER CN (4) ATC CN 2 (1) (8%) (6%) () () 6% 8% 1 (5) (4) (3) (2) (1) Source: FactSet, Macquarie Research, December December

5 Macquarie Wealth Management Fig 4 Gold and Silver price chart and forecasts (US$/oz) Gold $1,800 $1,700 $1,600 $1,500 $1,400 $1,300 $1,200 $1,100 $1,000 $900 Macquarie Deck Forward Curve Forecast $ Silver $40 $35 Macquarie Deck Forward Curve Forecast $30 $25 $20 $15 $ Source: Bloomberg, Macquarie Research, December December

6 Fig 5 Gold price, various currencies, 1yr ago = 100 Fig 6 Gold ETF inflows (outflows), tonnes/week (40) Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Source: Bloomberg, Macquarie Research, December 2016 Source: Company data, Macquarie Research, December (10) (20) (30) 3m moving average Fig 7 Silver ETF inflows (outflows), tonnes/week Fig 8 Gold price, % MoM v DXY index (100) (200) 3m moving average (300) Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Source: Company data, Macquarie Research, December 2016 Source: Macrobond, Macquarie Research, December 2016 Fig 9 Gold price, $/oz v 10yr TIPS bonds, value Fig 10 India, daily gold imports, tonnes /09 15/09 29/09 13/10 27/10 10/11 24/11 Source: Bloomberg, Macquarie Research, December 2016 Source: Macrobond, Macquarie Research, December December

7 Fig 11 Global production and cost metrics Au Production (000 oz) Operating Cash Costs (US$/oz) Total Capex (US$m) AISC (US$/oz)* Company 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E Seniors Barrick Gold 5,380 5,117 5, ,136 1,527 1, Goldcorp 2,876 2,821 2, Fresnillo 1,620 1,834 NA NA NA NA NA Newcrest Mining 2,439 2,546 2, Agnico Eagle Mines 1,646 1,574 1, Randgold Resources 1,186 1,149 NA NA NA AngloGold Ashanti 3,753 3,703 3, ,016 Kinross Gold 2,757 2,434 2, Yamana Gold 1,270 1,294 1, Gold Fields 2,098 2,130 1, ,002 1,062 Sibanye Gold 1,556 1,540 1, ,027 1,162 Harmony Gold Mining Co 1,004 1,024 1, ,002 1,041 1,157 Seniors Seniors Intermediates Tahoe Resources Detour Gold Eldorado Gold Evolution Mining Northern Star Resources Independence Group NL Centamin NA NA NA B2Gold OceanaGold Corporation Alamos Gold , IAMGOLD Corp ,063 1,058 1,071 Regis Resources Semafo Centerra Gold Silver Standard Resources Torex Gold Resources St Barbara Kirkland Lake Gold , Alacer Gold ,517 Primero Mining ,378 1,172 1,055 Intermediates Intermediates Juniors Saracen Mineral Holdings Pan African Resources Richmont Mines , Roxgold Teranga Gold Beadell Resources Doray Minerals NA NA NA Perseus Mining , Medusa Mining ,053 1, Juniors Juniors Overall (Ex. Royalties) Overall (Ex. Royalties) Royalties/Streamers Franco-Nevada NA NA NA NA NA NA NA NA NA Silver Wheaton Royal Gold NA NA NA NA NA NA NA NA NA Osisko Gold Royalties NA NA NA NA NA NA NA NA NA Anglo Pacific Group NA NA NA NA NA NA NA NA NA AuRico Metals NA NA NA NA NA NA NA NA NA Royalties/Streamers NMF NMF NMF NMF NMF NMF Royalties/Streamers NMF NMF NMF NMF NMF NMF *AISC is operating costs + exploration + corporate G&A + sustaining capex ^ Royalties/Streamers report production on GEO-basis NA: Not available NMF: Not meaningful Production is on attributable basis Source: Macquarie Research, December December

8 Fig 12 Global financial summary Macquarie Commodity Price Forecasts* Company NAV P/NAV 2016E 2016E 2016E 2016E Name US$/sh x Curr. EPS P/E CFPS P/CFPS EBITDA (m) EV/EBITDA FCF/sh FCF Yield Seniors Barrick Gold x USD x x 4, x % Goldcorp x USD 0.16 NMF x 1, x % Fresnillo x USD 0.19 NMF x x Newcrest Mining x USD x x 1, x % Agnico Eagle Mines x USD 0.71 NMF x x Randgold Resources x USD x x x % AngloGold Ashanti x USD x x 1, x Kinross Gold x USD 0.02 NMF x 1, x % Yamana Gold x USD x x x % Gold Fields x USD x x 1, x % Sibanye Gold x ZAR x x 8, x Harmony Gold Mining Co x ZAR x x 3, x Seniors 1.13x 19.4x 8.4x 7.7x 7.7% Seniors 1.13x 17.6x 5.7x 6.1x 6. Royalties/Streamers Franco-Nevada x USD 0.99 NMF x x % Silver Wheaton x USD x x x Royal Gold x USD 1.32 NMF x x % Osisko Gold Royalties x CAD x x x Anglo Pacific Group x GBP 0.01 NMF x x % AuRico Metals x USD (0.04) NMF (0.02) NMF 0 NMF (0.04) (5.9%) Royalties/Streamers 1.06x 39.0x 19.7x 18.8x 2.8% Royalties/Streamers 1.17x 39.0x 20.1x 19.3x 3.8% Intermediates Tahoe Resources x USD x x x Detour Gold x USD 0.19 NMF x x Eldorado Gold x USD x x x (0.16) (5.6%) Evolution Mining x AUD x x x Northern Star Resources x AUD x x 4.5x % Independence Group NL x AUD x x x % Centamin x USD x x x B2Gold x USD x x x (0.11) (4.) OceanaGold Corporation x USD x x x (0.27) (9.) Alamos Gold x USD (0.04) NMF x x % IAMGOLD Corp x USD (0.05) NMF x x Regis Resources x AUD x x x % Semafo x USD x x x Centerra Gold x USD x x x Silver Standard Resources x USD x x x % Torex Gold Resources x USD x x x % St Barbara x AUD x x x Kirkland Lake Gold x CAD x x x Alacer Gold x USD x x x % Primero Mining x USD (0.16) NMF x x (0.29) (31.8%) Intermediates 0.79x 19.0x 7.7x 7.0x 3. Intermediates 0.71x 15.0x 7.2x 6.0x 5.8% Juniors Saracen Mineral Holdings x AUD x x x Pan African Resources x GBP x x x % Richmont Mines x CAD x x x (0.25) (3.7%) Roxgold x USD x x x % Teranga Gold x USD x x x Beadell Resources x AUD x x x % Doray Minerals x AUD x x x % Perseus Mining x AUD (0.02) NMF x x (0.01) (2.) Medusa Mining x USD x x x % Juniors 0.76x 19.0x 9.0x 8.3x 9.7% Juniors 0.73x 11.0x 8.7x 7.6x 8.9% Producers 0.91x 20.3x 9.4x 8.7x 5.6% Producers 0.87x 15.0x 8.1x 7.5x 5.8% * Macquarie commodity price forecasts: 2016=$1264/oz, 2017=$1381/oz, 2018=$1375/oz, 2019=$1406/oz, 2020=$1438/oz, 2021=$1388/oz, and LT=$1250/oz NA: Not available NMF: Not meaningful (negative or larger than 50) Multiples calculated based on US$ share price and US$ estimates, converted at FX rate prevalent at time of calculations Source: FactSet, Macquarie Research, December December

9 5 December Fig 13 Global financial metrics and ratios based on Macquarie s commodity price forecasts Macquarie Commodity Price Forecasts* Company EPS P/E CFPS P/CFPS EBITDA (m) EV/EBITDA FCF/sh FCF Yield Name Curr. 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E Seniors Barrick Gold USD x 17.1x 17.9x x 6.9x 6.7x 4,345 4,059 3, x 6.3x 6.5x % % Goldcorp USD NMF 24.9x 21.8x x 6.7x 6.4x 1,274 1,813 1, x 7.6x 7.2x % Fresnillo USD NMF 47.0x 25.1x x 17.9x 12.5x , x 13.0x 8.9x % 4.8% Newcrest Mining USD x 17.1x 15.5x x 7.8x 7.2x 1,324 1,769 1, x 7.4x 7.0x % Agnico Eagle Mines USD NMF 29.9x 28.8x x 9.4x 8.9x 921 1,169 1, x 8.2x 7.9x % 2. Randgold Resources USD x 16.3x 12.5x x 10.6x 8.7x x 10.3x 9.0x % 7.9% 10.1% AngloGold Ashanti USD x 9.3x 10.7x x 3.1x 3.0x 1,656 2,086 2, x 3.2x 3.3x % 14.1% Kinross Gold USD NMF NMF 24.6x x 4.7x 4.4x 1,211 1,193 1, x 4.3x 3.9x 0.00 (0.03) % (0.7%) 1. Yamana Gold USD x 21.4x 12.5x x 4.9x 4.0x x 5.7x 4.7x % Gold Fields USD x 8.3x 10.3x x 2.5x 2.5x 1,057 1,225 1, x 3.1x 3.1x % 6.6% 12.1% Sibanye Gold ZAR x 5.6x 5.4x x 3.4x 3.3x 8,960 11,487 11, x 2.8x 2.7x Harmony Gold Mining Co ZAR x 5.8x 9.5x x 3.2x 3.9x 3,772 5,405 4, x 2.7x 3.4x % Seniors 19.4x 18.4x 16.2x 8.4x 6.8x 6.0x 7.7x 6.2x 5.6x 7.7% 7.8% 9. Seniors 17.6x 17.1x 14.0x 5.7x 5.8x 5.4x 6.1x 6.0x 5.6x Royalties/Streamers Franco-Nevada USD NMF 38.7x 36.8x x 19.5x 18.9x x 17.8x 17.1x % 2.1% 3. Silver Wheaton USD x 21.5x 20.7x x 12.3x 11.8x x 13.4x 13.3x % 8. Royal Gold USD NMF 31.0x 32.0x x 14.9x 15.3x x 13.8x 14.1x % Osisko Gold Royalties CAD x 40.6x 34.2x x 27.9x 24.7x x 18.4x 16.2x % 4.1% Anglo Pacific Group GBP NMF 9.8x 13.1x x 8.5x 10.8x x 7.5x 9.8x % % AuRico Metals USD (0.04) (0.00) (0.00) NMF NMF NMF (0.02) NMF NMF NMF NMF 37.9x 37.4x (0.04) (0.00) 0.00 (5.9%) (0.) 0. Royalties/Streamers 39.0x 28.3x 27.3x 19.7x 16.6x 16.3x 18.8x 18.1x 18.0x 2.8% 4.9% 5. Royalties/Streamers 39.0x 31.0x 32.0x 20.1x 14.9x 15.3x 19.3x 15.8x 15.1x 3.8% % Intermediates Tahoe Resources USD x 12.4x 11.7x x 8.2x 7.5x x 6.8x 6.3x % 5. Detour Gold USD NMF 13.9x 10.1x x 7.1x 6.0x x 6.9x 6.0x % 12. Eldorado Gold USD x 19.2x 16.9x x 7.9x 4.4x x 7.7x 4.3x (0.16) (0.16) 0.14 (5.6%) (5.7%) 5. Evolution Mining AUD x 9.9x 7.6x x 4.7x 4.0x , x 3.4x 2.8x % Northern Star Resources AUD x 9.9x 6.3x x 5.3x 3.9x x 3.7x 2.6x % 9.1% 15. Independence Group NL AUD x NMF 14.9x x 14.3x 6.3x x 10.5x 4.3x % Centamin USD x 27.2x 26.8x x 6.0x 5.9x x 4.8x 4.7x % B2Gold USD x 19.5x 8.4x x 8.5x 4.9x x 7.9x 4.7x (0.11) (0.00) 0.31 (4.) (0.) 12. OceanaGold Corporation USD x 4.8x 6.4x x 3.7x 4.9x x 3.5x 4.7x (0.27) (9.) Alamos Gold USD (0.04) NMF 25.8x 19.1x x 7.4x 6.2x x 6.8x 6.5x % 4.6% 0.1% IAMGOLD Corp USD (0.05) NMF NMF NMF x 5.0x 4.5x x 3.4x 3.1x % 10.1% Regis Resources AUD x 10.8x 7.5x x 7.3x 5.3x x 5.1x 3.7x % 9.7% 12.7% Semafo USD x 15.9x 13.3x x 6.6x 5.9x x 4.3x 3.8x (0.13) % (4.) Centerra Gold USD x 8.1x 9.8x x 3.6x 3.7x x 1.2x 1.2x (0.06) % (1.) Silver Standard Resources USD x 15.4x 17.3x x 7.6x 7.3x x 6.0x 5.8x % 1.1% 6.6% Torex Gold Resources USD x 16.1x 16.9x x 7.0x 6.6x x 6.3x 6.1x % % St Barbara AUD x 7.6x 5.4x x 5.1x 4.2x x 4.0x 3.4x % 24. Kirkland Lake Gold CAD x 5.7x 5.0x x 3.0x 2.6x x 2.6x 2.4x % 23.1% Alacer Gold USD 0.07 (0.02) (0.03) 27.6x NMF NMF x 9.5x 11.3x x 6.8x 6.1x % 3.8% 2.7% Primero Mining USD (0.16) (0.01) 0.04 NMF NMF 20.6x x 2.5x 2.1x x 2.4x 1.9x (0.29) (0.02) (0.03) (31.8%) (2.6%) (3.) Intermediates 19.0x 13.9x 12.4x 7.7x 6.5x 5.4x 7.0x 5.2x 4.2x % Intermediates 15.0x 13.1x 10.9x 7.2x 6.8x 5.1x 6.0x 5.0x 4.3x 5.8% 7.8% 9.6% Juniors Saracen Mineral Holdings AUD x 9.6x 9.2x x 5.5x 5.5x x 4.2x 4.1x Pan African Resources GBP x 5.7x 5.7x x 4.5x 4.5x x 4.5x 4.5x % % Richmont Mines CAD x 19.9x 7.5x x 7.8x 3.9x x 7.8x 3.7x (0.25) (0.18) 1.41 (3.7%) (2.7%) 21. Roxgold USD x 8.1x 9.4x x 5.5x 6.1x x 4.1x 4.5x % % Teranga Gold USD x 6.3x 13.5x x 4.3x 7.4x x 2.0x 3.0x % 10.7% Beadell Resources AUD x 4.2x 3.7x x 3.2x 2.9x x 2.6x 2.4x % Doray Minerals AUD 0.05 (0.01) x NMF 10.3x x 2.6x 1.7x x 2.8x 1.7x % Perseus Mining AUD (0.02) NMF 45.4x 7.5x x 10.4x 3.8x x 3.4x 1.1x (0.01) (2.) Medusa Mining USD x 1.9x 1.3x x 1.0x 0.7x x 1.0x 0.7x % 51.9% 78. Juniors 19.0x 12.6x 7.6x 9.0x 5.0x 4.1x 8.3x 3.6x 2.9x 9.7% Juniors 11.0x 7.2x 7.5x 8.7x 4.5x 3.9x 7.6x 3.4x 3.0x 8.9% Producers 20.3x 16.7x 14.2x 9.4x 7.4x 6.5x 8.7x 6.8x 6.1x 5.6% Producers 15.0x 14.6x 12.1x 8.1x 6.6x 5.4x 7.5x 5.1x 4.5x 5.8% 8.1% 10.1% * Macquarie commodity price forecasts: 2016=$1264/oz, 2017=$1381/oz, 2018=$1375/oz, 2019=$1406/oz, 2020=$1438/oz, 2021=$1388/oz, and LT=$1250/oz Multiples calculated based on US$ share price and US$ estimates, converted at FX rate prevalent at time of calculations NMF: negative or larger than 50 Source: FactSet, Macquarie Research, December 2016

10 Fig 14 M&A transactions since January 1, 2014 Announcement Date Target Name Acquirer Name Source: Company reports, FactSet, Macquarie Research, December 2016 Deal Announced Deal Premium Resource (m EV/Reserve EV/Resource Premium Value (US$m) (20 VWAP) oz AuEq) (US$/oz) (US$/oz) (Last Px) Gold Price Producers 29-Sep-16 Newmarket Gold Kirkland Lake $ % 6.4 $1,001 $120 $1,215 5-Jul-16 Thompson Creek Metals Centerra Gold $1,100 n/a $193 $159 $1, Jun-16 Batu Hijau mine (Newmont 48.) PT Amman Mineral $1,300 n/a n/a 4.3 $487 $302 $1,318 8-Feb-16 Lake Shore Gold (LSG) Tahoe Resources $ $884 $134 $1, Nov-15 St. Andrew Goldfields (SAS) Kirkland Lake $129 n/a $155 $48 $1, Dec-15 Rice Lake Mine Klondex Mines $32 n/a n/a 0.6 $70 $50 $1, Nov-15 Spring Valley/Ruby Hill (ABX) Waterton $110 n/a n/a 6.8 $4,583 $16 $1, Nov-15 Bald Mt/Round Mt (ABX) Kinross $610 n/a n/a 7.2 $297 $84 $1, Jul-15 Zaldivar (ABX) Antofagasta $1,005 n/a n/a 15.4 $83 $65 $1, Jul-15 Silvercrest Mines First Majestic $ $218 $26 $1,098 8-Jun-15 CC&V (ANG) Newmont Mining $820 n/a n/a 10.0 $207 $82 $1, May-15 Porgera (ABX) Zijin Mining $298 n/a n/a 9.2 $198 $65 $1, May-15 Cowal Mine (ABX) Evolution Mining $550 n/a n/a 3.4 $354 $160 $1, Apr-15 AuRico Gold Alamos Gold $1, $187 $118 $1,198 4-Jun-14 Elgin Mining Mandalay Resources $ $201 $37 $1, May-14 Jundee (NEM) Northern Star $83 n/a n/a 0.5 $201 $163 $1, Apr-14 Osisko Yamana & Agnico-Eagle $3, % n/a 27.9 $356 $129 $1, Feb-14 Eastern Dragon (ELD) CDH $40 n/a n/a 0.1 $231 $493 $1,324 9-Feb-15 Rio Alto Tahoe Resources $1, % $382 $145 $1,233 4-Feb-14 Marigold (G/ABX) Silver Standard $275 n/a n/a 2.5 $111 $41 $1, Jan-14 Kanowna (ABX) Northern Star $68 n/a n/a 1.2 $113 $56 $1,238 : $ $501 $119 $1,203 : $ % 5.08 $207 $84 $1,207 Explorers/Developers 20-Jun-16 Gryphon Minerals (GRY) Teranga $ $60 $21 $1,291 7-Jun-16 Goldrock Fortuna $ % 3.3 $60 $30 $1, May-16 Kaminak Gold (KAM) Goldcorp $ $184 $135 $1, Apr-16 Snip Gold Seabridge $ % 3.3 n/a $2 $1,230 4-Mar-16 True Gold Endeavour Mining $ $190 $78 $1,260 2-Dec-15 Buffalo claims (PGM) Premier Gold $4 n/a n/a n/a n/a n/a $1, Aug-15 King of the Hills/Kailis (SBM) Saracen Mineral $3 n/a n/a 0.4 n/a $8 $1, Jul-15 Romarco Oceana Gold $ % 72.7% 4.8 n/a $136 $1,096 9-Jun-15 OBM/EAG/RYG/CRG New Oban $46 n/a n/a 6.4 n/a $7 $1, Jan-15 Probe Mines Goldcorp $ n/a $101 $1, Apr-15 Mega Precious Metals Yamana Gold $ n/a $3 $1, Dec-14 Murgor Resources Alexandria Minerals $ n/a $8 $1, Dec-14 Caballo Blanco Timmins Gold $25 n/a n/a 1.0 n/a $25 $1, Dec-14 Paramount Gold & Silver Coeur Mining $ % n/a 3.5 n/a $44 $1, Oct-14 Fruta Del Norte (Kinross) Lundin Gold $240 n/a n/a 10.0 n/a $24 $1, Oct-14 Orbis Semafo $ % n/a 2.6 n/a $53 $1,242 8-Oct-14 Chaparral Gold Goldrock/Waterton $ % n/a 1.7 n/a $11 $1,221 3-Sep-14 Cayden Resources Agnico-Eagle $ n/a n/a n/a $0 $1, Aug-14 Chucapaca (GFI) Buenaventura $81 n/a n/a 6.1 n/a $26 $1, Jul-14 Kestanelik (Chesser) Nurol Holdings $40 n/a n/a 0.8 n/a $53 $1,307 3-Jun-14 Papillon Resources B2Gold $ % n/a $135 $1, May-14 Sulliden Gold Rio Alto Mining $ % 2.4 $267 $112 $1, Feb-14 Navachab (ANG) QKR Corporation $110 n/a n/a 1.9 $57 $25 $1,263 : $162 57% 69% 3.33 $136 $47 $1,232 : $101 49% $122 $26 $1,243 5 December

11 5 December Fig 15 Macquarie global precious metal equity research portal Seniors Royalties/streamers Intermediates Juniors Explorers/developers North America Agnico-Eagle Franco-Nevada Alamos Gold Teranga Gold ATAC Resources Barrick Silver Wheaton B2Gold Roxgold Midas Gold Eldorado Osisko Royalty Centerra Richmont Mines Pilot Gold Goldcorp Royal Gold Detour Gold Gold Standard Kinross AuRico Metals OceanaGold MAG Silver Yamana Primero Integra Gold Tahoe Resources Pure Gold SEMAFO Eastmain Resources Silver Standard Probe Metals Torex Rye Patch Gold Kirkland Lake Gold IAMGOLD Australia Newcrest Mining Alacer Gold St Barbara Gold Road Resources Evolution Mining Saracen Mineral Hld Dacian Gold Northern Star Resources Doray Minerals Regis Resources Beadell Resources Independence Group NL Medusa Mining Perseus Mining United Kingdom Fresnillo Anglo Pacific Group Centamin Pan African Resources Randgold Resources South Africa AngloGold Ashanti Sibanye Gold Gold Fields Harmony Source: Macquarie Research, December 2016

12 5 December Fig 16 Most recent Macquarie global commodity & thematic research Precious metal commodity research Date Gold be careful what you wish for 17-Nov-16 Reconciliation and discrepancies of gold flows into China 13-Oct-16 Why is gold not $2,000/oz? 30-Aug-16 Gold - "Bulls, but we're worried about the spec length". Should we be? 5-Jul-16 Gold in 1Q: supply and demand finally seems to make a difference 28-Apr-16 Metals and Bulks Forecasts - Winning the battle, but not yet the war 14-Mar-16 Sense-checking the recent gold price rally: too little, or too much? 5-Feb-16 China's gold imports: very big, very puzzling 29-Jan-16 Gold and the brave new world of a Fed hiking cycle 17-Dec-15 Precious metal equity research Region Date Global Gold Miners - Precious Metals Summit & Denver Gold Forum Preview Global 12-Sept-16 Global Precious Metals - The starts are (still) aligning Global 1-Jul-16 Global Metals & Mining - M&A is a necessary evil Global 8-Jun-16 Global Senior Gold Producers - Gold is on the charge again Global 14-Mar-16 Global Gold Developers & Explorers : Picking the winners Global 18-Dec-15 North American Precious Metals - 1Q16 preview: movin' on up North America 19-Apr-16 North American Precious Metals - A turn for the better North America 14-Mar-16 On the road to C$2,000/oz gold North America 22-Jan-16 4Q15 preview - out with a whimper North America 6-Jan-16 - Never a better time to build a mine Australia 17-Aug-16 - Muted currency impact for Aussie goldminers Australia 23-May-16 - Focusing on cash Australia 15-Mar-16 The Golden West Australia 29-Feb-16 Australia Resources - Pain set to intensify Australia 14-Dec-15 South African Gold Miners - Silicosis - More than a little dust South Africa 10-Aug-16 South African Gold Miners - Spot-light on SA gold South Africa 22-Jul-16 South African Gold Miners - Spot-light on SA gold South Africa 8-Jul-16 Positioning into Fed liftoff South Africa 22-Oct-15 UK Gold-Silver Equities - Riding the Wave United Kingdom 12-Feb-16 Source: Macquarie Research, December 2016

13 This publication was disseminated on 05 December 2016 at 09:26 UTC. Macquarie Wealth Management Important disclosures: Recommendation definitions Macquarie - Australia/New Zealand Outperform return > in excess of benchmark return Neutral return within of benchmark return Underperform return > below benchmark return Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield Macquarie Asia/Europe Outperform expected return >+1 Neutral expected return from -1 to +1 Underperform expected return <-1 Macquarie South Africa Outperform expected return >+1 Neutral expected return from -1 to +1 Underperform expected return <-1 Macquarie - Canada Outperform return > in excess of benchmark return Neutral return within of benchmark return Underperform return > below benchmark return Macquarie - USA Outperform (Buy) return > in excess of Russell 3000 index return Neutral (Hold) return within of Russell 3000 index return Underperform (Sell) return > below Russell 3000 index return Volatility index definition* This is calculated from the volatility of historical price movements. Very high highest risk Stock should be expected to move up or down in a year investors should be aware this stock is highly speculative. High stock should be expected to move up or down at least 40 6 in a year investors should be aware this stock could be speculative. Medium stock should be expected to move up or down at least 30 4 in a year. Low medium stock should be expected to move up or down at least 25 3 in a year. Low stock should be expected to move up or down at least 15 2 in a year. * Applicable to Asia/Australian/NZ/Canada stocks only Recommendations 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations Financial definitions All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards). Recommendation proportions For quarter ending 30 September 2016 AU/NZ Asia RSA USA CA EUR Outperform 47.26% % 45.47% 59.09% 48.21% (for US coverage by MCUSA, 8.2 of stocks followed are investment banking clients) Neutral 38.01% 29.31% 42.86% 48.77% 37.88% 36.79% (for US coverage by MCUSA, 8.2 of stocks followed are investment banking clients) Underperform % 18.68% 5.76% (for US coverage by MCUSA, 8.0 of stocks followed are investment banking clients) Company-specific disclosures: Important disclosure information regarding the subject companies covered in this report is available at Analyst certification: We hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. 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