January 19, 2012                                                                                                          ...
Metals & Mining Gold & Precious Metals                                                                                    ...
Metals & Mining Gold & Precious Metals                                                                                    ...
Metals & Mining    Gold & Precious Metals                                                                                 ...
Metals & Mining    Gold & Precious Metals                                                                                 ...
Metals & MiningGold & Precious Metals                                                                                     ...
Metals & MiningGold & Precious Metals                                                                                     ...
Metals & MiningGold & Precious Metals                                                                                     ...
Metals & MiningGold & Precious Metals                                                                   January 19, 2012  ...
Metals & MiningGold & Precious Metals                                                                                     ...
Metals & MiningGold & Precious Metals                                                                                     ...
Metals & MiningGold & Precious Metals                                                                                     ...
Metals & MiningGold & Precious Metals                                                                                     ...
Metals & MiningGold & Precious Metals                                                                                     ...
Metals & MiningGold & Precious Metals                                                                                     ...
Metals & MiningGold & Precious Metals                                                                                     ...
Metals & MiningGold & Precious Metals                                                                                     ...
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
Stifel report
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Stifel report

  1. 1. January 19, 2012 Metals & Mining Gold & Precious Metals Pre-Results Comment4Q11 Earnings Preview: Capital PunishmentCompanies under coverage begin reporting 4Q11 earnings during the week of January 23. We forecast a10% decrease in sector earnings from 3Q11 due to significant decreases in by-product revenues.A summary of updated target prices and estimates is included in the table below, with details on NAVPS and CFPSchanges on page 10. Quarterly deliverables and upcoming catalysts by company as well as detailed guidance may befound on pages 4-5.Fourth Quarter Earnings ExpectationsCompany Ticker Rating New Target Old Target Price 4Q11E (SN) 4Q11E (Cons) 2012E (SN) Earnings Date Analyst Price (1) Price (1) (Jan-18) (2) (2) (2) (3)Allied G old Mining PLC ALD-T HOLD C$2.43 -$0.02 $0.01 $0.36 Jan-23 Bef-Mkt JWBarrick G old Corp. ABX BUY US$70.00 US$69.00 US$47.95 $1.21 $1.31 $5.54 Feb-16 Bef-Mkt GTCentamin Egypt Ltd. CEE-T HOLD C$1.46 $0.04 $0.04 $0.18 Jan-30 Bef-Mkt GTChalice Gold Mines Ltd. CXN-T BUY $0.35 $0.50 C$0.30 $0.00 N/A -$0.01 N/A JWDundee Precious Metals Inc. DPM-T BUY $13.50 $13.50 C$8.94 $0.22 $0.26 $1.18 Feb-23 Aft-Mkt JWEldorado G old Corp. EGO HOLD US$13.99 $0.17 $0.20 $0.86 Feb-24 Bef-Mkt JWEuropean Goldfields Ltd. EGU-T HOLD C$11.95 -$0.07 -$0.04 -$0.22 Mar-15 Est. JWG oldcorp Inc. GG BUY US$65.00 US$65.00 US$44.93 $0.56 $0.62 $2.55 Feb-15 Aft-Mkt GTG reat Basin Gold Ltd. GBG-T HOLD C$1.09 $0.00 $0.02 $0.07 Feb-24 Bef Mkt JWIAMG OLD Corp. IAG BUY US$23.00 US$23.50 US$16.23 $0.37 $0.33 $1.33 Feb-23 Aft-Mkt JWKinross G old Corp. KG C BUY US$17.00 US$17.00 US$10.39 $0.19 $0.22 $0.92 Feb-15 Aft-Mkt GTNewmont Mining Corp. NEM BUY US$80.00 US$83.00 US$60.35 $1.17 $1.25 $4.96 Feb-24 Bef-Mkt GTO sisko Mining OSK-T HOLD C$11.51 $0.08 $0.10 $0.99 Feb-23 Aft-Mkt GTRandgold Resources G OLD HOLD US$111.54 $1.13 $1.48 $6.53 Feb-06 Bef-Mkt JWSemafo Inc. SMF-T BUY $10.50 $12.00 C$7.47 $0.11 $0.13 $0.49 Mar-14 Est. JWT orex Gold Resources Inc. T XG-T BUY $2.25 $2.25 C$1.99 -$0.02 N/A -$0.04 N/A JW(1) Canadian listed target prices are in CAD(2) EPS adjusted to exclude non-recurring or extraordinary items(3) G T - George Topping, JW - Josh W olfsonSource: FactSet, Bloomberg, StifelWe expect major quarterly themes to be:Capital Spending Increases: Thus far, 2012 capex guidance from five producers under coverage has been 50% higheron average than our previous forecast primarily due to timing differences and inflation. We forecast sector capitalspending will increase 14% from 2011, reflecting in part the 32% increase in sector operating cash flows as a result ofhigh gold prices in 2011 and consequent ability to finance more development projects, but also inflationary pressures.Although recent input price pressures have subsided somewhat since 3Q11 (diesel -3%, trade weighted US$ +4%),labour inflation persists and the risk of equipment availability shortages lingers, with manufacturers Komatsu and JoyGlobal anticipating double digit growth in 2012 from record 2011 mining equipment demand.Risks To Project Financing: While market conditions proved generally challenging in the fourth quarter, junior producersand advanced developers under coverage have been particularly impacted by project financing limitations for both equityand debt options. In addition to elements of production hedges, project financing facilities secured by producers AlliedJosh Wolfson, CFA jwolfson@stifel.com (416) 815-3080George Topping gtopping@stifel.com (416) 815-3113Dave Hove dhove@stifel.com (416) 815-1548Kelvin Lin klin@stifel.com (416) 815-3106Stifel Nicolaus Equity Trading Desk US: (800) 424-8870 Canada: (866) 752-4446Stifel Nicolaus does and seeks to do business with companies covered in its research reports. As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of thisreport. Investors should consider this report as only a single factor in making their investment decision.All relevant disclosures and certifications appear on pages 44 - 45 of this report.
  2. 2. Metals & Mining Gold & Precious Metals January 19, 2012Gold and Great Basin Gold in 4Q bear coupon rates of 12% and LIBOR + 4% respectively. While these debt financingsfacilitate project development and ramp up in the absence of equity financing options, increased corporate leverage andproduction hedges will limit the operating leverage available to equity investors. In our view, as financing limitations persistfor advanced developers, investor focus will shift towards project operating margins and initial spending requirements,from traditional NAV and per ounce valuations.Potential Industry Consolidation: Discounted equity valuations have spurred an increase in gold-related transactionswith companies seeking to consolidate jurisdictions and grow through acquisition. Eldorado Gold and European Goldfieldsannounced a friendly combination that would increase Eldorado’s presence in the Aegean, New Gold consolidatedownership of its Blackwater project in Canada by acquiring property holders Silver Quest Resources and Geo Minerals,and Chalice Gold announced the sale of its Zara gold project in Eritrea to Shanghai Construction Group, which maintainsa portfolio of projects in country. During the quarter, B2Gold announced it would acquire Auryx Gold, while Jaguar Miningand Oromin Explorations both announced entering discussions with unidentified parties that could potentially lead to salesor mergers.Operating Costs On The Rise: We forecast operating costs will increase by 11% in 2012 as a result of expected generalcost inflation in the mining industry, including consumables and labour, as well as lower grades mined, which becomeeconomic at high gold prices. Below is a summary of 2012 cost expectations by senior producers:Senior Producer Forecast Total Cash Cost Increases - Latest 2012E Guidance vs. 2011E 2011E 2012E Guidance 2012E Guidance/2011ECompany Ticker (US$/oz) (US$/oz) (% Change)Goldcorp GG $530 $550 - $600 4% - 13%Kinross KGC $600 $670 - $715 12% - 19%Newmont NEM $597 $625 - $675 5% - 13%Barrick (1) ABX $461 $530 15%(1) Barrick - no guidance has been provided for 2012, $530/oz (15% 2012E/2011E increase) is current SN estimateSource: Stifel Nicolaus estimates, company reports Page 2
  3. 3. Metals & Mining Gold & Precious Metals January 19, 2012Earnings CalendarCom pany Ticker Earnings Date Tim e Consensus S N 3Q 11E Adj. Call Date & Tim e Call N um bers EP S EP S (ET)Week of Jan 23, 2012 22-Jan Allied Gold Ltd. ALD-T 23-Jan B ef-M kt 0.01 (0.02)Week of Jan 30, 2012 29-Jan Centam in E gypt Ltd. CE E-T 30-Jan B ef-M kt 0.04 0.04 Royal Gold Inc. R GLD , RGL-T 2-Feb B ef-M kt 0.49 2-Feb 12:00PM 1 800 603 2779 or 1 973 200 3960Week of Feb 6, 2012 5-Feb Harm ony Gold M ining Co. Ltd. H MY 6-Feb E st. 1.00 Randgold R esources Ltd. GOLD 6-Feb B ef-M kt 1.48 1.13 6-Feb 11:00AM 1 866 966 5335 or 1 800 608 0547Week of Feb 13, 2012 12-Feb Pan Am erican Silver Corp. P AAS 15-Feb E st. 0.55 Goldcorp Inc. G G, GG -T 15-Feb Aft-M kt 0.62 0.56 16-Feb 1:00PM 1 800 355 4959 or 1 416 695 6617 Kinross G old C orp. KGC , K-T 15-Feb Aft-M kt 0.22 0.19 16-Feb 8:30AM 1 800 319 4610 or 1 604 638 5340 Agnico-E agle M ines Ltd. AEM , AE M-T 16-Feb E st. 0.52 16-Feb 11:00AM 1 800 814 4859 or 1 416 644 3414 OceanaGold Corp. OG C-T 16-Feb B ef-M kt 0.03 Barrick G old Corp. AB X, AB X-T 16-Feb B ef-M kt 1.31 1.21 16-Feb 9:30AM 1 800 742 6164 or 1 212 231 2901 Gold Fields Ltd. GFI 17-Feb E st. 1.49Week of Feb 20, 2012 19-Feb Yam ana Gold Inc. AUY , YRI-T 22-Feb Aft-M kt 0.25 23-Feb 11:00AM 1 800 952 6845 or 1 416 695 6616 Dundee P recious M etals Inc. D PM -T 23-Feb Aft-M kt 0.26 0.22 Golden Star Resources Ltd. G SS, G SC-T 23-Feb E st. 0.01 IAM GOLD Corp. IAG, IM G-T 23-Feb Aft-M kt 0.33 0.37 Alam os Gold Inc. AG I-T 23-Feb B ef-M kt 0.21 23-Feb 12:00PM 1 800 355 4959 or 1 416 695 6617 Centerra Gold Inc. CG -T 23-Feb Aft-M kt 0.37 24-Feb 10:30AM 1 800 895 5087 or 1 212 231 2903 Osisko Mining O SK-T 23-Feb Aft-M kt 0.10 0.08 24-Feb 11:00AM 1 800 931 6421 or 1 416 981 9000 Minefinders C orp. Ltd. M FN, M FL-T 23-Feb A ft-m kt 0.22 24-Feb 11:00AM 1 877 440 9795 or 1 416 340 8530 Com pania de M inas Buenaventura B VN 24-Feb E st. 0.84 Newm ont M ining C orp. N EM 24-Feb B ef-M kt 1.25 1.17 Great Basin Gold Ltd. GB G, GB G-T 24-Feb Bef Mkt 0.02 0.00 Prim ero M ining P-T 24-Feb E st. N/A Hecla M ining Com pany HL 24-Feb E st. 0.07 Eldorado Gold C orp. E GO, E LD-T 24-Feb B ef-M kt 0.20 0.17 24-Feb 11:30AM 1 877 440 9795 or 1 416 340 8527Week of Feb 27, 2012 and thereafter 26-Feb New Gold Inc. NG D, NG D-T 2-Mar E st. 0.11Week of M ar 5, 2012 and thereafter 4-M ar Silver W heaton Corp. SLW , SLW -T 14-Mar E st. 0.44 Aurizon M ines Ltd. A ZK, A RZ-T 15-Mar E st. 0.13 AngloG old Ashanti Ltd. AU 15-Mar E st. 3.87 European Goldfields Ltd. EG U-T 15-Mar E st. (0.04) (0.07) Jaguar Mining Inc. JA G, JAG -T 21-Mar E st. 0.03 Franco-N evada Corporation FNV-T 21-Mar E st. 0.32 22-Mar 10:00AM AuRico Gold Inc AU Q, AU Q-T 23-Mar E st. 0.19 Sem afo Inc. S MF-T 14-Mar E st. 0.13 0.11Source: Bloom berg, Com pany reports, Stifel N icolaus estim ates Page 3
  4. 4. Metals & Mining Gold & Precious Metals January 19, 2012Deliverables Update and Production Guidance - Senior and Intermediate Producers 4Q11 Deliverables In the Pipeline 2011 Corporate Guidance SN Models - 2011E 2012 Corporate Guidance SN Models - 2012EBarrick Gold Production (koz) Costs ($/oz) Production (koz) Costs ($/oz) Production (koz) Costs ($/oz) Production (koz) Costs ($/oz)· Pueblo Viejo construction update · Pueblo Viejo 60% j/v startup ( $3.6-3.8B capex, mid-2012) 7,600-7,800 equity $460-$475 TCC 7,700 $460 TBA 7,830 $530· Lumw ana copper production and exploration results from 16 rigs · Pascua Lama $1.25B debt financing (2012) · Pascua Lama startup ($5.0B capex, mid-2013) · Cerro Casale 75% j/v EIA approval ($6B capex, early 2013) · Jabal Sayid copper production startup ($400mm capex, 2H12)Eldorado Gold· Efemcukuru ramp-up update · European Goldfields merger meeting (February 2012) 650 consolidated $400 CC 659 $405 730-775 $430-$450 CC 743 $429 · Eastern Dragon permitting update (1H12), commissioning (3Q12) P ro ductio n and o perating co sts pre-released consolidated · Tocantizinho feasibility study (2Q12) and construction decision (2H12) · Approval of Perama Hill EIA (1H12)Goldcorp· Penasquito ramp up to 130ktpd ($30mm remedial capex) · Pueblo Viejo 40% j/v startup ($3.6-3.8B capex, delayed mid-2012) 2,500-2,550 equity $500-$550 TCC 2,515 $531 2,600 equity $550-$600 TCC 2,596 $566· Reserve and resource update, including Cerro Negro · El Morro construction startup ($3.9B capex, 2Q12) P ro ductio n pre-released · Cerro Negro startup ($0.7B capex, 2013) and Eleonore startup ($1.4B Trimmed fro m 2.65-2.75mmo z at $ 475-500/o z po st 2Q.IAMGOLD· Rosebel expansion details · Niobec pre-feasibility (1Q12), rare earth element resource (1Q12) 870-930 equity* $620-$650 TCC 896* $637 840-910 equity $670-$695 TCC 865 $676· Essakane expansion feasibility and construction decision · Updated Westw ood feasibility (1Q12) Operating results pre-released· Sadiola deep sulphide construction decision · Potential Niobec strategic transaction (2012) · Kalana resource (3Q12) · French Guiana election (April 2012), France election (May 2012) · Mali election (April 2012) *fro m co ntinuing o peratio nsKinross· Tasiast, FDN, and Lobo Marte project capex and optimization plan · Lobo Marte ($0.7B+~20% capex) feasibility study (delayed, 2012) 2,600-2,700 equiv. $565-$610 CAS 2,580 $604 2,600-2,800 equiv. $670-$715 CAS 2,672 $734· FDN mining agreement w ith Ecuador update · FDN ($1.1B+~20%) feasibility study (delayed, 2012) P rereleased that o perating results will be· Paracatu remedial third ball mill ramp up update · Tasiast 60ktpd expansion feasibility study ($3.0B, delayed to end-2012) appro ximately 2.6 mm GEO at $ 600/GEO · Dvoinoye feasibility study ($300mm capex, 1Q12) · Dvoinoye initial ore to Kupol (2H13) · Paracatu remedial investment (4th ball mill $120mm capex, 1H12) · Tasiast expansion permits (delayed, from 2Q12) · Tasiast startup (delayed, from 4Q13) Revised fro m 2.5-2.6 mmGEO po st co nso lidatio n o f Kupo l.New m ont Mining· Boddington ramp up update · Akyem start-up ($0.95-$1.1bln capex, early 2014E) 5,100-5,300 equity $560-$590 CAS 5,160 $897 5,100-5,200 equity $625-$675 CAS 5,139 $884· Conga (Peru) update · Conga startup ($4.0-$4.8B capex, 2015/2016E) P ro ductio n and o perating co sts pre-released· Merian (Suriname) development agreement update · Tanami expansion completion ($400-$450mm capex, 2015E)Osisko Mining· Malartic ramp up to 55ktpd capacity · South Barnat deposit road deviation approval (delayed) 190-200 equity *$900-932 CC 200 $925 610 - 675 equity $510-575 CC 537 $677· Hammond Reef development update · Malartic expansion to 60ktpd ($32mm capex, 1H12) 201 guidance trimmed fro m 285-295ko z po st 3Q, 350-400ko z po st 2Q & o riginal feasibility 498ko z at $ 273/o z 1 · Ramp up to full 60ktpd capacity (end of 2012) 201 CC guidance was fo r 2H1 o nly 1 1Randgold Resources· Loulo mill installation, heap leach study · Senegal elections (February 2012) 690-700 < $700 TCC 696 $718 TBA 853 $592· Gounkoto underground economic evaluation · Mali elections (April - July 2012) consolidated· Kibali construction commencement· Morila tailings reprocessing feasibility study· Recalculation of reserves at $1,000/oz Revised fro m < $ 600 TCCSEMAFO· Mana expansion to 8,000 tpd update · Samira Hill exploration (ongoing) 238-263 equity $595-$645 CC 250 $608 TBA 259 $655· Kiniero care and maintenance update · Mana exploration (ongoing) · Underground construction commencement (1Q12) · Mana phase IV plant expansion (2Q12) · Potential GoviEX listing (2H12) · Burkina Faso pow er line commissioning (2H13)(1) equivalent - Equivalent Gold Production (silver and gold); consolidated/ equity - Consolidated/ Equity Gold Production(2) CC - Cash Costs (before royalties); TCC - Total Cash Costs (after royalties); CAS - Cost Applicable To SalesSource: Company reports, Stifel Nicolaus estimates Page 4
  5. 5. Metals & Mining Gold & Precious Metals January 19, 2012Deliverables Update and Production Guidance - Junior Producers and Advanced Developers 4Q11 Deliverables In the Pipeline 2011 Corporate Guidance SN Models - 2011E 2012 Corporate Guidance SN Models - 2012EAllied Gold Production (koz) Costs ($/oz) Production (koz) Costs ($/oz) Production (koz) Costs ($/oz) Production (koz) Costs ($/oz)· Gold Ridge ramp-up update · Simberi plant 3.5 mmtpa expansion and HFO installation (4Q12) 58 Simberi $1,000 TCC 57 $1023 Simberi TBA 72 $890 Simberi · Simberi sulphide bankable feasibility (2012); construction decision (2014) 40 Gold Ridge Not Provided 51 $1392 Gold Ridge 100 $1038 Gold Ridge · Simberi & Gold Ridge exploration (ongoing) (FYE June 30) - co mpany guidance and SN estimates are CY 2011Centam in Egypt· Sukari mine ramp up to 5mmtpy update · Stage 4 plant expansion to 10 mmtpa completion ($255mm capex, 1Q13) 202-210 equity $550 CC 203* $640 TBA 242 $660· Sukari underground mining ramp up update · Egypt parliamentary (Nov 2011 - Mar 2012) P ro ductio n pre-released· Egypt update · Egypt presidential elections (Jun 2012) · New mining law in Egypt (pending) Guidance lo wered fro m 250-290ko z at $ 450/o z po st 2QChalice Gold· Koka mining agreement (delivered) · Receipt of ENAMCO $34mm payment for 30% interest (January 2012) - - - - - - - -· Koka mining license (delivered) · Due diligence completion by Shanghai Construction Group (March 2012) · Mogoraib drilling (1Q12) · Koka construction (1H12) and production (2014)Dundee Precious Metals· Krumovgrad EIA decision (delivered) · Chelopech expansion to 2 mmtpa (3Q12) 120-123* gold 113* $384* TBA 153* $314*· Krumovgrad feasibility study (delivered) · NCS sulphuric acid plant feasibility study (mid-2012) 38.0-39.5* mmlbs copper 34.1* $0.96*/lb 43.7* $0.7*/lb· Chelopech expansion update · NCS throughput expansion (4Q12) 1.8 mmt ore processed at Chelopech 1.7 mmt ore processed at Chelopech · Deno open-pit scoping study (2H12), underground resource (1Q13) *metals in co ncentrateEuropean Goldfields · Eldorado Gold merger meeting (February 2012) - - - - - - - - · Skouries construction permits and contractor selection (1H12) · Olympias concentrate agreement (1H12) · Piavitsa resource (1H12) · Flash smelter feasibility (2H12) · Certej final permits (2012)Great Basin Gold· Hollister resource update · Burnstone ramp-up (2011-2013) 100-110* Hollister $600-$650 CC 100* $574 100* 101* $653· Esmeralda on-site dore production · Hollister EIS approval (2012) 29-32 Burnstone $1677 - CC 24 $1676 135 71 $1120 · Burnstone line 2 electrical permit (2012) *go ld equivalent pro ductio nTorex Gold Resources · Updated Morelos resource estimate (1Q12) - - - - - - - - · Morelos bankable feasibility study (2Q12) · Mexico elections (July 2012) · Permanent land access agreements (1H12) · Morelos south of the river drilling (2012)(1) equivalent - Equivalent Gold Production (silver and gold); consolidated/ equity - Consolidated/ Equity Gold Production(2) CC - Cash Costs (before royalties); TCC - Total Cash Costs (after royalties); CAS - Cost Applicable To SalesSource: Company reports, Stifel Nicolaus estimates Page 5
  6. 6. Metals & MiningGold & Precious Metals January 19, 2012 4Q11 Earnings Preview Producers in our coverage universe are expected to begin reporting December quarter earnings during the week of January 23. Total sector earnings are forecasted to decrease 10% from last quarter and increase 24% from last year. Observations:  Total sector earnings are forecast to decrease 10% from 3Q11 to 4Q11, impacted by a 1% decrease in the price of gold, a 1% increase in total cash costs, and significant decreases in by-product revenues. Of the 14 reporting companies under coverage, producers expected to report notable increases in EPS include IAMGOLD and Osisko.  Year-over-year, total sector earnings excluding write-downs are expected to rise 24% from 4Q10 to 4Q11, due to higher metal prices (gold +23%, silver +20%, offset by copper -13%) and 2% higher production (13% increase in throughput as a result of consolidations, expansions, and new mines), slightly offset by 13% higher operating costs (3% lower head grades, 10% increase in diesel prices).  4Q results from by-product metal producers are expected to be weaker versus 3Q11 due to lower silver (-18%), copper (-17%), and zinc prices (-15%). The largest percentages of non-gold revenues in 4Q11 are expected to be generated by European Goldfields, (43% silver, 57% zinc and lead), Dundee Precious Metals (2% silver and 31% copper), and Goldcorp (15% silver, 4% copper, 7% zinc and lead). Lower base metals’ prices in the quarter are also expected to negatively impact by- product copper producers, including Barrick (14% copper) and Newmont (6% copper). The lower silver price in the quarter is expected to negatively impact Kinross (7% silver) and Great Basin (6% silver). Quarterly Currency & Commodity Comparisons Spot Change Change Change 4Q11 3Q11 4Q10 (Jan-18) Spot/4Q11 4Q11/3Q11 4Q11/4Q10 Gold (US$/oz) $1,661 -1% $1,682 $1,704 -1% $1,367 23% Silver (US$/oz) $30.50 -4% $31.80 $38.86 -18% $26.46 20% Copper (US$/lb) $3.73 10% $3.40 $4.07 -17% $3.92 -13% Zinc (US$/lb) $0.91 6% $0.86 $1.01 -15% $1.05 -18% WTI Crude (US$/Bbl) $100 7% $94 $89 5% $85 10% C$:US$ 1.01 -1% 1.02 0.98 4% 1.01 1% A$:US$ 0.96 -2% 0.99 0.95 4% 1.01 -2% Rand:US$ 8.02 -1% 8.09 7.13 13% 6.90 17% Real:US$ 1.77 -1% 1.80 1.63 10% 1.70 6% CLP:US$ 496 -3% 512 472 8% 480 7% Source: Factset, Bloomberg, Stifel Nicolaus Page 6
  7. 7. Metals & MiningGold & Precious Metals January 19, 2012 Operating Expectations For companies under coverage, production will be flat at 5.3 million ounces in 4Q11 versus last quarter. Increased production from Goldcorp (+16%, Penasquito ramping up and Marlin accessing higher grade ore) and IAMGOLD (+14%, 3Q11 production shortfall) is expected to be offset by weaker results from Barrick (-4%, lower grades at Cortez Hills) and Kinross (-5%, lower throughput at Paracatu). Fourth quarter total cash costs (co-product basis) are expected to rise 2% to $585/oz from $573/oz in 4Q11, and 14% from 4Q10. Compared to last quarter, the strongest improvements in total cash costs on a per ounce basis are expected to be reported by Centamin (-6%, Sukari ramping up as well as management capitalizing underground development costs and deferring stripping), Osisko (-8%, higher grades at Malartic), Newmont (-5%, higher grades at Boddington, Yanacocha, and Nevada), but not enough to offset higher costs forecasted for Barrick (+12%, higher consumable and labor costs at operations in Africa, Australia and South America off a low 3Q11 base), Kinross (+5%, higher consumable and labor costs at operations in Africa and South America), Dundee Precious Metals (+12%, lower copper revenues and weaker anticipated Deno results), and Allied Gold (+9%, ramp-up at Gold Ridge). Gold Production (000 ounces) 4Q11E 4Q11 4Q11 2011 2012 2013 Com pany 3Q11A 4Q10A 2010A 2011E 2012E 2013E (SN) /3Q11 /4Q10 /2010 /2011 /2012 Allied Gold Mining PLC 31 36 -14% 19 65% 70 108 54% 172 59% 222 29% Barrick Gold Corp. 1,835 1,928 -5% 1,700 8% 7,788 7,700 -1% 7,830 2% 8,158 4% Centamin Egypt Ltd. 59 51 17% 53 11% 150 203 35% 242 19% 374 55% Dundee Precious Metals Inc. 30 34 -12% 20 49% 79 109 37% 140 29% 157 12% Eldorado Gold Corp. 158 167 -6% 138 15% 594 612 3% 700 14% 836 20% European Goldfields Ltd. 0 0 NM 0 NM 0 0 NM 23 NM 55 142% Goldcorp Inc. 688 592 16% 690 0% 2,520 2,515 0% 2,596 3% 3,168 22% Great Basin Gold Ltd. 33 29 14% 21 62% 65 118 82% 163 38% 210 29% IAMGOLD Corp. 253 222 14% 315 -20% 967 963 0% 865 -10% 973 13% Kinross Gold Corp. 570 597 -5% 623 -9% 2,191 2,350 7% 2,503 6% 2,534 1% New mont Mining Corp. 1,279 1,311 -2% 1,353 -5% 5,391 5,160 -4% 5,139 0% 5,071 -1% Osisko Mining 80 74 8% 0 NM 0 200 NM 537 168% 630 17% Randgold Resources 190 182 4% 132 44% 440 696 58% 853 22% 855 0% Semafo Inc. 65 62 5% 62 5% 261 250 -4% 259 4% 348 34% Total 5,270 5,285 0% 5,124 3% 20,517 20,983 2% 22,021 5% 23,591 7% (1) Co-product costs w ith royalties Source: FactSet, Company reports, Stifel Nicolaus estimates Total Cash Costs (US$/oz) (co-product basis) 4Q11E 4Q11 4Q11 2011 2012 2013 Com pany 3Q11A 4Q10A 2010A 2011E 2012E 2013E (SN) /3Q11 /4Q10 /2010 /2011 /2012 Allied Gold Mining PLC 1254 1148 9% 652 92% 666 1196 80% 976 -18% 904 -7% Barrick Gold Corp. 509 453 12% 486 5% 457 460 1% 530 15% 562 6% Centamin Egypt Ltd. 647 686 -6% 539 20% 555 640 15% 660 3% 741 12% Dundee Precious Metals Inc. 69 8 765 14% 834 4% 786 817 4% 781 -4% 812 4% Eldorado Gold Corp. 472 477 -1% 460 3% 423 472 12% 486 3% 523 8% European Goldfields Ltd. 0 0 NM 0 NM 0 0 NM 915 NM 957 5% Goldcorp Inc. 542 561 -3% 461 18% 443 531 20% 566 7% 512 -9% Great Basin Gold Ltd. 1001 1018 -2% 669 50% 753 901 20% 943 5% 925 -2% IAMGOLD Corp. 646 674 -4% 574 12% 574 648 13% 676 4% 729 8% Kinross Gold Corp. 663 634 5% 551 20% 509 604 19% 734 21% 769 5% New mont Mining Corp. 600 634 -5% 517 16% 513 598 17% 675 13% 725 7% Osisko Mining 868 939 -8% 0 NM 0 953 NM 707 -26% 632 -11% Randgold Resources 741 747 -1% 766 -3% 697 718 3% 592 -17% 577 -3% Semafo Inc. 712 733 -3% 596 19% 518 690 33% 745 8% 800 7% Weighted Average 585 573 2% 515 14% 490 554 13% 615 11% 636 3% Source: FactSet, Company reports, Stifel Nicolaus estimates Page 7
  8. 8. Metals & MiningGold & Precious Metals January 19, 2012 Commodity Price Forecasts We have revised our near term commodity prices to better reflect current market conditions as summarized in the table below. All changes were minor except for zinc pricing which we pushed out the cyclical recovery to late 2014. We remain positive on equities and maintain our long-term commodity forecasts. Key Com m odity Price Forecasts 1Q11A 2Q11A 3Q11E 4Q11E 2011E 2012E 2013E Target Gold Price (US$/oz) $1,387 $1,507 $1,704 $1,682 $1,570 $1,763 $2,000 $1,600 previous $1,387 $1,507 $1,704 $1,750 $1,587 $1,800 $2,000 $1,600 Silver Price (US$/oz) $31.86 $38.49 $38.86 $31.80 $35.25 $38.63 $50.00 $38.00 previous $31.86 $38.49 $38.86 $35.00 $36.05 $39.38 $50.00 $38.00 Copper Price (US$/lb) $4.37 $4.15 $4.07 $3.40 $4.00 $3.88 $4.00 $2.65 previous $4.37 $4.15 $4.07 $3.50 $4.02 $3.94 $4.00 $2.65 Zinc Price (US$/lb) $1.08 $1.02 $1.01 $0.86 $0.99 $0.96 $1.14 $1.15 previous $1.08 $1.02 $1.01 $0.90 $1.00 $1.03 $1.28 $1.15 Oil Price ($/barrel) $94 $102 $89 $94 $95 $96 $99 $100 previous $94 $102 $89 $107 $98 $109 $112 $113 CAD$:US$ 0.99 0.97 0.98 1.02 0.99 0.99 0.95 0.95 previous 0.99 0.97 0.98 0.96 0.97 0.95 0.95 0.95 AUS$:US$ 0.99 0.94 0.95 0.99 0.97 0.96 0.95 0.95 previous 0.99 0.94 0.95 0.94 0.96 0.95 0.95 0.95 CLP$:US$ 481 469 472 512 483 516 525 525 previous 481 469 472 475 474 475 475 475 BRL$:US$ 1.67 1.59 1.63 1.80 1.67 1.68 1.60 1.60 previous 1.67 1.59 1.63 1.60 1.62 1.60 1.60 1.60 ZAR$:US$ 6.99 6.79 7.13 8.09 7.22 7.48 6.67 6.67 previous 6.99 6.79 7.13 6.67 6.89 6.67 6.67 6.67 Source: FactSet, Stifel Nicolaus estimates Page 8
  9. 9. Metals & MiningGold & Precious Metals January 19, 2012 Changes To Estimates In addition to adjusting our near-term commodity prices for all 16 companies under coverage, we have rolled over our 12-month target price setting cash flow estimates to 2012/2013 (from 2011/2012) and made the following changes: Goldcorp (GG, BUY)  Incorporated 4Q pre-released production.  Updated model with 2012 financial and operating guidance, as well as 5- year production guidance.  Delayed El Morro startup to 2018 (from 2016).  Adjusted Marlin production profile as it transitions to underground mining.  Lowered target setting cash flow multiple to 13x (from 14x), but maintained NAV multiple at 1.3x. Barrick (ABX, BUY)  Lowered target setting cash flow multiple to 10x (from 11x), but maintained NAV multiple at 1.0x. Newmont (NEM, BUY)  Incorporated 4Q pre-released production and operating costs.  Updated model with 2012 financial and operating guidance, including higher operating costs at Boddington and other Australia/NZ mines.  Increased capex generally in-line with guidance but allocated only $400mm (versus company guidance of $1.15-1.25billion) for Conga which we delayed to 2016E startup as a result of reported protests and work-stoppages.  Lowered target setting cash flow multiple to 10x (from 11x) to reflect the country risk (Peru) and lack of near-term growth, but maintained NAV multiple at 1.0x. Kinross (KGC, BUY)  See KGC note published 1/17/2012. Dundee Precious Metals (DPM-T, BUY)  Incorporated updated Krumovgrad assumptions in line with recently published feasibility study results. IAMGOLD (IAG, IMG-T, BUY)  Incorporated 4Q operating results and 2012 management guidance. SEMAFO (SMF-T, BUY)  Removed Kiniero from 2013 production estimates. Osisko (OSK-T, Hold)  Updated Hammond Reef resources (lower grades reported 11/7/11) resulting in increased LOM operating costs, increased our capex estimate to $1 billion (from $750mm) in-line with Malartic, and delayed startup to 2016 (from 2015).  For the first ten years, cash costs should average $600/oz.  Lowered Malartic’s discount rate to 3% (from 5%), in line with other producers.  Lowered our near-term tax rate assumptions as the company is partially sheltered by tax pools related to Hammond Reef spending. Page 9
  10. 10. Metals & MiningGold & Precious Metals January 19, 2012 Centamin (CEE-T, Hold)  Updated model with 4Q11 pre-released production.  Lowered 2012/2013 production estimates due to ongoing country turmoil, and in line with company expectations. Eldorado Gold (EGO, ELD-T, Hold)  Incorporated 4Q operating results and 2012 management guidance. Randgold (GOLD, Hold)  Revised 4Q estimates to reflect production issues at Tongon and Loulo.  Incorporated expanded throughput at Kibali, Loulo heap leach production, and updated Gounkoto underground mining assumptions. Allied Gold (ALD-T, Hold)  Revised Simberi per tonne costs to more appropriately reflect year-end throughput increases and HFO use. NAVPS And LOM Cash Cost Changes NAV At Target Gold LOM Cash Costs Price Com pany Ticker (Jan-18) New Previous Change New Previous Change Allied Gold Mining PLC ALD-T $3.20 4.58 4.35 5% 980 1,071 -8% Barrick Gold Corp. ABX $47.95 60.88 62.27 -2% 606 603 0% Centamin Egypt Ltd. CEE-T $1.46 2.84 2.87 -1% 799 772 4% Dundee Precious Metals Inc. DPM-T $8.94 14.96 14.60 2% 705 721 -2% Eldorado Gold Corp. EGO $13.99 15.53 16.18 -4% 607 585 4% European Goldfields Ltd. EGU-T $11.95 15.61 15.21 3% 687 702 -2% Goldcorp Inc. GG $44.93 53.68 56.52 -5% 550 528 4% Great Basin Gold Ltd. GBG-T $1.09 3.17 3.18 0% 833 836 0% IAMGOLD Corp. IAG $16.23 25.38 27.28 -7% 682 683 0% Kinross Gold Corp.(1) KGC $10.39 20.36 20.36 0% 782 782 0% New mont Mining Corp. NEM $60.35 80.98 84.78 -4% 711 702 1% Osisko Mining OSK-T $11.51 13.59 15.54 -13% 811 563 44% Randgold Resources GOLD $111.54 100.97 95.44 6% 634 621 2% Semafo Inc. SMF-T $7.47 9.04 9.25 -2% 930 921 1% (1) Updated KGC estimates published 1/17/2012 Source: FactSet, Stifel Nicolaus estimates Cash Flow Estimate Changes 2011E 2012E Price New Previous Change New Previous Change Com pany Ticker (Jan-18) Allied Gold Mining PLC ALD-T $3.20 0.10 0.17 -41% 0.47 0.70 -32% Barrick Gold Corp. ABX $47.95 6.14 6.26 -2% 7.27 7.90 -8% Centamin Egypt Ltd. CEE-T $1.46 0.17 0.18 -3% 0.23 0.41 -43% Dundee Precious Metals Inc. DPM-T $8.94 0.93 0.93 0% 1.54 1.55 -1% Eldorado Gold Corp. EGO $13.99 0.93 0.98 -5% 1.26 1.35 -7% European Goldfields Ltd. EGU-T $11.95 (0.10) (0.10) 0% (0.21) (0.20) 6% Goldcorp Inc. GG $44.93 3.17 3.30 -4% 3.64 4.52 -19% Great Basin Gold Ltd. GBG-T $1.09 0.06 0.06 -1% 0.13 0.12 12% IAMGOLD Corp. IAG $16.23 1.77 1.75 1% 1.79 1.81 -1% Kinross Gold Corp.(1) KGC $10.39 1.26 1.26 0% 1.43 1.43 0% New mont Mining Corp. NEM $60.35 6.42 6.82 -6% 7.23 7.89 -8% Osisko Mining OSK-T $11.51 0.18 0.20 -13% 1.12 0.97 15% Randgold Resources GOLD $111.54 6.12 6.96 -12% 8.70 8.97 -3% Semafo Inc. SMF-T $7.47 0.61 0.59 3% 0.73 0.77 -5% (1) Updated KGC estimates published 1/17/2012 Source: FactSet, Stifel Nicolaus estimates Page 10
  11. 11. Metals & MiningGold & Precious Metals January 19, 2012 Target Price Setting Methodology and Risk Statements Valuation Statem ent KGC Kinross Gold Corp. Our 12-month target price of $17.00 is based on an equal w eighting of 0.90x our 3%-NAVPS estimate at $1600/oz gold and 9.0x our 2011E/2012E blended CFPS estimates. Risks to our target price include: changes in the gold, silver, and copper price; input inflation risks; country and permitting risks; successful ramp-up of development and expansion projects, including Tasiast; and attainment of the company’s operating targets. GG Goldcorp Inc. Our 12-month target price of $65.00 is based on an equal w eighting of 1.30x our 3%-NAVPS estimate at $1600/oz gold and 13.0x our 2011E/2012E blended CFPS estimates. Risks to our target price include: changes in the gold, silver, and copper price; input inflation risks; country and permitting risks; successful ramp-up of development projects, including Penasquito; and attainment of the company’s operating targets. ABX Barrick Gold Corp. Our 12-month target price of $70.00 is based on an equal w eighting of 1.00x our 3%-NAVPS estimate at $1600/oz gold and 10.0x our 2011E/2012E blended CFPS estimates. Risks to our target price include: changes in the gold, silver, and copper price; input inflation risks; country and permitting risks; successful ramp-up of development projects, including Pueblo Viejo 60% j/v and Pascua Lama; and attainment of the company’s operating targets. NEM New m ont Mining Corp. Our 12-month target price of $80.00 is based on an equal w eighting of 1.00x our 3%-NAVPS estimate at $1600/oz gold and 10.0x our 2011E/2012E blended CFPS estimates. Risks to our target price include: changes in the gold, silver, and copper price; input inflation risks; country and permitting risks; successful ramp-up of development projects, including Boddington, Akyem and Conga; and attainment of the company’s operating targets. DPM Dundee Precious Metals Inc. Our 12-month target price of $13.50 is based on an equal w eighting of 0.80x our 3%-NAVPS estimate at $1600/oz gold and 8.0x our 2011E/2012E blended CFPS estimates. Risks to our target price include: changes in the gold and base metals prices; input inflation risks; successful ramp-up of development projects; permitting and country risks; and attainment of the company’s operating targets. IAG IAMGOLD Corp. Our 12-month target price of $23.00 is based on an equal w eighting of 1.00x our 3%-NAVPS estimate at $1600/oz gold and 10.0x our 2011E/2012E blended CFPS estimates. Risks to our target price include: changes in the gold price; input inflation risks; successful ramp-up of development projects, including Essakane; country risks; and attainment of the company’s operating targets. SMF Sem afo Inc. Our 12-month target price of $10.50 is based on an equal w eighting of 1.10x our 3%-NAVPS estimate at $1600/oz gold and 11.0x our 2011E/2012E blended CFPS estimates. Risks to our target price include: changes in the price of gold; input inflation risks (in particular energy); country risks; and attainment of operating and development targets. CXN Chalice Gold Mines Ltd. Our 12-month target price of $0.35 is based on 0.90x our 8%-NAVPS estimate at $1600/oz gold. Risks to our target price include: changes in the price of gold; input inflation risks (in particular energy); country risks; and attainment of operating and development targets. TXG Torex Gold Resources Inc. Our 12-month target price of $2.25 is based on 1.10x our 8%-NAVPS estimate at $1600/oz gold. Risks to our target price include: changes in the price of gold; input inflation risks (in particular energy); country risks; and attainment of operating and development targets. Source: Stifel Nicolaus estimates Page 11
  12. 12. Metals & MiningGold & Precious Metals January 19, 2012 Allied Gold Limited Income Statement (US$million) F.Y.E. Dec 31 Mar-11A Jun-11A Sep-11A Dec-11E Mar-12E Jun-12E Sep-12E Dec-12E 2010A 2011E 2012E 2013E Revenue 22.0 22.8 54.7 52.4 66.2 71.7 80.0 86.3 75.4 152.0 304.3 443.4 Operating Costs (12.5) (15.8) (42.7) (39.1) (41.5) (41.6) (42.3) (42.7) (50.0) (110.1) (168.1) (200.4) Depreciation (4.3) (4.9) (10.9) (9.9) (10.0) (10.0) (9.8) (10.1) (14.7) (30.0) (39.8) (45.1) G&A, Expl, Other (3.8) (5.1) 7.1 (5.0) (3.6) (3.8) (4.0) (4.1) (10.1) (6.8) (15.5) (35.5) EBIT 1.4 (3.0) 8.2 (1.6) 11.2 16.3 24.0 29.4 0.5 5.1 80.9 162.5 Net Interest (0.7) (0.4) (1.5) (1.1) (2.1) (2.1) (2.1) (2.1) 1.8 (3.7) (8.3) (5.7) Unusual/Other Items 0.9 (1.2) (2.9) (1.5) (1.0) 0.0 0.0 0.0 43.0 (4.8) (1.0) 0.0 Pretax Profit 1.5 (4.6) 3.8 (4.2) 8.1 14.2 21.9 27.4 45.3 (3.4) 71.6 156.8 Tax 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other (0.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (0.0) 0.0 0.0 0.0 Earnings reported 1.5 (4.6) 3.8 (4.2) 8.1 14.2 21.9 27.4 45.3 (3.4) 71.6 156.8 Earnings (Adjusted) 0.7 (3.3) (3.2) (4.2) 8.1 14.2 21.9 27.4 4.6 (10.0) 71.6 156.8 EPS Reported 0.01 (0.02) 0.02 (0.02) 0.04 0.07 0.11 0.14 0.26 (0.02) 0.36 0.78 EPS Adjusted 0.00 (0.02) (0.02) (0.02) 0.04 0.07 0.11 0.14 0.03 (0.05) 0.36 0.78 Gross Operating Margin 43% 31% 22% 25% 37% 42% 47% 50% 34% 28% 45% 55% Gold price assumptions: 2011 US$1570/oz, 2012 US$1763/oz, 2013 US$2000/oz, and long-term as of 2015 US$1600/oz Source: Company data, Stifel Nicolaus estimates Cash Flow Statement (US$million) F.Y.E. Dec 31 Mar-11A Jun-11A Sep-11A Dec-11E Mar-12E Jun-12E Sep-12E Dec-12E 2010A 2011E 2012E 2013E Earnings (adjusted) 0.7 (3.3) (3.2) (4.2) 8.1 14.2 21.9 27.4 4.6 (10.0) 71.6 156.8 Depreciation 4.3 4.9 10.9 9.9 10.0 10.0 9.8 10.1 14.7 30.0 39.8 45.1 Other 0.0 (1.2) (0.2) 0.0 0.0 0.0 0.0 (16.0) 3.1 (1.3) (16.0) (32.0) Operating Cash flow 5.1 0.4 7.5 5.7 18.1 24.2 31.7 21.4 22.5 18.7 95.4 169.9 Working Capital Changes 1.7 6.6 0.9 0.0 0.0 0.0 0.0 0.0 (26.2) 9.2 0.0 0.0 Cash Flow from Operations 6.8 7.0 8.4 5.7 18.1 24.2 31.7 21.4 (3.7) 27.9 95.4 169.9 Capital Expenditure (21.5) (35.1) (36.1) (31.2) (22.5) (24.8) (24.1) (6.9) (155.7) (123.9) (78.2) (12.4) Net Investments (1.5) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (4.8) (1.5) 0.0 0.0 Investing Cash Flow (23.0) (35.1) (36.1) (31.2) (22.5) (24.8) (24.1) (6.9) (160.5) (125.4) (78.2) (12.4) Debt Additions 0.0 4.2 0.0 0.0 80.0 0.0 0.0 0.0 55.6 4.2 80.0 0.0 Debt Repayments (2.6) (1.7) (4.2) (2.1) (53.8) 0.0 0.0 (16.0) (6.2) (10.6) (69.8) (32.0) Equity Financing 0.0 91.9 0.0 0.0 0.0 0.0 0.0 0.0 0.7 91.9 0.0 0.0 Other Net Financing 0.0 (2.8) (0.0) 0.0 0.0 0.0 0.0 16.0 (6.1) (2.8) 16.0 32.0 Financing Cash Flow (2.6) 91.6 (4.3) (2.1) 26.2 0.0 0.0 0.0 44.1 82.7 26.2 0.0 Foreign Exchange (1.4) 2.7 (2.6) 0.0 0.0 0.0 0.0 0.0 (0.0) (1.3) 0.0 0.0 Cash Increase (20.2) 66.2 (34.5) (27.6) 21.8 (0.6) 7.6 14.6 (120.2) (16.1) 43.4 157.5 Cash Balance 16.3 83.1 48.5 20.9 42.7 42.1 49.7 64.3 36.5 20.9 64.3 221.8 Free Cash Flow (16.4) (34.7) (28.6) (25.5) (4.4) (0.6) 7.6 14.6 (133.3) (105.2) 17.2 157.5 CFPS (adjusted) 0.03 0.00 0.04 0.03 0.09 0.12 0.16 0.11 0.13 0.10 0.47 0.85 Source: Company data, Stifel Nicolaus estimates Page 12
  13. 13. Metals & MiningGold & Precious Metals January 19, 2012 Balance Sheet (US$million) F.Y.E. Dec 31 Mar-11A Jun-11A Sep-11A Dec-11E Mar-12E Jun-12E Sep-12E Dec-12E 2010A 2011E 2012E 2013E Current Assets 50.9 142.8 128.3 100.6 122.4 121.9 129.4 144.0 63.4 100.6 144.0 301.5 Other Assets 424.0 501.0 505.6 526.9 539.4 554.2 568.5 565.3 402.2 526.9 565.3 532.6 Total Assets 474.9 643.8 633.9 627.5 661.8 676.0 698.0 709.3 465.6 627.5 709.3 834.1 Current Liabilities 42.9 103.3 87.4 112.5 58.7 58.7 58.7 74.7 27.1 112.5 74.7 74.7 Long Term Debt 34.9 12.4 11.2 (16.0) 64.0 64.0 64.0 32.0 4.5 34.9 64.0 32.0 Other Liabilities 10.0 21.5 22.1 22.1 22.1 22.1 22.1 22.1 48.2 (28.9) (9.9) (9.9) Total Liabilities 87.8 137.2 120.7 118.6 144.8 144.8 144.8 128.8 79.7 118.6 128.8 96.8 Shareholders Equity 387.0 506.6 513.2 508.9 517.0 531.3 553.2 580.5 385.8 508.9 580.5 737.3 Shares (End of Period) (mn) 175 200 200 201 201 201 201 201 175 201 201 201 Book Value per Share 2.21 2.54 2.57 2.53 2.57 2.64 2.75 2.89 2.21 2.53 2.89 3.67 Source: Company data, Stifel Nicolaus estimates Operating Summary F.Y.E. Dec 31 Mar-11A Jun-11A Sep-11A Dec-11E Mar-12E Jun-12E Sep-12E Dec-12E 2010A 2011E 2012E 2013E Production (koz) Simberi Oxide (100.0%), PNG 10.9 18.1 15.9 12.4 17.6 17.8 17.8 18.8 70.0 57.3 72.0 98.6 Gold Ridge (100.0%), Solomon Iss. 1.6 10.2 20.2 18.8 22.5 24.4 26.6 26.6 - 50.8 100.2 123.2 Adjustments/Other - - - - - - - - - - - - Equity Production 12.4 28.3 36.1 31.2 40.1 42.2 44.5 45.4 70.0 108.0 172.2 221.7 Total Cash Costs (US$/oz) Simberi Oxide (100.0%), PNG 1,020 860 1,105 1,161 926 903 897 838 666 1,023 890 911 Gold Ridge (100.0%), Solomon Iss. 1,531 1,923 1,182 1,317 1,116 1,047 987 1,013 - 1,392 1,038 898 Total Cash Costs 1,084 1,243 1,148 1,255 1,033 986 951 941 666 1,197 976 904 Capex (US$m n) Simberi Oxide (100.0%), PNG 3.7 4.3 17.0 21.0 19.1 19.1 20.5 3.3 25.2 46.0 62.0 6.2 Simberi Sulphide (100.0%), PNG 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 6.3 2.0 2.0 - Gold Ridge (100.0%), Solomon Iss. 16.8 26.8 38.5 9.7 2.9 5.2 3.1 3.1 107.2 91.7 14.3 6.2 Other 0.6 3.5 (19.9) - - - - - 17.0 (15.8) - - Capex ($mn) 21.5 35.1 36.1 31.2 22.5 24.8 24.1 6.9 155.7 123.9 78.2 12.4 Operating Margin 43% 31% 22% 25% 37% 42% 47% 50% 34% 28% 45% 55% Source: Company data, Stifel Nicolaus estimates Page 13
  14. 14. Metals & MiningGold & Precious Metals January 19, 2012 Barrick Gold Corp. Income Statement (US$million except per share data) F.Y.E. Dec. 31 Mar-11A Jun-11A Sep-11A Dec-11E Mar-12E Jun-12E Sep-12E Dec-12E 2010A 2011E 2012E 2013E Revenue 3,090.0 3,426.0 4,007.0 3,684.8 3,850.7 3,986.2 4,185.7 4,622.7 10,924.0 14,207.8 16,645.3 19,796.6 Operating Costs (1,053.0) (1,159.0) (1,354.0) (1,242.0) (1,321.6) (1,340.2) (1,366.9) (1,393.7) (4,201.0) (4,808.0) (5,422.4) (5,975.3) Depreciation (304.0) (337.0) (376.0) (346.1) (330.4) (348.5) (374.1) (410.6) (1,196.0) (1,363.1) (1,463.7) (1,656.0) G&A, Expl, Other (237.0) (258.0) (291.0) (188.8) (216.5) (216.5) (217.6) (224.0) (957.0) (974.8) (874.6) (896.6) EBIT 1,496.0 1,672.0 1,986.0 1,907.9 1,982.1 2,080.9 2,227.1 2,594.4 4,570.0 7,061.9 8,884.5 11,268.6 Net Interest (29.0) (44.0) (49.0) (70.8) (77.5) (77.2) (76.8) (156.8) (107.0) (192.8) (388.2) (588.9) Unusual/Other Items 41.0 98.0 92.0 0.0 0.0 0.0 0.0 0.0 124.0 231.0 0.0 0.0 Pretax Profit 1,508.0 1,726.0 2,029.0 1,837.1 1,904.6 2,003.7 2,150.3 2,437.7 4,587.0 7,100.1 8,496.3 10,679.7 Tax (494.0) (550.0) (654.0) (606.2) (628.5) (661.2) (709.6) (804.4) (1,370.0) (2,304.2) (2,803.8) (3,524.3) Other (13.0) (17.0) (10.0) (23.3) (34.0) (35.6) (38.7) (42.2) 57.0 (63.3) (150.6) (188.4) Earnings Reported 1,001.0 1,159.0 1,365.0 1,207.6 1,242.1 1,306.9 1,402.0 1,591.0 3,274.0 4,732.6 5,542.0 6,967.0 Earnings (Adjusted) 949.0 1,117.0 1,385.0 1,207.6 1,242.1 1,306.9 1,402.0 1,591.0 3,279.0 4,658.6 5,542.0 6,967.0 EPS Reported 1.00 1.16 1.37 1.21 1.24 1.31 1.40 1.59 3.31 4.74 5.54 6.97 EPS Adjusted 0.95 1.12 1.39 1.21 1.24 1.31 1.40 1.59 3.32 4.66 5.54 6.97 Realized Price (US$) $1,389 $1,513 $1,743 $1,682 $1,650 $1,700 $1,800 $1,900 $1,224 $1,582 $1,764 $2,003 Operating (Gross) Margin 66% 66% 66% 66% 66% 66% 67% 70% 62% 66% 67% 70% Gold price assumptions: 2011 US$1570/oz, 2012 US$1763/oz, 2013 US$2000/oz, and long-term as of 2015 US$1600/oz Source: Company data, Stifel Nicolaus estimates Cash Flow Statement (US$million except per share data) F.Y.E. Dec. 31 Mar-11A Jun-11A Sep-11A Dec-11E Mar-12E Jun-12E Sep-12E Dec-12E 2010A 2011E 2012E 2013E Earnings (adjusted) 949.0 1,117.0 1,385.0 1,207.6 1,242.1 1,306.9 1,402.0 1,591.0 3,279.0 4,658.6 5,542.0 6,967.0 Depreciation 304.0 337.0 376.0 346.1 330.4 348.5 374.1 410.6 1,196.0 1,363.1 1,463.7 1,656.0 Other 225.0 (230.0) 76.0 44.3 58.6 68.3 67.2 68.3 305.0 115.3 262.5 286.0 Operating Cash flow 1,478.0 1,224.0 1,837.0 1,597.9 1,631.1 1,723.7 1,843.4 2,069.9 4,780.0 6,136.9 7,268.1 8,909.0 Working Capital Changes (43.0) (534.0) 52.0 0.0 0.0 0.0 0.0 0.0 (653.0) (525.0) 0.0 0.0 Cash Flow from Operations 1,435.0 690.0 1,889.0 1,597.9 1,631.1 1,723.7 1,843.4 2,069.9 4,127.0 5,611.9 7,268.1 8,909.0 Capital Expenditure (1,071.0) (1,068.0) (1,514.0) (1,753.5) (1,434.3) (1,434.5) (1,263.5) (1,192.6) (3,323.0) (5,406.5) (5,325.0) (4,714.1) Net Investments 8.0 (7,326.0) (384.0) 0.0 0.0 0.0 0.0 0.0 (849.0) (7,702.0) 0.0 0.0 Investing Cash Flow (1,063.0) (8,394.0) (1,898.0) (1,753.5) (1,434.3) (1,434.5) (1,263.5) (1,192.6) (4,172.0) (13,108.5) (5,325.0) (4,714.1) Debt Additions 159.0 6,500.0 0.0 0.0 0.0 0.0 0.0 0.0 782.0 6,659.0 0.0 0.0 Debt Repayments (2.0) (347.0) (16.0) (8.0) (47.8) (47.8) (47.8) (47.8) (149.0) (373.0) (191.0) (2,076.0) Equity Financing 21.0 10.0 10.0 0.0 0.0 0.0 0.0 0.0 1,011.0 41.0 0.0 0.0 Other Net Financing (78.0) (48.0) 136.0 (150.0) (150.0) (150.0) (12.5) (150.0) (210.0) (140.0) (462.4) (599.9) Financing Cash Flow 100.0 6,115.0 130.0 (158.0) (197.7) (197.7) (60.2) (197.7) 1,434.0 6,187.0 (653.4) (2,675.9) Foreign Exchange 3.0 9.0 (19.0) 0.0 0.0 0.0 0.0 0.0 15.0 (7.0) 0.0 0.0 Cash Increase 475.0 (1,580.0) 102.0 (313.5) (0.9) 91.4 519.7 679.6 1,404.0 (1,316.5) 1,289.8 1,519.1 Cash Balance 4,443.0 2,863.0 2,965.0 2,651.5 2,650.6 2,742.0 3,261.7 3,941.3 3,968.0 2,651.5 3,941.3 5,460.3 Free Cash Flow 564.0 6,309.0 307.0 (163.6) 149.0 241.4 532.2 829.6 2,090.0 7,016.4 1,752.2 2,118.9 CFPS (adjusted) 1.48 1.23 1.84 1.60 1.63 1.72 1.84 2.07 4.84 6.14 7.27 8.91 Source: Company data, Stifel Nicolaus estimates Page 14
  15. 15. Metals & MiningGold & Precious Metals January 19, 2012 Balance Sheet (US$million except per share data) F.Y.E. Dec. 31 Mar-11A Jun-11A Sep-11A Dec-11E Mar-12E Jun-12E Sep-12E Dec-12E 2010A 2011E 2012E 2013E Current Assets 7,691.0 6,570.0 6,564.0 6,250.5 6,249.6 6,341.0 6,860.7 7,540.3 7,113.0 6,250.5 7,540.3 9,059.3 Other Assets 28,348.0 38,938.0 40,263.0 41,670.4 42,774.3 43,860.3 44,749.7 45,531.7 26,209.0 41,670.4 45,531.7 48,589.7 Total Assets 36,039.0 45,508.0 46,827.0 47,920.9 49,023.9 50,201.3 51,610.3 53,072.0 33,322.0 47,920.9 53,072.0 57,649.1 Current Liabilities 2,530.0 2,929.0 2,893.0 2,886.0 2,994.8 3,103.5 3,212.3 4,771.0 2,489.0 2,886.0 4,771.0 3,845.0 Long Term Debt 6,772.0 13,229.0 13,185.0 13,184.0 13,027.5 12,871.0 12,714.5 11,108.0 6,678.0 13,184.0 11,108.0 9,958.0 Other Liabilities 6,252.0 7,772.0 8,374.0 8,418.3 8,476.9 8,545.2 8,749.9 8,818.3 5,090.0 8,418.3 8,818.3 9,104.2 Total Liabilities 15,554.0 23,930.0 24,452.0 24,488.3 24,499.2 24,519.7 24,676.7 24,697.3 14,257.0 24,488.3 24,697.3 22,907.2 Shareholders Equity 20,485.0 21,578.0 22,375.0 23,432.6 24,524.7 25,681.6 26,933.7 28,374.7 19,065.0 23,432.6 28,374.7 34,741.9 Shares (End of Period) (MM) 999.17 999.44 999.80 999.80 999.80 999.80 999.80 999.80 986.25 999.80 999.80 999.80 Book Value per Share 20.50 21.59 22.38 23.44 24.53 25.69 26.94 28.38 19.33 23.44 28.38 34.75 Source: Company data, Stifel Nicolaus estimates Operating Summary F.Y.E. Dec. 31 Mar-11A Jun-11A Sep-11A Dec-11E Mar-12E Jun-12E Sep-12E Dec-12E 2010A 2011E 2012E 2013E Production (koz) North America (100.0%) 862.0 923.0 836.0 741.2 844.6 844.6 860.1 956.3 3,110.0 3,362.2 3,505.5 4,123.8 South America (100.0%) 498.0 453.0 475.0 487.5 468.8 468.8 468.8 468.8 2,120.0 1,913.5 1,875.4 1,663.5 Australia Pacific (100.0%) 459.0 463.0 472.0 488.2 468.8 468.8 468.8 468.8 1,961.0 1,882.2 1,875.3 1,784.2 Africa (73.9%) 129.0 127.0 135.0 118.3 143.5 143.5 143.5 143.5 564.0 509.3 574.0 586.8 Other 12.0 11.0 10.0 - - - - - 33.0 33.0 - - Equity Production 1,960.0 1,977.0 1,928.0 1,835.1 1,925.8 1,925.8 1,941.3 2,037.5 7,788.0 7,700.1 7,830.3 8,158.2 Total Cash Costs (US$/oz) North America (100.0%) $396 $404 $415 $485 $512 $518 $519 $482 $489 $423 $507 $495 South America (100.0%) $340 $373 $358 $377 $379 $383 $385 $386 $241 $362 $383 $461 Australia Pacific (100.0%) $585 $611 $609 $626 $672 $681 $691 $702 $616 $608 $687 $778 Africa (73.9%) $658 $652 $687 $732 $621 $625 $646 $653 $649 $681 $636 $656 Total Cash Costs $437 $445 $453 $509 $527 $533 $538 $522 $457 $460 $530 $562 Capex ($m n) North America (100.0%) 194.0 195.3 364.6 740.6 432.6 432.6 368.1 377.8 1,000.1 1,494.5 1,611.1 1,172.2 South America (100.0%) 296.0 317.0 416.0 555.2 578.5 578.5 538.5 538.5 1,065.3 1,584.2 2,234.1 2,753.5 Australia Pacific (100.0%) 70.0 32.0 209.7 282.5 288.4 288.4 221.5 221.5 284.0 594.2 1,019.8 564.2 Africa (73.9%) 47.0 30.0 84.0 47.3 21.5 21.5 21.5 21.5 129.4 208.3 86.1 88.0 Other 464.0 493.7 439.7 127.9 113.4 113.6 113.8 33.2 844.2 1,525.3 373.9 136.1 Capex ($mn) 1,071.0 1,068.0 1,514.0 1,753.5 1,434.3 1,434.5 1,263.5 1,192.6 3,323.0 5,406.5 5,325.0 4,714.1 Source: Company data, Stifel Nicolaus estimates Page 15
  16. 16. Metals & MiningGold & Precious Metals January 19, 2012 Centamin Egypt Ltd. Income Statement (US$million except per share data) F.Y.E Dec. 31 Mar-11A Jun-11A Sep-11A Dec-11E Mar-12E Jun-12E Sep-12E Dec-12E 2010A 2011E 2012E 2013E Revenue 88.7 77.7 89.1 99.2 95.0 97.9 111.2 122.7 124.2 354.7 426.9 750.4 Operating Costs (19.4) (24.6) (25.9) (38.2) (35.8) (36.2) (41.0) (46.4) (48.2) (108.1) (159.5) (277.0) Depreciation (9.2) (9.5) (18.0) (18.7) (13.1) (14.7) (17.5) (19.3) (32.8) (55.4) (64.5) (108.1) G&A, Expl, Other (5.0) 0.7 0.6 (2.5) (2.5) (2.5) (2.5) (2.5) 5.4 (6.2) (10.0) (10.0) EBIT 55.1 44.3 45.7 39.8 43.6 44.5 50.2 54.5 48.6 185.0 192.8 355.4 Net Interest 0.2 0.3 0.2 0.2 0.1 0.1 0.1 0.1 0.1 1.0 0.5 2.1 Unusual/Other Items 0.8 3.6 (2.5) 0.0 0.0 0.0 0.0 0.0 1.8 1.8 0.0 0.0 Pretax Profit 56.1 48.2 43.4 40.0 43.8 44.6 50.4 54.6 50.5 187.7 193.4 357.5 Tax 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Minority Interest 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (78.1) Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Earnings reported 56.1 48.2 43.4 40.0 43.8 44.6 50.4 54.6 50.5 187.7 193.4 279.4 Earnings (Adjusted) 56.1 48.2 43.4 40.0 43.8 44.6 50.4 54.6 50.5 187.7 193.4 279.4 EPS Reported 0.05 0.04 0.04 0.04 0.04 0.04 0.05 0.05 0.05 0.17 0.18 0.26 EPS Adjusted 0.05 0.04 0.04 0.04 0.04 0.04 0.05 0.05 0.05 0.17 0.18 0.26 Gold price assumptions: 2011 US$1570/oz, 2012 US$1763/oz, 2013 US$2000/oz, and long-term as of 2015 US$1600/oz Source: Company data, Stifel Nicolaus estimates Cash Flow Statement (US$million except per share data) F.Y.E Dec. 31 Mar-11A Jun-11A Sep-11A Dec-11E Mar-12E Jun-12E Sep-12E Dec-12E 2010A 2011E 2012E 2013E Earnings (adjusted) 56.1 48.2 43.4 40.0 43.8 44.6 50.4 54.6 50.5 187.7 193.4 279.4 Depreciation 9.2 9.5 18.0 18.7 13.1 14.7 17.5 19.3 32.8 55.4 64.5 108.1 Other (26.6) (30.6) 1.1 (0.4) 0.1 0.1 (2.3) (3.3) (33.8) (56.5) (5.3) (24.8) Operating Cash flow 38.7 27.2 62.5 58.3 57.0 59.4 65.6 70.6 49.6 186.6 252.6 362.7 Working Capital Changes 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Cash Flow from Operations 38.7 27.2 62.5 58.3 57.0 59.4 65.6 70.6 49.6 186.6 252.6 362.7 Capital Expenditure (32.5) (32.9) (37.7) (72.3) (54.3) (79.3) (79.6) (54.8) (47.9) (175.4) (268.1) (28.0) Net Investments (11.8) 0.0 (15.3) 0.0 0.0 0.0 0.0 0.0 (15.2) (27.1) 0.0 0.0 Investing Cash Flow (44.3) (32.9) (53.0) (72.3) (54.3) (79.3) (79.6) (54.8) (63.1) (202.5) (268.1) (28.0) Debt Additions 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Debt Repayments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Equity Financing (0.1) 1.4 6.9 0.0 0.0 0.0 0.0 0.0 134.8 8.2 0.0 0.0 Other Net Financing (0.3) (0.0) 1.1 0.0 0.0 0.0 0.0 0.0 7.7 0.8 0.0 0.0 Financing Cash Flow (0.4) 1.4 8.0 0.0 0.0 0.0 0.0 0.0 142.5 9.0 0.0 0.0 Foreign Exchange 0.8 1.4 (3.6) 0.0 0.0 0.0 0.0 0.0 1.7 (1.4) 0.0 0.0 Cash Increase (5.2) (3.0) 13.9 (14.0) 2.7 (19.9) (14.1) 15.8 130.7 (8.2) (15.5) 334.7 Cash Balance 149.2 146.2 160.3 146.3 148.9 129.1 115.0 130.8 154.3 146.3 130.8 465.5 Free Cash Flow 6.1 (5.7) 24.8 (14.0) 2.7 (19.9) (14.1) 15.8 1.7 11.3 (15.5) 334.7 CFPS (adjusted) 0.04 0.02 0.06 0.05 0.05 0.05 0.06 0.06 0.05 0.17 0.23 0.33 Source: Company data, Stifel Nicolaus estimates Page 16
  17. 17. Metals & MiningGold & Precious Metals January 19, 2012 Balance Sheet (US$million except per share data) F.Y.E Dec. 31 Mar-11A Jun-11A Sep-11A Dec-11E Mar-12E Jun-12E Sep-12E Dec-12E 2010A 2011E 2012E 2013E Current Assets 222.1 252.9 267.2 253.2 255.9 236.0 221.9 237.7 191.1 253.2 237.7 572.4 Other Assets 468.9 495.6 529.8 583.8 624.9 689.4 753.8 792.6 447.9 583.8 792.6 737.3 Total Assets 691.0 748.6 797.0 837.0 880.8 925.4 975.8 1,030.4 639.0 837.0 1,030.4 1,309.8 Current Liabilities 13.3 21.7 19.1 19.1 19.1 19.1 19.1 19.1 16.3 19.1 19.1 19.1 Long Term Debt 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other Liabilities 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 Total Liabilities 15.9 24.3 21.7 21.7 21.7 21.7 21.7 21.7 19.0 21.7 21.7 21.7 Shareholders Equity 675.1 724.2 775.3 815.3 859.1 903.7 954.1 1,008.7 620.0 815.3 1,008.7 1,288.1 Shares (End of Period) (mn) 1,090.91 1,091.86 1,095.16 1,095.30 1,095.30 1,095.30 1,095.30 1,095.30 1,081.95 1,095.30 1,095.30 1,095.30 Book Value per Share 0.62 0.66 0.71 0.74 0.78 0.83 0.87 0.92 0.57 0.74 0.92 1.18 Source: Company data, Stifel Nicolaus estimates Operating Summary F.Y.E Dec. 31 Mar-11A Jun-11A Sep-11A Dec-11E Mar-12E Jun-12E Sep-12E Dec-12E 2010A 2011E 2012E 2013E Production (koz) Sukari (100%*), Egypt 45.2 48.0 50.5 59.0 57.6 57.6 61.8 64.6 150.3 202.7 241.6 373.6 Adjustments - - - - - - - - - - - - Equity Production 45.2 48.0 50.5 59.0 57.6 57.6 61.8 64.6 150.3 202.7 241.6 373.6 Total Cash Costs (US$/oz) Sukari (100%*), Egypt 567 651 686 647 622 629 664 718 555 640 660 741 Total Cash Costs 567 651 686 647 622 629 664 718 555 640 660 741 Capex ($mn) $32.5 $32.9 $37.7 $72.3 $54.3 $79.3 $79.6 $54.8 $51.7 $175.4 $268.1 $28.0 Source: Company data, Stifel Nicolaus estimates Page 17

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