Vancouver July, 2015 7//20/2015 Gold Stocks Underperform Gold - PowerPoint PPT Presentation

Vancouver July, 2015 7//20/2015

Gold Stocks Underperform Gold Source: Bloomberg

Round Trip for Gold Stocks 200 150 100 54.20 50 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Bloomberg

Major Gold Producers 1. Barrick Gold 7.16 million oz. 2. Newmont Mining 5.1 million oz. 3. AngloGold Ashanti 4.1 million oz. 4. Goldcorp 2.67 million oz. 5. Kinross Gold 2.63 million oz. 6. Newcrest Mining 2.1 million oz. 7. Gold Fields 2.0 million oz. 8. Polyus Gold 1.65 million oz. 9. China National 1.4 million oz. 10. Yamana Gold 1.2 million oz. Source: Company reports 2014 est. production

World Mine Production 1800 3600 Gold, US$ Mine production, tonnes 1600 3200 1400 2800 1200 2400 1000 2000 800 1600 600 1200 400 800 200 400 0 0 Source: Thomson Reuters GFMS, LBMA, DCM Economics

Net Mine Supply 900 800 700 . 600 500 400 300 200 09-Q1 10-Q1 11-Q1 12-Q1 13-Q1 14-Q1 Source: World Gold Council tabulated by Thomson Reuters GFMS

Nevada Output Down 1978 - 2014 Source:

Gold Cash Costs $800 (US$/oz) $700 $600 $919* $500 $400 $300 $200 $100 $0 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2013 *estimate Source: Scotiabank GBM and Thompson Reuters

Costs Up, Gold Down Source: Canaccord Genuity estimates

Cash Costs Still High Source: Bloomberg

Costs Decline, But… Source:

High Cost Still High Source: GMP estimates, company news releases

Help From Oil 90 80 70 60 50.89 50 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2014 2015 Source: Bloomberg

Help From The Dollar 97.862 Source: Bloomberg

Help From Gold? 1334.47 Source: Bloomberg

No Profits 30 20 10 0 -10 -20 ‐ 26.8735 -30 -40 -50 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec31 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Bloomberg

Discoveries Fewer Source: SNL Metals & Mining

“Peak Gold”: Production to Decline Source: Goldcorp, SNL Metals & Mining

Grade Declines at Mines Source: 2013 Gold Mine Report and Deposit Rankings Report

Losses for 2013 1. Barrick Gold $10.3 billion 2. Newmont Mining $2.5 billion 3. AngloGold Ashanti $2.3 billion 4. Goldcorp $2.7 billion 5. Kinross Gold $3.0 billion 6. Newcrest $5.3 billion* 7. Gold Fields $214.4 million 8. Polyus Gold +$140 million 9. Yamana Gold $446.2 million 10. Agnico Eagle $406.5 million * Newcrest has a June 30 year end Source: Mineweb

Losses for 2014 1. Barrick Gold $2.91 billion 2. Newmont Mining +548 million 3. AngloGold Ashanti +1.67 billion 4. Goldcorp $2.4 billion 5. Kinross Gold $1.4 million 6. Newcrest $2.4 billion* 7. Gold Fields +$1.2 million 8. Polyus Gold TBA + 9. Yamana Gold $300 million 10. Agnico Eagle +$83 million * Newcrest has a June 30 year end Source: Mineweb

Write Offs… Since 2008 • Coal $19 billion • Nickel $21 billion • Steel $32 billion • Gold $45 billion Source: John Tumazos

They Keep Coming… • Barrick Several $2.8 billion • Newcrest Lihir $2.4 billion • Goldcorp Cerro Negro $2.3 billion • Coeur Several $1.0 billion • Yamana Brazil $66.8 million Source: Company Reports

2014 Reserves Down • Anglo Gold -22% • IAMGOLD -15% • Gold Fields -15% • Barrick -11% • Goldcorp -8% • Eldorado -6% • Coeur -27% Source: Brent Cook, Exploration Insights

Less Activity in 2014 $22 $22 billion divestments $44.6 $44.6 billion deals Source: EY Global Mining

Only 1 in 10,000

Exploration Financing by Juniors $1,500 175 Indexed Metals Price (May 2008=1) Amount Raised (US$ mil) $1,000 125 $500 75 $0 25 2008 2009 2010 2011 2012 2013 Source: SNL Metals & Mining

Running Out Of Money Source: Bloomberg

Getting Desperate! 57% 57% share offerings less than $1 million Source: EY Global Mining

Junior G&A High Source: Hunting Securities

Gold Moves in Long Cycles 1800 1600 1400 1200 1000 800 600 400 200 0 1800 1812 1824 1836 1848 1860 1872 1884 1896 1908 1920 1932 1944 1956 1968 1980 1992 2004 Source: Global Financial Data, US Bureau of Labor Statistics

The 1970 Bull Market – Price Corrections Source: Dundee Wealth

Round Trip for Gold Stocks 200 150 100 54.20 50 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Bloomberg

XAU/Gold Long Term 0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 Source: Thomson Reuters Datastream, LBMA, DCM Economics

Gold Stocks Undervalued Price to Book Value 10.00 8.00 6.00 4.00 2.00 0.8689 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Source: Bloomberg

Fourth Major Opportunity Source: Bloomberg

Royalty Business Model * Revenue royalties & streams Source: Franco-Nevada

Project Generators Beat The Market 350 Price Performance (Re-Based) 300 250 200 150 100 50 Source: Visual Capitalist

Change in Gold ETF’s 60 40 20 0 -20 -40 -60 -80 -100 2013 2014 2015 Source: Bloomberg, Dundee Economics

Chinese Gold Demand 80 70 Shanghai Gold Deliveries (tonnes weekly totals) 60 50 12-week MA 40 30 20 10 0 09 10 11 12 13 14 15 Date: July 3, 2015 Source: Shanghai Gold Exchange, Sharelynx Gold, DCM Economics

India Gold Demand 175 INDIA Gold Imports (monthly – tonnes) 150 125 100 12-month MA 75 50 25 0 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Last Month: November 2014 Source: Thomson Reuters Datastream, DCM Economics

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