australian gold miners - macquarie.com.au€¦ · macquarie wealth management australian gold...

Please refer to page 21 for important disclosures and analyst certification, or on our website

www.macquarie.com/research/disclosures.

AUSTRALIA

Recommendation change Upgrading from Neutral to Outperform Perseus Mining PRU AU

Preferred picks

Evolution Mining Outperform

Target Price $1.20

TSR 62%

Regis Resources Outperform

Target Price $1.80

TSR 42%

Saracen Minerals Outperform

Target Price $0.60

TSR 53%

Beadell Resources Outperform

Target Price $0.40

TSR 54%

Gold Road Resources Outperform

Target Price $0.55

TSR 57%

Doray Minerals Outperform

Target Price $0.70 $1.20

TSR 56%

Outperform recommendations

IGO, RRL, EVN, OGC, SAR, BDR,

GOR, PRU, DRM, AMI, TRY

Neutral recommendations

NCM, NST, AQG, MML, SLR, GRY

Underperform recommendations

KCN

20 March 2015 Macquarie Securities (Australia) Limited

Australian Gold Miners Wholesale earnings upgrades Event

We have upgraded our earnings forecasts and price targets for the Australian

Gold Miners after incorporating our new A$/U$ forecasts. Our currency

changes drive substantial earnings uplifts but the spot gold price represents

significant downside risk to our valuations.

Impact

Cuts to A$ drive earnings upgrades: Macquarie’s economics team has

made some material cuts to our exchange rate forecasts. Our A$/US$

forecasts fall 4% in FY15 and 13% in FY16, while our long-term rate declines

6% from 0.87 to 0.82. See The Global Outlook - The never-ending liquidity

story for more detail.

Positive earnings impact but modest TP upgrades: Incorporating our new

A$/US$ forecasts has had a materially positive impact on earnings. We have

taken the opportunity to mark-to-market precious metals for the 3QFY15 and

this has offset earnings upside in FY15 for most companies. Our earnings

upgrades from FY16 are wide ranging. We upgrade earnings for NCM 53% in

FY16e and 44% in FY17e with the larger mid-cap gold producers upgraded by

a similar quantum. Despite our earnings upgrades, upgrades to our target

prices and recommendations are modest. A number of our target prices

remain unchanged, in general reflecting the already substantial upside implied

from current share prices. Our target prices for NCM rises 5% to $15/sh and

NST increases 18% from $2.00/sh to $2.35/sh. Target price for IGO, RRL,

EVN, SAR, GOR, MML and SLR all rise by 6% to 9%.

Currency drops the free cash flow breakeven point: Under our new

currency forecasts all but PRU and SLR are US$ free cash flow breakeven

and the current US$ spot price. NCM and AQG remain the most robust

operators with the mid-tier producers all breakeven below US$850/oz, IGO

however is hampered by its nickel exposure. We note that a 10% change in

the A$/US$ exchange rate moves the free cash flow breakeven gold price for

A$ producers buy almost $100/oz.

Material downside to all our valuations at spot gold price: Our

commodity team maintains its longer-term positive outlook for gold, despite

the potential for ongoing price volatility in the near term. However, the current

A$ spot gold price of A$1,530/oz (US$1,170/oz, AUDUSD 0.77) still

represents material downside to most of our valuations. At spot our valuation

of NCM falls ~30% to A$10.85 with other valuations falling as much as ~70%.

Outlook

Maintain overweight stance on A$ gold: We continue to be overweight

gold with 11 of the 18 gold stocks under coverage rated as Outperform. Of

the producers our key picks in the sector are EVN for the scale of its

consistent +400koz production profile, RRL which we continue to believe has

been oversold, SAR for the upside potential in the Thunderbox development,

BDR for its exposure to both the declining Brazilian Real and A$ and DRM

which we believe has conquered the dilution issues at Andy Well and has an

attractive development option at Deflector. Our key developer pick remains

GOR with its substantial Gruyere project and significant exploration upside.

http://www.macquarie.com/research/disclosures

Macquarie Wealth Management Australian Gold Miners

20 March 2015 2

Key changes to exchange rate forecasts

Macquarie’s economics team has made a number of changes to its exchange rate forecasts. Our

A$/US$ forecasts have fallen by 4% in FY15, 13% in FY16 and 6-10% from then on. For more

detail on our FX changes see our Economics team note The Global Outlook - The never-ending

liquidity story.

Fig 1 Changes to A$/US$ forecasts

Y/E June FY15e FY16e FY17e FY18e Long-term

AUSUSD - old 0.840 0.773 0.805 0.850 0.870 AUDUSD - New 0.807 0.675 0.723 0.785 0.820 Change (4%) (13%) (10%) (8%) (6%)

Source: Macquarie Research, March 2015

Changes to earnings and valuations

Incorporating our new A$/US$ forecasts has had a materially positive impact on earnings. We

have taken the opportunity to mark-to-market all base and precious metals for the 3QFY15 and

this has offset earnings upside in FY15 for most companies. Our earnings upgrades from FY16

are wide ranging. US$ denominated AQG and MML are the only stocks for which our earnings

are unchanged. Outside of these upgrades range from ~25% to ~250% for marginal producer

PRU.

We upgrade earnings for NCM 53% in FY16e and 44% in FY17e with the larger mid-cap gold

producers upgraded by a similar quantum. BDR’s earnings also benefit from depreciation in the

Brazilian Real with a sustained 54% to 77% upgrade to earning between FY16e and FY19e. More

leveraged stock such as KCN, PRU and SLR achieve higher percentage changes although actual

earnings moves are modest. TRY’s earnings forecast suffers the largest fall in FY15 and muted

upgrades from FY16 due to a mark to market for silver and a change in our forecast silver to gold

ratio from 67:1 to 73:1 in FY16 and FY17.

Fig 2 Earnings changes

Company FY15e FY16e FY17e FY18e FY19e

NCM 8% 53% 44% 22% 18% NST 4% 35% 32% 22% 22% IGO 1% 32% 26% 17% 9% RRL (1%) 29% 29% 17% 15% EVN 2% 41% 35% 22% 24% AQG (1%) (0%) (0%) (0%) (0%) OGC 0% 0% 0% 0% 0% SAR 4% 23% 48% 26% 21% BDR 37% 54% 43% 62% 77% GOR nmf nmf nmf 37% 31% KCN 9% 100% 35% 22% 40% PRU 9% 246% 563% 188% 32% MML (2%) (0%) (0%) (0%) (0%) DRM 4% 37% 45% 44% 54% AMI 30% 51% 74% 9% 16% TRY (38%) 0% 22% 39% (16%) SLR 15% 107% 151% (109%) (5%) GRY nmf nmf nmf 25% 12%

Source: Company data, Macquarie Research, March 2015

Despite our earnings upgrades, upgrades to our target prices and recommendations are modest.

A number of our target prices remain unchanged, in general reflecting the already substantial

upside implied from current share prices. Our target prices for NCM rises 5% to $15/sh and NST

increases 18% from $2.00/sh to $2.35/sh. Target price upgrades for IGO, RRL, EVN, SAR, GOR,

MML and SLR, all rise by 6% to 9%.


20 March 2015 3

TRY is the only stock for which we have downgraded our target price which falls to $0.60/sh from

$0.72/sh due to the changes we have made to our silver forecast for the company. PRU is the

only recommendation change that we make, upgrading the stock from Neutral to Outperform

based on the substantial upside to our valuation; we note however that there is significant

downside to PRU at spot gold as is the case with many other stocks in our coverage universe.

Fig 3 Target price and recommendation upgrades are limited

Company Code Price Market cap (A$m)

Rating Old Rating New Old New Change

Newcrest Mining NCM 13.30 10,195 Neutral Neutral 14.30 15.00 5% Northern Star NST 2.36 1,398 Neutral Neutral 2.00 2.35 18% Independence Group IGO 5.50 1,288 Outperform Outperform 6.00 6.50 8% Regis Resources RRL 1.21 605 Outperform Outperform 1.70 1.80 6% Evolution Mining EVN 0.75 533 Outperform Outperform 1.10 1.20 9% Alacer Gold Corp AQG 2.67 520 Neutral Neutral 2.70 2.70 0% OceanaGold Corp OGC 2.36 476 Outperform Outperform 4.04 4.04 0% Saracen Mineral SAR 0.40 317 Outperform Outperform 0.55 0.60 9% Beadell Resources BDR 0.26 204 Outperform Outperform 0.40 0.40 0% Gold Road Resources GOR 0.34 202 Outperform Outperform 0.51 0.55 8% Kingsgate Consolidated KCN 0.67 150 Underperform Underperform 0.50 0.50 0% Perseus Mining PRU 0.27 142 Neutral Outperform 0.40 0.40 0% Medusa Mining MML 0.84 122 Neutral Neutral 0.85 0.90 6% Doray Minerals DRM 0.46 108 Outperform Outperform 0.70 0.70 0% Aurelia Metals AMI 0.27 105 Outperform Outperform 0.50 0.50 0% Troy Resources TRY 0.45 88 Outperform Outperform 0.72 0.60 (17%) Silver Lake Resources SLR 0.18 88 Neutral Neutral 0.22 0.24 9% Gryphon Minerals GRY 0.06 24 Neutral Neutral 0.09 0.09 0%

Source: Company data, Macquarie Research, March 2015, prices as of 19 March 2015

Currency drops the free cash flow breakeven point

Under our new currency forecasts all but PRU and SLR are US$ free cash flow breakeven at the

current US$ spot price. NCM and AQG remain the most robust with the mid-tier producers all

breakeven below US$450/oz, IGO however is hampered by its nickel exposure. We note that a

10% change in the A$/US$ exchange rate moves the free cash flow breakeven gold price for A$

producers buy almost $100/oz.

Fig 4 Our currency forecasts effectively lowers the free cash flow breakeven point for the Australian gold producers


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AQG NCM NST EVN BDR RRL AMI DRM TRY IGO MML SAR KCN SLR PRU

FCF - B/E (US$/oz) Spot (US$/oz)


20 March 2015 4

Material downside to all our valuations at spot gold price

Our commodity team maintains its longer-term positive outlook for gold, despite the potential for

ongoing price volatility in the near term. In conjunction with the changes in our A$ exchange rate

we now forecast the A$ gold price peaking at A$2,000/oz in 3Q2016.

Fig 5 Our A$ gold forecast achieves A$2,000/oz 3Q2016


However, the current A$ spot gold price of A$1,530/oz (US$1,170/oz, AUDUSD 0.77) still

represents material downside to most of our valuations. At spot our valuation of NCM falls ~30%

to A$10.85, again IGO is impacted by its base metal exposure which compounds it downside at

spot to ~60%. Sensitivity to spot price valuations increases for the more marginal producers with

~60%-70% downside to KCN, PRU and AMI.

Fig 5 Material downside to our valuations at spot gold price

Company Price NPV Macq NPV @ spot Downside

NCM 13.30 15.01 10.85 (28%) NST 2.36 2.35 1.87 (20%) IGO 5.50 6.51 2.50 (62%) RRL 1.21 1.78 1.42 (20%) EVN 0.75 1.22 0.88 (28%) AQG 2.67 2.78 2.16 (22%) OGC* 2.36 3.03 3.03 (0%) SAR 0.40 0.62 0.46 (26%) BDR 0.26 0.42 0.41 (2%) GOR 0.34 0.57 0.50 (12%) KCN 0.67 0.50 0.15 (70%) PRU 0.27 0.40 0.13 (68%) MML 0.84 0.70 0.56 (20%) DRM 0.46 0.71 0.58 (18%) AMI 0.27 0.52 0.22 (58%) SLR 0.18 0.24 0.14 (42%) GRY 0.06 0.09 0.02 (78%)

Source: Macquarie Research, March 2015 *OGC sensitivity not run

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2,100Gold (US$/oz) - Spot Gold (US$/oz) - Forecast

Gold (A$/oz) - Spot Gold (A$/oz) - Forecast


20 March 2015 5

Fig 8 AQG summary financials

Source: AQG, Macquarie Research, March 2015

Alacer Gold Corp

ASX: AQG Price: (A$ps) 3.00 Year end: Dec Rating: Neutral Up/dn -10%

Mkt cap: (A$m) 880 Diluted shares (m) 293.2 Target: 2.70 TSR -10%

CAD Target: 2.62

ASSUMPTIONS FY12 FY13 FY14 FY15e FY16e FY17e FY18e ATTRIBUTABLE MINE OUTPUT FY12 FY13 FY14 FY15e FY16e FY17e

Exchange Rate A$/US$ 1.03 1.03 0.93 0.84 0.68 0.71 0.78 Gold production (equity)

Spot Gold (US$/oz) 1,672 1,604 1,295 1,245 1,314 1,408 1,459 Çöpler Oxides (koz) 151.0 216.9 182.3 159.2 117.5 120.1

Çöpler Sulphide (koz) 0.0 0.0 0.0 0.0 0.0 4.8

RATIO ANALYSIS FY12 FY13 FY14 FY15e FY16e FY17e FY18e Total (koz) 151.0 216.9 182.3 159.2 117.5 124.8

Diluted share capital m 303.3 289.8 293.2 293.2 293.2 293.2 293.2 C1 Cash costs

EPS (diluted and pre sig. items) US¢ 31.8 -1.3 22.3 18.1 7.6 13.5 72.7 Çöpler Oxides (US$/oz) 347 494 509 550 829 723

P/E x 9.4x -237.9x 13.5x 16.6x 39.4x 22.3x 4.1x Çöpler Sulphide (US$/oz) 258

CFPS US¢ 57.4 63.7 48.7 45.7 25.7 32.4 130.9 C1 Cash costs (US$/oz) 347 494 509 550 829 705

P/CF x 5.2x 4.7x 6.2x 6.6x 11.7x 9.3x 2.3x AISC Cash Costs

DPS US¢ 0.0 0.0 2.0 0.0 0.0 0.0 22.0 Çöpler Oxides (US$/oz) 565 760 694 781 1,071 961

Dividend yield % 0.0% 0.0% 0.7% 0.0% 0.0% 0.0% 7.3% Çöpler Sulphide (US$/oz) 319

Franking Level % 0% 0% 0% 0% 0% 0% 0% AISC Cash Costs (US$/oz) 565 760 694 781 1,071 937

Book value per share x 3.85 2.19 2.37 2.60 2.70 2.87 3.73 Operational EBITDA Contribution (pre hedging)

P/Book value x 0.8x 1.4x 1.3x 1.2x 1.1x 1.0x 0.8x Çöpler Oxides US$m 197 168 131 87 36 69

R.O.E. (pre sig items) % 9% -1% 9% 7% 3% 5% 19% OPERATIONAL OUTLOOK

R.O.A. (pre sig items) % 11% 14% 12% 9% 3% 7% 26%

Interest Cover x 73.3x -152.6x nmf -6.7x -3.1x -25.3x -104.5x

EBITDA per share US$ps 0.61 0.47 0.49 0.39 0.22 0.34 1.41

EV/EBITDA x 3.6x 4.3x 3.7x 4.7x 10.9x 8.4x 1.2x

EARNINGS FY12 FY13 FY14 FY15e FY16e FY17e FY18e

Sales Revenue US$m 269 305 292 199 160 182 465

Other Revenue US$m 33 1 0 40 32 36 93

Total Revenue US$m 302 307 292 239 192 218 559

Operating Costs US$m (76) (117) (121) (90) (99) (90) (115)

Operational EBITDA US$m 226 189 171 149 93 127 444

Exploration Expense/Write-offs US$m (4) (3) (3) (15) (8) (9) (8)

Corporate & Other Costs US$m (36) (49) (23) (19) (20) (21) (22)

EBITDA US$m 186 138 145 115 65 98 414 AQG VALUATION BREAKDOWN

D&A US$m (24) (37) (54) (42) (39) (36) (63)

EBIT US$m 162 100 91 74 26 63 351

Net Interest US$m (2) 1 (0) 11 8 2 3

Profit Before Tax US$m 160 101 91 85 34 65 354

Tax Expense US$m (17) (75) (2) (17) (7) (13) (71)

Minorities US$m (44) (30) (23) (15) (5) (13) (70)

Adjusted NPAT US$m 99 (4) 65 53 22 40 213

Significant Items (post tax) US$m (552) (515) 0 0 0 0 0

Reported NPAT US$m (453) (519) 65 53 22 40 213

CASHFLOW FY12 FY13 FY14 FY15e FY16e FY17e FY18e

Net Profit US$m 210 98 104 68 28 52 283

Interest/Tax/D&A US$m 43 42 49 55 44 46 120 RESERVES AND RESOURCES (ATTRIBUTABLE)

Working Capital/other US$m (79) 45 (10) 11 3 (3) (19) Reserves

Net Operating Cashflow US$m 174 185 143 134 75 95 384 Project Mt g/t koz

Capex US$m (61) (78) (49) (138) (244) (215) (39) Çöpler Oxide In situ 26.2 0.9 771

Investments US$m 38 40 0 0 0 0 0 Çöpler Oxide Stockpile 0.02 2.1 1

Sale of PPE and Other US$m 0 0 (7) 0 0 0 0 Çöpler Sulphide In situ 30.1 2.4 2,330

Free cash flow US$m 151 147 87 (4) (169) (120) 345 Çöpler Sulphide Stockpile 1.5 0.0 225

Dividends Paid US$m 0 0 (6) 0 0 0 (32) Total 56.4 1.7 3,102

Debt US$m (61) (12) 0 0 0 50 0 Resources

Equity Issuance US$m 2 1 0 0 0 0 0 Project Mt g/t koz

Other US$m 0 0 0 0 0 0 0 Çöpler Open Pit Measured 0.0 0.00 0

Net Financing Cashflow US$m (59) (11) (6) 0 0 50 (32) Çöpler Open Pit Indicated 151.4 1.55 7,545

Net change in cash US$m 92 136 81 (4) (169) (70) 313 Çöpler Open Pit Inferred 51.8 1.39 2,314

Total 203.1 1.51 9,859

BALANCE SHEET FY12 FY13 FY14 FY15e FY16e FY17e FY18e EQUITY DCF VALUATION Macquarie forecasts Spot prices

Cash US$m 277 290 347 343 174 104 417 Projects A$m A$ps A$m A$ps

PP&E & Mine Development US$m 1,007 330 307 403 608 787 763 Çöpler Oxides 201 0.69 142 0.49

Exploration US$m 0 0 0 0 0 0 0 Çöpler Sulphide 347 1.18 232 0.79

Total Assets US$m 1,460 712 759 811 833 956 1,325 Undeveloped Resources 48 0.16 45 0.15

Debt US$m 69 0 0 0 0 50 50 Unpaid capital 0 0.00 0 0.00

Total Liabilities US$m 293 79 64 47 42 113 231 Forwards 0 0.00 0 0.00

Total Net Assets / Equity US$m 1,167 634 696 763 791 843 1,094 Corporate (128) (0.43) (128) (0.43)

Net Debt / (Cash) US$m (208) (290) (347) (343) (174) (54) (367) Net cash (debt) 347 1.18 341 1.16

Gearing (net debt/(nd + equity)) % (22%) (84%) (99%) (82%) (28%) (7%) (51%) Net Equity Value (@ 10% WACC) 815 2.78 633 2.16

Gearing (net debt/equity) % (18%) (46%) (50%) (45%) (22%) (6%) (34%) Price Target (AUD) 2.70 2.16

Price Target (CAD) 2.62

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Resources & Exploration

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Net cash (incl corp)27%


20 March 2015 6

Fig 9 BDR summary financials

Source: BDR, Macquarie Research, March 2015

Beadell Resources

ASX: BDR Price: (A$ps) 0.26 Year end: Dec Rating: Outperform Up/dn

Mkt cap: (A$m) 209 Diluted shares (m) 803.3 Target: 0.40 54%

ASSUMPTIONS FY11 FY12 FY13 FY14 FY15e FY16e FY17e ATTRIBUTABLE MINE OUTPUT FY11 FY12 FY13 FY14 FY15e FY16e FY17e


Spot Gold (US$/oz) 1,371 1,672 1,604 1,295 1,227 1,314 1,408 Tucano (koz) - 7.4 182.8 153.7 176.7 164.2 164.3

Total (koz) - 7.4 182.8 153.7 176.7 164.2 164.3

RATIO ANALYSIS FY11 FY12 FY13 FY14 FY15e FY16e FY17e Cash costs

Diluted share capital m 657.9 757.2 791.0 803.3 803.3 803.3 803.3 Tucano (A$/oz) - - 561 799 547 524 572

EPS (diluted and pre sig. items) A¢ -5.3 -4.3 14.6 1.7 9.2 11.5 11.0 AISC Cash Costs

P/E x -4.9x -6.1x 1.8x 15.4x 2.8x 2.3x 2.4x Tucano (A$/oz) - - 902 1,058 902 949 971

CFPS A¢ (3.6) (4.1) 11.0 3.4 14.8 16.1 15.1 AISC Cash Costs (A$/oz) - - 902 1,058 902 949 971

P/CF x -7.2x -6.3x 2.4x 7.7x 1.8x 1.6x 1.7x Operational EBITDA Contribution (pre hedging)

DPS A¢ 0.0 0.0 0.0 0.0 2.0 4.0 4.0 Tucano A$m - 2 149 109 120 132 136

Dividend yield % 0.0% 0.0% 0.0% 0.0% 7.7% 15.4% 15.4% OPERATIONAL OUTLOOK

Franking Level % 0% 0% 0% 0% 0% 0% 0%

Book value per share x 0.08 0.04 0.30 0.28 0.34 0.43 0.50

P/Book value x 3.2x 6.0x 0.9x 0.9x 0.8x 0.6x 0.5x

R.O.E. (pre sig items) % -66% -132% 31% 6% 27% 27% 22%

R.O.A. (pre sig items) % -26% -11% 25% 13% 23% 26% 24%

Interest Cover x 45.2x -1.7x 15.2x 1.8x 18.9x 77.0x -60.5x

EBITDA per share A$ps -0.05 -0.04 0.16 0.11 0.18 0.21 0.19

EV/EBITDA x -6.3x -12.2x 2.4x 3.6x 1.6x 0.8x 0.4x

EARNINGS FY11 FY12 FY13 FY14 FY15e FY16e FY17e

Sales Revenue A$m 0 2 255 260 307 328 315

Other Revenue A$m 0 0 1 1 0 0 0

Total Revenue A$m 0 2 256 261 307 328 315

Operating Costs A$m (1) (14) (108) (150) (138) (135) (134)

Operational EBITDA A$m (1) (12) 148 111 169 193 181

Exploration Expense/Write-offs A$m (18) (6) (12) (9) (11) (9) (9)

Corporate & Other Costs A$m (16) (9) (14) (16) (15) (16) (16) BDR VALUATION BREAKDOWN

EBITDA A$m (36) (27) 123 86 144 169 156

D&A A$m 0 0 (21) (37) (32) (34) (31)

EBIT A$m (36) (27) 102 50 111 134 124

Net Interest A$m 1 (16) (7) (28) (6) (2) 2

Profit Before Tax A$m (35) (43) 95 22 105 132 126

Tax Expense A$m 0 0 (20) (8) (32) (40) (38)

Minorities A$m 0 0 0 0 0 0 0

Adjusted NPAT A$m (35) (43) 75 14 74 93 88

Significant Items (post tax) A$m 0 0 0 0 0 0 0

Reported NPAT A$m (35) (43) 75 14 74 93 88

CASHFLOW FY11 FY12 FY13 FY14 FY15e FY16e FY17e

Net Profit A$m -35 -32 116 14 74 93 88

Interest/Tax/D&A A$m 18 21 59 66 51 34 31 RESERVES AND RESOURCES (ATTRIBUTABLE)

Working Capital/other A$m (8) (20) (88) (52) (6) 2 2 Reserves

Net Operating Cashflow A$m (24) (31) 87 27 119 129 121 Project Mt g/t koz

Capex A$m (61) (116) (46) (19) (40) (20) (19) Tucano - Total 29.0 1.5 1,432

Investments A$m 0 0 0 0 0 0 0 Duckhead 0.3 6.2 54

Sale of PPE and Other A$m 2 4 0 (10) 0 0 0 Stockpile 6.8 0.8 181

Free cash flow A$m (82) (143) 41 (2) 79 109 102 Total 36.1 1.4 1,667

Dividends Paid A$m 0 0 0 0 (8) (24) (32) Resources

Debt A$m 54 66 (61) 25 (50) (32) (38) Project Mt g/t koz

Equity Issuance A$m 29 46 24 1 0 0 0 Total Tucano Open Pit 97.4 1.40 4,388

Other A$m 0 0 0 0 0 0 0 Duckhead 0.8 3.63 93

Net Financing Cashflow A$m 83 112 (37) 26 (58) (56) (69) Stockpile 7.9 0.78 197

Net change in cash A$m 0 (31) 4 24 22 53 33 Tartuga 6.5 1.63 338

Total 111.0 1.39 4,966

BALANCE SHEET FY11 FY12 FY13 FY14 FY15e FY16e FY17e EQUITY DCF VALUATION Macquarie forecasts Spot prices

Cash A$m 40 5 10 13 55 108 141 Projects A$m A$ps A$m A$ps

PP&E & Mine Development A$m 87 201 226 181 189 175 163 Tucano 455 0.57 453 0.56

Exploration A$m 2 2 1 1 1 1 1 Undeveloped Resources 27 0.03 25 0.03

Total Assets A$m 138 247 402 386 477 510 518 Unpaid capital 6 0.01 6 0.01

Debt A$m 55 133 96 118 72 40 2 Forwards 0 0.00 0 0.00

Total Liabilities A$m 85 214 164 165 201 165 115 Corporate (75) (0.09) (75) (0.09)

Total Net Assets / Equity A$m 53 33 238 222 276 345 402 Net cash (debt) (80) (0.10) (81) (0.10)

Net Debt / (Cash) A$m 15 127 86 105 16 (69) (139) Net Equity Value (@ 10% WACC) 334 0.42 329 0.41

Gearing (net debt/(nd + equity)) % 22% 80% 27% 32% 6% (25%) (53%) Price Target 0.42 0.41

Gearing (net debt/equity) % 29% 391% 36% 47% 6% (20%) (35%)

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Tucano72%

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20 March 2015 7

Fig 10 DRM summary financials

Source: DRM, Macquarie Research, March 2015

Doray Minerals

ASX: DRM Price: (A$ps) 0.45 Year end: Jun Rating: Outperform Up/dn TSR

Mkt cap: (A$m) 107 Diluted shares (m) 238.5 Target: 0.70 56% 56%

ASSUMPTIONS FY12 FY13 FY14 FY15e FY16e FY17e ATTRIBUTABLE MINE OUTPUT FY12 FY13 FY14 FY15e FY16e FY17e

Exchange Rate A$/US$ 1.03 1.03 0.92 0.84 0.68 0.71 Andy Well

Spot Gold (US$/oz) 1,672 1,604 1,295 1,227 1,314 1,408 Gold producton (koz) nm nm 76.6 89.3 92.9 87.3

C1 Cash cost (A$/oz) nm nm 482 600 597 663

RATIO ANALYSIS FY12 FY13 FY14 FY15e FY16e FY17e Cash costs - AISC (A$/oz) nm nm 1,017 1,068 1,005 1,090

Diluted share capital m 81.3 120.6 149.5 239.8 278.7 278.7 Deflector

EPS (diluted and pre sig. items) A¢ -5.4 -7.0 17.6 8.3 20.8 30.2 Gold producton (koz) 0.0 0.0 0.0 0.0 22.7 66.1

P/E x -8.4x -6.5x 2.6x 5.4x 2.2x 1.5x Silver production (koz) 0.0 0.0 0.0 0.0 41.1 80.3

CFPS A¢ (18.6) (2.4) 34.7 24.1 40.1 60.5 Copper production (kt) 0.0 0.0 0.0 0.0 1.9 4.0

P/CF x -2.4x -18.5x 1.3x 1.9x 1.1x 0.7x C1 Cash cost (A$/oz) nm nm nm nm 13 330

DPS A¢ 0.0 0.0 0.0 0.0 0.0 0.0 Cash costs - AISC (A$/oz) nm nm nm nm 624 807

Dividend yield % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Group gold production (koz) nm nm 76.6 89.3 115.6 153.4

Franking Level % 0% 0% 0% 0% 0% 0% Group AISC (A$/oz) nm nm 1,017 1,068 930 968

Book value per share x 0.33 0.58 0.51 0.40 0.60 0.90 EV/Production (A$/oz) nm nm nm nm 4,619 1,588

P/Book value x 1.4x 0.8x 0.9x 1.1x 0.8x 0.5x

R.O.E. (pre sig items) % -16% -12% 34% 21% 34% 34% OPERATIONAL OUTLOOK

R.O.A. (pre sig items) % -17% -9% 23% 20% 33% 41%

Interest Cover x 7.2x 20.9x 10.6x 34.4x 48.7x -322.8x

EBITDA per share A$ps -0.06 -0.10 0.43 0.28 0.49 0.72

EV/EBITDA x -21.0x -11.4x 1.7x 1.6x 0.6x -0.1x

EARNINGS FY12 FY13 FY14 FY15e FY16e FY17e

Sales Revenue A$m 0 0 111 137 228 339

Other Revenue A$m 1 0 0 0 0 0

Total Revenue A$m 1 0 111 137 228 339

Operating Costs A$m 0 0 (41) (61) (82) (130)

Operational EBITDA A$m 1 0 70 75 146 210

Exploration Expense/Write-offs A$m (0) (8) (0) (1) (2) (3)

Corporate & Other Costs A$m (5) (4) (5) (6) (6) (6)

EBITDA A$m (5) (12) 64 68 137 201

D&A A$m 0 (1) (39) (39) (55) (81)

EBIT A$m (5) (13) 26 29 82 120

Net Interest A$m 1 1 (2) (1) (2) 0

Profit Before Tax A$m (4) (12) 24 28 81 120

Tax Expense A$m 0 4 3 (8) (24) (36) RESERVES AND RESOURCES (ATTRIBUTABLE)

Minorities A$m 0 0 0 0 0 0 Reserves

Adjusted NPAT A$m (4) (8) 26 20 57 84 Project Mt Au (g/t) Au (koz) Ag (g/t) Ag (koz) Cu (%) Cu (kt)

Significant Items (post tax) A$m 0 0 (32) 0 0 0 Wilbur -open pit 0.03 15.6 14

Reported NPAT A$m (4) (8) (6) 20 57 84 Wilbur - underground 0.6 8.1 148

Judy - underground 0.2 8.9 58

CASHFLOW FY12 FY13 FY14 FY15e FY16e FY17e Total 0.8 8.6 220

Net Profit A$m -4 -8 -6 20 57 84 Deflector - open pit 0.3 5.5 62 11.8 132 1.72% 6.0

Interest/Tax/D&A A$m (14) (2) 30 38 69 82 Deflector - Underground 1.4 5.6 260 4.9 228 0.70% 10.0

Working Capital/other A$m 4 8 28 (0) (14) 2 Total 3.4 7.0 762 6.3 360 0.90% 16.0

Net Operating Cashflow A$m (15) (3) 52 58 112 169

Capex A$m (1) (72) (33) (60) (101) (69) Resources

Investments A$m (0) 0 (4) 0 0 0 Project Mt Au (g/t) Au (koz) Ag (g/t) Ag (koz) Cu (%) Cu (kt)

Sale of PPE and Other A$m 0 0 (21) (4) 0 0 Andy Well -Wilbur 0.7 14.86 324

Free cash flow A$m (16) (75) (6) (6) 10 100 Andy Well - Judy 0.6 6.41 126

Dividends Paid A$m 0 0 0 0 0 0 Deflector - open pit 0.3 5.54 62 11.8 132 1.72% 6.0

Debt A$m 0 55 (20) 18 20 (52) Deflector - Underground 2.5 6.54 529 6.1 496 0.83% 21.0

Equity Issuance A$m 1 41 16 1 15 0 Deflector other 6.4 1.66 200.00

Other A$m 0 0 0 0 0 0 Total 11 3.66 1,241 2.1 628 0.29% 27.0

Net Financing Cashflow A$m 1 96 (4) 19 35 (52) EV/Reserve (A$/oz) 138 EV/Resource (A$/oz) 85

Net change in cash A$m (15) 21 (10) 13 46 48

BALANCE SHEET FY12 FY13 FY14 FY15e FY16e FY17e EQUITY DCF VALUATION Macquarie forecasts Spot prices

Cash A$m 5 26 16 28 74 122 Projects A$m A$ps A$m A$ps

PP&E & Mine Development A$m 1 101 71 91 138 125 Deflector 53 0.19 53 0.19

Exploration A$m 21 5 11 20 30 39 Andy Well 173 0.62 123 0.44

Total Assets A$m 29 147 115 146 246 291 Undeveloped Resources 5 0.02 6 0.02

Debt A$m 0 56 15 32 52 0 Unpaid capital & Investments 0 0.00 0 0.00

Total Liabilities A$m 2 77 38 51 80 41 Forwards (13) (0.05) (2) (0.01)

Total Net Assets / Equity A$m 27 70 77 95 166 250 Corporate (21) (0.08) (21) (0.08)

Net Debt / (Cash) A$m (5) 30 (0) 4 (22) (122) Net cash (debt) 2 0.01 3 0.01

Gearing (net debt/(nd + equity)) % (24%) 30% (0%) 4% (15%) (94%) Net Equity Value (@ 11% WACC) 199 0.71 161 0.58

Gearing (net debt/equity) % (19%) 43% (0%) 4% (13%) (49%) Price Target 0.70

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Andy Well Gold (koz) Def lector Au equiv (koz) AISC ($A/oz)


20 March 2015 8

Fig 10 EVN summary financials

Source: EVN, Macquarie Research, March 2015

Evolution Mining

ASX: EVN Price: (A$ps) 0.76 Year end: Jun Rating: Outperform Up/dn TSR



Exchange Rate A$/US$ 1.03 1.03 0.92 0.84 0.68 0.71 Gold production (equ)

Spot Gold (US$/oz) 1,672 1,604 1,295 1,227 1,314 1,408 Cracow (koz) 78.8 102.6 95.1 92.2 94.7 96.3

Pajingo (koz) 57.2 85.9 60.8 68.8 75.1 75.7

RATIO ANALYSIS FY12 FY13 FY14 FY15e FY16e FY17e Edna May (koz) 73.3 86.2 80.2 94.9 87.4 91.3

Diluted share capital m 539.1 707.9 732.5 736.5 736.5 736.5 Mt Rawdon (koz) 71.2 106.1 103.8 104.2 101.2 95.8

EPS (diluted and pre sig. items) A¢ 11.8 6.3 7.1 12.6 30.9 22.3 Mt Carlton (koz) 0.0 12.1 88.0 75.0 73.3 73.3

P/E x 6.4x 12.0x 10.6x 6.0x 2.4x 3.4x Total (koz) 280.4 392.9 427.7 435.1 431.7 432.5

CFPS A¢ 34.9 32.9 26.7 32.6 51.3 54.0 Cash costs - AISC

P/CF x 2.2x 2.3x 2.8x 2.3x 1.5x 1.4x Cracow (A$/oz) 944 1,246 1,052 1,066 1,066 1,068

DPS A¢ 0.0 1.0 2.0 2.0 2.0 2.0 Pajingo (A$/oz) 1,161 1,259 1,274 1,118 1,058 1,070

Dividend yield % 0.0% 1.3% 2.6% 2.6% 2.6% 2.6% Edna May (A$/oz) 1,219 1,064 1,204 897 983 893

Franking Level % 0% 0% 0% 0% 0% 0% Mt Rawdon (A$/oz) 937 844 855 956 990 1,067

Book value per share x 1.96 1.06 1.07 1.18 1.47 1.67 Mt Carlton (A$/oz) 0 580 844 1,073 1,229 1,257

P/Book value x 0.4x 0.7x 0.7x 0.6x 0.5x 0.5x Cash costs - AISC (A$/oz) 1,059 1,080 1,070 1,059 1,104 1,109

R.O.E. (pre sig items) % 6% 6% 7% 11% 21% 13% C1 Cash cost (A$/oz) 802 794 779 754 804 809

R.O.A. (pre sig items) % 8% 7% 6% 9% 17% 14%

Interest Cover x 25.7x 10.3x 4.7x 9.1x 58.8x -58.3x EV/Production (A$/oz) 2,260 1,613 1,482 1,456 1,468 1,465

EBITDA per share A$ps 0.35 0.30 0.29 0.37 0.55 0.54

EV/EBITDA x 2.3x 3.1x 3.2x 2.3x 0.9x 0.3x OPERATIONAL OUTLOOK


Sales Revenue A$m 469 605 634 671 838 840


Total Revenue A$m 469 605 635 671 838 840

Operating Costs A$m (249) (360) (387) (372) (401) (405)




EBITDA A$m 190 212 210 270 402 401

D&A A$m (94) (141) (144) (166) (170) (170)

EBIT A$m 96 70 66 104 231 230

Net Interest A$m (4) (7) (14) (12) (4) 4

Profit Before Tax A$m 92 63 52 93 227 234

Tax Expense A$m (29) (19) 0 0 0 (70)

Minorities A$m 0 0 0 0 0 0

Adjusted NPAT A$m 63 44 52 93 227 164 RESERVES AND RESOURCES (ATTRIBUTABLE)

Significant Items (post tax) A$m (26) (352) (2) 0 0 0 Reserves

Reported NPAT A$m 37 (307) 50 93 227 164 Project Mt g/t koz

Cracow 1.4 5.9 260

Pajingo 0.8 6.2 154

CASHFLOW FY12 FY13 FY14 FY15e FY16e FY17e Edna May 11.4 1.1 402

Net Profit A$m 37 -307 50 93 227 164 Mt Rawdon 30.6 0.9 862

Interest/Tax/D&A A$m 126 166 147 142 160 232 Mt Carlton 8.0 3.7 947

Working Capital/other A$m 25 374 (1) 5 (10) 2 Total 52.1 1.6 2,625

Net Operating Cashflow A$m 188 233 196 240 378 398 Resources

Capex A$m (233) (436) (164) (169) (127) (108) Project Mt g/t koz

Investments A$m 14 (21) 0 (2) 0 0 Cracow 3.4 6.57 724

Sale of PPE and Other A$m 0 0 0 0 0 0 Pajingo 4.8 5.93 922

Free cash flow A$m (31) (224) 32 69 251 290 Edna May 31.0 1.15 1,145

Dividends Paid A$m 0 0 (13) (13) (14) (14) Mt Rawdon 51.1 0.75 1,234

Debt A$m (16) 95 (1) (18) (4) (3) Mt Carlton 12.0 3.32 1,276

Equity Issuance A$m 158 1 0 0 0 0 Twin Hills 4.6 2.69 399

Other A$m 0 0 0 0 0 0 Total 107.0 1.66 5,700

Net Financing Cashflow A$m 143 96 (14) (31) (18) (17) EV/Reserve (A$/oz) 241 EV/Resource (A$/oz) 111

Net change in cash A$m 112 (128) 18 38 233 273 EQUITY DCF VALUATION Macquarie forecasts Spot prices

Projects A$m A$ps A$m A$ps

Cracow 211 0.29 139 0.19

BALANCE SHEET FY12 FY13 FY14 FY15e FY16e FY17e Pajingo 188 0.26 128 0.17

Cash A$m 142 14 32 70 303 576 Edna May 149 0.20 87 0.12

PP&E & Mine Development A$m 1,024 918 982 995 952 889 Mt Rawdon 338 0.46 261 0.35

Exploration A$m 0 0 0 10 20 28 Mt Carlton 266 0.36 206 0.28

Total Assets A$m 1,269 1,022 1,110 1,178 1,401 1,617 Undeveloped Resources 15 0.02 16 0.02



Total Net Assets / Equity A$m 1,056 747 785 866 1,079 1,229 Corporate (87) (0.12) (87) (0.12)

Net Debt / (Cash) A$m (106) 121 130 76 (160) (436) Net cash (debt) (94) (0.13) (91) (0.12)

Gearing (net debt/(nd + equity)) % (11%) 14% 14% 8% (17%) (55%) Net Equity Value (@ 9% WACC) 896 1.22 645 0.88

Gearing (net debt/equity) % (10%) 16% 17% 9% (15%) (35%) Price Target (1x NPV) 1.20

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FY11 FY12 FY13 FY14 FY15e FY16e FY17e FY18e FY19e FY20e

Cracow (koz) Pajingo (koz) Edna May (koz)

Mt Rawdon (koz) Mt Carlton (koz) AISC (A$/oz)


20 March 2015 9

Fig 10 GOR summary financials

Source: GOR, Macquarie Research, March 2015

Gold Road Resources

ASX: GOR Price: (A$ps) 0.35 Year end: Jun Rating: Outperform Up/dn

Mkt cap: (A$m) 208 Diluted shares (m) 594.9 Target: 0.55 57%

ASSUMPTIONS FY11 FY12 FY13 FY14e FY15e FY16e FY17e ATTRIBUTABLE MINE OUTPUT FY16e FY17e FY18e FY19e FY20e


Spot Gold (US$/oz) 1,371 1,672 1,604 1,295 1,236 1,314 1,408 Gruyere (koz) 0.0 6.2 301.5 301.5 304.2

Spot Gold (A$/oz) 1,390 1,631 1,563 1,406 1,482 1,939 1,975 Total (koz) 0.0 6.2 301.5 301.5 304.2

Cash costs

RATIO ANALYSIS FY11 FY12 FY13 FY14e FY15e FY16e FY17e Gruyere (A$/oz) - 1,053 803 814 818

Diluted share capital m 432.1 453.0 494.1 512.8 652.0 1,239.5 1,239.5 AISC Cash Costs

EPS (diluted and pre sig. items) A¢ -0.7 -0.7 -4.6 0.1 -1.9 -0.6 -1.4 Gruyere (A$/oz) - 1,209 939 970 979

P/E x -48.4x -53.3x -7.6x 417.3x -18.2x -54.0x -25.0x AISC Cash Costs (A$/oz) - 1,209 939 970 979

CFPS A¢ (0.4) (0.4) (0.4) 0.2 (2.5) (0.7) (2.0) Operational EBITDA Contribution (pre hedging)

P/CF x -91.0x -99.8x -92.0x 156.1x -13.8x -46.9x -17.3x Gruyere A$m - 5 322 306 301

DPS A¢ 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MODELLED PRODUCTION

Dividend yield % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Franking Level % 100% 100% 100% 100% 100% 100% 100%

Book value per share x 0.05 0.09 0.05 0.07 0.10 0.24 0.23


R.O.E. (pre sig items) % -14% -7% -88% 1% -17% -2% -6%

R.O.A. (pre sig items) % -17% -9% -87% -7% -21% -2% -2%

Interest Cover x 9.7x 4.3x 65.3x 8.4x 31.6x 9.0x -0.9x

EBITDA per share A$ps -0.01 -0.01 -0.05 -0.01 -0.03 -0.01 -0.01

EV/EBITDA x -53.2x -51.8x -8.4x -68.5x -11.3x -0.3x -63.7x


Sales Revenue A$m 0 0 0 0 0 0 12


Total Revenue A$m 0 0 0 0 0 0 12

Operating Costs A$m 0 0 0 0 0 0 (7)

Operational EBITDA A$m 0 0 0 0 0 0 5 MODELLED CASH FLOW


Corporate & Other Costs A$m (3) (4) (4) (3) (4) (4) (7)

EBITDA A$m (4) (4) (24) (3) (17) (10) (9)

D&A A$m 0 0 0 0 0 0 (3)

EBIT A$m (4) (4) (24) (3) (17) (10) (12)

Net Interest A$m 0 1 0 0 1 1 (13)

Profit Before Tax A$m (3) (3) (23) (3) (16) (9) (25)

Tax Expense A$m 0 0 1 3 5 3 7


Adjusted NPAT A$m (3) (3) (23) 0 (12) (6) (17)

Significant Items (post tax) A$m 0 0 0 0 0 0 0

Reported NPAT A$m (3) (3) (23) 0 (12) (6) (17)


Net Profit A$m -3 -3 -23 0 -12 -6 -17

Interest/Tax/D&A A$m (6) (17) 9 (17) (5) (3) (4) RESERVES AND RESOURCES (ATTRIBUTABLE)

Working Capital/other A$m 7 19 12 17 0 0 (4) Reserves

Net Operating Cashflow A$m (2) (2) (2) 1 (16) (9) (25) Project Mt g/t koz

Capex A$m (7) (18) (10) (13) (31) (36) (514) Gruyere 0.0 0.0 0

Investments A$m 0 0 0 0 0 0 0 Attila - Central Bore 0.0 0.0 0

Sale of PPE and Other A$m (0) (0) 1 3 10 0 0 Total 0.0 0.0 0

Free cash flow A$m (8) (19) (11) (9) (37) (46) (539) Resources

Dividends Paid A$m 0 0 0 0 0 0 0 Project Mt g/t koz

Debt A$m 0 0 0 0 0 200 155

Equity Issuance A$m 16 22 7 10 43 235 0 Gruyere 96.9 1.23 3,833.1

Other A$m 0 0 0 0 0 0 0 Attila - Central Bore 26.3 1.49 1,261.7

Net Financing Cashflow A$m 16 22 7 10 43 435 155 Total 96.9 1.23 3,837

Net change in cash A$m 8 3 (4) 1 6 389 (384)

EQUITY DCF VALUATION Macquarie forecasts Spot prices


BALANCE SHEET FY11 FY12 FY13 FY14e FY15e FY16e FY17e Gruyere 385 0.31 297 0.24

Cash A$m 10 13 9 10 16 405 21 Undeveloped Resources 97 0.08 96 0.08

PP&E & Mine Development A$m 1 2 1 1 32 68 579 Unpaid capital & new equity 257 0.21 257 0.21

Exploration A$m 11 28 17 27 27 31 38 Forwards 0 0.00 0 0.00

Total Assets A$m 23 43 27 39 80 510 664 Corporate (48) (0.04) (48) (0.04)

Debt A$m 0 0 0 0 0 200 355 Net cash (debt) 14 0.01 14 0.01

Total Liabilities A$m 1 2 1 3 12 213 384 Net Equity Value (@ 10% WACC) 705 0.57 615 0.50

Total Net Assets / Equity A$m 21 41 26 36 68 296 279 Price Target 0.57 0.50

Net Debt / (Cash) A$m (10) (13) (9) (10) (16) (205) 334 GOR Blended price target Blend 0.56

Gearing (net debt/(nd + equity)) % (84%) (46%) (53%) (36%) (30%) (224%) 54%

Gearing (net debt/equity) % (46%) (31%) (35%) (27%) (23%) (69%) 120%

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FY16e FY17e FY18e FY19e FY20e FY21e FY22e FY23e FY24e FY25e FY26e FY27e FY28e

Gruyere (koz) Cash Cost AISC (A$/oz) Gold (A$/oz)

-600.0

-500.0

-400.0

-300.0

-200.0

-100.0

0.0

100.0

200.0

300.0

400.0

FY11 FY12 FY13 FY14e FY15e FY16e FY17e FY18e FY19e FY20e

Operating cash f low (A$m) Free cash f low (A$m)


20 March 2015 10

Fig 10 GRY summary financials

Source: GRY, Macquarie Research, March 2015

Gryphon Resources (GRY)ASX: GRY Price: (A$ps) 0.08 Year end: Jun Rating: Neutral Up/dn

Mkt cap: (A$m) 32 Diluted shares (m) 400.9 Target: A$0.09 13%

ASSUMPTIONS FY12 FY13 FY14 FY15e FY16e FY17e ATTRIBUTABLE MINE OUTPUT FY15e FY16e FY17e FY18e FY19e

Exchange Rate A$/US$ 1.03 1.03 0.90 0.84 0.68 0.71 Production (equity)

Spot Copper Price US$/lb 3.70 3.48 3.19 2.93 2.98 3.25 Gold in dore koz 0.0 8.3 61.7 66.7 66.7

Gold Price Realised US$/oz nm 1314 1408 1459 1490

C1 Cash Costs US$/oz 0.00 711 722 741 760

RATIO ANALYSIS FY12 FY13 FY14 FY15e FY16e FY17e Notional Cash Margin US$/oz nm 602 685 718 730

Diluted share capital m 313.4 313.4 400.9 576.0 751.0 751.0

EPS (diluted and pre sig. items) A¢ -1.9 -1.3 -11.9 -4.0 -4.8 2.7 Banfora modelled gold production

P/E x -3.5x -5.0x -0.5x -1.6x -1.4x 2.4x

CFPS A¢ (1.0) (1.6) (0.6) (0.6) (4.5) (0.3)

P/CF x -6.6x -4.1x -10.4x -10.3x -1.5x -24.5x

DPS A¢ 0.0 0.0 0.0 0.0 0.0 0.0

Dividend yield % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Franking Level % 0% 0% 0% 0% 0% 0%

Book value per share x 0.58 0.67 0.41 0.11 0.03 0.06


R.O.E. (pre sig items) % -3% -2% -29% -27% -143% 45%

R.O.A. (pre sig items) % -5% -4% -30% -19% -21% 21%

Interest Cover x 2.9x 4.5x nm nm nm 3.2x

EBITDA per share A$ps -0.03 -0.03 -0.13 -0.03 -0.04 0.06

EV/EBITDA x 2.3x 3.0x 0.2x 0.6x -4.1x 1.6x


Sales Revenue A$m 0 0 0 0 18 124


Total Revenue A$m 0 0 0 1 18 124

Operating Costs A$m (3) (4) 0 0 (34) (71)

Operational EBITDA A$m (3) (4) 0 1 (16) 53



EBITDA A$m (9) (9) (50) (16) (27) 46

D&A A$m (0) (0) (0) 0 (1) (10)

EBIT A$m (9) (9) (50) (16) (28) 36

Net Interest A$m 3 2 2 (1) (8) (11) GRY valuation

Profit Before Tax A$m (6) (7) (49) (17) (36) 25

Tax Expense A$m 0 3 1 0 0 (4)


Net Profit After Tax A$m (6) (4) (48) (17) (36) 20

Significant Items (post tax) A$m 0 0 2 0 0 0

Reported NPAT A$m (6) (4) (45) (17) (36) 20

CASHFLOW FY12 FY13 FY14 FY15e FY16e FY17e

Operational Cash Flow A$m -6 -7 -4 -4 -25 47

Net Interest A$m 3 2 2 (0) (8) (11)

Tax Paid and Other A$m 5 (6) 1 (0) (4) (0)

Net Operating Cashflow A$m (3) (5) (3) (4) (33) 36

Exploration A$m (44) (36) (19) (10) (2) (2)

Capital Expenditure A$m 0 0 (0) (20) (80) (7)

Investments A$m (15) 20 2 0 0 0

Sale of PPE and Other A$m (1) (3) 2 1 0 0

Free cash flow A$m (63) (23) (18) (34) (115) 27

Net Investing Cashflow A$m (60) (18) (16) (30) (82) (9) Spot

Dividends Paid A$m 0 0 0 0 0 0 Projects A$m A$ps A$m A$ps

Debt A$m 0 0 0 19 81 14 Banfora 45 0.07 9 0.01

Equity Issuance A$m 59 30 0 35 0 0 Hedging 2 0.00 2 0.00

Other A$m 0 0 0 0 0 0 Corporate -15 -0.02 -15 -0.02

Net Financing Cashflow A$m 59 30 0 54 81 14 Net Cash / (Debt) 23 0.03 23 0.03

Net change in cash A$m (4) 6 (18) 20 (35) 42 Total equity valuation 55 0.09 19 0.02

Price Target 0.09

BALANCE SHEET FY12 FY13 FY14 FY15e FY16e FY17e

Cash A$m 46 52 34 55 20 62 RESERVES AND RESOURCES

PP&E & Mine Development A$m 2 4 3 23 102 98 Banfora Gold Project Total Mineral Resource

Exploration A$m 124 152 126 4 5 6 M&I

Invesments A$m 21 2 3 0 0 0 Mt Au g/t Cont

Au

Mt Au g/t Cont

Au Total Assets A$m 195 214 169 84 133 172

Debt A$m 0 0 0 19 104 109 Nogbele 33.1 1.3 1.36 1.0 1.1 0.03

Total Liabilities A$m 13 6 5 23 108 127 Fourkoura 7.3 1.2 0.28 1.1 1.1 0.04

Total Net Assets / Equity A$m 182 209 164 61 25 46 Samavogo 12.5 1.8 0.71 8.5 1.3 0.36

Net Debt / (Cash) A$m (46) (52) (34) (36) 84 47 Stinger 14.3 1.4 0.64 5.3 1.3 0.22

Gearing (net debt/(nd + equity)) % (34%) (33%) (26%) (138%) 77% 51% Total 67.2 1.4 2.99 15.9 1.3 0.66

Gearing (net debt/equity) % (25%) (25%) (21%) (58%) 333% 103%

Inferred

Macquarie

0.07

0.02 0.03

0.09

0

0.01

0.02

0.03

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Gold produced Gold recovery


20 March 2015 11

Fig 10 IGO summary financials

Source: IGO, Macquarie Research, March 2015

Independence Group

ASX: IGO Price: (A$ps) 5.44 Year end: Jun Rating: Outperform Up/dn TSR

Mkt cap: (A$m) 1,274 Diluted shares (m) 234.3 Target: 6.50 19% 25%


Exchange Rate A$/US$ 1.03 1.03 0.92 0.84 0.68 0.71 Nickel Production (equity)

Nickel price US$/lb 8.75 7.36 6.91 7.58 10.21 11.11 Long kt 10.0 11.2 10.9 10.5 11.1 11.6

Gold price US$/oz 1,672 1,604 1,296 1,227 1,314 1,408 Net Cash Cost (per pay lb Ni) US$/lb 4.78 4.49 3.46 3.44 2.81 2.94

RATIO ANALYSIS FY12 FY13 FY14 FY15e FY16e FY17e Zinc production (equity)

Diluted share capital m 218.7 234.8 235.3 236.6 236.6 236.6 Jaguar kt 16.6 33.8 41.2 44.8 36.6 35.7

EPS (diluted and pre sig. items) A¢ 39.2 11.0 33.4 43.5 101.1 113.9 Net Cash Cost (per pay lb Zn) US$/lb 0.52 0.46 0.29 0.30 0.24 0.13

P/E x 13.9x 49.3x 16.3x 12.5x 5.4x 4.8x Gold production (equity)

CFPS A¢ 15.4 12.6 65.3 98.0 173.8 154.5 Tropicana koz 0.0 0.0 104.4 152.5 145.4 144.1

P/CF x 35.3x 43.2x 8.3x 5.6x 3.1x 3.5x All in Cash Cost (US$/oz) US$/oz 682 683 523 557

DPS A¢ 3.0 2.0 8.0 13.0 30.0 34.0

Dividend yield % 0.6% 0.4% 1.5% 2.4% 5.5% 6.3% Operational EBIT Contribution (pre hedging)

Franking Level % 100% 100% 100% 100% 100% 100% Long A$m 43 43 17 45 139 155

Book value per share x 2.94 2.77 2.92 2.92 3.72 4.53 Jaguar A$m -15 20 41 52 72 92

P/Book value x 1.9x 2.0x 1.9x 1.9x 1.5x 1.2x Tropicana A$m 0 0 46 81 142 144

R.O.E. (pre sig items) % 13% 4% 11% 15% 27% 25% EBITDA BY PROJECT

R.O.A. (pre sig items) % -1% 4% 12% 18% 29% 28%

Interest Cover x 0.7x -18.0x 22.9x -281.8x -45.5x -29.7x


EV/EBITDA x 33.1x 21.8x 7.1x 4.7x 2.1x 1.7x


Sales Revenue A$m 207 222 398 525 690 736


Total Revenue A$m 207 223 398 525 690 736





EBITDA A$m 33 58 174 240 428 466

D&A A$m (39) (24) (70) (94) (93) (94)

EBIT A$m (6) 34 104 146 334 372

Net Interest A$m 8 2 (5) 1 7 13 RESERVES AND RESOURCES (ATTRIBUTABLE)

Profit Before Tax A$m 2 35 100 146 342 385 Nickel reserves

Tax Expense A$m 84 (10) (21) (43) (103) (115) Project (kt) Mt % Ni Ni (kt)

Minorities A$m 0 0 0 0 0 0 Long 0.7 4.0% 30

Adjusted NPAT A$m 86 26 79 103 239 269 Total nickel reserves (kt) 0.7 4.0% 30

Significant Items (post tax) A$m (371) (8) (32) 0 0 0 Nickel resources

Reported NPAT A$m (285) 18 47 103 239 269 Project (kt) Mt % Ni Ni (kt)

Long 1.4 5.3% 73

Total nickel resources (kt) 1.4 5.3% 73

CASHFLOW FY12 FY13 FY14 FY15e FY16e FY17e Gold reserves

Net Profit A$m (285) 18 47 103 239 269 Project (kt) Mt g/t Au Au (koz)

Interest/Tax/D&A A$m (56) (0) 92 134 186 96 Tropicana (IGO share) 16.0 2.1 1,068

Working Capital/other A$m 375 12 15 (5) (14) (0) Total gold reserves (koz) 16.0 2.1 1,068

Net Operating Cashflow A$m 34 30 154 232 411 366 Gold Resources

Capex A$m (156) (177) (123) (77) (130) (189) Project (kt) Mt g/t Au Cu (kt)

Investments A$m 0 (0) (0) 0 0 0 Tropicana (IGO share) 34.7 2.0 2,262

Sale of PPE and Other A$m 0 0 0 0 0 0 Total gold resources (koz) 34.7 2.0 2,262

Free cash flow A$m (122) (148) 30 155 281 176 Copper reserves

Dividends Paid A$m (11) (5) (9) (26) (49) (77) Project (kt) Mt % Cu Cu (kt)

Debt A$m (18) (13) 9 (27) 0 0 Jaguar 1.3 1.8% 23

Equity Issuance A$m 116 0 0 0 0 0 Total copper reserves (kt) 1.3 1.8% 23

Other A$m 0 0 0 0 0 0 Copper Resources

Net Financing Cashflow A$m 87 (18) (0) (53) (49) (77) Project (kt) Mt % Cu Cu (kt)

Net change in cash A$m (35) (165) 30 102 232 99 Jaguar 4.4 1.6% 71

Total copper resources (kt) 4.4 1.6% 71

EQUITY DCF VALUATION

BALANCE SHEET FY12 FY13 FY14 FY15e FY16e FY17e Projects A$m A$ps

Cash A$m 193 27 57 159 390 489 Long 498 2.10

PP&E & Mine Development A$m 160 385 412 358 395 490 Jaguar 238 1.01

Exploration A$m 203 199 187 116 126 136 Tropicana 641 2.71

Total Assets A$m 813 822 891 824 1,150 1,332 Stockman 76 0.32

Debt A$m 19 18 28 2 2 2 Undeveloped Resources 24 0.10

Total Liabilities A$m 171 173 204 133 269 260 Unpaid capital 0 0.00

Total Net Assets / Equity A$m 642 649 687 691 881 1,073 Corporate/forwards (50) (0.21)

Net Debt / (Cash) A$m (174) (10) (29) (157) (389) (487) Net cash (debt) 115 0.49

Gearing (net debt/(nd + equity)) % (37%) (2%) (4%) (29%) (79%) (83%) Net Equity Value (@ 9% WACC) 1,541 6.51

Gearing (net debt/equity) % (27%) (1%) (4%) (23%) (44%) (45%) Price Target (1x NPV) 6.50

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Long (A$m) Jaguar (A$m) Tropicana (A$m) Stockman (A$m)


20 March 2015 12

Fig 10 KCN summary financials

Source: KCN, Macquarie Research, March 2015

Kingsgate Consolidated

ASX: KCN Price: (A$ps) 0.67 Year end: Jun Rating: Underperform Up/dn TSR

Mkt cap: (A$m) 150 Diluted shares (m) 224.6 Target: 0.50 -25% -25%



Spot Gold (US$/oz) 1,672 1,604 1,295 1,227 1,314 1,408 Chatree (koz) 121.4 133.7 134.5 130.1 127.5 127.5

Challenger (koz) 87.4 66.2 75.0 74.4 50.5 0.0

RATIO ANALYSIS FY12 FY13 FY14 FY15e FY16e FY17e Nueva Esperanza (koz) 0.0 0.0 0.0 0.0 0.0 0.0

Diluted share capital m 143.2 151.8 172.2 224.6 224.6 224.6 Bowdens (koz) 0.0 0.0 0.0 0.0 0.0 0.0

EPS (diluted and pre sig. items) A¢ 53.6 19.7 -7.1 -4.2 10.1 7.6 Total (koz) 208.8 199.9 209.5 204.6 178.0 127.5

P/E x 1.3x 3.4x -9.5x -15.9x 6.7x 8.8x Cash costs - AISC

CFPS A¢ 115.4 56.0 21.5 24.6 44.9 36.6 Chatree (A$/oz) 812 1,036 978 1,121 1,454 1,403

P/CF x 0.6x 1.2x 3.1x 2.7x 1.5x 1.8x Challenger (A$/oz) 1,217 2,118 1,469 1,363 0 0

DPS A¢ 20.0 5.0 0.0 0.0 0.0 0.0 Nueva Esperanza (A$/oz) 0 0 0 0 0 0

Dividend yield % 29.9% 7.5% 0.0% 0.0% 0.0% 0.0% Bowdens (A$/oz) 0 0 0 0 0 0

Franking Level % 0% 0% 0% 0% 0% 0% Cash costs - AISC (A$/oz) 1,063 1,478 1,246 1,307 1,161 1,545

Book value per share x 5.42 3.12 2.40 1.91 2.01 2.09 C1 Cash cost (A$/oz) 589 753 934 978 738 989


R.O.E. (pre sig items) % 10% 6% -3% -2% 5% 4%

R.O.A. (pre sig items) % 10% 4% 1% -1% 6% 5%

Interest Cover x 12.8x 1.9x 0.3x -0.9x 5.3x 6.7x EV/Production (A$/oz) 1,126 1,176 1,122 1,150 1,321 1,845




Sales Revenue A$m 357 329 328 319 364 273


Total Revenue A$m 357 329 328 319 364 273





EBITDA A$m 169 116 62 56 106 83

D&A A$m (68) (86) (58) (64) (67) (54)

EBIT A$m 101 30 4 (8) 40 29

Net Interest A$m (8) (16) (13) (9) (7) (4)

Profit Before Tax A$m 93 14 (9) (17) 32 24

Tax Expense A$m (16) 16 (3) 7 (10) (7)

Minorities A$m (0) 0 0 0 0 0

Adjusted NPAT A$m 77 30 (12) (9) 23 17

Significant Items (post tax) A$m (2) (354) (84) (20) 0 0

Reported NPAT A$m 75 (324) (96) (30) 23 17 RESERVES AND RESOURCES (ATTRIBUTABLE)

Reserves

Project Mt g/t koz

CASHFLOW FY12 FY13 FY14 FY15e FY16e FY17e Chatree 54.4 0.8 1,390

Net Profit A$m 75 -324 -96 -30 23 17 Challenger 0.8 5.8 156

Interest/Tax/D&A A$m 78 63 63 55 76 62 Nueva Esperanza 17.1 0.3 148

Working Capital/other A$m 12 346 70 30 2 3 Bowdens 0.0 0.0 0

Net Operating Cashflow A$m 165 85 37 55 101 82 Total 72.3 0.7 1,694

Capex A$m (174) (134) (41) (34) (43) (35)

Investments A$m (58) (9) 1 (0) 0 0 Resources

Sale of PPE and Other A$m 0 0 0 0 0 0 Project Mt g/t koz

Free cash flow A$m (67) (57) (3) 21 58 48 Chatree 181.3 0.66 3,840

Dividends Paid A$m (19) (19) 0 0 0 0 Challenger 2.5 7.84 640

Debt A$m 70 18 (26) (29) (43) (42) Nueva Esperanza 28.9 0.27 251

Equity Issuance A$m 71 0 56 0 0 0 Bowdens 88.0 0.00 0

Other A$m 0 0 0 0 0 0 Total 300.7 0.49 4,731

Net Financing Cashflow A$m 122 (2) 31 (29) (43) (42)

Net change in cash A$m 55 (59) 28 (8) 15 5 EV/Reserve (A$/oz) 139 EV/Resource (A$/oz) 50



BALANCE SHEET FY12 FY13 FY14 FY15e FY16e FY17e Chatree 186 0.83 115 0.51

Cash A$m 91 33 59 55 71 76 Challenger 18 0.08 8 0.03

PP&E & Mine Development A$m 236 190 165 155 131 111 Nueva Esperanza 21 0.09 23 0.10

Exploration A$m 548 363 257 267 267 267 Bowdens 3 0.01 3 0.01

Total Assets A$m 1,048 770 643 634 643 602 Undeveloped Resources 45 0.20 48 0.21


Total Liabilities A$m 273 296 230 204 191 133 Forwards 0 0.00 0 0.00


Net Debt / (Cash) A$m 67 167 95 87 29 (19) Net cash (debt) (85) (0.38) (86) (0.38)

Gearing (net debt/(nd + equity)) % 8% 26% 19% 17% 6% (4%) Net Equity Value (@ 12% WACC) 112 0.50 34 0.15

Gearing (net debt/equity) % 9% 35% 23% 20% 6% (4%) Price Target (1.0x NPV) 0.50

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20 March 2015 13

Fig 10 MML summary financials

Source: MML, Macquarie Research, March 2015

Medusa Mining

ASX: MML Price: (A$ps) 0.84 Year end: Jun Rating: Neutral Up/dn TSR



Exchange Rate A$/US$ 1.03 1.03 0.92 0.84 0.68 0.71 Gold production (koz)

Spot Gold (US$/oz) 1,672 1,604 1,295 1,227 1,314 1,408 Co-O (koz) 60.6 62.2 59.9 99.9 104.1 113.9

Bananghilig (koz) 0.0 0.0 0.0 0.0 0.0 0.0

RATIO ANALYSIS FY12 FY13 FY14 FY15e FY16e FY17e Total (koz) 60.6 62.2 59.9 99.9 104.1 113.9


EPS (diluted and pre sig. items) US¢ 26.2 26.6 15.5 10.7 2.4 13.3 C1 cash costs

P/E x 3.2x 3.2x 5.4x 7.8x 35.0x 6.3x Co-O (US$/oz) 253 303 394 411 451 428

CFPS US¢ 25.7 44.6 20.2 31.4 36.6 47.3 Bananghilig (US$/oz)

P/CF x 3.3x 1.9x 4.1x 2.7x 2.3x 1.8x Cash costs - AISC

DPS US¢ 7.0 0.0 0.0 0.0 0.0 0.0 Co-O (US$/oz) 1,029 1,037 1,153 1,005 973 906

Dividend yield % 8.3% 0.0% 0.0% 0.0% 0.0% 0.0% Bananghilig (US$/oz)

Franking Level % 0% 0% 0% 0% 0% 0%

Book value per share x 1.67 1.87 2.04 2.10 2.13 2.26 EV/Production (US$/oz) 2,722 2,650 2,753 1,650 1,584 1,449


R.O.E. (pre sig items) % 16% 14% 8% 5% 1% 6%

R.O.A. (pre sig items) % 14% 13% 7% 5% 1% 5%

Interest Cover x -130.8x -1882.1x -192.8x 468.4x -27.0x -20.1x



EARNINGS FY12 FY13 FY14 FY15e FY16e FY17e OPERATIONAL OUTLOOK

Sales Revenue US$m 81 101 84 122 137 160

Other Revenue US$m 0 0 0 0 0 0

Total Revenue US$m 81 101 84 122 137 160

Operating Costs US$m (15) (19) (24) (41) (47) (49)

Operational EBITDA US$m 65 82 60 81 90 112

Exploration Expense/Write-offs US$m 0 0 (0) 0 0 0

Corporate & Other Costs US$m (7) (18) (12) (8) (8) (8)

EBITDA US$m 58 64 48 73 82 103

D&A US$m (10) (13) (18) (49) (77) (77)

EBIT US$m 48 51 31 23 5 26

Net Interest US$m 0 0 0 (0) 0 1

Profit Before Tax US$m 48 51 31 23 5 28

Tax Expense US$m 1 (0) 0 (1) 0 0

Minorities US$m 0 0 0 0 0 0

Adjusted NPAT US$m 50 51 31 22 5 28

Significant Items (post tax) US$m 0 0 (1) 0 0 0

Reported NPAT US$m 50 51 31 22 5 28

CASHFLOW FY12 FY13 FY14 FY15e FY16e FY17e RESERVES AND RESOURCES (ATTRIBUTABLE)

Net Profit US$m 50 51 31 22 5 28 Reserves

Interest/Tax/D&A US$m (6) 3 9 45 73 73 Project Mt g/t koz

Working Capital/other US$m 5 32 1 (2) (2) (2) Co-O 1.9 7.3 450

Net Operating Cashflow US$m 49 85 41 65 76 98 Bananghilig 0.0 0.0 0

Capex US$m (73) (89) (66) (60) (56) (57) Saugon 0.0 0.0 0

Investments US$m 0 0 0 0 0 0 Total 1.9 7.3 450

Sale of PPE and Other US$m 0 0 0 0 0 0

Free cash flow US$m (25) (4) (25) 6 20 41 Resources

Dividends Paid US$m (19) (4) 0 0 0 0 Project Mt g/t koz

Debt US$m 0 2 7 (1) (8) 0 Co-O 4.3 10.11 1,410

Equity Issuance US$m 1 0 30 0 0 0 Bananghilig 24.5 1.45 1,140

Other US$m 0 0 0 0 0 0 Saugon 0.1 7.78 20

Net Financing Cashflow US$m (18) (2) 37 (1) (8) 0 Total 28.9 2.76 2,570

Net change in cash US$m (43) (6) 12 5 12 41 EV/Reserve (A$/oz) 367 EV/Resource (A$/oz) 64



BALANCE SHEET FY12 FY13 FY14 FY15e FY16e FY17e Co-O 212 1.02 136 0.65

Cash US$m 12 5 13 18 29 70 Bananghilig 0 0.00 0 0.00

PP&E & Mine Development US$m 64 102 115 107 87 117 Saugon 0 0.00 0 0.00

Exploration US$m 183 220 262 279 283 237 Other 0 0.00 0 0.00

Total Assets US$m 332 379 445 463 467 504 Undeveloped Resources 0 0.00 0 0.00

Debt US$m 0 2 9 8 0 0 Unpaid capital & Investments 0 0.00 0 0.00

Total Liabilities US$m 17 23 33 25 25 35 Forwards 0 0.00 0 0.00

Total Net Assets / Equity US$m 316 356 412 437 442 470 Corporate (30) (0.14) (30) (0.14)

Net Debt / (Cash) US$m (12) (2) (4) (9) (29) (70) Net cash (debt) 10 0.05 9 0.04

Gearing (net debt/(nd + equity)) % (4%) (1%) (1%) (2%) (7%) (18%) Net Equity Value (@ 12% WACC) 192 0.92 116 0.56

Gearing (net debt/equity) % (4%) (1%) (1%) (2%) (7%) (15%) Price Target (1.0x NPV) 0.90

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20 March 2015 14

Fig 10 NCM summary financials

Source: NCM, Macquarie Research, March 2015

Newcrest Mining

ASX: NCM Price: (A$ps) 13.22 Year end: Jun Rating: Neutral Up/dn TSR

Mkt cap: (A$m) 10,133 Diluted shares (m) 766.5 Target: 15.00 13% 13%


Exchange Rate A$/US$ 1.03 1.03 0.92 0.84 0.68 0.71 Gold production

Gold (US$/oz) 1,672 1,604 1,296 1,227 1,314 1,408 Cadia Valley (koz) 473 447 593 641 679 755

Copper (US$/lb) 3.70 3.48 3.21 2.93 2.98 3.25 Telfer (koz) 475 526 536 544 512 531

RATIO ANALYSIS FY12 FY13 FY14 FY15e FY16e FY17e Lihir (koz) 604 649 721 685 854 815

Diluted share capital m 766.2 767.4 769.6 768.2 768.2 768.2 Gosowong (koz) 439 313 345 303 320 320

EPS (diluted and pre sig. items) A¢ 142.1 58.1 56.1 63.9 190.7 198.2 Bonikro (koz) 92 90 95 102 130 120

P/E x 9.3x 22.7x 23.6x 20.7x 6.9x 6.7x Hidden Valley (koz) 89 85 106 98 91 91

CFPS A¢ 204.7 72.3 126.7 157.5 293.1 308.9 Total (koz) 2,173 2,110 2,396 2,374 2,586 2,632

P/CF x 6.5x 18.3x 10.4x 8.4x 4.5x 4.3x Copper production

DPS A¢ 35.0 12.0 0.0 0.0 31.0 60.0 Cadia Valley (kt) 45 54 61 73 79 55

Dividend yield % 2.6% 0.9% 0.0% 0.0% 2.3% 4.5% Telfer (kt) 31 26 26 26 26 27

Franking Level % 8% 0% 0% 0% 25% 100% Total (kt) 76 80 86 99 104 82

Book value per share x 19.70 13.03 10.01 11.28 13.19 14.55 AISC (A$/oz)

P/Book value x 0.7x 1.0x 1.3x 1.2x 1.0x 0.9x Cadia Valley (A$/oz) 678 483 330 270 151 424

R.O.E. (pre sig items) % 7% 4% 6% 6% 14% 14% Telfer (A$/oz) 1,451 1,414 975 938 1,342 1,327

R.O.A. (pre sig items) % 8% 4% 6% 6% 12% 12% Lihir (A$/oz) 870 1,042 1,233 1,453 1,095 1,131

Interest Cover x 38.8x 6.8x 4.7x 5.3x 15.2x 24.1x Gosowong (A$/oz) 497 692 796 891 979 998

EBITDA per share A$ps 2.81 1.92 1.97 2.17 4.08 4.03 Bonikro (A$/oz) 1,767 1,881 1,063 1,141 1,395 1,531

EV/EBITDA x 5.7x 9.7x 9.3x 8.4x 4.0x 3.6x Hidden Valley (A$/oz) 1,935 2,377 1,415 1,634 1,476 1,484

AISC (A$/oz) (A$/oz) 961 1,396 953 967 941 1,013

OPERATIONAL OUTLOOK


Sales Revenue A$m 4,416 3,775 4,040 4,339 6,092 6,112


Total Revenue A$m 4,416 3,775 4,040 4,339 6,092 6,112

Operating Costs A$m (2,041) (2,158) (2,385) (2,555) (2,802) (2,861)

Operational EBITDA A$m 2,375 1,617 1,655 1,783 3,290 3,251



EBITDA A$m 2,151 1,473 1,514 1,668 3,135 3,092

D&A A$m (561) (728) (693) (744) (895) (823)

EBIT A$m 1,590 745 821 924 2,240 2,269

Net Interest A$m (41) (109) (174) (174) (148) (94) RESERVES AND RESOURCES (ATTRIBUTABLE)

Profit Before Tax A$m 1,549 636 647 750 2,093 2,175 Reserves Copper Gold

Tax Expense A$m (402) (187) (209) (252) (628) (652) Project Mt % Mt Mt g/t Moz

Minorities A$m (58) (3) (6) (7) 0 0 Cadia Valley 1,775 0.28% 5.0 1,775 0.5 28.0

Adjusted NPAT A$m 1,089 446 432 491 1,465 1,522 Telfer 228 0.16% 0.4 228 0.7 4.8

Significant Items (post tax) A$m 28 (6,229) (2,653) 0 0 0 Lihir 380 2.4 29.0

Reported NPAT A$m 1,117 (5,783) (2,221) 491 1,465 1,522 Gosowong 3 11.4 1.1

Bonikro 24 1.3 1.0

Hidden Valley 29 1.6 1.5

CASHFLOW FY12 FY13 FY14 FY15e FY16e FY17e Wafi Golpu 230 1.17% 2.7 230 0.8 6.2

Net Profit A$m 1,117 (5,783) (2,221) 491 1,465 1,522 Namosi 930 0.38% 3.5 930 0.1 3.6

Interest/Tax/D&A A$m 691 677 751 865 895 823 Reserves 3,163 0.36% 11.5 3,599 0.6 75.2

Working Capital/other A$m (240) 5,661 2,445 (146) (108) 27 Resources Copper Gold

Net Operating Cashflow A$m 1,568 555 975 1,210 2,252 2,373 Project Mt % Mt Mt g/t Moz

Capex A$m (2,596) (1,906) (842) (668) (623) (556) Cadia Valley 3,300 0.26% 8.6 3,300 0.4 44.1

Investments A$m (1) (26) 0 100 0 0 Telfer 489 0.17% 0.8 489 0.8 11.9

Sale of PPE and Other A$m 0 (40) 0 (3) 0 0 Lihir 780 2.4 59.0

Free cash flow A$m (1,029) (1,417) 133 639 1,629 1,817 Gosowong 5 13.0 2.0

Dividends Paid A$m (405) (256) (16) (24) 0 (475) Bonikro 39 1.4 1.8

Debt A$m 1,539 1,376 (39) 33 345 (1,134) Hidden Valley 56 1.5 2.7

Equity Issuance A$m (44) 116 (6) 0 0 0 Wafi Golpu 620 0.76% 4.7 620 0.7 14.0

Other A$m 0 0 0 0 0 0 Namosi 1,520 0.35% 5.3 1,520 0.1 5.3

Net Financing Cashflow A$m 1,090 1,236 (61) 9 345 (1,609) Marsden 277 0.30% 0.8 277 0.1 1.3

Net change in cash A$m 61 (181) 72 648 1,974 207 Total 6,206 0.33% 20.3 7,085 0.6 142.1



BALANCE SHEET FY12 FY13 FY14 FY15e FY16e FY17e Cadia Valley 8,301 10.81 6,643 8.65

Cash A$m 242 69 141 789 2,763 2,971 Telfer 1,183 1.54 754 0.98

PP&E & Mine Development A$m 4,364 5,544 4,683 4,988 4,716 4,449 Lihir 4,848 6.31 4,069 5.30

Exploration A$m 8,795 7,863 5,879 6,450 6,450 6,450 Gosowong 600 0.78 432 0.56

Total Assets A$m 20,509 17,073 13,587 15,880 18,880 18,612 Bonikro 165 0.21 83 0.11

Debt A$m 2,408 4,211 4,076 4,709 5,054 3,920 Hidden Valley 135 0.18 41 0.05

Total Liabilities A$m 5,415 7,071 5,880 7,215 8,751 7,436 Undeveloped Resources 928 1.21 902 1.17

Total Net Assets / Equity A$m 15,094 10,002 7,707 8,664 10,129 11,176 Corporate, forwards & other (543) (0.71) (526) (0.68)

Net Debt / (Cash) A$m 2,166 4,142 3,935 3,920 2,291 949 Cash 310 0.40 644 0.84

Gearing (net debt/(nd + equity)) % 13% 29% 34% 31% 18% 8% Debt (4,393) (5.72) (4,710) (6.13)

Gearing (net debt/equity) % 14% 41% 51% 45% 23% 8% Net Equity Value (@ 6.0% WACC) 11,534 15.01 8,333 10.85

Price Target (NPV) 15.00

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Bonikro Hidden Valley AISC


20 March 2015 15

Fig 10 NST summary financials

Source: NST, Macquarie Research, March 2015

Northern Star Mining

ASX: NST Price: (A$ps) 2.43 Year end: Jun Rating: Neutral Up/dn TSR

Mkt cap: (A$m) 1,443 Diluted shares (m) 593.8 Target: 2.35 -3% 2%



Spot Gold (US$/oz) 1,672 1,604 1,295 1,227 1,314 1,408 Paulsens (koz) 67.2 88.6 100.0 78.4 82.7 82.7

Plutonic (koz) 0.0 0.0 41.6 93.7 122.8 124.0

RATIO ANALYSIS FY12 FY13 FY14 FY15e FY16e FY17e Kanowna Belle (koz) 0.0 0.0 41.3 93.7 86.9 41.4

Diluted share capital m 430.0 429.3 483.3 593.8 593.8 593.8 Kundana (koz) 0.0 0.0 32.4 105.2 109.8 114.8

EPS (diluted and pre sig. items) A¢ 5.1 7.9 8.1 26.4 57.9 63.0 Jundee (koz) 0.0 0.0 0.0 224.3 225.0 225.0

P/E x 47.4x 30.6x 29.9x 9.2x 4.2x 3.9x Total (koz) 67.2 88.6 215.4 595.3 627.1 587.9

CFPS A¢ 11.4 14.0 19.3 45.8 73.0 85.0 Cash costs - AISC

P/CF x 21.3x 17.4x 12.6x 5.3x 3.3x 2.9x Paulsens (A$/oz) 969 980 1,061 1,252 1,232 1,256

DPS A¢ 2.5 3.5 3.5 8.2 18.2 18.4 Plutonic (A$/oz) 0 0 1,389 1,371 1,164 1,177

Dividend yield % 1.0% 1.4% 1.4% 3.4% 7.5% 7.6% Kanowna Belle (A$/oz) 0 0 958 1,149 1,383 1,407

Franking Level % 100% 100% 100% 100% 100% 100% Kundana (A$/oz) 0 0 732 627 662 648

Book value per share x 0.22 0.26 0.51 0.62 1.09 1.52 Jundee (A$/oz) 0 0 0 924 948 968

P/Book value x 11.1x 9.5x 4.8x 3.9x 2.2x 1.6x Cash costs - AISC (A$/oz) 969 980 1,069 1,073 1,038 1,021

R.O.E. (pre sig items) % 23% 31% 16% 42% 53% 41% C2 Cash cost (A$/oz) 661 684 868 812 826 806

R.O.A. (pre sig items) % 22% 26% 13% 33% 49% 43%

Interest Cover x -19.1x -41.7x -179.0x 104.2x -97.9x -40.6x EV/Production (A$/oz) 20,325 15,415 6,341 2,294 2,178 2,323




Sales Revenue A$m 100 144 297 875 1,178 1,165


Total Revenue A$m 100 144 299 876 1178 1165





EBITDA A$m 47 68 98 356 629 662

D&A A$m (17) (26) (48) (133) (144) (141)

EBIT A$m 30 42 51 223 486 521

Net Interest A$m 2 1 0 (2) 5 13

Profit Before Tax A$m 32 43 51 221 491 534

Tax Expense A$m (9) (8) (12) (64) (147) (160)

Minorities A$m 0 0 0 0 0 0 RESERVES AND RESOURCES (ATTRIBUTABLE)

Adjusted NPAT A$m 22 34 39 156 344 374 Reserves

Significant Items (post tax) A$m (0) (6) (15) (13) 0 0 Project Mt g/t koz

Reported NPAT A$m 22 28 24 144 344 374 Paulsens 1.1 3.6 124

Plutonic 0.6 6.2 113

Kanowna Belle 2.1 3.6 240

CASHFLOW FY12 FY13 FY14 FY15e FY16e FY17e Kundana 0.8 11.1 278

Net Profit A$m 22 28 24 144 344 374 Jundee 2.5 4.8 383

Interest/Tax/D&A A$m 24 30 50 119 111 116 Ashburton 0.4 3.8 50

Working Capital/other A$m 3 2 19 9 (21) 15 Total 7.4 5.0 1,188



Investments A$m (7) (1) (126) (91) 0 0 Paulsens 2.8 4.5 414

Sale of PPE and Other A$m 0 0 0 0 0 0 Plutonic 8.2 5.5 1,446

Free cash flow A$m (3) 2 (77) 66 304 374 Kanowna Belle 7.9 4.4 1,115

Dividends Paid A$m 0 (15) (16) (27) (66) (118) Kundana 2.1 12.9 865

Debt A$m 5 2 (5) (3) 0 0 Jundee 9.2 3.9 1,150

Equity Issuance A$m 46 1 126 0 0 0 Ashburton 21.3 2.4 1,668

Other A$m 0 0 0 0 0 0 Total 51.6 4.0 6,658

Net Financing Cashflow A$m 51 (12) 104 (30) (66) (118) EV/Reserve (A$/oz) 1,150 EV/Resource (A$/oz) 205

Net change in cash A$m 48 (9) 27 36 238 256 EQUITY DCF VALUATION Macquarie forecasts Spot prices


Paulsens 110 0.19 63 0.11

BALANCE SHEET FY12 FY13 FY14 FY15e FY16e FY17e Plutonic 183 0.31 111 0.19

Cash A$m 65 56 82 119 356 612 Kanowna Belle 50 0.08 21 0.04

PP&E & Mine Development A$m 26 52 151 265 250 240 Kundana 402 0.68 334 0.56

Exploration A$m 25 30 69 111 143 167 Jundee 409 0.69 298 0.50

Total Assets A$m 134 157 397 671 989 1,223 Undeveloped Resources & Exploration 252 0.42 267 0.45

Debt A$m 9 11 6 13 13 13 Unpaid capital 2 0.00 2 0.00

Total Liabilities A$m 39 47 152 301 341 320 Forwards & Investments (47) (0.08) (20) (0.03)


Net Debt / (Cash) A$m (56) (45) (76) (105) (343) (599) Net cash (debt) 77 0.13 78 0.13

Gearing (net debt/(nd + equity)) % (142%) (68%) (46%) (40%) (113%) (197%) Net Equity Value (@ 9% WACC) 1,397 2.35 1,113 1.87

Gearing (net debt/equity) % (59%) (40%) (31%) (28%) (53%) (66%) Price Target (1x NPV) 2.35

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20 March 2015 16

Fig 10 PRU summary financials

Source: PRU, Macquarie Research, March 2015

Perseus Mining

ASX: PRU Price: (A$ps) 0.27 Year end: Jun Rating: Outperform Up/dn

Mkt cap: (A$m) 142 Diluted shares (m) 526.7 AUD Target: 0.40 48%

CAD Target: 0.39

ASSUMPTIONS FY12 FY13 FY14 FY15e FY16e FY17e FY18e ATTRIBUTABLE MINE OUTPUT FY12 FY13 FY14 FY15e FY16e FY17e


Spot Gold (US$/oz) 1,672 1,604 1,295 1,227 1,314 1,408 1,459 Edikan (koz) 137.3 210.6 180.5 198.7 188.0 188.0

Total (koz) 137.3 210.6 180.5 198.7 188.0 188.0

RATIO ANALYSIS FY12 FY13 FY14 FY15e FY16e FY17e FY18e Cash costs

Diluted share capital m 461.9 494.1 526.7 526.7 526.7 526.7 526.7 Edikan (A$/oz) 589 837 1,043 923 987 1,017

EPS (diluted and pre sig. items) A¢ 9.6 -0.8 -2.6 2.2 1.9 1.3 1.2 AISC Cash Costs

P/E x 2.8x -35.9x -10.2x 12.5x 14.4x 20.1x 22.5x Edikan (A$/oz) - 931 1,360 1,183 1,075 1,114

CFPS A¢ 6.5 24.8 2.0 5.7 10.2 9.6 9.2 AISC Cash Costs (A$/oz) - 931 1,360 1,183 1,075 1,114

P/CF x 4.1x 1.1x 13.3x 4.7x 2.6x 2.8x 2.9x Operational EBITDA Contribution (pre hedging)

DPS A¢ 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Edikan A$m - 129 37 48 66 78

Dividend yield % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Franking Level % 100% 75% 50% 100% 100% 100% 100%

Book value per share x 0.78 0.97 0.89 1.03 1.05 1.06 1.08 OPERATIONAL OUTLOOK


R.O.E. (pre sig items) % 13% 13% -3% 2% 2% 1% 1%

R.O.A. (pre sig items) % 11% 14% -3% 3% 2% 1% 1%

Interest Cover x -49.7x -118.0x -11.7x -92.5x -6.8x -3.3x -2.1x

EBITDA per share A$ps 0.15 0.21 0.05 0.13 0.11 0.10 0.10



Sales Revenue A$m 145 294 264 314 380 372 368


Total Revenue A$m 145 294 264 314 380 372 368


Operational EBITDA A$m 86 141 68 80 82 78 77

Exploration Expense/Write-offs A$m 0 0 0 (1) (0) (0) (0)


EBITDA A$m 67 105 25 66 57 52 50

D&A A$m (10) (20) (41) (46) (44) (44) (44)

EBIT A$m 57 85 (16) 20 12 8 6

Net Interest A$m 1 1 (1) 0 2 2 3

Profit Before Tax A$m 58 85 (17) 21 14 10 9

Tax Expense A$m (8) (21) 5 (9) (4) (3) (3)

Minorities A$m (5) (3) (1) (1) 0 0 0

Adjusted NPAT A$m 45 61 (13) 11 10 7 6

Significant Items A$m 10 12 (20) 39 0 0 0

Reported NPAT A$m 55 73 (33) 50 10 7 6


Net Profit A$m 55 73 -33 50 10 7 6

Interest/Tax/D&A A$m (19) 54 28 42 42 42 42

Working Capital/other A$m (6) (5) 16 (63) 2 1 (0)

Net Operating Cashflow A$m 30 123 11 30 54 50 48

Capex A$m (70) (38) (39) (29) (28) (34) (29) RESERVES AND RESOURCES (ATTRIBUTABLE)

Investments A$m 0 0 0 0 0 0 0 Reserves

Sale of PPE and Other A$m 4 7 (0) (0) 0 0 0 Project Mt g/t koz

Free cash flow A$m (36) 91 (29) 1 26 16 19 Edikan 75.4 1.1 2,685

Dividends Paid A$m 0 0 0 0 0 0 0 Sissingue 9.7 2.1 657

Debt A$m (21) (61) 0 0 0 0 0 Total 85.1 1.2 3,342

Equity Issuance A$m 90 (0) 31 0 0 0 0 Resources

Other A$m 0 0 0 0 0 0 0 Project Mt g/t koz

Net Financing Cashflow A$m 68 (61) 31 0 0 0 0 Edikan 224.7 1.05 7,613

Net change in cash A$m 33 30 2 1 26 16 19 Sissingue 26.0 1.46 1,216

Total 250.7 1.10 8,829

BALANCE SHEET FY12 FY13 FY14 FY15e FY16e FY17e FY18e EQUITY DCF VALUATION Macquarie forecasts Spot prices

Cash A$m 105 35 37 49 74 91 110 Projects A$m A$ps A$m A$ps

PP&E & Mine Development A$m 288 367 374 405 389 379 364 Edikan 180 0.34 47 0.09



Debt A$m 60 0 0 0 0 0 0 Forwards 31 0.06 35 0.07


Total Net Assets / Equity A$m 360 481 467 544 554 561 567 Net cash (debt) 48 0.09 33 0.06

Net Debt / (Cash) A$m (45) (35) (37) (49) (74) (91) (110) Net Equity Value (@ 11% WACC) 208 0.40 67 0.13

Gearing (net debt/(nd + equity)) % (14%) (8%) (9%) (10%) (15%) (19%) (24%) Price Target 0.40 0.13

Gearing (net debt/equity) % (13%) (7%) (8%) (9%) (13%) (16%) (19%)

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20 March 2015 17

Fig 10 RRL summary financials

Source: RRL, Macquarie Research, March 2015

Regis Resources

ASX: RRL Price: (A$ps) 1.29 Year end: Jun Rating: Outperform Up/dn TSR




Spot Gold (US$/oz) 1,371 1,672 1,604 1,295 1,227 1,314 1,408 Moolart Well (koz) 80.9 105.4 105.7 104.8 97.6 84.0 79.7

Garden Well (incl Erlistoun) (koz) - - 163.3 137.2 110.9 134.7 175.8

RATIO ANALYSIS FY11 FY12 FY13 FY14 FY15e FY16e FY17e Rosemont (koz) - - 0.0 29.8 95.1 90.6 90.6

Diluted share capital m 440.1 461.9 494.1 499.8 499.7 499.7 499.7 Total (koz) 80.9 105.4 269.0 271.8 303.6 309.3 346.1

EPS (diluted and pre sig. items) A¢ 8.4 15.2 30.2 28.4 12.7 23.8 42.5 Cash costs

P/E x 15.3x 8.5x 4.3x 4.5x 10.1x 5.4x 3.0x Moolart Well (A$/oz) 559 512 552 587 633 726 766

CFPS A¢ 7.0 17.4 42.7 24.8 23.8 44.9 72.8 Garden Well (incl Erlistoun) (A$/oz) - - 671 959 984 859 707

P/CF x 18.4x 7.4x 3.0x 5.2x 5.4x 2.9x 1.8x Rosemont (A$/oz) - - 0 1,387 848 905 905

DPS A¢ 0.0 0.0 15.0 0.0 3.0 14.0 25.0 Group (A$/oz) 559 512 624 862 829 837 772

Dividend yield % 0.0% 0.0% 11.6% 0.0% 2.3% 10.9% 19.4% AISC Cash Costs

Franking Level % 100% 100% 100% 100% 0% 0% 0% Moolart Well (A$/oz) 627 594 631 694 781 911 961

Book value per share x 0.32 0.52 1.09 0.64 0.77 0.98 1.27 Garden Well (incl Erlistoun) (A$/oz) - - 1,002 1,319 1,264 1,123 929

P/Book value x 4.0x 2.5x 1.2x 2.0x 1.7x 1.3x 1.0x Rosemont (A$/oz) - - - 1,831 1,091 1,189 1,193

R.O.E. (pre sig items) % 26% 29% 27% 44% 17% 24% 34% Group (A$/oz) 627 594 856 1,134 1,054 1,085 1,005

R.O.A. (pre sig items) % 19% 23% 30% 17% 19% 26% 33% Operational EBITDA Contribution (pre hedging)

Interest Cover x -49x -64x -279x 123x 52x -196x -53x Moolart Well A$m 100 125 144 109 75 95 90

EBITDA per share A$ps 0.12 0.21 0.49 0.28 0.31 0.49 0.75 Garden Well (incl Erlistoun) A$m - - 138 55 48 136 210

EV/EBITDA x 11.9x 6.9x 2.4x 4.9x 4.1x 1.9x 0.7x Rosemont A$m - - - -1 53 87 90

OPERATIONAL OUTLOOK


Sales Revenue A$m 108 170 416 371 436 538 681


Total Revenue A$m 108 172 420 375 437 538 681





EBITDA A$m 55 98 243 139 155 246 377

D&A A$m (19) (24) (43) (59) (61) (77) (79)

EBIT A$m 36 74 200 80 93 169 298

Net Interest A$m 1 1 1 (1) (2) 1 6

Profit Before Tax A$m 36 75 201 79 92 170 304

Tax Expense A$m 0 (7) (55) 62 (28) (51) (91)


Adjusted NPAT A$m 36 68 146 142 64 119 213

Significant Items (post tax) A$m 0 0 0 (290) 0 0 0

Reported NPAT A$m 36 68 146 (148) 64 119 213 RESERVES AND RESOURCES (ATTRIBUTABLE)

Reserves

Project Mt g/t koz

CASHFLOW FY11 FY12 FY13 FY14 FY15e FY16e FY17e Moolart Well 8.2 0.9 246

Net Profit A$m 36 68 146 -148 64 119 213 Garden Well 51.8 0.9 1,551

Interest/Tax/D&A A$m 4 18 70 (17) 81 119 161 Erlistoun 2.7 2.3 203

Working Capital/other A$m (10) (6) (5) 289 (26) (14) (10) Rosemont 12.8 1.3 528

Net Operating Cashflow A$m 31 80 211 124 119 224 364 Total 75.5 1.04 2,528

Capex A$m (38) (123) (124) (147) (67) (55) (89) Resources

Investments A$m 0 1 (0) (0) (0) 0 0 Project Mt g/t koz

Sale of PPE and Other A$m 0 0 0 0 0 0 0 Moolart Well 55.3 0.74 1,313

Free cash flow A$m (7) (41) 87 (23) 51 169 275 Garden Well 88.8 0.89 2,550

Dividends Paid A$m 0 0 0 (75) 0 (15) (70) Erlistoun 5.3 1.89 322

Debt A$m 15 (0) (30) 40 (20) 0 (19) Rosemont 30.4 1.33 1,296

Equity Issuance A$m 9 15 3 3 0 0 0 Satellites 3.3 2.98 316

Other A$m 0 0 0 0 0 0 0 McPhillamys 73.1 0.94 2,210

Net Financing Cashflow A$m 25 15 (27) (32) (20) (15) (89) Total 256.2 0.97 8,007

Net change in cash A$m 18 (26) 60 (55) 32 154 186



BALANCE SHEET FY11 FY12 FY13 FY14 FY15e FY16e FY17e Moolart Well 204 0.41 144 0.29

Cash A$m 27 1 61 7 38 192 379 Garden Well incl Erlistoun 572 1.15 453 0.91

PP&E & Mine Development A$m 120 262 348 265 262 240 250 Rosemont 197 0.39 133 0.27



Debt A$m 30 30 0 40 20 20 1 Forwards (71) (0.14) (25) (0.05)


Total Net Assets / Equity A$m 140 238 540 321 386 490 632 Net cash (debt) 4 0.01 16 0.03

Net Debt / (Cash) A$m 3 29 (61) 33 (19) (173) (378) Net Equity Value (@ 9% WACC) 892 1.78 707 1.42

Gearing (net debt/(nd + equity)) % 2% 11% (13%) 9% (5%) (55%) (149%) Price Target 1.80 1.42

Gearing (net debt/equity) % 2% 12% (11%) 10% (5%) (35%) (60%) RRL Blended price target Blend 1.72

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20 March 2015 18

Fig 10 SAR summary financials

Source: SAR, Macquarie Research, March 2015

Saracen Mineral Holdings

ASX: SAR Price: (A$ps) 0.40 Year end: Jun Rating: Outperform Up/dn TSR



Exchange Rate A$/US$ 1.03 1.03 0.92 0.84 0.68 0.71 Gold production (equity)

Spot Gold (US$/oz) 1,672 1,604 1,295 1,227 1,314 1,408 Carosue Dam (koz) 116.1 136.2 133.5 167.6 171.3 152.9

Thunderbox (koz) 0.0 0.0 0.0 0.0 37.0 111.8

RATIO ANALYSIS FY12 FY13 FY14 FY15e FY16e FY17e Total (koz) 116.1 136.2 133.5 167.6 208.3 264.7

Diluted share capital m 576.6 595.1 657.3 794.3 794.3 794.3 Cash costs

EPS (diluted and pre sig. items) A¢ 5.3 -2.3 0.9 4.6 14.1 12.7 Carosue Dam (A$/oz) 905 1,071 864 828 608 887

P/E x 7.5x -17.2x 43.5x 8.7x 2.8x 3.2x Thunderbox (A$/oz) 1,041 1,135

CFPS A¢ 5.6 10.2 6.6 10.2 19.6 20.2 AISC Cash Costs

P/CF x 7.2x 3.9x 6.1x 3.9x 2.0x 2.0x Carosue Dam (A$/oz) 1,637 1,829 1,517 1,002 743 1,109

DPS A¢ 0.0 0.0 0.0 1.0 2.0 1.0 Thunderbox (A$/oz) 1,357 1,448

Dividend yield % 0.0% 0.0% 0.0% 2.5% 5.0% 2.5% AISC Cash Costs (A$/oz) 1,637 1,829 1,517 1,002 852 1,252

Franking Level % 0% 0% 0% 0% 100% 100% Operational EBITDA Contribution (pre hedging)

Book value per share x 0.36 0.30 0.35 0.33 0.46 0.57 Carosue Dam A$m 72 53 72 98 214 155

P/Book value x 1.1x 1.3x 1.1x 1.2x 0.9x 0.7x Thunderbox A$m 0 0 0 0 31 81

R.O.E. (pre sig items) % 15% -8% 3% 14% 31% 22% OPERATIONAL OUTLOOK

R.O.A. (pre sig items) % 14% -16% 3% 15% 31% 23%

Interest Cover x -14.1x -68.4x 5.4x 479.4x -56.5x -30.2x




Sales Revenue A$m 184 211 211 260 380 506


Total Revenue A$m 184 211 211 260 380 506





EBITDA A$m 63 24 42 101 210 209

D&A A$m (27) (62) (32) (48) (53) (70)

EBIT A$m 36 (38) 10 52 157 139

Net Interest A$m 3 (1) (2) (0) 3 5 RESERVES AND RESOURCES (ATTRIBUTABLE)

Profit Before Tax A$m 39 (39) 8 52 159 144 Reserves

Tax Expense A$m (8) 25 (2) (16) (48) (43) Project Mt g/t koz

Minorities A$m 0 0 0 0 0 0 Carosue Dam 7.3 1.9 434

Adjusted NPAT A$m 31 (14) 6 37 112 101 Porphyry 3.9 1.4 177

Significant Items (post tax) A$m (12) (49) (0) 0 0 0 Safari Bore 1.5 3.2 159

Reported NPAT A$m 19 (63) 6 37 112 101 Red October 0.3 6.9 74

Stockpiles 0.8 1.0 26

Carosue Dam 13.9 2.0 870

CASHFLOW FY12 FY13 FY14 FY15e FY16e FY17e Thunderbox 10.7 1.7 593

Net Profit A$m 19 -63 6 37 112 101 Bannockburn 4.0 1.5 190

Interest/Tax/D&A A$m 15 57 29 55 56 65 Thunderbox 14.7 1.7 783

Working Capital/other A$m (2) 67 9 (11) (12) (6) Total 28.6 1.8 1,653



Investments A$m (2) 4 (11) 0 0 0 Carosue Dam 26.3 2.0 1,659

Sale of PPE and Other A$m (11) 0 0 0 0 0 Porphyry 34.6 1.1 1,230

Free cash flow A$m (59) (31) (20) 40 87 76 Safari Bore 4.9 2.9 453

Dividends Paid A$m 0 0 0 0 (8) (16) Red October 10.5 1.9 631

Debt A$m (0) 20 (11) (10) (1) (1) Stockpiles 4.3 0.7 95

Equity Issuance A$m 62 0 58 0 0 0 Carosue Dam 80.6 1.6 4,068

Other A$m 0 0 0 0 0 0 Thunderbox 32.4 1.7 1,749

Net Financing Cashflow A$m 62 20 47 (10) (9) (17) Bannockburn 18.9 1.7 1,058

Net change in cash A$m 3 (11) 27 29 79 59 Thunderbox 51.3 1.7 2,807

Total 132.0 1.6 6,875

BALANCE SHEET FY12 FY13 FY14 FY15e FY16e FY17e EQUITY DCF VALUATION Macquarie forecasts Spot prices

Cash A$m 20 9 36 65 144 203 Projects A$m A$ps A$m A$ps

PP&E & Mine Development A$m 145 122 193 180 196 210 Carosue Dam 368 0.46 278 0.35

Exploration A$m 26 22 28 37 45 49 Thunderbox 142 0.18 66 0.08

Total Assets A$m 254 237 313 356 502 595 Undeveloped Resources 35 0.04 34 0.04

Debt A$m 3 25 14 5 4 3 Unpaid capital 0 0.00 0 0.00



Net Debt / (Cash) A$m (17) 16 (22) (61) (140) (200) Net cash (debt) 35 0.04 36 0.04

Gearing (net debt/(nd + equity)) % (9%) 8% (10%) (30%) (62%) (80%) Net Equity Value (@ 9% WACC) 494 0.62 367 0.46

Gearing (net debt/equity) % (8%) 9% (9%) (23%) (38%) (45%) Price Target (1.0x NPV) 0.60

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Carosue Dam (koz) Thunderbox (koz) AISC (A$/oz) Gold (A$/oz)


20 March 2015 19

Fig 10 SLR summary financials

Source: SLR, Macquarie Research, March 2015

Silver Lake Resources

ASX: SLR 0.18 Year end: Jun Rating: Neutral Up/dn TSR

91 Diluted shares (m) 503.2 Target: 0.24 32% 32%

ASSUMPTIONS FY13 FY14 FY15e FY16e FY17e FY18e ATTRIBUTABLE MINE OUTPUT FY13 FY14 FY15e FY16e FY17e FY18e

Exchange Rate A$/US$ 1.03 0.92 0.84 0.68 0.71 0.78 Mount Monger

Spot Gold (US$/oz) 1,604 1,295 1,227 1,314 1,408 1,459 Gold producton (koz) 151.3 214.9 119.9 160.2 134.7 62.3

C1 Cash cost (A$/oz) 846 912 1,027 1,082 1,107 1,139

RATIO ANALYSIS FY13 FY14 FY15e FY16e FY17e FY18e Cash costs - AISC (A$/oz) 1,094 1,043 1,227 1,294 1,321 1,354


EPS (diluted and pre sig. items) A¢ 0.4 -17.5 -1.3 8.0 7.3 0.1

P/E x 47.5x -1.0x -14.0x 2.3x 2.5x 161.4x OPERATIONAL OUTLOOK

CFPS A¢ (3.6) (2.2) (0.4) 8.7 11.0 (5.5)

P/CF x -5.0x -8.2x -45.0x 2.1x 1.6x -3.3x

DPS A¢ #DIV/0! 0.0 0.0 0.0 0.0 0.0

Dividend yield % #DIV/0! 0.0% 0.0% 0.0% 0.0% 0.0%

Franking Level % 0% 0% 0% 0% 0% 0%

Book value per share x 0.95 0.55 0.52 0.64 0.72 0.00

P/Book value x 0.2x 0.3x 0.3x 0.3x 0.3x nmf

R.O.E. (pre sig items) % 0% -29% -2% 12% 10% nmf

R.O.A. (pre sig items) % -9% -8% -1% 15% 12% -1%

Interest Cover x -10.9x 18.7x -4.2x -294.0x -41.7x 0.5x



EARNINGS FY13 FY14 FY15e FY16e FY17e FY18e

Sales Revenue A$m 216 310 186 297 268 117


Total Revenue A$m 216 310 186 297 268 117



Exploration Expense/Write-offs A$m 0 0 0 0 0 (26)


EBITDA A$m 2 19 44 106 101 5

D&A A$m (47) (48) (48) (49) (50) (6)

EBIT A$m (46) (29) (5) 57 51 (1)

Net Interest A$m (4) 2 (1) 0 1 2

Profit Before Tax A$m (50) (28) (6) 57 52 1

Tax Expense A$m 52 (53) (1) (17) (16) (0)


Adjusted NPAT A$m 2 (81) (6) 40 37 1 RESERVES AND RESOURCES (ATTRIBUTABLE)

Significant Items (post tax) A$m (321) (90) (6) 0 0 0 Reserves

Reported NPAT A$m (319) (170) (13) 40 37 1 Project Mt Au (g/t) Au (koz)

UG & OP (JORC 2014) 1.2 6.4 253

CASHFLOW FY13 FY14 FY15e FY16e FY17e FY18e Mount Monger (JORC 2004) 12.4 2.0 815

Net Profit A$m -319 -170 -13 40 37 1 Total 13.6 2.4 1,068

Interest/Tax/D&A A$m (73) 69 14 13 13 (6)

Working Capital/other A$m 379 90 (3) (9) 5 0 Resources

Net Operating Cashflow A$m (14) (11) (2) 44 55 (5) Project Mt Au (g/t) Au (koz)

Capex A$m (101) (8) (17) (38) (24) (28) Mount Monger 12.0 6.13 2,356

Investments A$m 12 0 0 0 0 0 Randalls 11.4 2.37 867

Sale of PPE and Other A$m 0 0 0 0 0 0 Aldiss 6.9 2.15 474

Free cash flow A$m (102) (19) (19) 5 31 (33) Tuckabianna 8.0 2.04 524

Dividends Paid A$m 0 0 0 0 0 0 Comet 3.8 2.89 353

Debt A$m 46 (56) 1 (7) 0 0 Moyagee 2.0 1.75 111

Equity Issuance A$m 1 86 0 20 0 0 Eelya 0.7 1.55 34

Other A$m 0 0 0 0 0 1 Gt Southern 16.0 1.95 1,002

Net Financing Cashflow A$m 47 30 1 13 0 1 Total 61 2.94 5,720

Net change in cash A$m (56) 11 (18) 19 31 (32) EV/Reserve (A$/oz) 80 EV/Resource (A$/oz) 15

BALANCE SHEET FY13 FY14 FY15e FY16e FY17e FY18e

Cash A$m 13 24 6 25 56 23 EQUITY DCF VALUATION Macquarie forecasts Spot prices

PP&E & Mine Development A$m 131 68 50 39 12 34 Projects A$m A$ps A$m A$ps

Exploration A$m 269 234 251 286 321 332 Mount Monger 121 0.24 56 0.11

Total Assets A$m 528 377 340 388 424 422 Murchison 3 0.01 3 0.01

Debt A$m 63 13 7 0 0 0 Undeveloped Resources 35 0.07 38 0.07



Net Debt / (Cash) A$m 50 (11) 0 (25) (56) (23) Net cash (debt) 5 0.01 5 0.01

Gearing (net debt/(nd + equity)) % 12% (4%) 0% (8%) (18%) (7%) Net Equity Value (@ 12% WACC) 120 0.24 68 0.14

Gearing (net debt/equity) % 14% (4%) 0% (8%) (16%) (6%) Price Target 0.24

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Mount Monger Cash costs - AISC (A$/oz) C1 Cash cost (A$/oz)

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20 March 2015 20

Fig 10 TRY summary financials

Source: TRY, Macquarie Research, March 2015

Troy Resources

ASX: TRY Price: (A$ps) 0.45 Year end: Jun Rating: Outperform Up/dn

Mkt cap: (A$m) 88 Diluted shares (m) 196.4 AUD Target: 0.60 33%

CAD Target: 0.58


Exchange Rate A$/US$ 0.99 1.03 1.03 0.89 0.84 0.68 0.71 Gold equivalent production (equity)

Spot Gold (US$/oz) 1,371 1,672 1,604 1,255 1,227 1,314 1,408 Casposo (koz) 17.8 88.8 93.4 101.7 106.4 98.6 85.3

Andorinhas (koz) 49.2 48.5 33.7 31.2 24.6 7.0 0.0

RATIO ANALYSIS FY11 FY12 FY13 FY14 FY15e FY16e FY17e Karouni (koz) 0.0 0.0 0.0 0.0 0.0 74.5 104.2

Diluted share capital m 88.0 88.6 90.9 196.4 196.7 196.7 196.7 Total (koz) 67.0 137.3 127.1 132.9 131.0 180.0 189.5

EPS (diluted and pre sig. items) A¢ 15.8 33.7 16.6 4.7 7.0 25.2 27.9 Cash costs

P/E x 2.8x 1.3x 2.7x 9.6x 6.4x 1.8x 1.6x Casposo (US$/oz) 869 643 834 781 678 867 898

CFPS A¢ 35.2 86.9 31.9 0.3 7.8 37.6 56.4 Andorinhas (US$/oz) 522 544 779 923 934 263

P/CF x 1.3x 0.5x 1.4x 172.3x 5.8x 1.2x 0.8x Karouni (US$/oz) 713 807

DPS A¢ 0.0 0.0 10.0 0.0 0.0 0.0 0.0 AISC (US$/oz)

Dividend yield % 0.0% 0.0% 22.2% 0.0% 0.0% 0.0% 0.0% Casposo (US$/oz) 631 542 695 892 873 719 774

Franking Level % 100% 100% 100% 100% 100% 100% 100% Andorinhas (US$/oz) 701 743 1,038 1,176 1,134

Book value per share x 1.25 1.49 1.60 1.00 0.92 1.17 1.45 Karouni (US$/oz) 949 1,060


R.O.E. (pre sig items) % 13% 23% 10% 5% 8% 22% 19% OPERATIONAL OUTLOOK

R.O.A. (pre sig items) % 11% 31% 15% 2% 6% 18% 17%

Interest Cover x 6.0x 20.8x 35.5x 1.6x 4.8x 10.0x 17.9x

EBITDA per share A$ps 0.56 1.00 0.69 0.19 0.26 0.64 0.74



Sales Revenue A$m 102 209 203 178 195 344 378


Total Revenue A$m 109 209 203 179 195 344 378





EBITDA A$m 49 89 62 38 52 126 145

D&A A$m (32) (32) (31) (33) (29) (45) (62)

EBIT A$m 17 57 31 5 23 81 83

Net Interest A$m (3) (3) (1) (3) (5) (8) (5) RESERVES AND RESOURCES (ATTRIBUTABLE)

Profit Before Tax A$m 14 54 31 2 18 73 78 Reserves

Tax Expense A$m (0) (24) (15) 9 (4) (23) (23) Project Mt g/t koz

Minorities A$m (0) (0) (0) (0) (0) 0 0 Casposo Proved 0.0 0.0 0.0

Adjusted NPAT A$m 14 30 15 10 14 50 55 Casposo Probable 1.6 4.6 240.0

Significant Items (post tax) A$m 1 2 3 (70) (30) 0 0 Andorinhas Proved 0.1 1.4 4.7

Reported NPAT A$m 15 31 19 (59) (17) 50 55 Andorinhas Probable 0.2 5.2 34.0

Karouni Proved 1.7 4.7 264.4

Karouni Probable 0.9 2.1 58.9

CASHFLOW FY11 FY12 FY13 FY14 FY15e FY16e FY17e Total Proved 1.8 4.5 269.1

Net Profit A$m 15 31 19 -59 -17 50 55 Total Probable 2.7 3.8 332.9

Interest/Tax/D&A A$m 23 25 12 5 19 37 54 Total Total 4.6 4.1 602.0

Working Capital/other A$m (6) 21 (2) 54 13 (13) 2

Net Operating Cashflow A$m 31 77 29 1 15 74 111 Resources

Capex A$m (47) (26) (46) (57) (105) (26) (15) Project Mt g/t koz

Investments A$m 5 0 0 5 0 0 0 Casposo Measured 0.2 5.0 27.5

Sale of PPE and Other A$m 0 1 0 0 (1) 0 0 Casposo Indicated 2.0 4.1 266.9

Free cash flow A$m (11) 52 (18) (51) (90) 48 96 Casposo Inferred 0.8 3.6 93.7

Dividends Paid A$m (3) (5) (7) (0) 0 0 0 Andorinhas Measured 0.1 1.6 5.9

Debt A$m 24 (18) (13) 37 65 (35) (15) Andorinhas Indicated 0.9 3.8 109.4

Equity Issuance A$m 1 2 4 32 0 0 0 Andorinhas Inferred 0.7 3.3 76.7

Other A$m 0 0 0 0 0 0 0 Karouni Measured 2.5 4.4 359

Net Financing Cashflow A$m 23 (21) (15) 69 65 (35) (15) Karouni Indicated 4.9 2.2 338.4

Net change in cash A$m 12 31 (33) 18 (25) 13 81 Karouni Inferred 8.0 1.8 470.2

Total Total 20.2 2.7 1747.7

BALANCE SHEET FY11 FY12 FY13 FY14 FY15e FY16e FY17e EQUITY DCF VALUATION Macquarie forecasts Spot prices

Cash A$m 28 59 26 43 19 33 114 Projects A$m A$ps C$ps A$m A$ps

PP&E & Mine Development A$m 97 90 123 102 178 158 111 Casposo 78 0.40 0.39 48 0.24

Exploration A$m 3 2 0 104 112 119 127 Andorinhas 11 0.05 0.05 7 0.04

Total Assets A$m 161 185 206 295 381 447 480 Karouni 146 0.74 0.72 73 0.37

Debt A$m 29 14 2 41 122 87 72 Undeveloped Resources 9 0.05 0.05 28 0.14

Total Liabilities A$m 51 53 60 98 201 217 196 Forwards 1 0.00 0.00 6 0.03

Total Net Assets / Equity A$m 110 132 146 196 180 230 284 Corporate (46) (0.23) (0.23) (46) (0.23)

Net Debt / (Cash) A$m 1 (45) (24) (3) 102 54 (42) Net cash (debt) (83) (0.42) (0.41) (88) (0.45)

Gearing (net debt/(nd + equity)) % 1% (51%) (19%) (1%) 36% 19% (17%) Net Equity Value (@ 10% WACC) 116 0.59 0.57 29 0.15

Gearing (net debt/equity) % 1% (34%) (16%) (1%) 57% 24% (15%) Price Target 0.60 0.15

TRY Blended price target Blend 0.51

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20 March 2015 21

Important disclosures:

Recommendation definitions

Macquarie - Australia/New Zealand Outperform – return >3% in excess of benchmark return Neutral – return within 3% of benchmark return Underperform – return >3% below benchmark return Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield

Macquarie – Asia/Europe Outperform – expected return >+10% Neutral – expected return from -10% to +10% Underperform – expected return <-10%

Macquarie First South - South Africa Outperform – expected return >+10% Neutral – expected return from -10% to +10% Underperform – expected return <-10%

Macquarie - Canada

Outperform – return >5% in excess of benchmark return Neutral – return within 5% of benchmark return Underperform – return >5% below benchmark return

Macquarie - USA Outperform (Buy) – return >5% in excess of Russell 3000 index return Neutral (Hold) – return within 5% of Russell 3000 index return Underperform (Sell)– return >5% below Russell 3000 index return

Volatility index definition*

This is calculated from the volatility of historical price movements. Very high–highest risk – Stock should be

expected to move up or down 60–100% in a year – investors should be aware this stock is highly speculative. High – stock should be expected to move up or down at least 40–60% in a year – investors should be aware this stock could be speculative. Medium – stock should be expected to move up or down at least 30–40% in a year. Low–medium – stock should be expected to move up or down at least 25–30% in a year. Low – stock should be expected to move up or down at least 15–25% in a year. * Applicable to Asia/Australian/NZ/Canada stocks only

Recommendations – 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations

Financial definitions

All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards).

Recommendation proportions – For quarter ending 31 December 2014

AU/NZ Asia RSA USA CA EUR Outperform 51.80% 58.06% 45.07% 44.42% 60.54% 46.81% (for US coverage by MCUSA, 5.29% of stocks followed are investment banking clients)

Neutral 31.80% 27.37% 30.99% 50.10% 35.37% 33.51% (for US coverage by MCUSA, 3.08% of stocks followed are investment banking clients)

Underperform 16.39% 14.57% 23.94% 5.48% 4.08% 19.68% (for US coverage by MCUSA, 0.44% of stocks followed are investment banking clients)

Company-specific disclosures: Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/disclosures.

Analyst certification: The views expressed in this research reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst principally responsible for the preparation of this research receives compensation based on overall revenues of Macquarie Group Ltd (ABN 94 122 169 279, AFSL No. 318062) (“MGL”) and its related entities (the “Macquarie Group”) and has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. General disclosure: This research has been issued by Macquarie Securities (Australia) Limited (ABN 58 002 832 126, AFSL No. 238947) a Participant of the Australian Securities Exchange (ASX) and Chi-X Australia Pty Limited. This research is distributed in Australia by Macquarie Equities Limited (ABN 41 002 574 923, AFSL No. 237504) ("MEL"), a Participant of the ASX, and in New Zealand by Macquarie Equities New Zealand Limited (“MENZ”) an NZX Firm. Macquarie Private Wealth’s services in New Zealand are provided by MENZ. Macquarie Bank Limited (ABN 46 008 583 542, AFSL No. 237502) (“MBL”) is a company incorporated in Australia and authorised under the Banking Act 1959 (Australia) to conduct banking business in Australia. None of MBL, MGL or MENZ is registered as a bank in New Zealand by the Reserve Bank of New Zealand under the Reserve Bank of New Zealand Act 1989. Any MGL subsidiary noted in this research, apart from MBL, is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Australia) and that subsidiary’s obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that subsidiary, unless noted otherwise. This research is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. This research has been prepared for the use of the clients of the Macquarie Group and must not be copied, either in whole or in part, or distributed to any other person. If you are not the intended recipient, you must not use or disclose this research in any way. If you received it in error, please tell us immediately by return e-mail and delete the document. We do not guarantee the integrity of any e-mails or attached files and are not responsible for any changes made to them by any other person. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. This research is based on information obtained from sources believed to be reliable, but the Macquarie Group does not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. The Macquarie Group accepts no liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research. The Macquarie Group produces a variety of research products, recommendations contained in one type of research product may differ from recommendations contained in other types of research. The Macquarie Group has established and implemented a conflicts policy at group level, which may be revised and updated from time to time, pursuant to regulatory requirements; which sets out how we must seek to identify and manage all material conflicts of interest. The Macquarie Group, its officers and employees may have conflicting roles in the financial products referred to in this research and, as such, may effect transactions which are not consistent with the recommendations (if any) in this research. The Macquarie Group may receive fees, brokerage or commissions for acting in those capacities and the reader should assume that this is the case. The Macquarie Group‘s employees or officers may provide oral or written opinions to its clients which are contrary to the opinions expressed in this research. Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/disclosures.

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