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9 June 2010

Gold: Neither a Borrower nor a Lender Be

US inflation slid to its lowest level in 44 years amongst fears that Europe’s problems will spillover to
North America causing a Japanese style deflation which led to a lost decade of growth. A worsening
regional debt crisis that began in Dubai then Greece has spread globally, engulfing the global markets
causing a worrying replay of the market collapse of 2008 and 2009. The euro has fallen sharply. The
spectre of deflation has again cast a darkening shadow over the markets giving central banks yet
another excuse to inject more stimulus spending into their economies. The dramatic collapse in the euro
makes European goods more competitive and US goods less which raises the risks of a defacto
competitive devaluation reminiscent of the Thirties.

Greed and the financial sector are synonymous and Wall Street deserves no small part of the blame for
the economy’s collapse. But greedy bankers are not the whole story. A dangerous gap of mistrust and
incomprehension has opened between investors and financial markets. The 1,000 point plunge ( and
recovery) is further evidence that the world’s centre of wealth creation has become an out-of-control
casino rigged with exotic financial instruments, high frequency trading and huge profits. We believe the
“flash crash” was not your every day garden-variety pullback. Instead, it was an overdue recognition that
the game of financial musical chairs has stopped as a consequence of too much debt and leverage. To
us, the market simply went “no bid”.

Too Big to Bailout

A primary cause of concern is that the European trillion dollar rescue raises familiar problems of moral
hazard where a group of self-serving, unaccountable individuals are to be made whole as taxpayers are
asked once again to foot the costs of greed which contributed to the economic meltdown. In adding to
the burden of debt, governments have ratcheted up spending in classic Keynesian fashion to
compensate for the spending shortfall. Thus far, spending by government and households have
increasingly substituted for consumption from income with consumption from credit with dubious
results. And worse, the public debt has become a private burden.

Today the European rescue focuses on the solvency of those

who actually guarantee all those debts, a replay of the AIG
debt moment. The interconnected relationship between the
investment banks and sovereign nations were so intertwined
that just the threat of a default raised the risk that the chain
reaction would sink the global financial system. The bailout
then was really a bailout of the European banking system. And
ironically, any future trouble will require an even bigger
bailout and even the useful capital of Wall Street. Putting a
“Robin Hood” levy on the banking sector’s capital was no way
to deal with Europe’s problems, particularly when they will
eventually need that capital. Markets are saying that if we
can’t trust Lehman Brothers, Goldman, Dubai and now Greece,
why should we trust the system? And with so many frauds,
charges and deceptions found to be underlying the current
financial crisis, no wonder confidence and trust is gone. Gold is
a good thing to have.

Just a few weeks ago, the bailout was supposed to buy time
but the same lack of discipline in economic policy and fiscal
policies is evident. The world is flooded with liquidity, yet
liquidity does not equal solvency. It does not repair the
structural imbalances that got Greece and others in trouble in
the first place. Worse, the next big domino to fall is the UK
which has a budgetary deficit of almost 12 percent of GDP and
despite a new austerity plan, needs to borrow one pound for
every four it spends. The UK reported record deficits in April.
Of concern is that while Greece was small enough to be bailed
out, investors worry that ominous comparisons can be made with “Triple A” countries like the United
Kingdom or even the United States while not too big to fail, are really too big to bailout.

Greece is a Symbol of Sovereign Indebtedness

A chain is only as strong as its weakest link. The myth of the European Union was that the sixteen
member economies would eventually converge with a common currency and that the stronger
economies would drag along the weakest economies. But it soon became apparent that the inherent
structural imbalances, actually diverged as the huge current account of Germany, the area’s biggest
economy was not offset by the weaker countries such as Greece or Portugal. And now the trillion dollar
rescue package monetizes the debt of several weaker European countries as the European Central Bank
backstops their debt. The very large size of the European government bailout is indicative of the
Keynesian “solution of the day” but does nothing to make them more solvent, particularly the other
weakened Club Med members of the Eurozone. The Greek bailout simply piles more debt upon more
debt, pushing its debt to GDP ratio to 113 percent with a budgetary deficit at 13.7 percent of GDP.
Greece has become a symbol of sovereign indebtedness.

And for the most part, the rescue comes at an extraordinary high price for the European Central Bank
which is breaking its own laws from purchasing member’s toxic debts, to the pumping of huge amounts
of money, to ignoring the risk of high inflation. The introduction of the IMF is a signal that the European
Central Bank has not only lost creditability but sovereignty over its own matters.

And elsewhere, the International Monetary Fund (IMF) has calculated that in less than five years,
western governments’ public debt would have grown by 40 percent from 2007 to an average of 110
percent of GDP, making Greece’s problems pale in comparison. At the end of this year, OECD sovereign
debt will have exploded by nearly 70 percent from 38 percent of GDP in 2007. According to the Bank of
International Settlements (BIS), structural budgetary deficits are now equivalent to 10 percent of GDP,
the highest in modern history.

America’s Addiction To Debt Looks More Greek

America shares many of the same fiscal problems currently haunting Europe. America is the weakest
“Triple A” credit. After decades of living beyond its means, the US has a debt burden heavier than
several of the European weak countries. It has the highest budgetary deficit, the most debt and a
worsening current account deficit, making it reliant on financing from Asia. The world’s largest
economy’s balance sheet is getting worse every day with a national debt load at $13 trillion or a
whopping $117,975 per debt taxpayer. The Congressional Budget Office (CBO) projects that in the next
decade, US cumulative deficits will reach almost $10 trillion, and the federal debt as a percentage of
GDP will surpass that of Italy, Greece and most other nations. This year, America’s deficit will grow to 11
percent of GDP and the gross public debt will reach 97 percent of GDP next year. Debt to revenue has
more than doubled over the past three years and is now over 400 percent according to Moody’s
Investor Services Inc. Moody’s has even recently warned that America’s “Triple A” bond rating risks a
downgrade unless measures were taken to reduce the projected record budget deficits.

Add the deficits of the states like California and entitlements, the true shortfall grows even larger. After
spending a trillion to bailout Wall Street and an imploding housing sector, America needs to borrow
more to finance not only current programs, but new programs let alone the refinancing of existing debt
loads. And worse, annual interest payments on these borrowings is to exceed domestic discretionary
spending. Of course, President Obama could always increase taxes or cut spending but even the CBO has
calculated that the burden is so high that balancing the budget is impossible. In 1950, total public
spending made up 24 percent of GDP and despite Obama blaming his predecessor, total spending when
Bush left office was 35 percent. Today total spending by federal, state and local will top 44 percent this
year, adding tens of billions in red ink and i.o.u’s.

Bernanke’s Printing Press Undermines the Dollar’s Role

There is an alternative. Truth is that history suggests a third and likely option. Ben Bernanke, Fed
Chairman, once said that the Fed has a marvellous invention for fighting deflation. He said that the

“printing press” could “produce as many US dollars as it wishes, at essentially no cost.” Those dollars are
needed, since the US Treasury has been the major buyer of its own debt. We believe that the US
worsening fiscal situation and unlimited money creation increases, the likelihood of a devaluation that
would allow America to inflate their way out of their problems and pay back their loans with a currency
worth less. It is not deflation to worry about, but inflation.

And while America has become the biggest debtor of the world, the dollar is still favoured as a safe
haven currency. Because the dollar remains the world’s reserve currency, it allows Washington to
borrow cheaply and finance its gargantuan deficits. Unfortunately, the strength of the dollar is not a sign
of strong fundamentals in the American economy. The rush to the so-called safety of US government
debt is like handing an anchor to a drowning swimmer. And as Mr Bernanke said, he can always print
more – or can he? With today’s debt load, the US looks more Greek than the Europeans.

Over half of America’s outsized indebtedness is owed to others. China and other foreigners continue to
hold the bulk of US Treasuries and remain the drivers for demand for US securities. But that debt load
undermines the dollar’s role as a reserve currency. Europe’s problems forced investors to seek other
safe haven currencies. Brazil’s real is up 27 percent in the past 12 months, even the Russian rouble is up
14 percent and the Canadian dollar is up more than 15 percent. These countries possess abundant
natural resources and investors are hedging their dollar bets. From 1987, the dollar fell by 50 percent as
part of the Plaza Accord to reduce the US current account deficit, at 3.5 percent of GDP. Today, the US
runs the largest current account deficit in the world that is almost twice as big as then. Greece’s near
default is a clear warning about the clear and present dangers of unsustainable government debt.

The Shadow Banking System, A System-wide Shell Game?

Derivatives dominate trading from mortgages to stock options, to commodities, and currencies
becoming the most profitable of activities for Wall Street’s giants. Securitization allowed the big banks
to collect fees, lend more, and leverage up their balance sheets, without the need for more capital.
However, the discipline of the market was subverted by the Fed’s bailout two years ago. With
government bailouts assured, it is not surprising that the US financial system has seen explosive growth.
Even today, the housing sector remains fully reliant on government-backed guarantees of its paper
despite the financial meltdown. Government wards, Fannie and Freddie are still the principal backer of
these securities bolstered with $136 billion of Fed money but are still losing money with Freddie posting
a $10.6 billion loss in the first quarter. The European bailout itself requires the same financial alchemy
by the creation of a special purpose entity to issue debt to provide loans to the weaker countries. The
Office of the Comptroller of the Currency reported that investment banks generated a record $22.6
billion in derivative trading revenues last year. And despite the failure of Lehman Brothers and Bear
Stearns, Wall Street icons like Goldman Sachs have become bigger and remain outside the purview of
the government. Those same players have some $1.7 trillion exposure to Europe’s weak members. In a
déjà vu moment then, the Greek bailout was really another bailout of the big investment banks.

Last month, the markets were transfixed by oil spills, volcanoes and Goldman Sachs. At one time there
were reports that Goldman Sachs had helped Greece to hide its public debt through derivative
transactions. At the centre of the Security Exchange Commission’s (SEC) case against Goldman Sachs is
a collateralised debt obligation (CDO) which casts a spotlight on the exotic instruments and the “system-
wide shell game” practices that helped devastate the financial system costing taxpayers trillions while
delivering billions of profits to a select few.

The fraud charges against Goldman Sachs sheds light on the “shadow banking system”. Today, it is still
too big for the banks and too big for governments to allow to fail. The simple mechanics of pooling
various loans and selling the cash flow to yield-hungry investors has evolved into opaque instruments
like discredited credit default swaps (CDS), collateralized debt obligations (CDOs), or COCOs which has
spread epidemic-like throughout the financial world. By now, everyone knows that credit default swaps
allows investors to bet or hedge the risk that a company or country will not be able to pay its debts.
From Goldman Sachs to Greece and even the US, these so-called over-the-counter derivatives or
contracts allowed investor to “short” without having to own the underlying securities. And now,
Germany has banned speculation on European government bonds with credit-default swaps, causing a
short squeeze. However in the United States, legislators watered down their own “Volcker rule” that
would have banned banks from proprietary trading for their own account.

Not only has the shape of the market changed radically but so has its players. Today, many of the hedge
funds, including commodity-type hedge players are even bigger than the banks. In fact today only one
third of all of America’s mortgages are on the banks’ balance sheets. According to the Investment
Company Institute data, in the last fourteen months almost $400 billion moved into US bond funds and
bond mutual funds while stock funds gathered less than $12 billion during the same period. While
Obama’s financial reform was to address some of the needs of the banks, the big hedge and mutual
funds remain outside the purview of the Fed and are left untouched. Today some fourteen hedge funds
each manage $20 billion or more with industry hedge assets at $1.6 trillion. Indeed, Bear Stearns and
Lehman Brother were not even banks. To be sure, the shadow banking system needs fixing but that
means more than just the banks. It means mutual funds, it means the hedge funds, and also means
those big sovereign funds. America’s addiction to debt is a deeper problem than Goldman Sachs’
securities problem. And once the oil spill ends, the volcano settles down and the ash clouds disappear, it
is the taxpayer who will pay, not for clouded ash or Goldman’s transgressions, but for America’s
addiction to debt.

Gold Is Sound Money

We believe that gold is a beneficiary of the consequences from the massive bailouts, roller coaster
markets and over-valued currencies which have eroded trust in the fiscal and monetary credibility of the
global financial system. The history of fiat money has been hyperinflation as governments monetize
their debts and currencies collapse to a trillionth of their value. In Weimar Germany, the government
printed so many marks as the only way to pay for the war reparations causing hyperinflation and the
collapse of the economy. Venezuela and Zimbabwe today are experiencing hyperinflation. In the last
century there have been 25 episodes of hyperinflation. All were preceded by up to a decade of excess
government spending and monetization of debt such as today. One thing was clear then and now, when
government’s spend more than they bring in and monetize their debts with increased supplies of fiat
currency to fill that gap, great countries can go insolvent.

Freed from the discipline that tied currencies to gold under Bretton Woods which ended almost forty
years ago, the major economies led by the United States were able to spend, incur big deficits and
bailout their economies with unlimited printed fiat money. Since then, we have been moving from crisis
to crisis. With regularity, central banks have opened the monetary flood gates, creating ever bigger
bubbles that eventually burst. The explosion of US dollars in the wake of America’s easy money policy
has seen the monetary base skyrocketing to over $2 trillion producing another trillion dollar currency
bubble. As the European credit crisis and Wall Street’s bailout now clearly shows, unrestrained
government spending has consequences.
Almost a trillion dollars and a year and half later, Wall Street’s collapse caused a shrinking greenback
and gold reached $1000 an ounce. Because the US spends much more than they produce and owes
much more than they own, the world is awash with US dollars. Central banks became net buyers of gold
for the first time in twenty years. Today the price of gold has hit all time highs as investors seek a safer
alternative to currencies clobbered by Europe’s financial crisis. Obama’s stimulus is coming undone.
Gold has reached all-time highs in euros, swiss francs, sterling and even in dollars. Gold by default has
once again become a universal safe haven and protector of all currencies. It is both the index of currency
fears and a hedge against declining currencies. Gold is accumulated, not consumed and has acted as a
medium of exchange for over 5,000 years.

Part of gold’s allure is to be all things to all people. It is seen as a store of value when everything else is
risky. For thousands of years it was money and when America decoupled the gold standard in 1971, it
was relegated as a commodity. However, commodities have emerged as an asset class. Investment
demand has increased with hedge funds and ETFs purchasing physical gold in a diversification move
from equities and protection from a sinking dollar. Declining mine output, in particular from South
Africa is also supporting prices. And, consumption in Asia remains strong. Yet the dynamics of gold
differs too from traditional commodity markets. It is the relationship between the world’s dominant
currency, the dollar and reaction of global central banks to the various bailouts and defaults that makes
gold an attractive bet. In the last century, the dollar has lost almost 95 percent of its purchasing power,
yet gold has appreciated 13 times. Gold is money, sound money. It is not that gold has done well, rather
it is that the dollar has performed poorly in protecting wealth. Gold is the only alternative investment, it
is money.

In 2008, gold rose 5.8 percent as a hedge against the collapse of Wall Street despite US consumer prices
gaining only 0.1 percent. In 2005, gold rose 18.5 percent as a hedge against dollar volatility. This year
the dollar has jumped 11 percent and gold is also up some 11 percent as both are safe haven
beneficiaries. While $1250 may seem high today, it is in fact only half of the inflation adjusted price at
$2,200 per ounce. Between 1971 and 1980, gold rose nearly 3,000 percent as investors sought
protection from inflation and fears of hyperinflation. This time, with so little metal above ground, gold
will head higher as too much money chases too few stocks as investors seeks protection from currency
depreciation and the consequences of Obama’s unprecedented spending spree. Investors face a trifecta
of concerns: a mountain of new sovereign debt, casino-like stock markets and a flood of paper
currencies. Yet, gold is only up some 370 percent from its low some eleven years ago. We believe gold
will hit $2,000 an ounce this year but head even higher next year as investors seek shelter from
continued market uncertainty. Inflation will be tomorrow’s problem. This bull market is still a calf.


Replacing reserves is the biggest issue for the gold mining industry as many find themselves stuck on the
treadmill. While there is no shortage of small deposits in the world, there are few midsize deposits that
can justify the billion dollar price tags and time requirement needed to replace the industry’s declining
profile. For example, American Barrick’s multi-billion Cerro Casale project has a rate of return of only 5.5
percent. In addition, while most of the consolidation in the mining industry has occurred, the big
companies are left to spinning off smaller assets or to acquiring small deposits in the hopes of expanding
these deposits. Goldcorp’s acquisition of Eleonore in Quebec, is a good example of how Goldcorp has
been expanding its reserves and resources, though output is still two years away. The competition for
deposits has escalated with a Chinese state-owned company acquiring a majority stake in the 17 million
ounce Las Cristinas deposit leaving Crystallex with a third carried interest.
As gold retests its all time high, there will be more investor attention and pressure for producers to grow
their production and reserves. As such we continue to emphasize the mid-cap producers Eldorado Gold,
Agnico-Eagle, Centerra and smaller Aurizon because of their growth profile and their ability to
organically grow their production and reserves. We expect a competition for development/exploration
companies like Detour Lake, Osisko Mines, and East Asia Minerals whose deposits are expected to
garner attention from the senior producers. We believe that it is still cheaper to buy ounces on Bay
Street. And, given the positive outlook for the price of gold, we believe that the smaller exploration
companies will attract increased attention not only from the cash flush producers but also from
investors. At long last, we believe that the Street will finance well grounded exploration plays and thus
we have profiled the following number of potential “ten baggers”.

Aurizon Mines Ltd.

Aurizon is a gold producer whose assets are in the Abitibi region of northwestern Quebec. Aurizon
Mines reported a positive quarter as their Casa Berardi mine in Quebec continues to generate profits
and sufficient cash flow to develop the 100 percent owned Joanna project. Aurizon has an excellent
balance sheet and an attractive exploration/development program. We like the shares here.

East Asia Minerals Corp.

East Asia continues to expand its large MIwah gold project in Aceh province, northern Indonesia. The
high sulphidization epithermal project is a major gold discovery and has expanded to more than 10
million ounces of resource outlined so far. While, East Asia believes the main zones are open in all
directions, recent drill plans appear to be testing the westerly limits are drilling towards Moon River and
Sipopok, to the north of Miwah. East Asia has drilled about 33 holes and plans another 40 odd holes this
year with a recent $18 million financing allowing East Asia to fasttrack this program. The addition of a
third drill machine, will test the western and northern boundaries of the deposit.

It is our view that this impressive deposit is similar to the volcanic setting of the big Yanacocha system in
Peru, which is the second largest mine in the world. Yanacocha is also a large high sulphidisation gold
system with numerous clusters covering some 22,000 acres with almost 30 million ounces. East Asia was
recently granted title to the 85 percent owned Miwah deposit through an IUP, which gives East Asia
three years to complete exploration and under the new Indonesian mining law, can automatically
convert its license to a 20 year term with another 20 year renewable period. We continue to
recommend the shares as one of the most exciting exploration plays in the last five years. Buy.

Excellon Resources Inc.

Excellon has the highest grade mine in Mexico, with an average grade at 980 gram/tonne with 9 percent
lead and 10 percent zinc. Excellon reported a small profit in the first quarter on revenues of $10 million.
Excellon shipped 432,000 ounces silver, 2 million pounds of lead, and 2.2 million pounds of zinc during
the quarter. Cash costs after by product credits average $5 an ounce silver, and the company expensed
$2.2 million on exploration. Excellon released results at the La Platosa which showed an expansion of
the southerly mantos and also released initial results at the Miquel Auza program. Excellon is drilling six
northwest trending epithermal quartz, sulphide-rich Madera veins which are part of the known Fresnillo
trend which produces about 10 percent of Mexico’s silver production. Excellon has an ambitious
exploration program which could easily develop into company builders.

Meanwhile, Excellon is expanding its production beyond the 1.6 million ounces of annual production
and in our opinion could double its output. To date, Excellon has easily replaced reserves and in time is a
potential takeover target or indeed acquisitor. Excellon has $8.2 million in cash and is on track to
discover the source of the La Platosa carbonate replacement deposit system (CRD). While the Miquel
Azua mill is running at 200 tonnes per day, the mill could easily run at double that rate, which would
expand production and lower cash costs. We visited Excellon’s La Platosa mine and Miquel Auza mill last
year. We like the shares here.

Lake Shore Gold Corp.

Lake Shore is bringing three mines into production and should produce 65,000 ounces this year. The
underground mine at Timmins Ontario is part of the Bell Creek complex which was refurbished to
capacity of 1,500 tonnes per day. Thunder Creek will be brought on next year, which could double Lake
Shore’s output. Lake Shore has almost 2 million ounces of resources. Hochschild Mining Plc of Peru
currently owns 38 percent and we believe they will make a bid for the balance once its standstill expires
this November. We believe the shares should be bought here for both the takeover potential and rising
production profile.

MAG Silver Corp.

MAG Silver is an advanced high grade silver player that completed the Valdecanas scoping study at its
Juanicipo joint venture in the Zacatecas silver district in Mexico. We expect joint venture partner
Fresnillo PLC to make another bid for Mag’s 44 percent interest which abuts Fresnillo’s huge mining
complex. The $1 billion project has an IRR of 48.4 percent, 12 year mine life and could produce 14
million ounces of silver annually. MAG Silver has ten other projects in Mexico including the promising
Cinco de Mayo moly/gold prospect in northern Chihuahua. Drilling continues with four machines. MAG
Silver has a healthy balance sheet with $26 million of cash and is well positioned for the inevitable
takeover. Buy.

Rubicon Minerals Corp.

Rubicon is expanding the F2 gold discovery in the heart of the Red Lake district in northwestern Ontario.
Drilling results at the 100 percent owned Phoenix property continues to show excellent high grade as
the company delineates the north part of the system. Most intersections to date contain more than
bonanza-like 10 grams per tonne of gold and the results are part of a huge 158,000 metre drill program.
We like Rubicon here as they expand the deposit, making it an ideal takeover tidbit for a company
looking for a look-a-like Campbell Red Lake deposit.

St. Andrew Goldfields Ltd.

St. Andrew Goldfield’s is a new gold producer with an extensive land package in the Timmins mining
district in northwestern Ontario. St. Andrew has pulled off a turnaround led by Jacques Perron who has
reopened the Holloway mine and begun production from the nearby Hislop open pit. The company
should produce 65,000 ounces this year and expected to produce about 110,000 ounces next year. Now
that the royalty issue was settled in its favour, St. Andrew will brings the Holt mine into production,
which is adjacent to the Holloway mine. St Andrew finally has cash flow and now, the company has the
funds to explore one of the largest land positions in the Timmins mining district. Exploration at Smoke
Deep and Deep Thunder zones have been encouraging, which could expand the Holloway reserves and
extend mine life. Also St. Andrews has the one million ounce Aquarius project in inventory which has an
attractive upside. With a growing production profile, three development projects and almost $200
million of tax pools, St. Andrews is a well placed junior. Buy.

US Gold Corp

Rob McEwen’s US Gold continues to expand the promising El Gallo project in Sinaloa state in
northwestern Mexico. US Gold has a whopping 500,000 acres in Mexico and the El Gallo silver/gold
deposit continues to grow and is open in all direction. We recently visited El Gallo. US Gold is spending
$18 million in exploration mostly at El Gallo with a 100,000 metre drill program. US Gold plans to
complete a feasibility study next year and the deposit together with nearby Palmarito could be
processed at US Gold’s Majistral plant which is currently on care and maintenance. Preliminary bottle
and column met tests show good recoveries. Meanwhile, drilling and exploration work continues at the
company’s other gold prospects in Nevada. In our view US Gold has an excellent balance sheet and an
excellent pipeline of projects which have exceptional potential to add value. Buy

John R. Ing


Price 52 Week Range Shares Production oz (000) $/oz Per Share Earnings PE Multiple Market Market Stock
Symbol 08-Jun High Low (Mil) 2007 2008 2009 2010E Cost 2007 2008 2009 2010E 2007 2008E Cap $Mil Cap/oz Rank
Allied Nevada ANV 20.56 23.29 8.59 72.4 - 0 80 100 400 - - 0.05 0.40 - - 1,488.54 18,607 2
Agnico Eagle AEM 62.75 77.32 53.74 154.3 230 320 500 1100 310 1.05 0.51 1.75 2.15 59.8 123.0 9,682.33 30,257 5
Aurizon ARZ 5.12 5.98 3.63 156.6 158 158 160 165 430 0.04 0.20 0.15 0.20 128.0 25.6 801.79 5,075 5
Barrick Gold ABX 45.49 50.54 35.59 982.7 8000 7600 7400 7700 465 1.26 1.90 1.80 2.10 36.1 23.9 44,703.02 5,882 4

Centamin Egypt CEE 2.37 2.63 1.340 1020.7 - - 80 200 400 - - (0.01) 0.10 2,419.06 30,238 4
Centerra Gold CG 12.71 15.10 5.09 234.7 550 740 675 700 450 0.18 0.55 0.48 0.85 70.6 33.5 2,983.04 4,031 5
Eldorado Gold ELD 18.43 8.93 8.83 362.4 265 308 342 590 380 0.13 0.46 0.30 0.65 141.8 40.1 6,679.03 21,685 5
Etruscan EET 0.36 0.61 0.18 148.4 60 80 80 85 400 (0.15) 0.02 (0.03) 0.02 (2.4) 18.0 53.42 668 1

Goldcorp G 46.40 48.37 35.12 730.5 2300 2300 2300 2600 400 0.61 0.90 0.75 1.10 76.1 51.6 33,895.20 14,737 2
Iamgold Corp IMG 18.14 21.95 9.98 376.0 965 997 939 945 485 (0.14) (0.03) 0.32 0.70 (129.6) (604.7) 6,820.64 6,841 2
Kinross Gold K 18.26 25.22 17.18 658.9 1600 1800 2200 2300 450 0.29 0.40 0.70 0.85 63.0 45.7 12,031.51 6,684 2

Newmont Mine NMC 59.18 60.58 42.54 459.0 5300 5100 5300 5500 450 1.99 2.03 2.65 2.50 29.7 29.2 27,163.62 5,326 2
Northgate Minerals NGX 3.13 3.70 2.12 255.7 245 360 365 365 500 0.25 0.05 0.20 0.20 12.5 62.6 800.34 2,223 2
Yamana YRI 11.45 15.00 1.00 751.0 588 1000 939 980 400 0.45 0.75 0.44 0.80 25.4 15.3 8,598.95 8,599 1

* Cdn Dollars

Rank From 1 lowest to 5 highest Gold Price

2007 $697
2008 $950
2009 $975
2010 $1,350

John R. Ing
Company Name Trading Symbol *Exchange Disclosure code
Eldorado ELD T 1
Agnico-Eagle Mines AEM T -
Rubicon RMX T 1
MAG Silver MAG T 1
East Asia Minerals EAS V 1,8
Excellon EXN T 1,5,6,8
US Gold UXG T 1,8
Aurizon ARZ T 1
Lake Shore Gold LSG T 1
St. Andrews Gold SAS T 1
Centerra CG T 1

Analyst Disclosure
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and/or affiliated companies beneficially own more than 1% of any class of common equity of the issuers. 3=<Employee name> who is an officer or
director of Maison Placements Canada Inc. or it's affiliated companies serves as a director or advisory Board Member of the issuer. 4=In the
previous 12 months a Maison Analyst received compensation from the subject company. 5=Maison Placements Canada Inc. has managed co-
managed or participated in an offering of securities by the issuer in the past 12 months. 6=Maison Placements Canada Inc. has received
compensation for investment banking and related services from the issuer in the past 12 months. 7=Maison is making a market in an equity or
equity related security of the subject issuer. 8=The analyst has recently paid a visit to review the material operations of the issuer. 9=The analyst
has received payment or reimbursement from the issuer regarding a recent visit. T-Toronto; V-TSX Venture; NQ-NASDAQ; NY-New York Stock

Rating Structure
Analysts at Maison use two main rating structures: a performance rating and a number rating system.
Performance Rating: Out perform: The target price is more than 25% over the most recent closing price. Market Perform: The target price is more than
15% but less than 25% of the most recent closing price. Under Perform: The target price is less than 15% over the most recent closing price.
Number Rating: Our number rating system is a range from 1 to 5. (1=Strong Sell; 2=Sell; 3=Hold; 4=Buy; 5=Strong Buy) With 5 considered among the
best performers among its peers and 1 is the worst performing stock lagging its peer group. A 3 would be market perform in line with the TSX market. NR
is no rating given that the company is either in registration or we do not have an opinion.
Analyst’s Certification: As to each company covered in this report, each analyst certifies that the views expressed accurately reflect the analyst’s personal
views about the subject securities or issuers. Each analyst has not, and will not receive, directly or indirectly compensation in exchange for expressing
specific recommendations in this report.
Analyst’s Compensation: The compensation of the analyst who prepared this research report is based upon in part; the overall revenues and profitability of
Maison Placements Canada Inc. Analysts are compensated on a salary and bonus system. Some factors affecting compensation including the productivity
and quality of research, support to institutional, investment bankers, net revenues to the equity and investment banking revenue as well as compensation
levels for analysts at competing brokerage dealers.
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General Disclosures: This report is approved by Maison Placements Canada Inc. (“Maison”) which is a Canadian investment- dealer and a member of the
Toronto Stock Exchange and regulated by the Investment Industry Regulatory Organization of Canada (IIROC).
The information contained in this report has been compiled by Maison from sources believed to be reliable, but no representation or warranty, express or
implied, is made by Maison, its affiliates or any other person as to its accuracy, completeness or correctness. All estimates, opinions and other information
contained in this report constitute Maison’s judgment as of the date of this report, are subject not change without notice and are provided in good faith but
without legal responsibility or liability.
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securities mentioned herein either for their own account or the accounts of their customers. Accordingly, Maison or their affiliates may at any time have a
long or short position in any such securities, related securities or in options, futures, or other derivative instruments based thereon.
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