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14 March 2007 Weekly Valuation and Key Issues

INTRODUCING…. THE URANIUM MONITOR


Compared with other sectors in the market, the uranium sector has until recently
Damien Hackett Scott Finlay suffered from a lack of investment choice due to the small number of participants.
44.20.7050.6641 44.20.7050.6651 This has changed in the past few years due to the rise in uranium prices so that at
last count there were over 450 listed entities aspiring to be uranium producers.
Jim Taylor Nick Chalmers Investors interested in the sector appear to have to come to grips with how to
44.20.7050.6648 44.20.7050.6636
recognise value in a market where reliable sector multiples do not exist and where
many companies do not have earnings track records.
Nicholas Pickens
44.20.7050.6646 This combination of circumstances with aspects of both the new and the old
economy has understandably given rise to much conjecture as to how to value
stocks trading in this sector so our first effort here has been to produce a
Inside: comparison on a like-for-like basis of what we believe to be the key metrics
Guide to Weekly Uranium Monitor 2 investors should focus upon. With the weakness of any standardisation process, is
Global Mining Financial comparisons 6 that the details can be overlooked, our following analysis uses such common
Share price performance monitor 9 assumptions as discount rates and commodity prices we recommend contacting
European mining companies 10 the relevant analyst on any stock specific choice before taking action.
America’s mining companies 12
This week, we are introducing our Uranium Monitor.
Commodity price assumption 15

Figure 1: Exchange Traded Fund and Uranium prices

110

Steven Butler Graeme Currie 100


U S$/l b U 3O8 e qui va l e nt

1.416.869.7918 1.604.643.7405 90

80
Scott Finlay Gary Lampard
44.20.7050.6651 1.416.867.6020 70

60
Toni Wallis Orest Wowkodaw 50
1.604.643.7551 1.416.869.3092
40
Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07
Wendell Zerb Christopher Chang
1.604.643.7485 1.416.869.7299
NU..L U.TO U3O8 spot

Gary Hon John Vinnai


1.416.869.7376 1.416.869.7289 Source: Bloomberg

Canaccord Adams is the global capital markets group of Canaccord Capital Inc. (CCI : TSX|AIM)
The recommendations and opinions expressed in this Investment Research accurately reflect the Investment Analyst’s personal,
independent and objective views about any and all the Designated Investments and Relevant Issuers discussed herein. For important
information, please see the Important Disclosures section in the appendix of this document or visit or visit
http://www.canaccordadams.com/research/Disclosure.htm.
Global Metals and Mining |2
14 March 2007

USERS GUIDE TO THE WEEKLY URANIUM MONITOR


Structure
The uranium monitor is split into three main sections:

1. Exchange traded funds,

2. Canaccord researched producers and explorers, and

3. Other significant uranium producers.

Exchange Traded Funds (ETF)


Listed exchange traded funds perform a useful role in the absence of a futures market for
uranium, by providing a glimpse as to what investors are prepared to pay for uranium as
opposed to what nuclear utilities are currently paying for uranium. This difference is
highlighted in the lower section of the monitor (Figure 4) which provides answers to two
important questions:

1. Who is prepared to pay more for uranium, producers or investors? Uranium spot
prices are reported on a weekly basis by consultants who specialise in this area: as of
13 March 2007 this was US$91/lb. This figure can be compared to the ETF’s average
enterprise value per pound (EV/lb), which currently sits at US$102/lb. This implies to
us that uranium investors are expecting spot prices to rise by a further 12%. In Figure
2, we have lagged UxC’s short-term forecast (high – low range) by two weeks to
provide a comparable as to where we think the current market’s expectation is for the
Market expectations:
uranium price. UxC is suggesting prices are likely to move higher over the next few
- Consultants; weeks but we note that holders of U.TO look to be pricing this increase in already.
- Utilities;
- Investors.
Figure 2: Uranium ETF EV/lb, spot U3O8 price and two-week lagged UxC forecast

$110

$105 104 103


$100
97
$95
93
U S$/l b

$90 91

$85

$80

$75

$70
5/2/07 19/2/07 5/3/07 19/3/07

Ux U3O8 2w H (f) 2w L (f) U.TO

Source: UxC, Datastream, Company reports


Global Metals and Mining |3
14 March 2007

2. How far apart are the ETFs trading with respect to each other? Subtracting each
respective EV/lb indicates to us what investors are willing to pay in the UK versus
ETF trading strategy… what investors are willing to pay in Canada. At present, the Canadian-listed Uranium
Participation Corporation is trading at a US$7.50/lb premium to the UK-listed Nufcor.
Figure 3 shows that at times these markets can, and do, get out of line thus presenting
investors with buying and selling opportunities.

Figure 3: Uranium Participation Corp versus Nufcor Uranium

25
20
15
10
U S$/l b

5
0
-5
-10
-15
-20
Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07

U.TO vs NU..L Spread

Source: Company reports, Canaccord Adams.

Producers/Explorers
The current Canaccord uranium universe covers both explorers and producers. We have
separated these in the weekly uranium monitor to enable suitable comparison.

Valuing producers using the P/NAV multiple


For the purposes of comparison, we have assumed common discount rates of 10% and
three price scenarios corresponding to:

• Canaccord forecast long-term US$50/lb

• Market spot US$91/lb

• Canaccord forecast peak US$100/lb

We apply these assumptions to our forecasting models and compare the resulting net asset
value estimate of the firm to its current share price to create a P/NAV multiple. We
interpret the results in the following context.

• In a rising commodity market, we would expect listed equities to trade at P/NAV


multiples above commodity based ETFs because of the higher leverage equities offer to
the underlying commodity, as well as the ability to add value through exploration and
the ability to pay dividends. Using a spot price of US$91/lb, we find the average ETF
P/NAV multiple is 1.18 and Uramin is trading at 1.02. This suggests to us that, on
Canaccord production assumptions, UMN is offering value relative to the ETFs.
Global Metals and Mining |4
14 March 2007

• Assuming, over time, stocks trade close to their NAV, the uranium price at which the
P/NAV equals one is what we believe equity investors are factoring in for uranium
prices. Presently this is a little above US$100/lb. We consider that this makes a useful
comparison in indicating what commodity investors (ETF EV/lb US$102/lb) and
uranium producers (i.e. spot/term prices US$91/lb) are willing to pay. We believe that
the relative movements of these variables over time can provide indications of investor
sentiment and, therefore, provide an important context for whether to buy, hold or sell
a position.

• Whilst at present there is much focus on the possible upside, we recommend that
investors also keep an eye on their risk exposure. To capture this we input long-term
pricing assumptions (currently US$50/lb) to reproduce the P/NPV multiples. Again,
assuming that stocks will eventually trade around their NAV, the purpose of a long-
term P/NAV is to show the potential downside. For example, using US$50/lb suggests
that if Nufcor were to do nothing and simply hold its inventory we would expect the
stock to fall by 45% from its current price.

Valuing explorers
The difficulties with valuing early stage speculative ventures are well documented and we
see uranium explorers as no different. Factors that we see as important in explorers
include location of exploration ground, track record of the exploration team, current stage
of project advancement and the ability to finance its objectives.

In compiling a list of what we regard as the most prospective explorers, we see the most
reliable metric as that measuring the percentage difference between the market price and
our target price to provide a relative ranking of our favored picks in this sector.

Other producers
We also include for completeness other publicly listed uranium producers and explorers
that have an influence over the market. The metric we use for comparison here is EV/lb
which in itself does not offer a method of valuation but we believe does provide evidence of
the range the market is willing to pay. In this week’s edition the full range is from US$3/lb
for Strathmore Minerals (STM.VA) up to US$42/lb for Denison Mines (DML.TO).
Global Metals and Mining |5
14 March 2007

Figure 4: Weekly Uranium Monitor


NA V SE NSI TI V I TY
Sy m bo l - M k t C a p D a i l y V o l Lo n g- te r m U S $ 50/ l b Sp o t U S $9 1/ l b P e a k U S $ 100 / l b T a r ge t Prem/
E x c h a n ge Cu r n cy Pri ce lo ca l M U S$M NA V 10% P/NAV NA V 10% P/NAV NA V 10% P/NAV Pr i ce (D i sc) R a ti n g Analyst
UrAsia Energy UUU-V CAD 7.15 3,439 16.5 3.69 1.94 5.53 1.29 6.15 1.16 NA NA UR JT
SXR Uranium One SXR-T CAD 16.21 2,186 24.0 8.09 2.00 12.87 1.26 13.91 1.17 19.30 19% Spec Buy TW
UraMin UMN-L GBp 2.59 556 4.6 1.53 1.69 2.54 1.02 2.90 0.89 2.90 12% Buy JT
Uranium Participation Corp* U-T CAD 14.76 716 4.6 7.26 2.03 11.67 1.26 12.64 1.17 NA NA NA NA
Nufcor Uranium* NU/-L GBp 3.50 115 0.1 1.83 1.91 3.31 1.06 3.64 0.96 NA NA NA NA
AVERAGE 1.92 1.18 1.07
* Uranium funds U and NU are not rated and are included for comparative purposes only. NAVs for both are calculated by value of uranium inventories held adjusted for cash and debt.

C C A E X P LO R E R S U N I V E R S E

Sy m bo l - M k t Ca p Da i l y V o l 52 we e k M K t Ca p EV R e so ur ce s* M k t Ca p/ EV/ T a r ge t Prem/
E x c h a n ge Cu r n cy Pri ce lo ca l M U S$M l o w-h i gh U S$M U S$M M l b U 3O 8 l b U 3O 8 l b U 3O 8 Pr ice (D i sc) R a ti n g Analyst
Aurora Energy Resources AXU-T CAD 14.88 966 0.7 3.55-17.75 825 778 96.9 8.51 8.03 21.00 41% Spec Buy TW
Crosshair Exploration CXX-V CAD 3.40 216 0.9 1.23-4.20 185 177 5.6 32.97 31.55 4.60 35% Spec Buy TW
Energy Metals Corp EMC-T CAD 12.54 974 4.2 4.60-14.30 832 768 186.9 4.45 4.11 15.80 26% Spec Buy TW
ForsysMetals FSY-T CAD 7.78 496 1.8 1.08-8.90 424 375 13.9 30.38 26.89 7.90 2% Hold TW
Tournigan Gold TVC-V CAD 2.98 336 2.5 1.28-3.75 287 248 18.1 15.85 13.73 3.75 26% Spec Buy TW
UraMin UMN-L GBp 2.59 556 4.6 0.47-2.82 1,073 985 192.4 5.58 5.12 2.90 12% Buy JT
UR Energy URE-T CAD 4.27 315 2.0 1.32-5.45 269 245 28.7 9.38 8.53 5.60 31% Spec Buy TW
AVERAGE 15.30 13.99
WEIGHTED AVERAGE 7.18 6.59
* Includes all NI 43-101 compliant resources plus relevant historical resources where deemed appropriate.

NO T R A TED

Sy m bo l - M k t Ca p Da i l y V o l 52 we e k M K t Ca p EV R e so ur ce s* M k t Ca p/ EV/ T a r ge t Prem/
E x c h a n ge Cu r n cy Pri ce lo ca l M U S$M l o w-h i gh U S$M U S$M M l b U 3O 8 l b U 3O 8 l b U 3O 8 Pr ice (D i sc) R a ti n g Analyst
SENI O R PR O D U CER S
Cameco Corp CCO-T CAD 44.78 15,776 59.2 35.35-49.95 13,483 13,799 961.6 14.02 14.35 NA NA NA NA
Denison Mines DML-T CAD 13.89 2,602 13.9 4.28-16.30 2,224 2,191 52.4 42.44 41.81 NA NA NA NA
Energy Resources Australia ERA-A AUD 24.59 4,690 15.8 10.13-26.89 3,677 3,671 567.0 6.49 6.47 NA NA NA NA
AVERAGE 20.98 20.88
WEIGHTED AVERAGE 12.26 12.44

EM ER G ING PR O DU CER S/DE V ELO PER S


Paladin Resources PDN-A AUD 8.99 4,504 22.5 3.30-10.75 3,531 3,707 220.0 16.05 16.85 NA NA NA TW
AVERAGE 16.05 16.85
WEIGHTED AVERAGE 16.05 16.85

E X P LO R E R S
Khan Resources KRI:T CAD 4.01 200 2.1 1.11-4.80 171 164 32 5.33 5.12 NA NA NA TW
Strathmore Minerals STM-V CAD 4.50 316 1.4 1.49-5.40 270 240 72.6 3.72 3.31 NA NA NA TW
Triex Minerals TXM-V CAD 5.73 73 0.1 1.75-6.43 62 54 4.7 13.22 11.52 NA NA NA TW
UEX Corp UEX-T CAD 5.68 1,027 2.7 2.92-6.40 878 801 30.1 29.20 26.64 NA NA NA TW
Uranium Power Corp UPC-V CAD 1.21 100 2.4 0.37-1.24 85 83 7.8 10.96 10.62 NA NA NA TW
Western Prospector WNP-V CAD 4.84 215 0.1 1.66-6.19 183 170 23.0 7.97 7.38 NA NA NA TW
AVERAGE 11.73 10.76
WEIGHTED AVERAGE 9.69 8.88

U R A NI U M E TF s
Uranium Participation Corp U-T CAD 14.76 716 4.6 7.16-14.90 612 615 5.9 104.21 104.71 NA NA NA TW
Nufcor Uranium NU/-L GBp 3.50 115 0.1 2.05-3.50 222 221 2.3 96.72 96.12 NA NA NA NA
AVERAGE 100.47 100.41
WEIGHTED AVERAGE 102.10 102.29
* Includes all NI 43-101 compliant resources plus relevant historical resources where deemed appropriate. Resources for U-T represent U3O8 equivalent.

Uranium ETF Mkt cap per pound U3O8 spot price Average changes with weekly U3O8 price
UM N
NEL
UPC

110 UUU
STM
CXX
100
U S$/l b U 3O 8 e q ui va l e nt

FSY
U3O8
90
WNP
EM C
80
SM M
TXM
70
DM L
ERA
60 PDN
URE
50 LAM
TVC
40 AXU
UEX
Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07
SXR
U
NU
NU..L U.TO U3O8 spot URRE
CCO

-1% 0% 1% 2% 3% 4% 5%

Source: Company Reports, Bloomberg, TradeTech UxC, Canaccord Adams estimates


Global Metals and Mining |6
14 March 2007

Figure 5: Global Metals & Mining: Non-Gold Project Developers - Quantitative Comparables
1
C om pa n y TK R R a tin g S h a re Price 5 2 w eek R a n g e Mkt Cap EV N et C a s h N AV /S P/N AV
Cu r r e n t Ta r ge t Lo w H igh U S$M U S$M U S$M

A r ico m TIO -A IM Buy GB p 57.0 90.0 34.0 69.0 369 211 158 GB p 0.9 63.33x
Ca le d o n R e so u r ce s CD N-A IM Buy GB p 30.3 59.0 16.9 40.6 81 77 15 GB p 6.0 5.04x
E a ste r n Pla tin u m E LR -TSX Buy C$ 1.97 2.40 0.94 2.05 865 730 157 C$ 2.38 0.83x
E u r o p e a n D ia m o n d s E PD -A IM Buy GB p 16.8 35.0 9.3 26.8 20 20 0 GB p 35.0 0.48x
E u r o p e a n N ick e l E NK -A IM Buy GB p 59.0 70.0 28.8 60.0 422 283 139 GB p 60.0 0.98x
G e m fie ld s G EM -A IM Buy GB p 35.5 60.0 35.5 52.5 72 56 15 GB p 60.0 0.59x
Kenm are K M R -LSE Buy GB p 45.0 70.0 32.0 51.0 588 786 73 GB p 0.7 61.64x
M wa n a A fr ica M W A -A IM Buy GB p 42.0 60.0 27.5 69.5 200 102 98 GB p 66.6 0.63x
Nik a n o r NK R -A IM Buy GB p 510 625 478.5 700.0 1,376 1,024 352 GB p 511.0 1.00x
N o r th e r n O r io n NNO -TSX Hold C$ 4.98 4.80 3.85 6.96 652 438 214 C$ 6.88 0.72x
O r ie l R e so u r ce s O R I-A IM Buy GB p 46.5 70.0 27.5 53.0 498 462 37 GB p 51.0 0.91x
Sie r r a Le o n e D ia m o n d s SLD -A IM Spec B uy GB p 107 215 78 213 228 212 16 GB p na na
U r A sia E n e r gy U U U -TSX - C$ 7.10 - 1.95 8.15 2,921 2,889 56 C$ - -
U r a M in U M N-A IM Buy GB p 258.0 290.0 46.5 282.0 1,069 939 130 GB p 290.0 0.89x

(1) Enterprise value = market cap - net current assets + long-term debt.
Prices as at close March 13th 2007.
Source: DataStream, Company data, Canaccord Adams estimates
Global Metals and Mining |7
14 March 2007

Figure 6: Global Metals & Mining: Non-Gold Project Developers - Qualitative Comparables
1
C om pa n y M a in Project( s ) In teres t Loca tion C om m odity S ta tu s C a pex req 1 s t prod. E B IT D A N ex t C a ta lys t E x pected
US $ M US $ M
A ric o m K im a n sk o y e 100% R u ssi a F e Ore Pr e -fe a si b ility $371 Q 2/09 $276 F e a si b ility stu d y Ju n -07
Kuranak h 74% R u ssi a Ilm e n ite Co nstr u ctio n $70 Q 3/07 $38 Sta r t-u p Q 3/07
Kuranak h 100% R u ssi a Pigm e n t Pr e -fe a si b ility $281 Q 2/11 $150 F e a si b ility stu d y Q 1/08

C a le d o n Re so urc e s Co o k 100% A u str a li a Co k i n g Co a l R e fu r b i sh m e n t na Q 1/07 $21 Pr o d u ctio n Q 1/Q 2 2007

Ea ste rn P la tin um M a r e e sb ur g 76% So u th A fr ica PG M s Co nstr u ctio n $15 2007 $25 Sta r t-u p Q 1/07
Sp i tz k o p 88% So u th A fr ica PG M s F e a sib i lity $100 2009 $120 F e a si b ility stu d y Q 2/07
Cr o co d i le R ive r 69% So u th A fr ica PG M s O p e r a ti ng $160 2006 $78 E x p a n sio n a n n o u n ce m e n t 2007
K e n ne d y 's V a le 69% So u th A fr ica PG M s Pr e -fe a si b ility $150 2009 $45

Eu ro p e a n D ia m o n d s Sa te lli te Pi p e 75% Le so th o Diam o nds O p e r a ti ng na Q 1/06 $4 F u ll p r o d u ctio n


M a in Pi p e 100% Le so th o Diam o nds Pr e -fe a si b ility $25 Q 1/09 $18 In itia l b u lk sa m p li ng r e sults

Eu ro p e a n N ic ke l Ca ld a g 100% Tu rk e y Ni -Co F e a s/Co n st $300 Q 4/07 $66 F o r e str y p e r m it Q 1/07

G e m f ie ld s M b uva -Ch ib o le le 100% Zam bia E m e r a ld s Co nstr u ctio n $11 Q 4/06 $37 Co n str u cti o n co m p le te d

K e n m a re M oma 100% M o z a m b iq u e Ilm e n ite Co nstr u ctio n $461 Q 1/07 $130 Tr ia l sh i p m e n ts Q 1/07

M w an a A f ric a B in d u r a 53% Z i m b a b we Ni O p e r a ti ng na na $50 Sh a ft d e e p e n in g 2007


F r e d a R e b e cca 85% Z i m b a b we Au O p e r a ti ng na na $15 R e fu r b ish m e n t 2007
M IB A 20% DRC Diam o nds O p e r a ti ng na na na

N ik a n o r KOV 75% DRC Cu -Co D e ve lo p m e n t $1,300 Q 4/2009 $450 D e b t fin a n ci n g Q 1/07

N o rthe rn O rio n A lu m b r e ra 13% A r ge n tin a Cu -A u O p e r a ti ng na na $89 M ill d e -b o ttle ne ck in g Q 1/07


A gu a R i ca 100% A r ge n tin a Cu -A u -M o F e a sib i lity $1.9b n 2010 $386

O rie l Re so u rc e s V o sk h o d 100% K a z a k h sta n Ch r o m ite F e a sib i lity $131 H 1/08 $104 Se e k in g p a r tn e r


Sh e vch e nk o 90% K a z a k h sta n F e r ro n i ck e l F e a sib i lity $700 2009 $113

Sie rra L e o n e D ia m o n d s K o n o Pr o j e ct 100% Si e r r a Le o n e Diam o nds Pr o d u cin g $8 Q 2/06 $150

U rA sia En e rgy A k d a la 70% K a z a k h sta n U r a n iu m O p e r a ti ng na na - Q 1/07


So u th In k a i 70% K a z a k h sta n U r a n iu m F e a sib i lity $180 Q 4/07 - D r illin g u p d a te Q 1/07
K h a ra ssa n 30% K a z a k h sta n U r a n iu m F e a sib i lity $120 2008 - D r illin g u p d a te Q 1/07

U ra M in Tr e k k o p j e 100% N a m ib i a U r a n iu m F e a sib i lity $181 Q 4/2008 $62 Co m p le ti o n o f D F S H 2/07


B ak oum a 90% CA R U r a n iu m E va lu a tio n na Q 4/2010 na 43-101 r e so u r ce sta te m e n t H 1/07
R y st K u il 65% So u th A fr ica U r a n iu m E va lu a tio n $120 Q 4/2009 $50

(1) Average steady state EBITDA per annum


Source: DataStream, Company data, Canaccord Adams estimates
Global Metals and Mining |8
14 March 2007

Figure 7: Global Metals & Mining: Financial comparisons


(1) (2)
Company TKR Rating Share price Mkt Cap EV Earnings Free cash Dividend EBITDA margin % EBIT margin % NPAT margin %
4
Year to December Code Current Target US$ x mill 2006E 2007E 2008E 2006E 2007E 2008E 2006E 2007E 2008E 2006E 2007E 2008E 2006E 2007E 2008E 2006E 2007E 2008E

Senior Diversified
(5)
BHP Billiton BLT.L Buy £ 10.39 £ 12.00 120,952 111,994 2.00 1.98 1.99 2.27 2.98 3.16 0.39 0.43 0.43 46.3 46.1 45.0 40.2 37.8 36.0 28.4 26.4 26.1
CVRD RIO.NYSE Buy $ 35.64 $ 38.50 86,390 85,949 UR 4.12 4.21 UR 5.12 5.20 0.57 0.60 0.66 UR 53.4 53.4 UR UR UR UR UR UR
Rio Tinto RIO.L Hold £ 27.15 £ 26.00 68,569 67,004 5.46 5.18 4.35 5.84 6.44 6.05 0.80 0.90 0.97 49.2 47.1 44.1 42.2 40.2 36.7 28.8 25.0 22.5
Teck Cominco TEKB.TSX Buy $ 80.23 $ 93.00 14,938 10,394 10.49 11.23 7.13 9.97 10.04 7.04 1.41 2.00 2.00 58.4 54.9 45.8 54.4 51.0 40.5 36.6 34.0 28.3

Precious Metals and Minerals


AngloGold Ashanti AU.NYSE Hold $ 43.19 $ 40.00 11,792 12,814 2.08 2.62 2.02 3.54 2.96 2.20 1.29 1.73 1.34 32.4 45.9 43.7 16.4 28.2 24.2 7.6 19.4 16.1
Hochschild HOC.L Buy £ 3.55 £ 4.50 2,105 1,641 0.24 0.28 0.35 0.27 0.37 0.49 na 0.08 0.10 52.2 48.6 53.2 44.6 37.4 45.1 28.8 28.1 23.1
Peter Hambro Mining POG.L Buy £ 11.15 £ 13.00 1,745 1,773 0.32 0.56 1.29 0.33 0.57 1.02 0.00 0.00 0.00 41.1 45.0 55.8 32.1 60.1 63.1 19.7 26.9 35.0

Base Metals and Minerals


Antofagasta ANTO.L Buy £ 4.75 £ 5.50 9,023 7,109 1.40 1.10 0.93 1.42 1.42 1.15 0.37 0.35 0.28 75.2 69.9 64.9 71.8 64.9 59.4 34.0 35.5 33.1
AUR Resources AUR.TSX Buy $ 20.38 $ 22.00 1,716 1,319 3.00 2.13 2.02 2.63 1.37 1.48 0.26 0.94 0.11 69.1 55.1 54.7 64.9 45.8 44.0 39.8 30.3 29.9
Breakwater Resources BWR.TSX Buy $ 1.98 $ 2.90 653 400 0.34 0.40 0.34 2.63 1.37 1.48 0.00 0.00 0.00 38.0 47.8 41.7 34.2 44.3 37.4 34.6 27.9 24.9
First Quantum Minerals FM:TSX Buy $ 66.75 $ 70.00 3,803 3,283 7.48 8.40 8.61 7.83 10.61 10.88 0.31 0.80 0.88 73.0 66.7 63.5 64.0 61.4 58.0 42.7 40.3 40.1
FNX Mining FNX.TSX Buy $ 22.70 $ 28.00 1,639 1,496 0.81 1.66 2.50 -0.14 0.71 2.35 0.00 0.00 0.00 56.1 67.3 67.3 48.3 62.0 61.6 40.4 41.0 41.0
Freeport McMoran FCX.NYSE Hold $ 57.94 $ 53.00 11,411 11,287 6.83 3.88 4.23 8.82 5.26 6.07 4.78 4.25 4.25 53.6 41.2 46.6 49.5 36.5 41.1 24.9 18.0 20.1
HudBay Minerals Inc HBM.TSX Buy $ 20.75 $ 22.70 2,239 1,357 3.49 4.63 2.95 3.16 5.02 3.01 0.00 0.00 0.00 44.5 48.6 43.4 38.9 43.9 38.2 36.7 41.8 31.1
Inmet Mining IMN.TSX Buy $ 57.76 $ 70.00 2,385 1,894 8.21 9.16 8.97 6.00 0.87 8.20 0.20 0.20 0.20 49.6 53.9 56.0 50.6 51.3 53.4 36.5 37.9 32.9
LionOre Mining LIM.TSX Buy $ 15.94 $ 19.00 2,984 2,229 1.54 2.97 2.28 1.57 2.67 2.28 0.00 0.00 0.00 60.5 62.4 59.8 47.8 54.3 50.8 32.7 38.1 35.6
Phelps Dodge PD.NYSE Te n d e r $126.66 $120.00 25,857 19,853 14.82 13.33 9.40 19.79 13.41 11.85 4.80 0.80 0.80 36.4 43.4 37.5 32.6 38.9 32.1 26.5 23.5 19.7
Polaris Minerals PLS.TSX Hold $ 9.29 $ 7.00 236 253 -0.11 -0.08 0.18 -0.05 0.00 0.28 0.00 0.00 0.00 na 38.3 58.5 na na 39.6 na -19.7 23.2

Energy Minerals
Fording Canadian Coal Trust FDG.UN.TSX Se l l $ 26.6 $ 18.5 3,349 3,514 3.99 2.72 2.28 4.28 2.81 2.35 4.13 2.72 2.28 40.5 32.6 29.0 37.6 29.2 25.3 31.4 24.7 21.3
(5)
Grand Cache Coal GCE.TSX Se l l $ 0.51 $ 0.60 22 44 -0.05 0.21 0.39 -0.42 0.52 0.47 0.00 0.00 0.00 4.6 13.1 16.6 -2.5 10.1 13.7 -2.1 8.1 12.0
Hillsborough Resources HLB.TSX Sp B uy $ 0.56 $ 1.00 28 26 0.05 0.07 0.06 0.02 0.09 0.07 0.00 0.00 0.00 16.8 21.1 21.5 9.6 13.8 14.2 13.9 12.9 11.3
(5)
Western Canadian Coal WTN.TSX Buy $ 1.90 $ 2.35 157 317 -0.06 0.22 0.24 -0.12 0.40 0.41 0.00 0.00 0.00 5.1 21.9 20.2 -3.1 14.3 13.3 -9.8 8.0 8.1
(1) Earnings per share in US$ (except AUR, FNX, HBM,GCE,PVM, HLB, IMN,TCK and PLS in CAD dollars) before exceptional items, adjusted for goodwill and before the non-cash impact of currency translation and diluted for "in the money" convertibles.
(2) Free cash per share as operating cash flow plus dividends from JVs and Associates less exploration, maintenance capex, net interest and tax paid but before expansion capex EXCEPT CVRD, which shows operating cash flow.
(3) Data adjusted for a comparable December balance.
(4) Prices as at March 12th
(5) Data adjusted for a comparable December balance. BLT not yet updated for Interim '07 results.

Source: DataStream, Company data, Canaccord Adams estimates


Global Metals and Mining |9
14 March 2007

Figure 8: Global Metals & Mining: Financial comparisons


(2) (3) (5)
Company TKR Rating DCF Valuation Mkt Cap EV PE Ratio Free cash yield % Dividend yield % EV / EBITDA ROIC % Gearing %
Year to December Code NPV Premium (1) US$ x mill 2006E 2007E 2008E 2006E 2007E 2008E 2006E 2007E 2008E 2006E 2007E 2008E 2006E 2007E 2008E 2006E 2007E 2008E

Senior Diversified
(4)
BHP Billiton BLT.L Buy £ 7.88 32% 120,952 111,994 8.1 10.3 10.1 14.0 14.6 15.8 2.4 2.1 2.1 5.2 5.5 4.8 29.7 27.2 26.1 5.9 (25.1) (57.5)
CVRD RIO.NYSE Buy $ - na 86,390 85,949 UR 8.2 8.1 UR 6.6 6.5 1.9 1.7 1.8 UR UR UR UR UR UR UR 29.8 14.2
Rio Tinto RIO.L Hold £ 22.80 19% 68,569 67,004 8.4 10.3 12.0 12.4 12.1 11.5 1.7 1.7 1.9 5.4 5.6 6.0 30.7 24.8 19.7 11.5 (6.5) (19.3)
Teck Cominco TEKB.TSX Buy $ 60.42 33% 14,938 10,394 7.6 7.1 11.3 11.3 12.5 8.8 1.6 2.5 2.5 4.1 3.1 4.4 30.8 24.6 13.3 (110.6) (139.1) (179.7)

Precious Metals and Minerals

AngloGold Ashanti AU.NYSE Hold $ 26.08 66% 11,792 12,814 54.2 16.5 21.4 7.5 6.8 5.1 2.7 4.0 3.1 14.0 7.7 8.8 3.6 9.9 7.5 25.3 23.5 24.6
Hochschild HOC.L Buy £ 3.55 0% 2,105 1,641 na 25.2 19.7 na 5.3 7.1 na na 1.5 11.0 11.4 6.6 62.6 54.3 67.6 (233.2) (209.6) (147.4)
Peter Hambro Mining POG.L Buy £ 13.34 -16% 1,745 1,773 52.7 39.3 16.7 1.9 2.6 4.8 0.0 0.0 0.0 25.6 23.8 10.3 9.3 14.0 28.4 5.8 7.6 (5.2)

Base Metals and Minerals


Antofagasta ANTO.L Buy £ 5.74 -17% 9,023 7,109 6.3 8.4 9.8 16.1 15.2 12.6 4.2 3.7 3.1 3.5 4.7 5.0 73.6 45.9 40.4 (32.2) (60.4) (89.0)
AUR Resources AUR.TSX Buy $ 22.71 -10% 1,716 1,319 5.8 8.2 8.6 10.8 6.7 7.3 4.6 0.5 0.4 4.8 4.2 3.9 21.6 16.6 9.9 (87.7) (108.5) (132.7)
Breakwater Resources BWR.TSX Buy $ 2.12 -7% 653 400 5.4 4.6 5.4 5.3 12.7 13.1 0.0 0.0 0.0 8.0 3.6 3.6 40.3 22.8 10.6 (105.3) (201.2) (260.9)
First Quantum Minerals FM:TSX Buy $ 64.01 4% 3,803 3,283 7.7 6.8 6.6 7.2 8.1 8.5 0.3 0.6 0.7 4.0 3.5 2.8 62.9 47.2 46.3 (6.4) (52.7) (139.9)
FNX Mining FNX.TSX Buy $ 21.09 8% 1,639 1,496 27.9 13.7 9.1 -0.7 3.1 10.4 0.0 0.0 0.0 15.0 7.6 4.5 9.5 16.2 19.1 (22.5) (27.8) (56.4)
Freeport McMoran FCX.NYSE Hold $ 60.53 -4% 11,411 11,287 8.5 14.9 13.7 15.8 9.1 10.5 8.6 7.3 7.3 3.7 6.7 6.0 38.9 21.0 22.1 (9.4) (4.8) (7.3)
HudBay Minerals Inc HBM.TSX Buy $ 17.98 15% 2,239 1,357 6.0 4.5 7.0 14.5 24.2 14.5 0.0 0.0 0.0 4.3 2.3 2.3 85.2 111.9 74.7 (73.1) (209.0) (291.9)
Inmet Mining IMN.TSX Buy $ 53.36 8% 2,385 1,894 7.0 6.3 6.4 9.6 1.5 14.2 0.3 0.3 0.3 4.8 3.6 2.6 40.2 27.8 19.9 (112.0) (61.6) (104.6)
LionOre Mining LIM.TSX Buy $ 22.15 -38% 2,984 2,229 7.4 4.6 6.0 11.9 16.8 14.3 0.0 0.0 0.0 4.3 2.2 2.3 50.0 47.9 23.6 (19.9) (84.8) (136.0)
Phelps Dodge PD.NYSE Te n d e r $ 91.52 38% 25,857 19,853 7.5 9.5 13.5 16.5 10.6 9.4 4.0 0.6 0.6 4.3 4.0 4.9 77.1 52.1 36.4 (117.4) (156.5) (226.6)
Polaris Minerals PLS.TSX Hold $ 10.49 -11.4% 236 253 na na 51 0.0 0.0 3.0 0.0 0.0 0.0 (50) 73 20 (7.5) (2.4) 5.5 (17.5) 20.1 10.2

Energy Minerals

Fording Canadian Coal Trust FDG.UN.TSX Se l l $ 23.5 13% 3,349 3,514 6.7 9.8 11.7 17.8 10.5 8.8 17.2 10.2 8.6 4.9 7.8 9.0 90.8 61.1 50.6 32.5 34.5 34.4
(5)
Grand Cache Coal GCE.TSX Se l l $ 0.75 -32% 22 44 na 2.5 1.3 -44.8 101.8 92.5 0.0 0.0 0.0 12.6 3.0 1.0 (3.9) 13.3 23.3 22.3 22.8 0.9
Hillsborough Resources HLB.TSX Sp B uy $ 1.00 -44% 28 26 12.1 8.5 10.2 4.8 16.8 11.7 0.0 0.0 0.0 7.2 4.9 4.5 8.7 10.3 8.8 5.0 (5.9) (18.6)
(5)
Western Canadian Coal WTN.TSX Buy $ 2.47 -23% 157 317 na 8.8 7.9 0 -4.1 24.5 25.3 0.0 0.0 0.0 76.6 5.5 4.8 (5.8) 5.9 6.6 52.3 47.4 38.6
(1) Percentage of current price to NPV. Note LIM and AUR share price and target in C$.
(2) Enterprise value adjusted for book value of minorities.
(3) Adjusted net income divided by equity plus long term debt.
(4) Data adjusted for a comparable December balance. BLT not yet updated for Interim '07 results.
(5) Net debt divided by net debt plus equity

Source: DataStream, Company data, Canaccord Adams estimates


Global Metals and Mining | 10
14 March 2007

Figure 9: Share price performance monitor

CANACCORD ADAMS’ AIM METALS AND MINING INDEX


Weekly Changes Monthly Changes One year relative performance
-50% -25% 0% 25% 50% -50% -25% 0% 25% 50%
2.50
M urch Ut d. M urch Utd.
Oxus Albidon
Albidon Afr.Plat
Ridge Anglo 2.00
M edoro Lionore
Highland Herencia
M aghreb Front ier
St ratex Bzl. Diam.
Bzl. Diam. E.Nickel 1.50
E.Nickel M edoro

Ormonde Gladst one


Kryso St hnEra 1.00
Frontier Elkedra
M inco Caledon
Eurasia Persian
Crtl. Af r. Gold Churchill
Namibian M incorp 0.50
St h China Eurogold 13-M ar 13-M ay 13-Jul 13-Sep 13-No v 13-Jan
Sunrise Falkland
Afr.Eagle Palmaris CA A M Index FTSE M ining

S&P/TSX METALS AND MINING INDEX


Weekly Changes Monthly Changes One year relative performance
-50% -25% 0% 25% 50% -50% -25% 0% 25% 50%
1.30
FNX Ivanho e
Ivanho e Crystallex
A lgo ma Gdn. Star
1.20
Lio no re Sho re Go ld
Gdn. Star FNX 1.10
N.Orio n Tenke
S.Western Inmet
Tenke Lio no re 1.00
Gammo n Lk. Gammo n Lk.
Sherritt F.Quantum 0.90
TSX M INING TSX M INING
Hudbay No vago ld
Inmet B arrick 0.80
B arrick Go ldco rp
A gnico Ipsco
Iamgo ld 0.70
A lamo s
A ber No velis 2-Feb 2-Apr 2-Jun 2-Aug 2-Oct 2-Dec 2-Feb
Iamgo ld N.Orio n
Go ldco rp Labrado r S&P TSX M ining FTSE M ining
Centerra Centerra
M eridian A lamo s

Source: Canaccord Adams, Bloomberg. Past performance does not predict future results
Global Metals and Mining | 11
14 March 2007

Figure 10: European mining companies – 2007E revenue breakdown and share price performance
BHP BILLITON RIO TINTO ANGLOGOLD ASHANTI HOCHSCHILD MINING
2007E Sales Breakdown 2007E Sales Breakdown 2007E Sales Breakdown 2007E Sales Breakdown

Nam USA Tanz


Steel Alum Alum South
Fe ore 6% Moris San Filipe Arcata
2% 7% Africa San Jose
inputs 13% B Metals 17% 2% 0%
31% 17% 22%
26% Mali 40%
23% Pall'a Selene
9%
4% 11%
Copper Guin
S'less
Diam 24% 5%
inputs
Petrol. 3% Ares
11% En Coal Ind min Arg
16% 44%
8% 10% Diam. Ghana Brazil Aust 4%
Energy
4% 14% 6% 7%
14%

Years ended June 30th 2006 E 2007 E 2008 E Years ended D ecem ber 31st 2006 E 2007 E 2008 E Years ended D ecem ber 31s t 2006 E 2007 E 2008 E Years ended D ecem ber 31st 2006 E 2007 E 2008 E
Sales $ USM 39,099 43,843 46,459 Sales $ USM 25,440 27,089 25,300 Sales $ USM 3,087 3,687 3,427 Sales $ USM 254 302 461

EB ITD A $ USM 16,706 20,545 21,430 EB IT D A $ USM 12,524 12,751 11,167 EB IT D A $ USM 999 1,694 1,498 EB IT D A $ USM 133 147 245

N et pro fit adj. $ USM 10,154 12,161 12,251 N et pro fit adj. $ USM 7,338 6,784 5,696 N et pro fit adj. $ USM 235 717 551 N et pro fit adj. $ USM 73 85 107

F ree cash (1) $ US/s h 3.54 2.96 2.20 F ree c ash (1) $ US/sh 0.27 0.37 0.49
F ree cash (1) $ US/s h 1.46 2.91 3.12 F ree cash (1) $ US/sh 5.84 6.44 6.05

Share Price Performance Share Price Performance Share Price Performance Share Price Performance
BHP Billiton Lt d Rio Tint o Plc AngloGold Ashant i Lt d Hochschild M ining
1.5 35.00 1.5 65.00 1.5 5.00
12.00
1.25
11.00 4.00
1.25 55.00
30.00 1.25
10.00 1
3.00
9.00 1 45.00 0.75
25.00 1
8.00 2.00
0.5
7.00 0.75 35.00 1.00
20.00 0.75 0.25
6.00

5.00 0.5 25.00 0 -

Price (GBP) Price Relative to FTSE All Share Index 15.00 0.5 Price (US$) Price Relat ive t o S&P 500 Comp. Index Price
Price (GBP) Price Relat ive t o FTSE All Share Index

1.) Operating cash flow before investment and financing.


Past performance does not predict future results
Source: Datastream, Company data, Canaccord Adams estimates
Global Metals and Mining | 12
14 March 2007

Figure 11: European mining companies – 2007E revenue breakdown and share price performance
PETER HAMBRO MINING ANTOFAGASTA
2007E Sales Breakdown 2007E Sales Breakdown

Omachak
JV Transport Water Moly . Gold
18% 4% 2% 8% 1%

Pokrov skiy
Rudnik
Copper
82%
85%

Years ended D ecem ber 31st 2006 E 2007 E 2008 E Years ended D ec em ber 31s t 2006 E 2007 E 2008 E
Sales $ USM 133 168 299 Sales $ USM 4,032 3,071 2,771
EB IT D A $ USM 55 75 167 EB IT D A $ USM 3,016 2,124 1,773
N et pro fit adj. $ USM 26 45 105 N et pro fit adj. $ USM 1,363 1,078 904
F ree cash (1) $ US/sh 0.33 0.57 1.02 F ree cash (1) $ US/s h 1.41 1.40 1.14

Share Price Performance Share Price Performance


Peter Hambro M ining Antof agast a Plc
18.00 2.00 8.00 2

16.00 7.00 1.75


1.75

14.00 6.00 1.5


1.50
12.00
5.00 1.25
1.25
10.00
4.00 1
1.00
8.00
0.75 3.00 0.75
6.00
2.00 0.5
4.00 0.50
Price Price Relative to FTSE All Share. Index Price (GBP) Price Relative to FTSE All Share Index

1.) Operating cash flow before investment and financing.


Past performance does not predict future results
Source: Datastream, Company data, Canaccord Adams estimates
Global Metals and Mining | 13
14 March 2007

Figure 12: Americas mining companies – 2006E-2008E revenue breakdown and share price performance
CVRD TECK COMINCO AUR RESOURCES BREAKWATER RESOURCES
Earnings Summary Earnings Summary Earnings Summary Earnings Summary
Years ended D ec em ber 31s t 2006 E 2007 E 2008 E Years ended D ecem ber 31st 2006 E 2007 E 2008 E Years ended D ec em ber 31s t 2006 E 2007 E 2008 E Years ended D ecem ber 31s t 2006 E 2007 E 2008 E
Sales $ USM 17,837 30,249 30,204 Sales $ USM 6,539 7,183 5,479 Sales $ USM 738 690 662 Sales $ USM 657 657 629
EB IT D A $ USM 9,026 16,166 16,119 EB ITD A $ USM 3,818 3,943 2,508 EB IT D A $ USM 511 380 362 EB ITD A $ USM 172 314 262

N et pro fit adj. $ USM 6,376 7,634 8,028 N et pro fit adj. $ USM 2,395 2,445 1,551 N et pro fit adj. $ USM 157 183 157
N et pro fit adj. $ USM 294 209 198
F ree cas h (1) $ US/s h 2.26 3.20 3.26 F ree c as h (1) $ US/s h 0.17 0.46 0.47
Free cash (1) $ US/sh 9.97 10.04 7.04 F ree c as h (1) $ US/s h 2.63 1.37 1.48

Share Price Performance Share Price Performance Share Price Performance Share Price Performance
Companhia Vale do Rio Doce Aur Resources Breakwater Resources
Teck Cominco
35.00 2.00 100.00 1.40 30.00 5.00

1.20 4.50
1.75 25.00 4.00
30.00 80.00
1.00
1.50 20.00 3.50
3.00
25.00 60.00
0.80
15.00
1.25 2.50
0.60 2.00
20.00 40.00 10.00
1.00
0.40 1.50 1.00
15.00 20.00 5.00
0.75
0.20
- 0.50 -
10.00 0.50 - - Price S&P 500 Comp
Price Price Relat ive to S&P 500 Comp. Index
Price (US$) Price Relative to S&P 500 Comp. Index Price Price Relative t o S&P 500 Comp. Index

FIRST QUANTUM MINERALS FNX MINING FREEPORT McMORAN HUDBAY MINERALS


Earnings Summary Earnings Summary Earnings Summary Earnings Summary
Years ended D ec em ber 31s t 2006 E 2007 E 2008 E Years ended D ecem ber 31st 2006 E 2007 E 2008 E Years ended D ec em ber 31s t 2006 A 2007 E 2008 E Years ended D ec em ber 31st 2006 E 2007 E 2008 E
Sales $ USM 1,420 1,420 1,463 Sales $ USM 170 342 515 Sales $ USM 5,791 4,427 4,334 Sales $ CM 1,165 1,421 1,215
EB IT D A $ USM 848 947 930 EB IT D A $ USM 95 230 346 EB IT D A $ USM 3,103 1,823 2,021 EB ITD A $ CM 518 690 527
N et pro fit adj. $ USM 497 572 587 N et pro fit adj. $ USM 69 140 211 N et pro fit adj. $ USM 1,440 796 873 N et pro fit adj. $ CM 427 595 378
Free cash (1) $ US/sh 7.83 10.61 10.88 F ree c ash (1) $ US/sh -0.14 0.71 2.35 F ree c as h (1) $ US/s h 8.82 5.26 6.07 F ree c as h (1) $ C /s h 3.16 5.02 3.01

Share Price Performance Share Price Performance Share Price Performance Share Price Performance
First Quantum M inerals FNX M ining Freeport M cM oran HudBay M inerals
75.00 2.00 25.00 3.00
80.00 2.00 60.00 1.80
1.80 1.60
50.00 65.00 1.75
1.60 1.40
60.00 20.00
1.40 1.50
40.00 1.20 2.00
1.20 55.00
1.00 1.25
40.00 1.00 30.00 15.00
0.80 0.80
45.00
0.60 20.00 0.60 1.00
20.00 1.00
0.40 0.40 35.00 10.00
10.00 0.75
0.20 0.20
- -
- - 25.00 0.50
Price S&P 500 Comp Price S&P 500 Comp 5.00 -
Price (US$) Price Relat ive to S&P 500 Comp. Index
Price (C$) Price Relative t o S&P 500 Comp. Index

1.) Operating cash flow before investment and financing.


Past performance does not predict future results
Source: Datastream, Company data, Canaccord Adams estimates
Global Metals and Mining | 14
14 March 2007

Figure 13: Americas mining companies – Earnings summary and share price performance
INMET MINING LIONORE MINING PHELPS DODGE FORDING CANADIAN COAL
Earnings Summary Earnings Summary Earnings Summary Earnings Summary
Years ended D ec em ber 31s t 2006 E 2007 E 2008 E Years ended D ecem ber 31s t 2006 E 2007 E 2008 E Years ended D ec em ber 31st 2006 E 2007 E 2008 E Years ended D ec em ber 31s t 2006 E 2007 E 2008 E
Sales $ USM 1,088 1,170 1,319 Sales $ USM 1,116 1,888 1,540 Sales $ USM 13,000 11,556 9,706 Sales $ USM 1,871 1,618 1,572
EB IT D A $ USM 539 630 739 EB IT D A $ USM 675 1,177 920 EB IT D A $ USM 4,732 5,015 3,638 EB IT D A $ USM 758 528 456
N et pro fit adj. $ USM 397 443 434 N et pro fit adj. $ USM 365 719 548 N et pro fit adj. $ USM 3,446 2,712 1,913 N et pro fit adj. $ USM 587 400 335
F ree cas h (1) $ US/s h 6.00 0.87 8.20 F ree cash (1) $ US/sh 1.57 2.67 2.28 Free cash (1) $ US/s h 19.79 13.41 11.85 F ree c as h (1) $ US/s h 4.28 2.81 2.35

Share Price Performance Share Price Performance Share Price Performance Share Price Performance
Inmet M ining LionOre M ining Phelps Dodge Fording Canadian Coal
100.00 3.00 2.50 160.00 2.50 100.00 1.50
20.00
2.25 140.00 2.25
1.25
2.50
75.00 2.00 2.00 75.00
15.00 120.00
1.00
2.00 1.75 1.75
100.00
50.00 1.50 50.00 0.75
10.00 1.50
1.50 80.00
1.25 1.25 0.50
25.00 60.00 25.00
1.00 1.00 1.00
5.00 0.25
40.00 0.75
0.75
- 0.50 - -
- 0.50 20.00 0.50
Price Price Relative to S&P 500 Comp. Index Price Price Relative to S&P 500 Comp. Index Price(US$) Price Relative to S&P 500 Comp. Index Price Price Relative t o S&P 500 Comp. Index

GRANDE CACHE COAL HILLSBOROUGH RESOURCES WESTERN CANADIAN COAL POLARIS MINERALS
Earnings Summary Earnings Summary Earnings Summary Earnings Summary
Years ended M arch 31st 2006 E 2007 E 2008 E Years ended D ecem ber 31st 2006 E 2007 E 2008 E
Years ended M arch 31st 2006 E 2007 E 2008 E Years ended D ecem ber 31st 2006 E 2007 E 2008 E Sales $ CM 60 161 278 Sales $ USM 0 11 24
Sales $ CM 90 107 147 Sales $ CM 24 30 28 EB ITD A $ CM 3 25 59 EB IT D A $ USM -4 4 14
EB IT D A $ CM -27 7 23 EB IT D A $ CM 4 6 6 N et pro fit adj. $ CM 1 5 22 N et pro fit adj. $ USM -3 -2 6

N et pro fit adj. $ CM -32 0 15 N et pro fit adj. $ CM 3 4 3 Free cash (1) $ C /sh 0.17 -0.12 0.40 F ree cash (1) $ US/sh 0 0 0

F ree cash (1) $ C /sh -0.96 -0.29 0.54 Free cash (1) $ C /sh 0.02 0.09 0.07

Share Price Performance Share Price Performance Share Price Performance Share Price Performance
Grande Cache Coal Hillsborough Resources Western Canadian Coal Polaris M inerals
20.00 2.00
5.00 2.00 10.00 2.00 8.00

15.00 1.50 4.00 8.00


1.50 1.50 6.00

6.00
3.00
10.00 1.00 1.00 4.00
1.00
4.00
2.00
5.00 0.50 0.50 2.00
0.50 2.00
1.00

- - - - -
- -
Price (C$) Price Relat ive t o S&P 500 Comp. Index Price (C$) Price Relative to S&P 500 Comp. Index Price
Price (C$) Price Relative to S&P 500 Comp. Index

1.) Operating cash flow before investment and financing.


Past performance does not predict future results
Source: Datastream, Company data, Canaccord Adams estimates
Global Metals and Mining | 15
14 March 2007

Figure 14: Global Metals & Mining: Commodity price history and assumptions for CY2006 – 2009E

Average for Quarter Calendar Year 1Q06 2Q06 3Q06 4Q06 1Q07E 2Q07E 3Q07E 4Q07E 1Q08E 2Q08E 3Q08E 4Q08E 1Q09E 2Q09E 3Q09E 4Q09E Long term 2006 2007E 2008E 2009E

CURRENCY
A$ VALUE US$ 0.74 0.75 0.76 0.77 0.80 0.80 0.80 0.80 0.78 0.78 0.78 0.78 0.75 0.75 0.75 0.75 0.75 0.75 0.80 0.78 0.75
C$ VALUE US$ 0.87 0.89 0.89 0.88 0.85 0.85 0.85 0.85 0.85 0.85 0.85 0.85 0.85 0.85 0.85 0.85 0.85 0.88 0.85 0.85 0.85
Euro VALUE US$ 1.20 1.26 1.28 1.33 1.33 1.30 1.30 1.25 1.25 1.25 1.25 1.25 1.20 1.20 1.20 1.20 1.20 1.27 1.30 1.25 1.20
Rand VALUE US$ 6.14 6.47 7.15 7.31 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 6.77 7.00 7.00 7.00

REFINED METAL
Copper (1) US¢/lb 225.0 329.7 348.4 321.5 255.0 252.5 247.5 245.0 235.0 230.0 210.0 200.0 190.0 180.0 170.0 160.0 125.0 306.2 250.0 218.8 175.0
Lead (1) US¢/lb 56.2 49.7 54.1 73.3 77.5 75.0 70.0 65.0 60.0 55.0 50.0 50.0 50.0 45.0 45.0 45.0 45.0 58.3 71.9 53.8 46.3
Zinc (1) US¢/lb 102.0 148.7 152.0 190.0 200.0 200.0 180.0 170.0 150.0 140.0 130.0 125.0 120.0 100.0 80.0 75.0 62.0 148.2 187.5 136.3 93.8
Nickel (1) US¢/lb 674.0 908.0 1310.0 1491.0 1425.0 1400.0 1350.0 1300.0 1250.0 1200.0 1150.0 1100.0 1000.0 950.0 900.0 850.0 525.0 1095.8 1368.8 1175.0 925.0
Aluminium (1) US¢/lb 110.0 120.4 112.7 123.5 125.0 120.0 115.0 110.0 105.0 105.0 100.0 100.0 95.0 90.0 85.0 82.0 80.0 116.7 117.5 102.5 88.0
Tin (1) US¢/lb 385.0 384.5 389.5 466.6 500.0 490.0 480.0 460.0 450.0 350.0 350.0 300.0 300.0 300.0 300.0 300.0 300.0 406.4 482.5 362.5 300.0
Gold Spot US$/oz 626.3 628.3 621.3 614.4 625.0 650.0 650.0 675.0 650.0 625.0 625.0 600.0 575.0 575.0 575.0 575.0 550.0 622.6 650.0 625.0 575.0
Silver Spot US$/oz 9.70 12.30 11.72 12.60 12.75 13.00 13.00 13.25 12.00 12.00 12.00 12.00 11.00 11.00 11.00 11.00 9.5 11.6 13.0 12.0 11.0
Platinum Spot US$/oz 1037.0 1187.0 1216.0 1129.0 1150.0 1100.0 1000.0 1000.0 900.0 900.0 900.0 900.0 900.0 900.0 900.0 900.0 900.0 1142.3 1062.5 900.0 900.0
Palladium Spot US$/oz 292.9 345.6 324.0 323.0 325.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 321.4 306.3 300.0 300.0
Rhodium Spot US$/oz 3504.0 4997.2 4693.0 5058.0 5500.0 5000.0 4500.0 4500.0 4000.0 4000.0 3000.0 3000.0 2500.0 2500.0 2500.0 2500.0 2500.0 4563.1 4875.0 3500.0 2500.0
MINOR METALS
Cobalt US$/lb 13.50 15.10 16.70 20.30 20.00 20.00 20.00 20.00 15.00 15.00 15.00 15.00 12.50 12.50 12.50 12.50 10.0 16.4 20.0 15.0 12.5
Molybdenum (2) US$/lb 33.70 24.70 26.00 25.70 25.00 20.00 17.50 15.00 12.50 10.00 10.00 10.00 9.00 9.00 8.00 8.00 8.0 27.5 19.4 10.6 8.5

BENCHMARK CONCENTRATE TREATMENT CHARGES (US$/tonne;USc/lb)


Copper Treatment charge (3) US$/t 95.00 95.00 73.00 73.00 60.00 60.00 60.00 60.00 70.00 70.00 70.00 70.00 75.00 75.00 75.00 75.00 75.0 84.0 60.0 70.0 75.0
Copper Refining Charge (3) USc/lb 9.50 9.50 7.30 7.30 6.00 6.00 6.00 6.00 7.00 7.00 7.00 7.00 7.50 7.50 7.50 7.50 7.5 8.40 6.00 7.0 7.5
Zinc TC (basis US$1000/t) (3) US$/t 128.0 128.0 128.0 128.0 115.0 115.0 115.0 115.0 150.0 150.0 150.0 150.0 175.0 175.0 175.0 175.0 175.0 128.0 115.0 150.0 175.0

Source: Canaccord Adams estimates, LME, Bloomberg, Datastream


Global Metals and Mining | 16
14 March 2007

Figure 15: Global Metals & Mining: Commodity price history and assumptions for CY2006E - 2009E

Average for Quarter Calendar Year 1Q06 2Q06 3Q06E 4Q06E 1Q07E 2Q07E 3Q07E 4Q07E 1Q08E 2Q08E 3Q08E 4Q08E 1Q09E 2Q09E 3Q09E 4Q09E Long term 2006 2007E 2008E 2009E
STEEL RELATED
Hard Coking Coal (Goonyella) (4) Change -8.8% -15.8% -5.0% -5.0% 80.2
Semi-Soft Coking Coal (5) Change -31.5% 10.0% 0.0% 0.0% 59.4
Iron Ore Lump (6) Change 19.0% 9.5% 0.0% -10.0% 83.1
Iron Ore Pellets Change -3.0% 5.3% 0.0% -10.0% 86.0
Iron Ore Fines - Brockman (6) Change 19.0% 9.5% 0.0% -10.0% 58.6
Iron Ore Fines - Robe (6) Change 19.0% 9.5% 0.0% -10.0% 58.6
Iron Ore Fines - Yandi (6) Change 19.0% 9.5% 0.0% -10.0% 58.6
Manganese Ore (7) Change -24.5% -12.5% 0.0% 0.0%

Hard Coking Coal (Goonyella) (4) US$/t 125.0 114.0 114.0 114.0 114.0 96.0 96.0 96.0 96.0 91.2 91.2 91.2 91.2 86.6 86.6 86.6 80.2 116.7 100.5 92.4 87.8
Canadian Coal Coking (Fording) US$/t 125.0 107.0 107.0 107.0 107.0 93.0 93.0 93.0 93.0 88.4 88.4 88.4 88.4 83.9 83.9 83.9 77.7 111.5 96.5 89.5 85.0
Semi-Soft Coking Coal (5) US$/t 78.8 54.0 54.0 54.0 54.0 59.4 59.4 59.4 59.4 59.4 59.4 59.4 59.4 59.4 59.4 59.4 59.4 60.2 58.0 59.4 59.4
Iron Ore Pellets - Tubarao, BF US¢/dmtu 115.5 112.0 112.0 112.0 112.0 118.0 118.0 118.0 118.0 118.0 118.0 118.0 118.0 106.2 106.2 106.2 86.0 112.9 116.5 118.0 109.1
Iron Ore Lump US¢/dmtu 78.8 93.7 93.7 93.7 93.7 102.6 102.6 102.6 102.6 102.6 102.6 102.6 102.6 92.4 92.4 92.4 83.1 90.0 100.4 102.6 94.9
Iron Ore Fines - Brockman US¢/dmtu 61.7 73.5 73.5 73.5 73.5 80.4 80.4 80.4 80.4 80.4 80.4 80.4 80.4 72.4 72.4 72.4 58.6 70.5 78.7 80.4 74.4
Iron Ore Fines - Robe (6) US¢/dltu 50.0 59.5 59.5 59.5 59.5 65.1 65.1 65.1 65.1 65.1 65.1 65.1 65.1 58.6 58.6 58.6 47.5 57.1 63.7 65.1 60.3
Iron Ore Fines - Yandi (6) US¢/dmtu 58.0 69.0 69.0 69.0 69.0 75.6 75.6 75.6 75.6 75.6 75.6 75.6 75.6 68.0 68.0 68.0 55.1 66.3 74.0 75.6 69.9
Ferrochrome (7) US¢/lb 63.0 70.0 75.0 77.3 77.0 75.0 70.0 70.0 65.0 65.0 60.0 60.0 55.0 55.0 55.0 55.0 55.0 71.3 73.0 62.5 55.0
Manganese Ore (8) US$/dltu 3.99 3.01 3.01 3.01 3.01 2.64 2.64 2.64 2.64 2.64 2.64 2.64 2.64 2.64 2.64 2.64 2.64 3.26 2.73 2.64 2.64
Heavy Melt Scrap #1 (9) US$/t 233 282 272 280 275 275 275 250 250 250 250 250 250 250 250 250 250.0 267 269 250 250
Hot-Rolled Coil - Eu export (10) US$/t 403 465 549 600 600 550 550 550 550 550 500 500 500 500 500 450 450.0 504 563 525 488
Hot-Rolled Coil - US import US$/t 579 705 658 588 575 550 500 500 500 500 500 500 500 500 500 500 500.0 633 531 500 500
LV PCI coal US$/t 102.0 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 76 68 68 68

OTHER MINERALS
Alumina (11) US$/t 276 309 301 327 331 317 304 291 266 266 253 253 241 228 215 208 203 303 311 260 223
Ilmenite (11) US$/t 79 85 86 85 85 85 85 85 85 85 85 85 85 85 85 85 85 84 85 85 85
TiO2 pigment (11) US$/t 1860 1872

RBA Non-Rural Commodity Index 210.9 227.7 232.9 238.3 234.7 232.8 229.2 227.2 220.5 216.2 211.9 209.3 201.5 192.3 188.2 185.7 170.5 227.5 231.0 214.5 191.9
LME Metal Index 2645 3476 3667 3810 3513 3449 3312 3210 3045 2951 2753 2658 2519 2355 2198 2091 1,733.4 3400 3371 2852 2291

ENERGY PRICES
Oil - WTI (12) US$/bbl 63.3 70.7 71.5 60.0 62.2 64.6 66.2 67.0 65.0 65.0 65.0 65.0 55.0 55.0 55.0 55.0 58.4 66.4 65.0 65.0 55.0
Uranium (Ux Spot) US$/lb 38.4 42.9 49.2 61.9 75.0 80.0 80.0 85.0 90.0 100.0 105.0 105.0 105.0 103.0 103.0 101.0 50.0 48.1 80.0 100.0 103.0
Steaming Coal Contract (13) US$/t 53.9 52.3 52.3 52.3 52.3 52.3 52.3 52.3 52.3 52.3 52.3 52.3 52.3 52.3 52.3 52.3 52.3 52.7 52.3 52.3 52.3
Steaming Coal Contract (13) Change -3.0% 0.0% 0.0% 0.0%
Steaming Coal South African (14) US$/t 49.7 52.2 51.6 49.4 50.0 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 50.7 51.9 52.5 52.5
Steaming Coal Australian spot (15) US$/t 46.0 52.6 50.2 46.4 50.0 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 48.8 51.9 52.5 52.5
(1) Cash LME price. (9) Heavy Melt Scrap No.1, C&F Asia
(2) Bloomberg MBMOUSOX, Metal Bulletin Canned Molybodic Oxide, in w arehouse, USA (10) Hot rolled coil ex-EU mills (FOB) commercial quality.
(3) Base TC/RCs, Japanese smelters (11) Average export price from Australia. Mineral sands includes small parcel sales
(4) Japanese reference price (12) Current energy cost equivalent of oil from W PL to Japan.
(5) Hunter Valley (10% ash) semi-soft coking coal to Japan, Barlow Jonker for historical prices. (13) 6700 Kilocalorie per kilogram, Japanese reference price.
(6) Brockman ore FOB per iron unit on contract to Japan, /dltu prior to Q2'04 . (14) McCloskey Coal Richards Bay, 6,000 kcal/kg, fob
(7) MB EU charge lumpy 52% FeCr. (15) McClosky Coal, New castle, 6,700 kcal/kg, fob
(8) Groote Eylandt high grade (48% Mn) metallurgical lump. (11)

Source: Canaccord Adams estimates, LME, Bloomberg, Datastream


Global Metals and Mining | 17
14 March 2007

APPENDIX: IMPORTANT DISCLOSURES


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related to the specific recommendations or views expressed by the authoring analyst in the investment
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Distribution of Ratings: Coverage Universe IB Clients


Global Stock Ratings Rating # % %
(as of 1 March 2007) Buy 285 55.3% 44.2%
Speculative Buy 67 13.0% 73.1%
Hold 134 26.0% 29.9%
Sell 29 5.6% 13.8%
515 100.0%

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Global Metals and Mining | 18
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