February 2019

North American Palladium Ltd. (TSX:PDL)- A Clean Technology FCF Machine

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With materially improved operations and a rising palladium price, we believe North American Palladium is poised for a significant re-rating and that its shares are worth C$21.17 suggesting 62% upside. Recent operating improvements and a new LOM plan that points to production growth combined with a strong palladium price, we believe this company is poised to generate substantially more FCF and EBITDA than its share price reflects.

De Grey Mining Ltd. (ASX:DEG) – Updates Demonstrate Project Wide Upside

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Impact: Mildly Positive De Grey has provided positive updates from both its conglomerate target Loudens Patch target and Farno JV highlighting project wide explorational potential. As De Grey continues to outline an increasingly economic operation for its Pilbara project supported by significant exploration upside, we expect mid-tier producers to begin to show an interest.

Gran Colombia Gold Corp. (TSX:GCM) – Results Point to Reserve and Resource Growth

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Impact: Mildly Positive Gran Colombia has provided generally positive news with a first look at production results for 2019 and final details from its 2018 drill season. This update supports the company’s strong outlook for 2019 which we expect to be affirmed with continued production and drilling success. We believe the market has still not priced in this company’s turnaround and as Gran Colombia executes operationally, we expect it re-rate towards peers.

RNC Minerals. (TSX:RNX) -More High-Grades from Western Flanks

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Impact: Positive New drill results from Beta Hunt’s Western Flanks and A Zones continue to demonstrate Beta Hunt’s high-grade gold and bulk mining potential. Results continue to support our current fair value estimate at C$0.97 (unchanged). We continue to expect ongoing exploration and development work to be the key catalysts for demonstrating the potential that we see at Beta Hunt.

De Grey Mining Ltd. (ASX:DEG) – Bigger Throughput Pushes Project Over 100k oz pa

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Impact: Positive De Grey announced an increase in the scale of the its Pilbara Gold Project from 1Mtpa to 2Mtpa plant throughput based on 2018 exploration success and improved metallurgy. As well, the company announced that it expects the resource to grow to 2Moz by year-end. Both these updates support our view that De Grey is continuing to improve the scale and economics of its Pilbara project, which we expect is likely to start attracting the interest of mid-tier gold miners in Australia.

Coro Mining Corp. (TSX:COP) – Sorpresa Adds Fuel to the Fire

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Impact: Positive Coro Mining announced results from the Sorpresa area of its Marimaca Project in the Antofagasta Region of Chile. Sorpresa occurs ~2km south of Coro’s Marimaca oxide-copper deposit. Today’s results at Sorpresa define a 350m by 100m zone of copper oxide mineralization which remains open and supports our thesis that a viable copper heap leach story is going to expand materially through the drill bit.

Novo Resources Corp. (TSXV:NVO) – Beatons Creek Resource Getting Ready to Grow

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Impact: Positive Novo has announced a positive update from Beatons Creek, which includes initial bulk sampling results and wireframe modelling. Average bulk sample grades are in line with resource grades and updated wireframe model points to a substantial increase in the mineralized footprint of the deposit. Both updates contribute to additional upside we see at Beatons Creek beyond the C$1.10- 1.40/sh of our preliminary model, which underpin the company’s current value.

Bonterra Resource Ltd. (TSXV:BTR) – Drilling Continues to Expand Gladiator

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Impact: Mildly Positive Results from Bonterra’s ongoing drilling program demonstrate the significant expansion potential of this deposit, beyond the ~2Moz that we believe already exists. With a mill in-place and a basket of growing deposits, we believe the company is likely to be the first company in production in the rapidly growing Urban-Barry camp.

De Grey Mining Ltd. (ASX:DEG) – Higher Recoveries Increase Preliminary Estimates

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Impact: Mildly Positive Recent metallurgical test results from De Grey outlined a straightforward flowsheet for the Pilbara Gold Project with improved recoveries resulting in at least a 10% increase in our preliminary estimated valuation. We expect further resource growth and continued improvement of potential mine economics to make De Grey a target for mid-tier producers.

Red Pine Exploration Inc. (TSXV:RPX) – Surluga Results Bode Well for Update

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Impact: Mildly Positive Drilling results announced today by Red Pine at Surluga validate the company’s geological model and suggest the company is on track for Surluga resource update in Q2 2019. We continue to believe the Wawa Gold Corridor hosts a large gold system and that Red Pine is positioned to deliver multiple gold discoveries.