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In our view, sustaining free cash flow margin is a key driver in determining asset positioning and avoids
inherent flaws in analyzing margins on all-in sustaining cash costs (AISC). This is due to the variable
nature of AISC and visual benefit of by-product credits on cash costs. We contrast the sustaining free
cash flow margins for North American producers over the next few years (Exhibit 1), along with implied
AISC margins at $1,300/oz (Exhibit 2). Companies with the highest sustaining FCF over the next few
years include TMR, PVG, OGC, ROXG, BTO, TXG, GUY, and AEM. Companies with the largest variance
between AISC margins and sustaining FCF include DPM, CG, TMR, ABX, NGD, GG, PVG, and AUY. We
believe that by focusing on a company's relative cost structure based on unlevered sustaining free cash
flow margins, investors can better analyze companies on an equal basis as it captures a company's cost
of production and tax structure while removing the effects of interest payments.
50%
40%
2017-19E
30%
20%
10%
0%
TGZ
KDX
GUY
EDV
AR
OGC
AEM
NGD
NEM
DGC
KGC
THO
BTO
EGO
KL
ALO
TMR*
PVG*
ROXG
TXG
GG
AKG
IAG
CG
PG
ASR
ABX
AGI
SSRI
AUY
PPP
DPM
Source: RBC Capital Markets estimates. * Forecast sustaining free cash flow margin risked given need to demonstrate operational track record
50%
Implied AISC Margin (%)
40%
2017-19E
30%
20%
10%
0%
TMR
NEM
KGC
EGO
BTO
KL
THO
ALO
PVG
ROXG
GG
TXG
CG
AKG
IAG
PG
TGZ
ABX
KDX
AGI
SSRI
GUY
AR
PPP
AUY
EDV
ASR
NGD
OGC
DPM
AEM
DGC
Priced as of prior trading day's market close, EST (unless otherwise noted).
Disseminated: Jun 27, 2017 10:35ET; Produced: Jun 27, 2017 10:35ET All values in USD unless otherwise noted.
For Required Non-U.S. Analyst and Conflicts Disclosures, see page 16.
Precious Metals & Minerals Weekly Valuation Tables
Analyst Marketing
Date Analyst Coverage Universe Location
July 18 Toronto
Andrew Wong Fertilizers and Uranium
July 20 Montreal
July 29 Paul Hissey Australian Gold and Base Metals Mining Sydney
Corporate Marketing
Date Company Representatives Location
June 26 Boston
Sebastien de Montessus, President & CEO
June 27 Endeavour Mining New York
Martino De Ciccio, VP - Strategy & Investor Relations
June 29 Toronto
Gold Road Ian Murray, Managing Director & CEO
June 28 Sydney
Resources John Donaldson, General Manager, Geology
Wheaton Precious Randy Smallwood, President & CEO
June 29-30 New York
Metals Patrick Drouin, SVP, Investor Relations
July 10 London
Continental Gold Ari Sussman, President & CEO
July 11 Zurich
July 11 Singapore
July 12 Vale SA Andr Figueiredo, Head of Investor Relations Melbourne
July 13-14 Sydney
July 28 Mick Wilkes President & CEO Melbourne
OceanaGold
July 31 Aug 1 Jeffrey Sansom Investor Relations Sydney
RBC Events
Date Event Location Registration
Please contact your
November 14 Senior Gold Conference London RBCCM sales
representative
Silver Producers
Coeur Mining CDE O $8.61 $13.00 51% 7% (5%) - 0.0% $8.13 1.06x $1.20 7.2x $0.16 28.8x 17.2 $12.2 7% $211 22% $162
Fresnillo FRES U 15.55 10.90 -28% (0%) 27% $0.34 1.7% 7.47 2.08x $1.10 18.0x $0.69 28.8x 59.7 $9.9 14% $797 24% $382
Hecla Mining HL SP $5.31 $6.00 13% 0% 1% $0.01 0.2% $3.79 1.40x $0.56 9.6x $0.23 22.9x 13.5 $8.7 (10%) $507 26% $199
Hochschild Mining HOC O 2.82 3.10 10% 2% 34% $0.01 0.4% 2.23 1.26x $0.54 6.7x $0.07 49.9x 20.8 $11.6 15% $291 27% $140
Pan American Silver PAAS O $17.06 $22.00 30% (3%) 13% $0.10 0.6% $14.72 1.16x $1.67 10.2x $0.56 30.4x 25.6 $10.4 6% $43 3% $218
Wheaton Precious Metals WPM O $20.14 $27.00 35% (3%) 4% $0.28 1.4% $12.44 1.62x $1.34 15.0x $0.73 27.5x 51.1 $5.9 (1%) $1,193 19% $124
Tahoe Resources THO O C$11.58 C$15.00 32% 8% (8%) C$0.24 2.7% C$10.84 1.07x $1.25 7.0x $0.73 12.0x 20.6 $8.9 0% $35 1% $163
Global 20% 2% 9% 1.0% 1.38x 10.5x 28.6x $9.7 4% 17%
Long-Term Price Assumptions: Gold: 2017 = $1,280; 2018 = $1,300; 2019 = $1,300; 2020 = $1,300; 2021+ = $1,300; Silver: 2017 = $18.79; 2018 = $19.25; 2019 = $19.25; 2020 = $19.25; 2021+ = $19.25
Priced as of market close June 26 2017.
Source: Company Reports, RBC Capital Markets estimates. Please see footnotes on page 12
Long-Term Price Assumptions: Gold: 2017 = $1,280; 2018 = $1,300; 2019 = $1,300; 2020 = $1,300; 2021+ = $1,300; Silver: 2017 = $18.79; 2018 = $19.25; 2019 = $19.25; 2020 = $19.25; 2021+ = $19.25
Note: Stocks are sorted based on a combination of Rating and Return to Target
Priced as of market close June 26 2017.
Continued
Tier I, II, & III Gold Producers - Cash Flow Metrics (2/4)
CFPS (2) P/CF AdjCFPS (after sustaining capital) EV/AdjCF
Company Tick 16A/E 17E 18E 19E 16A/E 17E 18E 19E 16A/E 17E 18E 19E 16A/E 17E 18E 19E
Long-Term Price Assumptions: Gold: 2017 = $1,280; 2018 = $1,300; 2019 = $1,300; 2020 = $1,300; 2021+ = $1,300; Silver: 2017 = $18.79; 2018 = $19.25; 2019 = $19.25; 2020 = $19.25; 2021+ = $19.25
Note: Stocks are sorted based on a combination of Rating and Return to Target
Priced as of market close June 26 2017.
Continued
Long-Term Price Assumptions: Gold: 2017 = $1,280; 2018 = $1,300; 2019 = $1,300; 2020 = $1,300; 2021+ = $1,300; Silver: 2017 = $18.79; 2018 = $19.25; 2019 = $19.25; 2020 = $19.25; 2021+ = $19.25
Note: Stocks are sorted based on a combination of Rating and Return to Target
Priced as of market close June 26 2017.
Continued
Tier I, II, & III Gold Producers - Operational and Reserve/Resource Metrics (4/4)
Production (Koz) Cash Costs ($/oz) All-in Sustaining Costs ($/oz) Reserve Resource EV/ EV/
Company Tick 16A/E 17E 18E 19E 3yr CAGR 16A/E 17E 18E 19E 16A/E 17E 18E 19E (P&P) (4) (M&I) (4) Rsrv Rsrc
Long-Term Price Assumptions: Gold: 2017 = $1,280; 2018 = $1,300; 2019 = $1,300; 2020 = $1,300; 2021+ = $1,300; Silver: 2017 = $18.79; 2018 = $19.25; 2019 = $19.25; 2020 = $19.25; 2021+ = $19.25
Note: Stocks are sorted based on a combination of Rating and Return to Target
Priced as of market close June 26 2017.
Continued
Royalty Companies
Price Report Target Rt. to Performance 52 Wk 52 Wk Shares Mkt Cap EV (1)
Company Tick Curr Curr Analyst Rating Price (12m) Target QTD YTD Low High NAV P/NAV (MM) (US$M) (US$M)
Wheaton Precious Metals WPM USD USD DR O $20.14 $27.00 35% (3%) 4% $16.94 $31.35 $12.44 1.62x 442 $8,892 $9,521
Osisko Gold Royalties OR CAD CAD DR O C$16.22 C$21.00 30% 10% 24% C$11.90 C$18.64 C$11.21 1.45x 157 $1,919 $1,504
Royal Gold RGLD USD USD SW O $77.88 $83.00 8% 11% 23% $60.21 $87.74 $29.33 2.66x 65 $5,059 $5,620
Franco-Nevada FNV CAD USD SW O C$97.42 C$102.00 6% 12% 21% C$71.44 C$105.69 C$36.04 2.70x 178 $13,120 $12,760
Sandstorm Gold SSL CAD USD DR SP - Spec C$4.92 C$7.50 52% (14%) (7%) C$4.29 C$8.73 C$4.59 1.07x 152 $564 $476
Global 26% 3% 13% 1.90x $29,554 $29,881
Wheaton Precious Metals WPM $1.34 $1.34 $1.46 $1.49 15.0x 15.0x 13.8x 13.5x $1.39 $1.39 $1.48 $1.49 15.5x 15.5x 14.6x 14.4x
Osisko Gold Royalties OR C$0.52 C$0.63 C$0.76 C$0.89 31.4x 25.6x 21.3x 18.2x C$0.51 C$0.66 C$0.79 C$0.90 24.7x 19.2x 16.1x 14.1x
Royal Gold RGLD $3.76 $4.20 $4.05 $4.51 20.7x 18.5x 19.2x 17.3x $2.49 $4.55 $4.50 $4.97 34.7x 19.0x 19.2x 17.4x
Franco-Nevada FNV $2.56 $2.73 $3.04 $3.27 28.7x 26.9x 24.2x 22.5x $2.54 $2.76 $3.07 $3.29 28.1x 25.9x 23.3x 21.7x
Sandstorm Gold SSL $0.27 $0.27 $0.24 $0.32 13.7x 13.8x 15.4x 11.7x $0.27 $0.27 $0.24 $0.32 11.6x 11.5x 12.8x 9.8x
Global 21.9x 20.0x 18.8x 16.6x 22.9x 18.2x 17.2x 15.5x
Wheaton Precious Metals WPM $0.62 $0.73 $0.83 $0.86 32.5x 27.5x 24.2x 23.3x -2.5% 6.6% 7.3% 7.4% $0.28 1.4% 38% 6%
Osisko Gold Royalties OR C$0.33 C$0.31 C$0.39 C$0.48 49.9x >50x 41.9x 34.0x -0.1% n.m. 12.3% 5.5% C$0.16 1.0% 51% 3%
Royal Gold RGLD $1.00 $1.46 $1.75 $2.15 >50x >50x 44.5x 36.3x -16.7% 1.4% 4.9% 5.8% $0.94 1.2% 65% 4%
Franco-Nevada FNV $0.92 $1.08 $1.23 $1.34 >50x >50x >50x >50x -2.3% 1.3% 2.1% 4.1% $0.88 1.2% 81% 5%
Sandstorm Gold SSL $0.04 $0.07 $0.06 $0.09 >50x >50x >50x 41.7x 5.1% 7.3% 6.5% 8.5% $0.00 0.0% n.m. 2%
Global 41.2x 27.5x 36.9x 33.8x -3.3% 4.1% 6.6% 6.3% 1.0% 59% 4%
Gold Equivalent Production (Koz) Cash Costs ($/oz AuE) All-in Sustaining Costs ($/oz AuE) Reserve Resource EV/ EV/
Company Tick 16A/E 17E 18E 19E 3yr CAGR 16A/E 17E 18E 19E 16A/E 17E 18E 19E (P&P) (3) (M&I) (3) Rsrv Rsrc
Wheaton Precious Metals WPM 766 753 782 800 1.5% $354 $351 $356 $362 $402 $399 $404 $409 22.4 37.1 $424 $257
Osisko Gold Royalties OR 38 62 91 105 40.1% $0 $114 $156 $167 $417 $461 $391 $361 n.a. n.a. n.m. n.m.
Royal Gold RGLD 334 348 354 365 3.1% $250 $266 $272 $268 $376 $390 $388 $375 n.a. n.a. n.m. n.m.
Franco-Nevada FNV 463 489 533 561 6.6% $228 $229 $255 $264 $280 $277 $300 $306 n.a. n.a. n.m. n.m.
Sandstorm Gold SSL 50 53 48 59 6.1% $258 $275 $273 $256 $461 $472 $494 $433 n.a. n.a. n.m. n.m.
Global 11.5% $218 $247 $263 $263 $387 $400 $395 $377
Long-Term Price Assumptions: Gold: 2017 = $1,280; 2018 = $1,300; 2019 = $1,300; 2020 = $1,300; 2021+ = $1,300; Silver: 2017 = $18.79; 2018 = $19.25; 2019 = $19.25; 2020 = $19.25; 2021+ = $19.25
Note: Stocks are sorted based on a combination of Rating and Return to Target
Priced as of market close June 26 2017.
Continued
Gold Road Resources GOR AUD AUD PH O A$0.69 A$0.90 30% 25% 20% A$0.50 A$0.75 A$0.85 0.81x 871 $456 $387
Liberty Gold LGD CAD USD DR O - Spec C$0.40 C$0.90 128% (31%) (11%) C$0.38 C$0.95 C$0.85 0.46x 152 $45 $33
Continental Gold CNL CAD USD DR O - Spec C$3.88 C$6.00 55% (3%) (12%) C$2.62 C$5.75 C$4.38 0.89x 142 $415 $395
Dalradian DNA CAD CAD SW O - Spec C$1.63 C$2.50 53% 16% 39% C$0.97 C$1.78 C$2.49 0.65x 241 $297 $273
Osisko Mining OSK CAD CAD DR O - Spec C$4.51 C$6.50 44% (7%) 85% C$2.03 C$5.65 C$6.38 0.71x 181 $618 $556
Integra Gold ICG CAD CAD SC O - Spec C$1.00 C$1.00 0% 10% 79% C$0.52 C$1.16 C$1.07 0.93x 477 $360 $337
S2 Resources S2R AUD AUD PH SP - Spec A$0.16 A$0.40 158% (28%) (30%) A$0.15 A$0.86 A$0.37 0.42x 216 $25 $13
Midas Gold Corp. MAX CAD USD SW SP - Spec C$0.73 C$1.25 71% (10%) (16%) C$0.62 C$1.22 C$1.21 0.61x 178 $98 $135
NovaGold Resources NG CAD CAD SW SP - Spec C$6.06 C$9.00 49% (6%) (1%) C$5.09 C$9.56 C$9.02 0.67x 317 $1,451 $1,482
Sabina Gold & Silver SBB CAD CAD SC SP - Spec C$1.89 C$2.25 19% 23% 93% C$0.84 C$2.00 C$2.23 0.85x 224 $319 $289
Global 61% (1%) 25% 0.70x $4,084 $3,902
Production (Koz) Cash Cost ($/oz) All-in Sustaining Costs ($/oz) Reserve Resource EV/ EV/
Company Tick 16A/E 17E 18E 19E 3yr CAGR 16A/E 17E 18E 19E 16A/E 17E 18E 19E (P&P) (3) (M&I) (3) Rsrv Rsrc
Gold Road Resources GOR - - - 121 - n.m. n.m. n.m. $1,033 n.m. n.m. n.m. $1,342 - 4.7 n.m. $83
Liberty Gold LGD - - - - - n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. - 1.3 n.m. $26
Continental Gold CNL - - - - - n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. 3.7 4.5 $107 $88
Dalradian DNA - - - - - n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. 1.4 2.1 $190 $130
Osisko Mining OSK - - - - - n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. - 3.9 n.m. $144
Integra Gold ICG - - 49 98 - n.m. n.m. $454 $454 n.m. n.m. $1,012 $730 - 0.9 n.m. $376
S2 Resources S2R - - - - - n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. - 0.1 n.m. $187
Midas Gold Corp. MAX - - - - - n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. 4.6 6.6 $30 $21
NovaGold Resources NG - - - - - n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. 19.7 28.5 $75 $52
Sabina Gold & Silver SBB - - - - - n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. 2.5 5.3 $115 $54
Global n.m. n.m. n.m. $454 $744 n.m. n.m. $1,012 $1,036 $103 $116
Long-Term Price Assumptions: Gold: 2017 = $1,280; 2018 = $1,300; 2019 = $1,300; 2020 = $1,300; 2021+ = $1,300; Silver: 2017 = $18.79; 2018 = $19.25; 2019 = $19.25; 2020 = $19.25; 2021+ = $19.25
Note: Stocks are sorted based on a combination of Rating and Return to Target
Priced as of market close June 26 2017.
Continued
Silver Producers
Price Report Target Rt. to Performance 52 Wk 52 Wk Shares Mkt Cap EV (1)
Company Tick Curr Curr Analyst Rating Price (12m) Target QTD YTD Low High NAV P/NAV (MM) (US$M) (US$M)
Coeur Mining CDE USD USD MM O $8.61 $13.00 51% 7% -5% $7.30 $16.41 $8.13 1.06x 181 $1,562 $1,547
Wheaton Precious Metals WPM USD USD DR O $20.14 $27.00 35% (3%) 4% $16.94 $31.35 $12.44 1.62x 442 $8,892 $8,662
Tahoe Resources THO CAD USD SW O C$11.58 C$15.00 32% 8% (8%) C$9.58 C$22.13 C$10.84 1.07x 313 $2,733 $3,070
Pan American Silver PAAS USD USD MM O $17.06 $22.00 30% (3%) 13% $13.80 $21.59 $14.72 1.16x 153 $2,612 $2,346
Hochschild Mining HOC GBP USD TB O 2.82 3.10 10% 2% 34% 1.61 3.28 2.23 1.26x 506 $1,816 $2,007
Hecla Mining HL USD USD MM SP $5.31 $6.00 13% 0% 1% $4.60 $7.64 $3.79 1.40x 396 $2,102 $2,458
Fresnillo FRES GBP USD TB U 15.55 10.90 -28% (0%) 27% 10.52 20.57 7.47 2.08x 737 $14,573 $14,979
Global 20% 2% 9% 1.38x $34,291 $35,069
Coeur Mining CDE $0.83 $1.20 $1.58 $1.54 10.4x 7.2x 5.4x 5.6x $0.69 $1.13 $1.43 $1.33 12.3x 7.5x 6.0x 6.4x
Wheaton Precious Metals WPM $1.34 $1.34 $1.46 $1.49 15.0x 15.0x 13.8x 13.5x $1.39 $1.39 $1.48 $1.49 14.1x 14.1x 13.3x 13.1x
Tahoe Resources THO $1.09 $1.25 $1.20 $1.36 8.1x 7.0x 7.3x 6.4x $0.70 $0.75 $0.72 $1.01 13.9x 13.0x 13.6x 9.8x
Pan American Silver PAAS $1.44 $1.67 $2.26 $2.31 11.8x 10.2x 7.6x 7.4x $0.93 $1.21 $1.79 $1.84 16.4x 12.7x 8.6x 8.3x
Hochschild Mining HOC $0.59 $0.54 $0.65 $0.61 6.1x 6.7x 5.5x 5.9x $0.34 $0.28 $0.45 $0.42 11.8x 14.1x 8.8x 9.6x
Hecla Mining HL $0.48 $0.56 $0.62 $0.59 11.1x 9.6x 8.5x 9.0x $0.20 $0.36 $0.46 $0.43 30.3x 17.1x 13.6x 14.4x
Fresnillo FRES $1.02 $1.10 $1.33 $1.40 19.4x 18.0x 14.8x 14.1x $0.81 $0.90 $0.00 $0.00 24.9x 22.7x n.m. n.m.
Global 11.7x 10.5x 9.0x 8.8x 17.7x 14.5x 10.6x 10.3x
Coeur Mining CDE $0.29 $0.16 $0.39 $0.40 29.5x >50x 21.8x 21.3x 2.5% 6.8% 12.8% 12.9% $0.00 - n.m. 4%
Wheaton Precious Metals WPM $0.62 $0.73 $0.83 $0.86 32.5x 27.5x 24.2x 23.3x -2.5% 6.6% 7.3% 7.4% $0.28 1.4% 39% 9%
Tahoe Resources THO $0.62 $0.73 $0.61 $0.67 14.2x 12.0x 14.3x 13.0x 4.9% 3.1% 5.5% 11.1% $0.24 2.7% 33% 6%
Pan American Silver PAAS $0.52 $0.56 $0.77 $0.83 32.8x 30.4x 22.0x 20.5x 0.4% 4.5% 9.0% 9.3% $0.10 0.6% 18% 6%
Hochschild Mining HOC $0.11 $0.07 $0.22 $0.22 32.7x 49.9x 16.4x 16.6x 10.4% 7.2% 11.8% 11.7% $0.01 0.4% 19% 4%
Hecla Mining HL $0.18 $0.23 $0.23 $0.19 30.1x 22.9x 23.2x 27.3x 2.9% 4.8% 7.0% 6.5% $0.01 0.2% 4% 6%
Fresnillo FRES $0.50 $0.69 $0.92 $0.82 39.8x 28.8x 21.5x 24.2x 0.4% -0.2% 3.1% 3.6% $0.34 1.7% 50% 18%
Global 30.2x 28.6x 20.5x 20.9x 2.7% 4.7% 8.1% 8.9% 1.0% 27% 8%
Production (Moz) Cash Cost ($/oz) All-in Sustaining Costs ($/oz) Reserve Resource EV/ EV/
Company Tick 16A/E 17E 18E 19E 3yr CAGR 16A/E 17E 18E 19E 16A/E 17E 18E 19E (P&P) (3) (M&I) (3) Rsrv Rsrc
Coeur Mining CDE 14.8 17.2 18.0 18.3 7.2% $9.3 $6.8 $5.4 $7.0 $15.0 $12.2 $10.1 $11.1 177 382 $8.76 $4.04
Wheaton Precious Metals WPM 55.8 51.1 52.8 54.0 -1.1% $4.9 $5.2 $5.2 $5.3 $5.5 $5.9 $5.9 $6.0 1,516 2,505 $5.72 $3.46
Tahoe Resources THO 20.3 20.6 20.8 20.4 0.2% $5.8 $6.3 $7.1 $6.9 $8.1 $8.9 $10.3 $9.7 292 398 $10.52 $7.71
Pan American Silver PAAS 25.4 25.6 28.7 30.1 5.8% $4.8 $6.0 $4.5 $4.6 $11.9 $10.4 $8.8 $8.7 286 981 $8.21 $2.39
Hochschild Mining HOC 16.7 20.8 25.3 25.2 14.7% $7.8 $8.1 $7.7 $8.3 $11.0 $11.6 $10.0 $10.6 152 936 $13.19 $2.14
Hecla Mining HL 17.2 13.5 14.2 12.4 -10.4% $3.1 ($0.3) $1.1 $0.5 $11.7 $8.7 $9.3 $9.6 172 344 $14.27 $7.15
Fresnillo FRES 50.7 59.7 68.9 74.5 13.7% $5.6 $6.3 $5.2 $5.7 $9.2 $9.9 $9.2 $0.0 1,074 1,085 $13.95 $13.81
Global 4.3% $5.9 $5.5 $5.2 $5.5 $10.3 $9.7 $9.1 $8.0 $10.66 $5.82
Long-Term Price Assumptions: Gold: 2017 = $1,280; 2018 = $1,300; 2019 = $1,300; 2020 = $1,300; 2021+ = $1,300; Silver: 2017 = $18.79; 2018 = $19.25; 2019 = $19.25; 2020 = $19.25; 2021+ = $19.25
Note: Stocks are sorted based on a combination of Rating and Return to Target
Priced as of market close June 26 2017.
Footnotes:
Source: Company Reports, RBCCM Estimates RBCCM's gold price forecast is $1,280/oz, $1,300/oz, $1,300/oz, and $1,300/oz for 2017, 2018, 2019, and 2020 respectively, with $1,300/oz long-term
TP - Top Pick; O - Outperform; SP - Sector Perform; U - Underperform; R - Restricted RBCCM's silver price forecast is $18.79/oz, $19.25/oz, $19.25/oz, and $19.25/oz for 2017, 2018, 2019, and 2020 respectively, with $19.25/oz long-term
Spec - Speculative Risk RBCCM's platinum price forecast is $1,032/oz, $1,150/oz, $1,200/oz, and $1,200/oz for 2017, 2018, 2019, and 2020 respectively, with $1,200/oz long-term
DR - Dan Rollins; MM - Mark Mihaljevic; PH - Paul Hissey; RH - Richard Hatch; SW - Stephen Walker; SC - Sam Crittenden; TB - Tyler Broda RBCCM's palladium price forecast is $784/oz, $825/oz, $875/oz, and $850/oz for 2017, 2018, 2019, and 2020 respectively, with $800/oz long-term
(1) Enterprise Value (EV) calcualted as market cap plus debt, reclamation and employee obligations less cash, investments at market value, and working capital * June year-end companies have been converted to December year-end for comparison purposes.
(2) CFPS and FCF for Barrick, Goldcorp and Newmont shown on an adjusted attributable basis. Please note that we do not include Diamond names in our comp tables.
(3) Free Cash Flow is calculated as: Operating Cash Flow - Capex
(4) Reserves and Resources in gold only for gold companies, in silver only for silver companies
Exhibit 3: P/NAV versus 3-year production growth Exhibit 4: 3-year EV/AdjCF versus 3-year production growth
1.75x
Source: RBC Capital Markets estimates Source: RBC Capital Markets estimates
Exhibit 5: 3-year FCF Yield versus 3-year production growth Exhibit 6: P/NAV versus 3-year EV/AdjCF
1.75x
20%
AEM
15% 1.50x
ACA SGL NEM
3-year Avg Operating FCF Yield (2017-19E)
ROXG
GG
KDX EVN RRL
EVN ABX
SAR
NST
10%
RRL OGC BTO 1.25x
AUY AR TXG KGC Tier I
ABX DGC GUY CEY
P/NAV
NEM NCM POLY DPM BTO
KL
GG THO NST
ALO ANG KL AKG NGD
5% Tier I CEY Tier II OGC POLY
RSG EDV THO IAG
KGC
SSRI RRS IAG EDV 1.00x SGL GFI Tier II TXG
GFI Tier III
AGI
AEM TMR AUY
ROXG KDX
0% NCM SSRI
AGI NGD CG
SAR ANG
PPP
0.75x AR EGO
GUY DGC
-5% Tier III
ACA ASR
EGO DPM TGZ
TGZ RSG
AKG
CG SLR
-10% 0.50x
(20%) (10%) 0% 10% 20% 30% 2x 4x 6x 8x 10x 12x 14x 16x 18x
3-year production CAGR (2016-19E) 3-year EV/AdjCF (2017-19E)
Source: RBC Capital Markets estimates Source: RBC Capital Markets estimates
Contributing Authors
RBC Dominion Securities Inc.
Stephen D. Walker (Head of Global Mining Research) (416) 842-4120 stephen.walker@rbccm.com
Dan Rollins (Analyst) (416) 842-9893 dan.rollins@rbccm.com
Sam Crittenden (Analyst) (416) 842-7886 sam.crittenden@rbccm.com
Mark Mihaljevic (Analyst) (416) 842-3804 mark.mihaljevic@rbccm.com
Wayne Lam (Senior Associate) (416) 842-7840 wayne.lam@rbccm.com
Melissa Oliphant (Associate) (416) 842-8934 melissa.oliphant@rbccm.com
Required disclosures
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Stephen D. Walker, Dan Rollins, Sam Crittenden, Mark Mihaljevic, Paul Hissey, Tyler Broda, Richard Hatch, Wayne Lam, Melissa
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RBC Capital Markets, Equity Research
As of 31-Mar-2017
Investment Banking
Serv./Past 12 Mos.
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SELL [Underperform] 101 6.22 8 7.92
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