14 March 2007

Weekly Valuation and Key Issues

INTRODUCING…. THE URANIUM MONITOR
Damien Hackett 44.20.7050.6641 Jim Taylor 44.20.7050.6648 Nicholas Pickens 44.20.7050.6646 Scott Finlay 44.20.7050.6651 Nick Chalmers 44.20.7050.6636 Compared with other sectors in the market, the uranium sector has until recently suffered from a lack of investment choice due to the small number of participants. 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. Investors interested in the sector appear to have to come to grips with how to recognise value in a market where reliable sector multiples do not exist and where many companies do not have earnings track records. 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 comparison on a like-for-like basis of what we believe to be the key metrics investors should focus upon. With the weakness of any standardisation process, is that the details can be overlooked, our following analysis uses such common assumptions as discount rates and commodity prices we recommend contacting the relevant analyst on any stock specific choice before taking action. This week, we are introducing our Uranium Monitor. Figure 1: Exchange Traded Fund and Uranium prices

Inside:
Guide to Weekly Uranium Monitor Global Mining Financial comparisons Share price performance monitor European mining companies America’s mining companies Commodity price assumption 2 6 9 10 12 15

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

Steven Butler 1.416.869.7918 Scott Finlay 44.20.7050.6651 Toni Wallis 1.604.643.7551 Wendell Zerb 1.604.643.7485 Gary Hon 1.416.869.7376

Graeme Currie 1.604.643.7405 Gary Lampard 1.416.867.6020 Orest Wowkodaw 1.416.869.3092 Christopher Chang 1.416.869.7299 John Vinnai 1.416.869.7289

100 90 80 70 60 50 40 Jul-06 Aug-06 NU..L Sep-06 Oct-06 Nov-06 U.TO Dec-06 Jan-07 Feb-07 U3O8 spot

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.

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14 March 2007

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USERS GUIDE TO THE WEEKLY URANIUM MONITOR
Structure
The uranium monitor is split into three main sections:
1. 2. 3.

Exchange traded funds, Canaccord researched producers and explorers, and 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.

Market expectations: - Consultants; - Utilities; - Investors.

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 uranium price. UxC is suggesting prices are likely to move higher over the next few weeks but we note that holders of U.TO look to be pricing this increase in already.

Figure 2: Uranium ETF EV/lb, spot U3O8 price and two-week lagged UxC forecast
$110 $105 $100 U S$/l b $95 $90 $85 $80 $75 $70 5/2/07 Ux U3O8
Source: UxC, Datastream, Company reports

104 97 91

103

93

19/2/07 2w H (f)

5/3/07 2w L (f)

19/3/07 U.TO

Global Metals and Mining
14 March 2007
2.
ETF trading strategy…

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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 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 Market spot Canaccord forecast peak US$50/lb US$91/lb 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
14 March 2007 •

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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 longterm 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).

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14 March 2007

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Figure 4: Weekly Uranium Monitor
NA V SE NSI TI V I TY Sy m bo l E x c h a n ge UrAsia Energy SXR Uranium One UraMin Uranium Participation Corp* Nufcor Uranium* AVERAGE UUU-V SXR-T UMN-L U-T NU/-L Cu r n cy CAD CAD GBp CAD GBp Pri ce 7.15 16.21 2.59 14.76 3.50 M k t C a p D a i l y V o l Lo n g- te r m lo ca l M 3,439 2,186 556 716 115 U S$M 16.5 24.0 4.6 4.6 0.1 NA V 10% 3.69 8.09 1.53 7.26 1.83 U S $ 50/ l b P/NAV 1.94 2.00 1.69 2.03 1.91 1.92 Sp o t NA V 10% 5.53 12.87 2.54 11.67 3.31 U S $9 1/ l b P/NAV 1.29 1.26 1.02 1.26 1.06 1.18 P e a k U S $ 100 / l b NA V 10% 6.15 13.91 2.90 12.64 3.64 P/NAV 1.16 1.17 0.89 1.17 0.96 1.07 T a r ge t Pr i ce NA 19.30 2.90 NA NA Prem/ (D i sc) NA 19% 12% NA NA R a ti n g UR Spec Buy Buy NA NA Analyst JT TW JT NA NA

* 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 E x c h a n ge Aurora Energy Resources Crosshair Exploration Energy Metals Corp ForsysMetals Tournigan Gold UraMin UR Energy AVERAGE WEIGHTED AVERAGE AXU-T CXX-V EMC-T FSY-T TVC-V UMN-L URE-T Cu r n cy CAD CAD CAD CAD CAD GBp CAD Pri ce 14.88 3.40 12.54 7.78 2.98 2.59 4.27

M k t Ca p Da i l y V o l lo ca l M 966 216 974 496 336 556 315 U S$M 0.7 0.9 4.2 1.8 2.5 4.6 2.0

52 we e k l o w-h i gh 3.55-17.75 1.23-4.20 4.60-14.30 1.08-8.90 1.28-3.75 0.47-2.82 1.32-5.45

M K t Ca p U S$M 825 185 832 424 287 1,073 269

EV R e so ur ce s* U S$M 778 177 768 375 248 985 245 M l b U 3O 8 96.9 5.6 186.9 13.9 18.1 192.4 28.7

M k t Ca p/ l b U 3O 8 8.51 32.97 4.45 30.38 15.85 5.58 9.38 15.30 7.18

EV/ l b U 3O 8 8.03 31.55 4.11 26.89 13.73 5.12 8.53 13.99 6.59

T a r ge t Pr ice 21.00 4.60 15.80 7.90 3.75 2.90 5.60

Prem/ (D i sc) 41% 35% 26% 2% 26% 12% 31% R a ti n g Spec Buy Spec Buy Spec Buy Hold Spec Buy Buy Spec Buy Analyst TW TW TW TW TW JT TW

* Includes all NI 43-101 compliant resources plus relevant historical resources where deemed appropriate. NO T R A TED

Sy m bo l E x c h a n ge SENI O R PR O D U CER S Cameco Corp Denison Mines Energy Resources Australia AVERAGE WEIGHTED AVERAGE EM ER G ING PR O DU CER S/DE V ELO PER S Paladin Resources AVERAGE WEIGHTED AVERAGE E X P LO R E R S Khan Resources Strathmore Minerals Triex Minerals UEX Corp Uranium Power Corp Western Prospector AVERAGE WEIGHTED AVERAGE U R A NI U M E TF s Uranium Participation Corp Nufcor Uranium AVERAGE WEIGHTED AVERAGE U-T NU/-L CAD GBp 14.76 3.50 KRI:T STM-V TXM-V UEX-T UPC-V WNP-V CAD CAD CAD CAD CAD CAD 4.01 4.50 5.73 5.68 1.21 4.84 PDN-A AUD 8.99 CCO-T DML-T ERA-A CAD CAD AUD 44.78 13.89 24.59 Cu r n cy Pri ce

M k t Ca p Da i l y V o l lo ca l M 15,776 2,602 4,690 U S$M

52 we e k l o w-h i gh

M K t Ca p U S$M 13,483 2,224 3,677

EV R e so ur ce s* U S$M 13,799 2,191 3,671 M l b U 3O 8 961.6 52.4 567.0

M k t Ca p/ l b U 3O 8 14.02 42.44 6.49 20.98 12.26

EV/ l b U 3O 8 14.35 41.81 6.47 20.88 12.44

T a r ge t Pr ice NA NA NA

Prem/ (D i sc) NA NA NA R a ti n g NA NA NA Analyst NA NA NA

59.2 35.35-49.95 13.9 4.28-16.30 15.8 10.13-26.89

4,504

22.5

3.30-10.75

3,531

3,707

220.0

16.05 16.05 16.05

16.85 16.85 16.85

NA

NA

NA

TW

200 316 73 1,027 100 215

2.1 1.4 0.1 2.7 2.4 0.1

1.11-4.80 1.49-5.40 1.75-6.43 2.92-6.40 0.37-1.24 1.66-6.19

171 270 62 878 85 183

164 240 54 801 83 170

32 72.6 4.7 30.1 7.8 23.0

5.33 3.72 13.22 29.20 10.96 7.97 11.73 9.69

5.12 3.31 11.52 26.64 10.62 7.38 10.76 8.88

NA NA NA NA NA NA

NA NA NA NA NA NA

NA NA NA NA NA NA

TW TW TW TW TW TW

716 115

4.6 0.1

7.16-14.90 2.05-3.50

612 222

615 221

5.9 2.3

104.21 96.72 100.47 102.10

104.71 96.12 100.41 102.29

NA NA

NA NA

NA NA

TW NA

* 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
UM N NEL UPC

Average changes with weekly U3O8 price

110 U S$/l b U 3O 8 e q ui va l e nt 100 90 80 70 60 50 40 Jul-06 Aug-06 NU..L Sep-06 Oct-06 Nov-06 U.TO Dec-06 Jan-07 Feb-07 U3O8 spot

UUU STM CXX FSY U3O8 WNP EM C SM M TXM DM L ERA PDN URE LAM TVC AXU UEX SXR U NU URRE CCO -1% 0% 1% 2% 3% 4% 5%

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

Global Metals and Mining
14 March 2007

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Figure 5: Global Metals & Mining: Non-Gold Project Developers - Quantitative Comparables
R a tin g
Cu r r e n t Buy Buy Buy Buy Buy Buy Buy Buy Buy Hold Buy Spec B uy Buy GB p 258.0 290.0 46.5 282.0 C$ 7.10 1.95 8.15 GB p 107 215 78 213 228 2,921 1,069 GB p 46.5 70.0 27.5 53.0 498 C$ 4.98 4.80 3.85 6.96 652 GB p 510 625 478.5 700.0 1,376 1,024 438 462 212 2,889 939 GB p 42.0 60.0 27.5 69.5 200 102 GB p 45.0 70.0 32.0 51.0 588 786 GB p 35.5 60.0 35.5 52.5 72 56 GB p 59.0 70.0 28.8 60.0 422 283 GB p 16.8 35.0 9.3 26.8 20 20 0 139 15 73 98 352 214 37 16 56 130 C$ 1.97 2.40 0.94 2.05 865 730 157 GB p 30.3 59.0 16.9 40.6 81 77 15 GB p 57.0 90.0 34.0 69.0 369 211 158 GB p GB p C$ GB p GB p GB p GB p GB p GB p C$ GB p GB p C$ GB p Ta r ge t Lo w H igh U S$M U S$M U S$M 0.9 6.0 2.38 35.0 60.0 60.0 0.7 66.6 511.0 6.88 51.0 na 290.0 63.33x 5.04x 0.83x 0.48x 0.98x 0.59x 61.64x 0.63x 1.00x 0.72x 0.91x na 0.89x

C om pa n y

TK R

S h a re Price

5 2 w eek R a n g e

Mkt Cap

EV

1

N et C a s h

N AV /S

P/N AV

A r ico m

TIO -A IM

Ca le d o n R e so u r ce s

CD N-A IM

E a ste r n Pla tin u m

E LR -TSX

E u r o p e a n D ia m o n d s

E PD -A IM

E u r o p e a n N ick e l

E NK -A IM

G e m fie ld s

G EM -A IM

Kenm are

K M R -LSE

M wa n a A fr ica

M W A -A IM

Nik a n o r

NK R -A IM

N o r th e r n O r io n

NNO -TSX

O r ie l R e so u r ce s

O R I-A IM

Sie r r a Le o n e D ia m o n d s

SLD -A IM

U r A sia E n e r gy

U U U -TSX

U r a M in

U M N-A IM

(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
14 March 2007

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Figure 6: Global Metals & Mining: Non-Gold Project Developers - Qualitative Comparables
In teres t
100% 74% 100% 100% 76% 88% 69% 69% 75% 100% 100% 100% 100% 53% 85% 20% 75% 13% 100% 100% 90% 100% 70% 70% 30% 100% 90% 65% So u th A fr ica CA R U r a n iu m U r a n iu m N a m ib i a U r a n iu m K a z a k h sta n U r a n iu m K a z a k h sta n U r a n iu m K a z a k h sta n U r a n iu m O p e r a ti ng F e a sib i lity F e a sib i lity F e a sib i lity E va lu a tio n E va lu a tio n Si e r r a Le o n e Diam o nds Pr o d u cin g K a z a k h sta n F e r ro n i ck e l F e a sib i lity K a z a k h sta n Ch r o m ite F e a sib i lity A r ge n tin a Cu -A u -M o F e a sib i lity A r ge n tin a Cu -A u O p e r a ti ng DRC Cu -Co D e ve lo p m e n t $1,300 na $1.9b n $131 $700 $8 na $180 $120 $181 na $120 DRC Diam o nds O p e r a ti ng na Z i m b a b we Au O p e r a ti ng na Z i m b a b we Ni O p e r a ti ng na M o z a m b iq u e Ilm e n ite Co nstr u ctio n $461 Q 1/07 na na na Q 4/2009 na 2010 H 1/08 2009 Q 2/06 na Q 4/07 2008 Q 4/2008 Q 4/2010 Q 4/2009 Zam bia E m e r a ld s Co nstr u ctio n $11 Q 4/06 Tu rk e y Ni -Co F e a s/Co n st $300 Q 4/07 Le so th o Diam o nds Pr e -fe a si b ility $25 Q 1/09 $18 $66 $37 $130 $50 $15 na $450 $89 $386 $104 $113 $150 $62 na $50 D r illin g u p d a te D r illin g u p d a te Co m p le ti o n o f D F S 43-101 r e so u r ce sta te m e n t Q 1/07 Q 1/07 Q 1/07 H 2/07 H 1/07 Se e k in g p a r tn e r D e b t fin a n ci n g M ill d e -b o ttle ne ck in g Q 1/07 Q 1/07 Le so th o Diam o nds O p e r a ti ng na Q 1/06 $4 So u th A fr ica PG M s Pr e -fe a si b ility $150 2009 $45 F u ll p r o d u ctio n In itia l b u lk sa m p li ng r e sults F o r e str y p e r m it Co n str u cti o n co m p le te d Tr ia l sh i p m e n ts Sh a ft d e e p e n in g R e fu r b ish m e n t Q 1/07 2007 2007 Q 1/07 So u th A fr ica PG M s O p e r a ti ng $160 2006 $78 So u th A fr ica PG M s F e a sib i lity $100 2009 $120 So u th A fr ica PG M s Co nstr u ctio n $15 2007 $25 Sta r t-u p F e a si b ility stu d y E x p a n sio n a n n o u n ce m e n t 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 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 R u ssi a Ilm e n ite Co nstr u ctio n $70 Q 3/07 $38 Sta r t-u p 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

C om pa n y

M a in Project( s )

Loca tion

C om m odity

S ta tu s

C a pex req US $ M

1 s t prod.

E B IT D A US $ M

1

N ex t C a ta lys t

E x pected
Ju n -07 Q 3/07 Q 1/08 Q 1/Q 2 2007 Q 1/07 Q 2/07 2007

A ric o m

K im a n sk o y e

Kuranak h

Kuranak h

C a le d o n Re so urc e s

Co o k

Ea ste rn P la tin um

M a r e e sb ur g

Sp i tz k o p

Cr o co d i le R ive r

K e n ne d y 's V a le

Eu ro p e a n D ia m o n d s

Sa te lli te Pi p e

M a in Pi p e

Eu ro p e a n N ic ke l

Ca ld a g

G e m f ie ld s

M b uva -Ch ib o le le

K e n m a re

M oma

M w an a A f ric a

B in d u r a

F r e d a R e b e cca

M IB A

N ik a n o r

KOV

N o rthe rn O rio n

A lu m b r e ra

A gu a R i ca

O rie l Re so u rc e s

V o sk h o d

Sh e vch e nk o

Sie rra L e o n e D ia m o n d s

K o n o Pr o j e ct

U rA sia En e rgy

A k d a la

So u th In k a i

K h a ra ssa n

U ra M in

Tr e k k o p j e

B ak oum a

R y st K u il

(1) Average steady state EBITDA per annum Source: DataStream, Company data, Canaccord Adams estimates

Global Metals and Mining
14 March 2007

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Figure 7: Global Metals & Mining: Financial comparisons
Rating
Current
2006E 2007E 2008E 2006E 2007E 2008E 2006E 2007E 2008E 2006E 2007E 2008E
4

Company
Target US$ x mill
2006E 2007E 2008E

TKR

Share price

Mkt Cap

EV

Earnings

(1)

Free cash

(2)

Dividend

EBITDA margin %

EBIT margin %

NPAT margin %
2006E 2007E 2008E

Year to December

Code

Senior Diversified
Buy Buy Hold 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

BHP Billiton
£ 10.39 $ 35.64 £ 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

(5)

BLT.L $ 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 42.2 54.4

£ 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 UR 40.2 51.0

36.0 UR 36.7 40.5

28.4 UR 28.8 36.6

26.4 UR 25.0 34.0

26.1 UR 22.5 28.3

CVRD

RIO.NYSE

Rio Tinto

RIO.L

Teck Cominco

TEKB.TSX

Precious Metals and Minerals
Hold Buy 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

AngloGold Ashanti
$ 43.19 £ 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 45.0

AU.NYSE

$ 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 53.2 55.8

16.4 44.6 32.1

28.2 37.4 60.1

24.2 45.1 63.1

7.6 28.8 19.7

19.4 28.1 26.9

16.1 23.1 35.0

Hochschild

HOC.L

Peter Hambro Mining

POG.L

Base Metals and Minerals
Buy Buy Buy Buy Buy Hold Buy Buy Buy Te n d e r Hold $ 9.29 $ 7.00 236 253
-0.11 -0.08 0.18 -0.05 0.00

Antofagasta
£ $ 20.38 $ $ 66.75 $ 22.70 $ 57.94 $ 20.75 $ 57.76 $ 15.94 $126.66 $120.00 25,857 19,853
14.82 13.33 9.40

ANTO.L $ 22.00 $ $ 70.00 $ 28.00 $ 53.00 $ 22.70 $ 70.00 $ 19.00 2,984 2,229
1.54 2.97 2.28 1.57 2.67 2.28 0.28 19.79 13.41 11.85

4.75 1,716 653 3,803 1,639 11,411 2,239 2,385 1,894
8.21 9.16 8.97 6.00 0.87 8.20

£ 1,319 400 3,283 1,496 11,287 1,357
3.49 4.63 2.95 3.16 5.02 3.01 6.83 3.88 4.23 8.82 5.26 6.07 4.78 0.00 0.20 0.00 4.80 0.00 0.81 1.66 2.50 -0.14 0.71 2.35 0.00 7.48 8.40 8.61 7.83 10.61 10.88 0.31 0.80 0.00 4.25 0.00 0.20 0.00 0.80 0.00 0.34 0.40 0.34 2.63 1.37 1.48 0.00 0.00 3.00 2.13 2.02 2.63 1.37 1.48 0.26 0.94 0.11 0.00 0.88 0.00 4.25 0.00 0.20 0.00 0.80 0.00

5.50 2.90

9,023

7,109

1.40

1.10

0.93

1.42

1.42

1.15

0.37

0.35

0.28

75.2 69.1 38.0 73.0 56.1 53.6 44.5 49.6 60.5 36.4 na

69.9 55.1 47.8 66.7 67.3 41.2 48.6 53.9 62.4 43.4 38.3

64.9 54.7 41.7 63.5 67.3 46.6 43.4 56.0 59.8 37.5 58.5

71.8 64.9 34.2 64.0 48.3 49.5 38.9 50.6 47.8 32.6 na

64.9 45.8 44.3 61.4 62.0 36.5 43.9 51.3 54.3 38.9 na

59.4 44.0 37.4 58.0 61.6 41.1 38.2 53.4 50.8 32.1 39.6

34.0 39.8 34.6 42.7 40.4 24.9 36.7 36.5 32.7 26.5 na

35.5 30.3 27.9 40.3 41.0 18.0 41.8 37.9 38.1 23.5 -19.7

33.1 29.9 24.9 40.1 41.0 20.1 31.1 32.9 35.6 19.7 23.2

AUR Resources
1.98

AUR.TSX

Breakwater Resources

BWR.TSX

First Quantum Minerals

FM:TSX

FNX Mining

FNX.TSX

Freeport McMoran

FCX.NYSE

HudBay Minerals Inc

HBM.TSX

Inmet Mining

IMN.TSX

LionOre Mining

LIM.TSX

PD.NYSE

Phelps Dodge Polaris Minerals

PLS.TSX

Energy Minerals
Se l l Se l l Sp B uy Buy $ 1.90 $ 2.35 157 317
-0.06 0.22

Fording Canadian Coal Trust
$ $ $ 0.56 $ 1.00 28 26
0.05 0.07 0.06 0.24

FDG.UN.TSX 0.51 $ 0.60 22 44
-0.05 0.21 0.39

26.6

$

18.5

3,349

3,514

3.99

2.72

2.28

4.28 -0.42 0.02 -0.12

2.81 0.52 0.09 0.40

2.35 0.47 0.07 0.41

4.13 0.00 0.00 0.00

2.72 0.00 0.00 0.00

2.28 0.00 0.00 0.00

40.5 4.6 16.8 5.1

32.6 13.1 21.1 21.9

29.0 16.6 21.5 20.2

37.6 -2.5 9.6 -3.1

29.2 10.1 13.8 14.3

25.3 13.7 14.2 13.3

31.4 -2.1 13.9 -9.8

24.7 8.1 12.9 8.0

21.3 12.0 11.3 8.1

Grand Cache Coal

(5)

GCE.TSX

Hillsborough Resources

HLB.TSX

Western Canadian Coal

(5)

WTN.TSX

(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
14 March 2007

|9

Figure 8: Global Metals & Mining: Financial comparisons
Rating
PE Ratio
2006E 2007E 2008E 2006E 2007E 2008E 2006E 2007E 2008E 2006E 2007E 2008E 2006E 2007E 2008E

Company
Free cash yield % Dividend yield % EV / EBITDA ROIC %
NPV Premium (1) US$ x mill

TKR

DCF Valuation

Mkt Cap

EV

(2)

(3)

Gearing %

(5)

Year to December

Code

2006E 2007E 2008E

Senior Diversified
Buy Buy Hold 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

BHP Billiton
£ $ £ 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

(4)

BLT.L 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 30.7 30.8

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 UR 24.8 24.6

26.1 UR 19.7 13.3

5.9 UR 11.5

(25.1) 29.8 (6.5)

(57.5) 14.2 (19.3) (110.6) (139.1) (179.7)

RIO.NYSE

CVRD Rio Tinto

RIO.L

Teck Cominco

TEKB.TSX

Precious Metals and Minerals
Hold Buy 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

AngloGold Ashanti
$ 26.08 £ 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 23.8

AU.NYSE

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 6.6 10.3

3.6 62.6 9.3

9.9 54.3 14.0

7.5 67.6 28.4

25.3 5.8

23.5 7.6

24.6 (233.2) (209.6) (147.4) (5.2)

Hochschild

HOC.L

Peter Hambro Mining

POG.L

Base Metals and Minerals
Buy Buy Buy Buy Buy Hold Buy Buy Buy Te n d e r Hold $ 10.49 -11.4% 236 253
na na 51 0.0 0.0

Antofagasta
£ $ 22.71 $ $ 64.01 $ 21.09 $ 60.53 $ 17.98 $ 53.36 $ 22.15 $ 91.52 38% 25,857 19,853
7.5 9.5 13.5 16.5 10.6

ANTO.L -10% -7% 4% 8% -4% 15% 8% -38% 2,984 2,229
7.4 4.6 6.0 11.9 16.8 14.3 9.4 3.0

5.74 1,716 653 3,803 1,639 11,411 2,239 2,385 1,894
7.0 6.3 6.4 9.6 1.5 14.2

-17% 1,319 400 3,283 1,496 11,287 1,357
6.0 4.5 7.0 14.5 24.2 14.5 8.5 14.9 13.7 15.8 9.1 10.5 8.6 0.0 0.3 0.0 4.0 0.0 27.9 13.7 9.1 -0.7 3.1 10.4 0.0 7.7 6.8 6.6 7.2 8.1 8.5 0.3 0.6 0.0 7.3 0.0 0.3 0.0 0.6 0.0 5.4 4.6 5.4 5.3 12.7 13.1 0.0 0.0 5.8 8.2 8.6 10.8 6.7 7.3 4.6 0.5 0.4 0.0 0.7 0.0 7.3 0.0 0.3 0.0 0.6 0.0

9,023

7,109

6.3

8.4

9.8

16.1

15.2

12.6

4.2

3.7

3.1

3.5 4.8 8.0 4.0 15.0 3.7 4.3 4.8 4.3 4.3 (50)

4.7 4.2 3.6 3.5 7.6 6.7 2.3 3.6 2.2 4.0 73

5.0 3.9 3.6 2.8 4.5 6.0 2.3 2.6 2.3 4.9 20

73.6 21.6 40.3 62.9 9.5 38.9 85.2 40.2 50.0 77.1 (7.5)

45.9 16.6 22.8 47.2 16.2 21.0 111.9 27.8 47.9 52.1 (2.4)

40.4 9.9 10.6 46.3 19.1 22.1 74.7 19.9 23.6 36.4 5.5

(32.2)

(60.4)

(89.0) (87.7) (108.5) (132.7) (105.3) (201.2) (260.9) (6.4) (22.5) (9.4) (112.0) (19.9) (17.5) (52.7) (139.9) (27.8) (4.8) (56.4) (7.3) (73.1) (209.0) (291.9) (61.6) (104.6) (84.8) (136.0) (117.4) (156.5) (226.6) 20.1 10.2

AUR.TSX 2.12

AUR Resources Breakwater Resources

BWR.TSX

First Quantum Minerals

FM:TSX

FNX Mining

FNX.TSX

Freeport McMoran

FCX.NYSE

HBM.TSX

HudBay Minerals Inc Inmet Mining

IMN.TSX

LionOre Mining

LIM.TSX

Phelps Dodge

PD.NYSE

Polaris Minerals

PLS.TSX

Energy Minerals
Se l l Se l l Sp B uy Buy $ 2.47 -23% 157 317
na 8.8

Fording Canadian Coal Trust
$ $ $ 1.00 -44% 28 26
12.1 8.5 10.2 7.9 0

FDG.UN.TSX 0.75 -32% 22 44
na 2.5 1.3

23.5

13%

3,349

3,514

6.7

9.8

11.7

17.8 4.8 -4.1

10.5 -44.8 101.8 16.8 24.5

8.8 92.5 11.7 25.3

17.2 0.0 0.0 0.0

10.2 0.0 0.0 0.0

8.6 0.0 0.0 0.0

4.9 12.6 7.2 76.6

7.8 3.0 4.9 5.5

9.0 1.0 4.5 4.8

90.8 (3.9) 8.7 (5.8)

61.1 13.3 10.3 5.9

50.6 23.3 8.8 6.6

32.5 22.3 5.0 52.3

34.5 22.8 (5.9) 47.4

34.4 0.9 (18.6) 38.6

(5)

GCE.TSX

Grand Cache Coal Hillsborough Resources

HLB.TSX

Western Canadian Coal

(5)

WTN.TSX

(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
14 March 2007

| 10

Figure 9: Share price performance monitor

CANACCORD ADAMS’ AIM METALS AND MINING INDEX
Monthly Changes
-50% -25% 0% 25% 50%

Weekly Changes
2.50

One year relative performance

-50%

-25%

0%

25%

50%

2.00

M urch Ut d. Oxus Albidon Ridge M edoro Highland M aghreb St ratex Bzl. Diam. E.Nickel

M urch Utd. Albidon Afr.Plat Anglo Lionore Herencia Front ier Bzl. Diam. E.Nickel M edoro

1 .50

1 .00

0.50 1 3-M ar 1 3-M ay 1 3-Jul 1 3-Sep 1 3-No v 1 3-Jan CA A M Index FTSE M ining

Ormonde Kryso Frontier M inco Eurasia Crtl. Af r. Gold Namibian St h China Sunrise Afr.Eagle Gladst one St hnEra Elkedra Caledon Persian Churchill M incorp Eurogold Falkland Palmaris

S&P/TSX METALS AND MINING INDEX
Monthly Changes
-50% -25% 0% 25% 50%

Weekly Changes

One year relative performance
1 .30 1 .20 10 .1 1 .00 0.90 0.80 0.70
2-Feb 2-Apr 2-Jun 2-Aug S&P TSX M ining 2-Oct 2-Dec 2-Feb FTSE M ining

-50% FNX Ivanho e A lgo ma Lio no re Gdn. Star N.Orio n S.Western Tenke Gammo n Lk. Sherritt TSX M INING Hudbay Inmet B arrick A gnico A lamo s A ber Iamgo ld Go ldco rp Centerra M eridian
Ivanho e Crystallex Gdn. Star Sho re Go ld FNX Tenke Inmet Lio no re Gammo n Lk. F.Quantum TSX M INING No vago ld B arrick Go ldco rp Ipsco Iamgo ld No velis N.Orio n Labrado r Centerra A lamo s

-25%

0%

25%

50%

Source: Canaccord Adams, Bloomberg. Past performance does not predict future results

Global Metals and Mining
14 March 2007

| 11

Figure 10: European mining companies – 2007E revenue breakdown and share price performance

BHP BILLITON
2007E Sales Breakdown
Alum 17%
Mali 9%
4%

RIO TINTO
2007E Sales Breakdown
Nam 2% Africa 40%
17% Pall'a

ANGLOGOLD ASHANTI

HOCHSCHILD MINING
2007E Sales Breakdown

2007E Sales Breakdown
USA 7%
San Jose

Steel

Alum

Tanz 6% South

inputs

13%

Fe ore 31%

26%

B Metals

Moris San Filipe 0% 2%

Arcata 22% Selene 11%

23%

S'less

inputs

Diam

Copper
Guin 5% Arg

11%

Petrol.

16%

En Coal

3%

24% Ind min 10% Energy 14% 4%
14% 7% 6%

Ares 44%

8%

Diam.

Ghana Aust 4%

Brazil

Years ended June 30th Sales $ USM

2006 E 39,099 21 ,430 12,251

2007 E 2008 E 43,843 46,459

Years ended D ecem ber 31 st Sales $ USM 2006 E 2007 E 2008 E 25,440 27,089 25,300 1 2,524 7,338 5.84 6.44 6.05
F ree cash (1) $ US/s h Years ended D ecem ber 31 t s Sales $ USM EB IT D A N et pro fit adj. $ USM $ USM 999 235 3.54

2006 E 2007 E 3,087 3,687 1 ,694 71 7 2.96

2008 E 3,427 1,498 551 2.20

Years ended D ecem ber 31st Sales $ USM EB IT D A N et pro fit adj. F ree c ash (1) $ USM $ USM $ US/sh

2006 E 254 133 73 0.27

2007 E 302 147 85 0.37

2008 E 461 245 107 0.49

EB ITD A

$ USM

1 6,706

20,545

EB IT D A N et pro fit adj. F ree cash (1 ) $ US/sh $ USM 6,784 5,696

$ USM

12,751

1 67 1,1

N et pro fit adj. 3.1 2

$ USM

1 54 0,1

1 2,161

F ree cash (1 )

$ US/s h

1 .46

2.91

Share Price Performance Share Price Performance
1.5

Share Price Performance
AngloGold Ashant i Lt d

Share Price Performance
Hochschild M ining

BHP Billiton Lt d

Rio Tint o Plc 35.00 1.5
65.00

1.5 1.25

12.00 1.25

5.00 4.00

11.00

10.00 1

30.00

1.25

55.00 1

9.00

3.00

8.00 0.75

25.00

1

45.00

0.75
2.00

7.00

0.5 35.00

6.00 0.5

20.00

0.75
25.00

0.25 0 Price (US$) Price Relat ive t o S&P 500 Comp. Index

1.00 Price

5.00

Price (GBP)

Price Relative to FTSE All Share Index

15.00 Price (GBP)

0.5 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
14 March 2007

| 12

Figure 11: European mining companies – 2007E revenue breakdown and share price performance

PETER HAMBRO MINING
2007E Sales Breakdown

ANTOFAGASTA

2007E Sales Breakdown

Omachak

JV

Transport 4% 2% 8% 1%

Water Moly . Gold

18%

Pokrov skiy 82%

Rudnik

Copper 85%

Years ended D ecem ber 31st Sales $ USM 167 105 1.02
F ree cash (1 ) $ US/s h 1.41 1 .40 1.1 4 N et pro fit adj. $ USM 1 ,363 1 ,078 904 EB IT D A $ USM 3,01 6 2,1 24 1 ,773

2006 E 2007 E 2008 E 133 168 299

Years ended D ec em ber 31 t s Sales $ USM 2006 E 4,032 2007 E 2008 E 3,071 2,771

EB IT D A

$ USM

55

75

N et pro fit adj.

$ USM

26

45

F ree cash (1)

$ US/sh

0.33

0.57

Share Price Performance Share Price Performance
Antof agast a Plc
2.00 1.75 1.50 1.25 1.00 0.75

Peter Hambro M ining

18.00

8.00 7.00 6.00 5.00 4.00 3.00 2.00 Price (GBP) 1 0.75 0.5 Price Relative to FTSE All Share Index 1.25 1.5 1.75

2

16.00

14.00

12.00

10.00

8.00

6.00

4.00

Price

0.50 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
14 March 2007

| 13

Figure 12: Americas mining companies – 2006E-2008E revenue breakdown and share price performance

CVRD
Earnings Summary
2008 E 30,204

TECK COMINCO
Earnings Summary
2008 E 5,479 Years ended D ecem ber 31st Sales $ USM 2006 E 6,539 2007 E 7,183

AUR RESOURCES
Years ended D ec em ber 31s t Sales $ USM 2006 E 738 511 294 2.63 1.37 1 .48 209 198 380 362
EB ITD A N et pro fit adj. F ree c as h (1)

BREAKWATER RESOURCES
Earnings Summary
2008 E 662
Years ended D ecem ber 31s t Sales $ USM $ USM $ USM $ US/s h 2006 E 657 172 157 0.17 2007 E 657 314 183 0.46 2008 E 629 262 157 0.47

Earnings Summary
2007 E 690
1 6,119

Years ended D ec em ber 31 t s Sales $ USM

2006 E 17,837

2007 E 30,249

EB IT D A

$ USM

9,026

16,1 66

EB ITD A

$ USM

3,818

3,943

2,508

EB IT D A N et pro fit adj. F ree c as h (1) $ US/s h $ USM

$ USM

N et pro fit adj.

$ USM

6,376

7,634

8,028

N et pro fit adj. Free cash (1) $ US/sh 9.97 10.04 7.04

$ USM

2,395

2,445

1 ,551

F ree cas h (1)

$ US/s h

2.26

3.20

3.26

Share Price Performance
2.00
30.00 25.00 20.00 15.00 10.00 5.00 Price 1.50 0.50 Price Relat ive to S&P 500 Comp. Index 3.50 2.50 4.50

Share Price Performance
100.00 1.40 1.20 1.00 60.00 0.80 0.60 0.40 20.00 0.20 Price Price Relative t o S&P 500 Comp. Index 40.00 80.00 Teck Cominco
Aur Resources

Share Price Performance
5.00 4.00 3.00 2.00 1.00 -

Share Price Performance
Breakwater Resources

Companhia Vale do Rio Doce

35.00 1.75 1.50 1.25 1.00 0.75 0.50

30.00

25.00

20.00

15.00

10.00

Price

S&P 500 Comp

Price (US$)

Price Relative to S&P 500 Comp. Index

FIRST QUANTUM MINERALS
Earnings Summary
2008 E 1,463

FNX MINING
Years ended D ecem ber 31st Sales $ USM 2006 E 170 95 69 -0.14 0.71 2.35 140 211 230 346 2007 E 342 2008 E 515 EB IT D A N et pro fit adj. F ree c ash (1) $ US/sh $ USM $ USM

FREEPORT McMORAN
Earnings Summary
Years ended D ec em ber 31s t Sales $ USM EB IT D A N et pro fit adj. F ree c as h (1) $ USM $ USM $ US/s h 2006 A 2007 E 5,791 4,427 3,1 03 1 ,440 8.82 1,823 796 5.26 2008 E 4,334 2,021 873 6.07
EB ITD A

HUDBAY MINERALS
Earnings Summary
Years ended D ec em ber 31 st Sales $ CM $ CM N et pro fit adj. F ree c as h (1) $ CM $ C /s h 2006 E 2007 E 2008 E 1 65 ,1 1 ,421 1 ,215 518 427 3.16 690 595 5.02 527 378 3.01

Earnings Summary
930 587 10.88

Years ended D ec em ber 31 t s Sales $ USM

2006 E 1,420

2007 E 1,420

EB IT D A

$ USM

848

947

N et pro fit adj.

$ USM

497

572

Free cash (1)

$ US/sh

7.83

10.61

Share Price Performance
FNX M ining

Share Price Performance
2.00 1.80 1.60
50.00 40.00 30.00 20.00 10.00 Price S&P 500 Comp 60.00 1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 25.00 35.00 45.00 75.00 65.00 55.00

Share Price Performance
Freeport M cM oran 2.00 1.75 1.50 1.25 1.00 0.75 0.50 Price (US$) Price Relat ive to S&P 500 Comp. Index

Share Price Performance
HudBay M inerals 25.00 3.00

First Quantum M inerals

80.00

60.00 1.40 1.20 1.00 0.80 0.60 0.40 0.20 -

20.00 2.00 15.00 1.00 10.00

40.00

20.00

-

Price

S&P 500 Comp

5.00 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 March 2007

| 14

Figure 13: Americas mining companies – Earnings summary and share price performance

INMET MINING
Earnings Summary
Years ended D ecem ber 31 t s Sales $ USM 2006 E 2007 E 2008 E 1,11 6 1,888 1,540 675 1 77 ,1 920

LIONORE MINING
Earnings Summary
Years ended D ec em ber 31 st Sales $ USM 2006 E 2007 E 2008 E 13,000 11,556 9,706 4,732 5,015 3,638 EB IT D A $ USM

PHELPS DODGE
Years ended D ec em ber 31s t Sales $ USM EB IT D A N et pro fit adj. F ree c as h (1) $ USM $ USM $ US/s h

FORDING CANADIAN COAL
Earnings Summary
2006 E 2007 E 1,871 1,618 758 587 4.28 528 400 2.81 2008 E 1,572 456 335 2.35

Earnings Summary
739

Years ended D ec em ber 31s t Sales $ USM

2006 E 1,088

2007 E 2008 E 1 ,170 1,319

EB IT D A

$ USM

539

630

EB IT D A N et pro fit adj. $ USM 365 71 9 548

$ USM

N et pro fit adj.

$ USM

397

443

434

N et pro fit adj. Free cash (1) $ US/s h 1 9.79 13.41 1 1.85

$ USM

3,446

2,712

1 ,913

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

Share Price Performance
LionOre M ining
3.00

Share Price Performance
Phelps Dodge

Share Price Performance
2.50 2.25
140.00 120.00 100.00 80.00 60.00 40.00 20.00 Price(US$) 1.75 1.50 1.25 1.00 0.75
25.00 50.00

Share Price Performance
Fording Canadian Coal

Inmet M ining

100.00

20.00
2.25 2.00

160.00

2.50

100.00

1.50 1.25 75.00 1.00 0.75 0.50 0.25 Price Price Relative t o S&P 500 Comp. Index

75.00

2.50

15.00
2.00

2.00 1.75

50.00 1.50

10.00 1.25 5.00 0.75 Price 0.50 Price Relative to S&P 500 Comp. Index 1.00

1.50

25.00 1.00 0.50

-

Price

Price Relative to S&P 500 Comp. Index

0.50 Price Relative to S&P 500 Comp. Index

GRANDE CACHE COAL
Earnings Summary
Years ended D ecem ber 31 st Sales $ CM 2006 E 2007 E 2008 E 24 30 28
EB ITD A N et pro fit adj. Free cash (1 ) Years ended M arch 31 st Sales $ CM $ CM $ CM $ C /sh

HILLSBOROUGH RESOURCES

WESTERN CANADIAN COAL
Earnings Summary
2006 E 2007 E 2008 E 60 1 61 278 3 1 0.1 7 25 5 -0.12 59 22 0.40

POLARIS MINERALS
Earnings Summary
Years ended D ecem ber 31st Sales $ USM EB IT D A N et pro fit adj. F ree cash (1) $ USM $ USM $ US/sh 2006 E 0 -4 -3 0 2007 E 2008 E 11 24 4 -2 0 14 6 0

Earnings Summary

Years ended M arch 31st Sales $ CM 7
EB IT D A N et pro fit adj. Free cash (1) $ C /sh 0.02 0.09 0.07 $ CM 3 4 3 $ CM 4 6 6

2006 E 2007 E 2008 E 90 107 147 23 15 0.54 0

EB IT D A

$ CM

-27

N et pro fit adj.

$ CM

-32

F ree cash (1)

$ C /sh

-0.96

-0.29

Share Price Performance
2.00

Share Price Performance
Hillsborough Resources 5.00 4.00 3.00 1.00 2.00
0.50

Share Price Performance
Western Canadian Coal

Share Price Performance
Polaris M inerals
10.00 2.00

20.00

Grande Cache Coal

2.00

8.00
8.00

15.00 1.50

1.50
6.00

1.50

6.00

10.00 1.00

1.00 4.00

4.00

5.00

1.00
-

0.50

2.00 -

0.50

2.00

-

Price (C$)

Price Relative to S&P 500 Comp. Index

Price (C$) Price Relative to S&P 500 Comp. Index

Price

Price (C$)

Price Relat ive 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 March 2007

| 15

Figure 14: Global Metals & Mining: Commodity price history and assumptions for CY2006 – 2009E
1Q06 0.74 0.87 1.20 6.14 225.0 329.7 56.2 49.7 102.0 148.7 674.0 908.0 110.0 120.4 385.0 384.5 626.3 628.3 9.70 12.30 1037.0 1187.0 292.9 345.6 3504.0 4997.2 348.4 54.1 152.0 1310.0 112.7 389.5 621.3 11.72 1216.0 324.0 4693.0 321.5 73.3 190.0 1491.0 123.5 466.6 614.4 12.60 1129.0 323.0 5058.0 255.0 77.5 200.0 1425.0 125.0 500.0 625.0 12.75 1150.0 325.0 5500.0 252.5 75.0 200.0 1400.0 120.0 490.0 650.0 13.00 1100.0 300.0 5000.0 247.5 70.0 180.0 1350.0 115.0 480.0 650.0 13.00 1000.0 300.0 4500.0 245.0 65.0 170.0 1300.0 110.0 460.0 675.0 13.25 1000.0 300.0 4500.0 235.0 60.0 150.0 1250.0 105.0 450.0 650.0 12.00 900.0 300.0 4000.0 230.0 55.0 140.0 1200.0 105.0 350.0 625.0 12.00 900.0 300.0 4000.0 210.0 50.0 130.0 1150.0 100.0 350.0 625.0 12.00 900.0 300.0 3000.0 200.0 50.0 125.0 1100.0 100.0 300.0 600.0 12.00 900.0 300.0 3000.0 190.0 50.0 120.0 1000.0 95.0 300.0 575.0 11.00 900.0 300.0 2500.0 180.0 45.0 100.0 950.0 90.0 300.0 575.0 11.00 900.0 300.0 2500.0 170.0 45.0 80.0 900.0 85.0 300.0 575.0 11.00 900.0 300.0 2500.0 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 7.00 160.0 45.0 75.0 850.0 82.0 300.0 575.0 11.00 900.0 300.0 2500.0 0.75 0.89 1.26 0.76 0.89 1.28 0.77 0.88 1.33 0.80 0.85 1.33 0.80 0.85 1.30 0.80 0.85 1.30 0.80 0.85 1.25 0.78 0.85 1.25 0.78 0.85 1.25 0.78 0.85 1.25 0.78 0.85 1.25 0.75 0.85 1.20 0.75 0.85 1.20 0.75 0.85 1.20 0.75 0.85 1.20 0.75 0.85 1.20 7.00 125.0 45.0 62.0 525.0 80.0 300.0 550.0 9.5 900.0 300.0 2500.0 2Q06 3Q06 4Q06 1Q07E 2Q07E 3Q07E 4Q07E 1Q08E 2Q08E 3Q08E 4Q08E 1Q09E 2Q09E 3Q09E 4Q09E Long term

Average for Quarter Calendar Year

2006 0.75 0.88 1.27 6.77 306.2 58.3 148.2 1095.8 116.7 406.4 622.6 11.6 1142.3 321.4 4563.1

2007E 0.80 0.85 1.30 7.00 250.0 71.9 187.5 1368.8 117.5 482.5 650.0 13.0 1062.5 306.3 4875.0

2008E 0.78 0.85 1.25 7.00 218.8 53.8 136.3 1175.0 102.5 362.5 625.0 12.0 900.0 300.0 3500.0

2009E 0.75 0.85 1.20 7.00 175.0 46.3 93.8 925.0 88.0 300.0 575.0 11.0 900.0 300.0 2500.0

CURRENCY A$ VALUE C$ VALUE Euro VALUE

US$ US$ US$

Rand VALUE

US$

REFINED METAL Copper Lead Zinc Nickel Aluminium Tin Gold Silver Platinum Palladium Rhodium

(1) (1) (1) (1) (1) (1) Spot Spot Spot Spot Spot

US¢/lb US¢/lb US¢/lb US¢/lb US¢/lb US¢/lb US$/oz US$/oz US$/oz US$/oz US$/oz

MINOR METALS Cobalt Molybdenum 13.50 33.70 73.00 7.30 128.0 60.00 6.00 115.0 60.00 6.00 115.0 60.00 6.00 115.0 60.00 6.00 115.0 70.00 7.00 150.0 70.00 7.00 150.0 70.00 7.00 150.0 15.10 24.70 16.70 26.00 20.30 25.70 20.00 25.00 20.00 20.00 20.00 17.50 20.00 15.00 15.00 12.50 15.00 10.00 15.00 10.00

(2)

US$/lb US$/lb

15.00 10.00 70.00 7.00 150.0

12.50 9.00 75.00 7.50 175.0

12.50 9.00 75.00 7.50 175.0

12.50 8.00 75.00 7.50 175.0

12.50 8.00 75.00 7.50 175.0

10.0 8.0 75.0 7.5 175.0

16.4 27.5 84.0 8.40 128.0

20.0 19.4 60.0 6.00 115.0

15.0 10.6 70.0 7.0 150.0

12.5 8.5 75.0 7.5 175.0

BENCHMARK CONCENTRATE TREATMENT CHARGES (US$/tonne;USc/lb) Copper Treatment charge 95.00 95.00 73.00 (3) US$/t Copper Refining Charge 9.50 9.50 7.30 (3) USc/lb 128.0 128.0 128.0 Zinc TC (basis US$1000/t) (3) US$/t

Source: Canaccord Adams estimates, LME, Bloomberg, Datastream

Global Metals and Mining
14 March 2007

| 16

Figure 15: Global Metals & Mining: Commodity price history and assumptions for CY2006E - 2009E
1Q06 -8.8% -31.5% 19.0% -3.0% 19.0% 19.0% 19.0% -24.5% 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
116.7 111.5 60.2 112.9 90.0 70.5 57.1 66.3 71.3 3.26

Year -15.8% 10.0% 9.5% 5.3% 9.5% 9.5% 9.5% -12.5% 0.0% 0.0% 0.0% 0.0% -10.0% -10.0% -10.0% 0.0% 58.6 58.6 58.6
100.5 96.5 58.0 116.5 100.4 78.7 63.7 74.0 73.0 2.73 92.4 89.5 59.4 118.0 102.6 80.4 65.1 75.6 62.5 2.64

2Q06 -5.0% 0.0% 0.0% 0.0% -5.0% 0.0% -10.0% -10.0% 80.2 59.4 83.1 86.0

3Q06E

4Q06E 1Q07E 2Q07E

3Q07E

4Q07E 1Q08E

2Q08E

3Q08E

4Q08E

1Q09E

2Q09E

3Q09E

4Q09E

Long term
2006 2007E 2008E

2009E

Average for Quarter Calendar STEEL RELATED Hard Coking Coal (Goonyella) Semi-Soft Coking Coal Iron Ore Lump Iron Ore Pellets

(4) (5) (6)

Change Change Change Change

Iron Ore Fines - Brockman Iron Ore Fines - Robe Iron Ore Fines - Yandi Manganese Ore

(6) (6) (6) (7)

Change Change Change Change

Hard Coking Coal (Goonyella)

(4)

US$/t

87.8 85.0 59.4 109.1 94.9 74.4 60.3 69.9 55.0 2.64

Canadian Coal Coking (Fording) Semi-Soft Coking Coal Iron Ore Pellets - Tubarao, BF Iron Ore Lump Iron Ore Fines - Brockman Iron Ore Fines - Robe Iron Ore Fines - Yandi Ferrochrome Manganese Ore 233 403 579 102.0 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 282 465 705 272 549 658 280 600 588 275 600 575 275 550 550 275 550 500 250 550 500 250 550 500 250 550 500 250 500 500 250 500 500 250 500 500 250 500 500 250 500 500 67.5 250 450 500 67.5

(5)

(6) (6) (7) (8)

US$/t US$/t US¢/dmtu US¢/dmtu US¢/dmtu US¢/dltu US¢/dmtu US¢/lb US$/dltu

125.0 78.8 115.5 78.8 61.7 50.0 58.0 63.0 3.99

107.0 54.0 112.0 93.7 73.5 59.5 69.0 70.0 3.01

107.0 54.0 112.0 93.7 73.5 59.5 69.0 75.0 3.01

107.0 54.0 112.0 93.7 73.5 59.5 69.0 77.3 3.01

107.0 54.0 112.0 93.7 73.5 59.5 69.0 77.0 3.01

93.0 59.4 118.0 102.6 80.4 65.1 75.6 75.0 2.64

93.0 59.4 118.0 102.6 80.4 65.1 75.6 70.0 2.64

93.0 59.4 118.0 102.6 80.4 65.1 75.6 70.0 2.64

93.0 59.4 118.0 102.6 80.4 65.1 75.6 65.0 2.64

88.4 59.4 118.0 102.6 80.4 65.1 75.6 65.0 2.64

88.4 59.4 118.0 102.6 80.4 65.1 75.6 60.0 2.64

88.4 59.4 118.0 102.6 80.4 65.1 75.6 60.0 2.64

88.4 59.4 118.0 102.6 80.4 65.1 75.6 55.0 2.64

83.9 59.4 106.2 92.4 72.4 58.6 68.0 55.0 2.64

83.9 59.4 106.2 92.4 72.4 58.6 68.0 55.0 2.64

83.9 59.4 106.2 92.4 72.4 58.6 68.0 55.0 2.64

77.7 59.4 86.0 83.1 58.6 47.5 55.1 55.0 2.64 250.0 450.0 500.0 67.5

Heavy Melt Scrap #1 Hot-Rolled Coil - Eu export Hot-Rolled Coil - US import

(9) (10)

US$/t US$/t US$/t

267 504 633 76

269 563 531 68

250 525 500 68

250 488 500 68

LV PCI coal

US$/t

OTHER MINERALS 276 79 210.9 2645 227.7 3476 232.9 3667 238.3 3810 234.7 3513 232.8 3449 229.2 3312 227.2 3210 220.5 3045 216.2 2951 211.9 2753 209.3 2658 309 85 1860 301 86 1872 327 85 331 85 317 85 304 85 291 85 266 85 266 85 253 85 253 85 241 85 201.5 2519 228 85 192.3 2355 215 85 188.2 2198 208 85 185.7 2091 203 85 170.5 1,733.4
303 84 227.5 3400 66.4 48.1 52.7 50.7 48.8 311 85 231.0 3371 65.0 80.0 52.3 51.9 51.9 260 85 214.5 2852 65.0 100.0 52.3 52.5 52.5 223 85 191.9 2291 55.0 103.0 52.3 52.5 52.5

Alumina Ilmenite TiO2 pigment

(11) (11) (11)

US$/t US$/t US$/t

RBA Non-Rural Commodity Index LME Metal Index 64.6 80.0 52.3 0.0% 52.5 52.5 52.5 52.5 52.5 52.5 66.2 80.0 52.3 67.0 85.0 52.3 65.0 90.0 52.3

ENERGY PRICES Oil - WTI US$/bbl 63.3 70.7 71.5 60.0 62.2 (12) Uranium (Ux Spot) US$/lb 38.4 42.9 49.2 61.9 75.0 Steaming Coal Contract (13) US$/t 53.9 52.3 52.3 52.3 52.3 Steaming Coal Contract (13) Change -3.0% Steaming Coal South African (14) US$/t 49.7 52.2 51.6 49.4 50.0 Steaming Coal Australian spot (15) US$/t 46.0 52.6 50.2 46.4 50.0 (1) Cash LME price. (2) Bloomberg MBMOUSOX, Metal Bulletin Canned Molybodic Oxide, in w arehouse, USA (3) Base TC/RCs, Japanese smelters (4) Japanese reference price (5) Hunter Valley (10% ash) semi-soft coking coal to Japan, Barlow Jonker for historical prices. (6) Brockman ore FOB per iron unit on contract to Japan, /dltu prior to Q2'04 . (7) MB EU charge lumpy 52% FeCr. (8) Groote Eylandt high grade (48% Mn) metallurgical lump. (11)

65.0 65.0 65.0 55.0 55.0 55.0 55.0 58.4 100.0 105.0 105.0 105.0 103.0 103.0 101.0 50.0 52.3 52.3 52.3 52.3 52.3 52.3 52.3 52.3 0.0% 0.0% 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 (9) Heavy Melt Scrap No.1, C&F Asia (10) Hot rolled coil ex-EU mills (FOB) commercial quality. (11) Average export price from Australia. Mineral sands includes small parcel sales (12) Current energy cost equivalent of oil from W PL to Japan. (13) 6700 Kilocalorie per kilogram, Japanese reference price. (14) McCloskey Coal Richards Bay, 6,000 kcal/kg, fob (15) McClosky Coal, New castle, 6,700 kcal/kg, fob

Source: Canaccord Adams estimates, LME, Bloomberg, Datastream

Global Metals and Mining
14 March 2007

| 17

APPENDIX: IMPORTANT DISCLOSURES Analyst Certification: Each authoring analyst of Canaccord Adams whose name appears on the front page of this investment
research hereby certifies that (i) the recommendations and opinions expressed in this investment research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the investment research.

Distribution of Ratings:
Global Stock Ratings (as of 1 March 2007)
Rating Buy Speculative Buy Hold Sell

Coverage Universe # % 285 55.3% 67 13.0% 134 26.0% 29 5.6% 515 100.0%

IB Clients % 44.2% 73.1% 29.9% 13.8%

Canaccord Adams Ratings System:

BUY: The stock is expected to generate risk-adjusted returns of over 10% during the next 12 months. HOLD: The stock is expected to generate risk-adjusted returns of 0-10% during the next 12 months. SELL: The stock is expected to generate negative risk-adjusted returns during the next 12 months. “Risk-adjusted return” refers to the expected return in relation to the amount of risk associated with the designated investment or the relevant issuer.

Risk Qualifier:

SPECULATIVE: Stocks bear significantly higher risk that typically cannot be valued by normal fundamental criteria. Investments in the stock may result in material loss. Canaccord Adams is the business name used by certain subsidiaries of Canaccord Capital Inc., including Canaccord Adams Inc., Canaccord Adams Limited, and Canaccord Adams, a division of Canaccord Capital Corporation. Clients of Canaccord Adams, in the past 12 months, may have been clients of Canaccord Capital Corporation, Canaccord Capital (Europe) Limited, Canaccord Capital Corporation USA Inc., and/or Adams Harkness Financial Group Ltd. The authoring analysts who are responsible for the preparation of this investment research are employed by Canaccord Adams, a securities broker-dealer with principal offices located in Vancouver, Calgary, Toronto, Montreal (all Canada), Boston, New York, San Francisco (all US) and London (UK). In the event that this is compendium investment research (covering six or more relevant issuers), Canaccord Adams and its affiliated companies may choose to provide specific disclosures of the subject companies by reference, as well as its policies and procedures regarding the dissemination of investment research. To access this material or for more information, please send a request to Canaccord Adams Research, Attn: Disclosures, P.O. Box 10337 Pacific Centre, 2200-609 Granville Street, Vancouver, BC, Canada V7Y 1H2 or disclosures@canaccordadams.com. The authoring analysts who are responsible for the preparation of this investment research have received (or will receive) compensation based upon (among other factors) the Corporate Finance/Investment Banking revenues and general profits of Canaccord Adams. However, such authoring analysts have not received, and will not receive, compensation that is directly based upon or linked to one or more specific Corporate Finance/Investment Banking activities, or to recommendations contained in the investment research. Canaccord Adams and its affiliated companies may have a Corporate Finance/Investment Banking or other relationship with the company that is the subject of this investment research and may trade in any of the designated investments mentioned herein either for their own account or the accounts of their customers, in good faith and in the normal course of market making. Accordingly, Canaccord Adams or their affiliated companies, principals or employees (other than the authoring analyst(s) who prepared this investment research) may at any time have a long or short position in any such designated investments, Related designated investments or in options, futures or other derivative instruments based thereon. Some regulators require that a firm must establish, implement and make available a policy for managing conflicts of interest arising as a result of publication or distribution of investment research. This investment research has been prepared in accordance with Canaccord Adams’ policy on managing conflicts of interest, and information barriers or firewalls have been used where appropriate. Canaccord Adams’ policy is available upon request. The information contained in this investment research has been compiled by Canaccord Adams from sources believed to be reliable, but (with the exception of the information about Canaccord Adams) no representation or warranty, express or implied, is made by Canaccord Adams, its affiliated companies or any other person as to its fairness, accuracy, completeness or correctness. Canaccord Adams has not independently verified the facts, assumptions, and estimates contained herein. All estimates, opinions and other information contained in this investment research constitute Canaccord Adams’ judgement as of the date of this investment research, are subject to change without notice and are provided in good faith but without legal

Global Metals and Mining
14 March 2007

| 18

responsibility or liability. Canaccord Adams salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desk that reflect opinions that are contrary to the opinions expressed in this investment research. Canaccord Adams’ affiliates, proprietary trading desk, and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this investment research. This investment research is provided for information purposes only and does not constitute an offer or solicitation to buy or sell any designated investments discussed herein in any jurisdiction where such offer or solicitation would be prohibited. As a result, the designated investments discussed in this investment research may not be eligible for sale in some jurisdictions. This investment research is not, and under no circumstances should be construed as, a solicitation to act as a securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. This material is prepared for general circulation to clients and does not have regard to the investment objectives, financial situation or particular needs of any particular person. Investors should obtain advice based on their own individual circumstances before making an investment decision. To the fullest extent permitted by law, none of Canaccord Adams, its affiliated companies or any other person accepts any liability whatsoever for any direct or consequential loss arising from or relating to any use of the information contained in this investment research.

For Canadian Residents:

This investment research has been approved by Canaccord Adams, a division of Canaccord Capital Corporation, which accepts responsibility for this investment research and its dissemination in Canada. Canadian clients wishing to effect transactions in any Designated Investment discussed should do so through a qualified salesperson of Canaccord Adams, a division of Canaccord Capital Corporation in their particular jurisdiction. This investment research complies with the Financial Services Authority's Conduct of Business Sourcebook and is approved by Canaccord Adams Limited, which is authorized and regulated by the Financial Services Authority, in connection with its distribution in the United Kingdom. This material is not for distribution in the United Kingdom to private customers, as defined under the rules of the Financial Services Authority. Canaccord Adams Limited accepts responsibility for this investment research and its dissemination in the United Kingdom. The information contained in this investment research is only intended for distribution in the UK to persons who qualify as intermediate customers or market counterparties, as defined under the rules of the Financial Services Authority. If this investment research is intended for disclosure in any jurisdiction other than the United Kingdom, the US or Canada, then the relevant rules and regulatory requirements of that jurisdiction will apply. Additional information is available on request. Copyright © Canaccord Adams, a division of Canaccord Capital Corporation 2006. – Member IDA/CIPF Copyright © Canaccord Adams Limited 2007. – Member LSE, regulated and authorized by the Financial Services Authority. Copyright © Canaccord Adams Inc. 2007. – Member NASD/SIPC All rights reserved. All material presented in this document, unless specifically indicated otherwise, is under copyright to Canaccord Adams, a division of Canaccord Capital Corporation, Canaccord Adams Limited, and Canaccord Adams Inc. None of the material, nor its content, nor any copy of it, may be altered in any way, or transmitted to or distributed to any other party, without the prior express written permission of the entities listed above.

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