Metals & Mining

EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

ANALYST TEAM Link to ScotiaView

Metals & Mining Orest Wowkodaw, CPA, CA, CFA | Analyst 416-945-4526 Scotia Capital Inc. - Canada Q4/17 Reporting Preview: Results Improvement Continues Ian Grundy, CPA, CA, CFA | Associate Analyst 416-863-7623 OUR TAKE: We anticipate Q4 EPS and EBITDA to be modestly above consensus Scotia Capital Inc. - Canada expectations for the majority of the companies in our coverage universe, although we COVERAGE SUMMARY

anticipate consensus expectations to further improve over the next few weeks. While

we forecast EBITDA to exhibit meaningful improvements on both a QoQ and YoY basis Rating 1-Yr. Target Return ALS-T SP C$15.25 8.1% for most companies given the broad improvement in commodity prices, EPS appears ANTO-L SP GBP 11.00 12.9% mixed relative to prior periods. Outside of 2018 guidance, we anticipate few companies CCO-T SU C$11.00 -7.7% delivering meaningful catalysts during the Q4 reporting season. CMMC-T SP C$1.70 24.1% CS-T SO C$2.00 37.9% ERO-T SO C$9.25 19.7% KEY POINTS FCX-N* SP US$19.00 -5.0% FM-T SO C$22.00 15.6% * Our estimates are slightly above HBM-T FS C$14.50 24.7% Q4 estimates modestly above consensus. LIF-T SO C$30.00 19.9% consensus on both an EPS and an EBITDA basis for the majority of companies, LUN-T SO C$9.50 9.9% although we anticipate this gap further closing as expectations are updated during NEXA-N SO US$25.50 27.8% NSU-T SO C$4.75 63.8% the next few weeks, particularly for positive provisional pricing adjustments for non- SMT-T SP C$3.50 6.1% bulk commodities. For the large and mid-cap companies in our coverage, our EPS S-T SP C$1.60 22.1% * and EBITDA estimates are, on average, 6% and 3% above consensus. Our small TECK.B-T FS C$42.00 16.3% TI-T SO C$1.90 34.8% cap EBITDA estimates are a minor 2% above consensus expectations. See Exhibits TKO-T SU C$2.25 0.0% 1 and 2. We highlight our expectations for Q4/17 production, unit costs, and other TRQ-T SO C$5.75 37.6% TV-T SO C$2.00 31.6% relevant metrics vs. prior periods in Exhibits 3-5. The Q4 reporting season for the metals *Companies with pertinent revisions complex officially begins with Freeport on January 25, although a number of companies have already pre-released Q4 operating results and 2018 guidance. See Exhibit 6 for reporting timelines and conference call details.

Notable outliers. Our Q4 EBITDA estimates for ANTO, FCX, HBM, and TRQ are all >5% above consensus expectations. Among large and mid-cap companies, we anticipate only NSU and TV missing current EBITDA expectations.

Solid sequential and YoY gains expected. We anticipate Q4/17 financial results showing continued EBITDA improvement, both on a QoQ and a YoY basis, driven by higher commodity prices. For our large and mid-cap coverage, we anticipate average EBITDA improving by 19% QoQ and by 35% on a YoY basis. While we anticipate meaningful EPS improvement on a YoY basis, we forecast relatively muted EPS growth on a QoQ basis. For our small cap coverage, we anticipate EBITDA improving by an average of 25% on a QoQ basis. TECK and CS are the only two companies where we anticipate negative YoY EBITDA growth.

Awaiting 2018 guidance. We await the release of 2018 guidance for several of the larger producers, including FCX, FM, NEXA, and TECK. We remain concerned that maiden Cobre Panama ramp-up guidance from FM could disappoint the market. TECK should also update the expected impact of the recent dryer incident at Elkview.

Who is likely to have a material catalyst? HBM is expected to update the market on the LOM positive grade reconciliation at Constancia by April. While FCX could announce a definitive agreement to resolve its Grasberg dispute, we remain cautious.

Our preferred equities. We continue to recommend HBM, LUN, FM, LIF, NEXA, NSU, TECK.B, TV, and TRQ. Among the smaller caps, we prefer CS, ERO, and TI.

Dissemination: January 23, 2018, 04:49 ET. Production: January 22, 2018, 19:36 ET.

For Reg AC Certification and important disclosures see Appendix A of this report. Analysts employed by non-U.S. affiliates are 1 not registered/qualified as research analysts with FINRA in the U.S. This report is intended for [email protected]. Unauthorized distribution of this prohibited.

EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

Large Cap Base Metals, Bulks, and Uranium

Antofagasta – January 24 Pre-Market (Q4 Production Results)

Antofagasta is scheduled to report Q4/17 production results on Wednesday, January 24 before market open. We forecast copper production of 176kt, 2% lower than the Q3/17 level. We forecast gold production of 56k ozs, down 6% QoQ due to grade decline at Centinela. We forecast net cash costs of $1.31/lb, up 11% QoQ and 16% YoY. ANTO is scheduled to report full year financial results on March 13. We forecast H2/17 EPS of $0.43, in-line with consensus of $0.42 but well above the $0.29 earned in H1/17. However, our EBITDA forecast of $1.5 billion is 8% above consensus of $1.4 billion.

In addition to operating results, we anticipate the market will look for any updates on the planned Phase I expansion at Los Pelambres (including potential project sanction). The company has already issued 2018 guidance.

Cameco – February 9 Pre-Market

Cameco is scheduled to report Q4/17 results before market open on Friday, February 9. We forecast EPS of C$0.43, above consensus of C$0.35 and well above the Q3/17 loss of C$0.13. Our EBITDA forecast of C$291 million is 11% above the consensus of C$263 million.

We anticipate uranium sales of 11.5m lbs, in line with CCO's guidance and the Q4/16 level of 11.7m lbs but up from 9.2m lbs in Q3/17 due to seasonality. We forecast CCO to realize an average uranium price of $42/lb (C$53/lb), up 28% QoQ in USD terms and 27% QoQ in CAD terms. We forecast cash production costs of C$15/lb, down from C$24/lb in Q3/17 (which was negatively impacted by CCO’s summer shutdowns) but flat versus the Q4/16 level. We estimate unit cost of sales (including royalties and depreciation) of C$36/lb, flat versus the Q3/17 level but down 7% from the C$38/lb realized in Q4/16.

We will look for updates on CCO’s market outlook (including its rolling 5-year price realization guidance), 2018 guidance, the CRA litigation process, and the Tepco contract dispute. CCO will hold an investor call on Friday, February 9, although call timing and dial-in details have not yet been released.

First Quantum – Production Results Likely Late January; Financial Results Mid-February

We expect FM to release Q4/17 production results and three year guidance (including maiden Cobre Panama guidance) late this week. We forecast Q4/17 copper and gold production of 149kt and 52k ozs which are +3% and +11% QoQ. We forecast copper cash costs of $1.28/lb (Q3/17: $1.21/lb).

As we recently noted, we forecast the Cobre Panama (CP) ramp-up to grow FM’s consolidated 2018-2020 copper production to 617kt, 780kt, and 837kt, respectively, up an impressive 47% from the 2017 level of ~570kt. Our 2018-2020 estimates conservatively assume CP output of 25kt, 172kt, and 282kt, representing 8%, 52%, and 85% of nameplate. We note that the implied 2019 consensus CP output of 214kt is 24% above our estimate, suggesting room for potential disappointment, in our view.

For Q4/17, we forecast EBITDA of $317 million, in-line with both consensus and Q3/17 results as FM’s low- priced hedge book will continue to materially suppress near-term profitability. We forecast an EPS loss of $0.06, largely flat vs. the Q3/17 loss of $0.04 but below consensus EPS of $0.04. In addition to operating results, we anticipate the market will focus on the ongoing ramp-up at Sentinel, the development progress at Cobre Panama, any update on the Cobre Panama project financing package, and any update on the company’s copper hedging activities in 2018. FM’s investor call details are TBD.

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EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

Freeport McMoRan – January 25 Pre-Market

FCX is scheduled to report Q4/17 results before market open on Thursday, January 25. We forecast EPS of $0.54, slightly above consensus of $0.49 and well above the Q3/17 level of $0.34 as high-grade production volumes at Grasberg are expected to peak in Q4/17. Our EBITDA forecast of $2.2 billion is 6% above consensus and 36% higher than the Q3/17 level of $1.6 billion. We forecast consolidated copper and gold sales of 1.0B lbs and 629k ozs, up 10% and 77% QoQ, although we note this assumes FCX realizes significantly improved sequential results at Grasberg. We forecast unit cash costs of $0.92/lb, down 24% QoQ and 23% YoY.

The market will be focused on Grasberg updates, primarily related to ongoing long-term fiscal and legal operating rights in Indonesia. Specifically, we will look for additional details on the potential sale of a ~42% stake in PT-FI (and how FCX plans to realize fair value) as well as updates on Grasberg’s medium- and long-term production outlook. Grasberg, the world’s second-largest Cu mine, represents 29% of our 8% NAVPS. FCX will host a conference call on Thursday, January 25 at 10:00 a.m. EST. The dial-in number is 1 (800) 403-5770; the passcode is 957 1339.

Teck Resources – February 14 Pre-Market

Teck is scheduled to report Q4/17 results before market open on Wednesday, February 14. We forecast EPS of C$1.29, slightly above consensus of C$1.22 and up from Q3/17 of C$1.08, largely reflecting higher realized prices for both base metals and (to a lesser extent) met coal. We forecast EBITDA of C$1.6 billion, 4% above consensus of C$1.5 billion and 12% above the C$1.4 billion realized in Q3/17. In coal, we forecast sales of 6.5 million tonnes (in-line with Teck’s guidance) at relatively high cash costs of C$90/t (including transportation) reflecting the impact of a lower volume sales quarter. We forecast a realized price of $168/t, within Teck’s recent guidance of $165-$170/t. We forecast copper and zinc production of 78kt and 176kt, respectively, +4% and -4% from Q3/17 levels. We anticipate copper cash costs of $1.21/lb, down 4% from Q3/17 and below Teck’s annual guidance range of $1.30-$1.40/lb.

In addition to operating results, we believe the market will focus on 2018 guidance, Teck’s outlook for the met coal market, and details of the production impact of the recently announced dryer pressure event at the Elkview mine. We have lowered our 2018 coal production and sales volumes by 1.8Mt to 25.5Mt as a preliminary estimate of the production impact, partially offset by a higher Q1/18 benchmark HCC index of $220/t given QTD levels (vs. our $200/t estimate previously). We have also increased our 2018 coal cost forecast to $91/t (from $87/t) due to the Elkview incident. The net impact of our slightly lower 2018 estimates reduced our 12-month target to C$42.00 per share (from C$43.00). Outside of coal, we anticipate 2018 output guidance of 290kt of Cu and 634kt of Zn, with Cu cash costs of $1.19/lb, respectively. Teck will hold an investor call on Wednesday, February 14 at 11:00 a.m. EST. The dial-in number is +1 (866) 225-0198.

Turquoise Hill – Q4/17 Financials TBD

We expect Turquoise Hill to release Q4/17 financial results in mid- to late-March. We note that Rio Tinto PLC (RIO:L – not covered) released production results for TRQ’s Oyu Tolgoi mine on January 15 and as a result, we expect financial results will be less meaningful. We forecast EPS of $0.01, in-line with consensus but down from the Q3/17 level of $0.04 and the Q4/16 level of $0.05. Our EBITDA forecast of $67 million is 26% above consensus of $53 million and well above the $41 million earned in Q4/16 but largely in-line with the Q3/17 level of $71 million.

We expect the market to primarily focus on Phase II underground development updates. The company has already released 2018 guidance.

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EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

Mid-Cap Base Metals

Hudbay Minerals – February 21 After Market Close

We expect HBM to report Q4/17 results on Wednesday, February 21 after market close. HBM pre-released Q4/17 production results and 2018 guidance and, as a result, we expect financial results to be less meaningful. We forecast EPS of $0.27, 18% above consensus of $0.23 and above the Q3/17 level of $0.21. Our EBITDA forecast of $219 million is 13% above consensus of $194 million and 27% above the Q3/17 level of $173 million. We forecast payable copper and zinc sales of 42kt and 34kt, respectively, in-line with recently released production volumes. We forecast copper cash costs of $0.83/lb, 3% below the $0.86/lb realized in Q3/17 due to stronger by-product credits.

While the full implications of the recently completed twin hole drilling at Constancia are not expected to be released until April, we expect the market to focus on any commentary regarding the potential LOM positive grade reconciliation. We continue to believe that this positive grade reconciliation could be a positive development for HBM, even if it comes at the expense of lower-than-planned recoveries. We will also look for additional details on the Rosemont permitting process and any updates with respect to the revised Manitoba optimization study. HBM’s investor call details are TBD.

Lundin Mining – February 15 After Market Close

Lundin is expected to report Q4/17 results on Thursday, February 15 after market close. LUN released a very disappointing guidance update in late November 2017 and recently announced in-line Q4/17 production. As a result, we expect financial results to be less meaningful. We forecast EPS of $0.15, in-line with consensus of $0.14 but modestly below the Q3/17 level of $0.18. Our EBITDA forecast of $278 million is 4% above consensus of $268 million but 15% below the Q3/17 level of $327 million. We forecast cash costs of $1.38/lb for copper (Q3/17 – $1.12/lb), $0.27/lb for zinc (Q3/17 – $0.30/lb), and $1.02/lb for nickel (Q3/17 – $0.63/lb).

We expect the market to remain primarily focused on LUN's capital allocation strategy, including ongoing investment programs at Neves-Corvo and Candelaria, among others. LUN will host an investor call on Friday, February 16 at 8:00am EST. The dial-in number is +1 (877) 648-7976.

Nevsun Resources – March 1 After Market Close

We expect NSU to release 2018 guidance later this week. We forecast Bisha to produce 255m lbs of zinc and 25m lbs of copper in 2018, up 23% and 47% YoY respectively driven by a combination of both higher grades and recoveries. NSU is scheduled to release Q4/17 financial results on March 1 after market close. We forecast EPS of $0.01, in-line with consensus of $0.02 and the Q3/17 level of $nil. Our EBITDA forecast of $29 million is slightly below consensus of $33 million, but up markedly from the $20 million realized in Q3/17.

We anticipate the market to remain focused on Timok (87% of our 10% NAVPS), including permitting updates for the underground decline and planned 2018 spending levels for the project. We also expect a maiden pre-feasibility study for the project in Q1/18, although the results are likely to be relatively similar to the Q4/17 PEA. NSU will host an investor call on Friday, March 2 at 11:00 a.m. EST. The dial-in number is +1 (888) 390-0546.

Nexa Resources – February 15 After Market Close

We expect Nexa to release Q4/17 financial results and 2018 guidance on February 15 after market close. We forecast Q4/17 mined zinc and copper production of 91kt at by-product cash costs of $0.32/lb, both

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EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

largely flat QoQ. We forecast copper production to decline 20% QoQ to 9.5kt. We forecast refined zinc sales of 149kt, with Nexa’s Smelting segment generating $61 million in EBITDA (up from $41 million in Q3/17). We forecast EPS of $0.37, modestly below consensus of $0.40 and down from the $0.62 reported in Q3/17. Our consolidated EBITDA forecast of $207 million is in-line with consensus of $203 million and up 28% from the $161 million realized in Q3/17.

We expect the market to be focused on Nexa’s operating and financial results, including more detailed disclosure, as well as 2018 guidance. We forecast 2018 mined and refined zinc production of 366kt and 607kt, which compares to an estimated 364kt and 576kt in 2017, respectively. We expect Nexa to host an investor call on the morning of February 16, although timing and dial-in details have not yet been released.

Trevali Mining – March 8 After Market Close

We expect Trevali to report Q4/17 financial results on Thursday, March 8 after market close. TV released Q4/17 production results and 2018 guidance on January 15 and, as a result, we expect financial results to be less meaningful. We forecast EPS of $0.03, below consensus levels of $0.07 but up from $0.01 in Q3/17. We forecast EBITDA of $64 million, below consensus of $79 million but well up from the $20 million realized in Q3/17. While we expect Q4/17 to be a stronger quarter sequentially (as Perkoa sales were deferred into the quarter), we expect financial results to continue to be negatively impacted by purchase accounting for TV’s purchase of the Rosh Pinah and Perkoa mines from Glencore.

We expect the market to focus on the financial performance at the Glencore assets and any updates to TV’s capital allocation priorities. TV’s conference call timing and dial-in number have not been released.

Small Cap Base Metals and Royalties

Capstone Mining – February 14 After Market Close

Capstone is scheduled to release Q4/17 financial results on Wednesday, February 14 after market close. We note that CS released Q4/17 production results, 2018 guidance and hosted an investor workshop in early January. As a result, we expect that financial results will be less meaningful. We forecast Q4/17 EPS of $0.03, in-line with consensus of $0.02 but improved from the Q3/17 loss of $0.03. Our EBITDA forecast of $43 million is 19% above consensus of $36 million and up 27% from the $34 million realized in Q3/17. Our Q4/17 cash cost forecast of $1.86/lb is down 7% QoQ but up 47% from Q4/16 when CS realized the benefit of high gold by-product credits at Minto.

We expect the market to focus on operating performance at Pinto Valley. CS will host an investor call on February 15 at 11:30 am EST. The dial in is +1 (888) 390-0546.

Copper Mountain – Q4/17 Timing TBD

We expect CMMC to report financial results in mid- to late March. We note that CMMC has already released Q4/17 production and 2018 operating guidance and, as a result, we expect financial results to be less meaningful. We estimate Q4/17 cash costs of $1.91/lb, up from $1.62/lb in Q3/17 and $1.64/lb in Q4/16. We forecast EPS of C$0.07, slightly above consensus of C$0.05 but below the C$0.10 realized in Q3/17. We forecast consolidated EBITDA of C$27 million, modestly above consensus of C$24 million but down 10% from the C$31 million realized in Q3/17. We anticipate the market will focus on operational performance at Copper Mountain and the status of CMMC’s proposed Altona acquisition. CMMC’s conference call timing and dial-in details have not yet been released.

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EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

Ero Copper – Q4/17 Timing TBD

We expect Ero to report Q4/17 financial results in mid- to late March. In early January, Ero pre-released its 2018 production guidance, although the company has not released its Q4/17 operating results. Given the ongoing ramp-up of the MCSA Complex (including the development of the Vermelhos mine), we view Ero’s near-term financial results as less meaningful. We forecast an EPS loss of $0.06, well below consensus EPS of $nil but in-line with the Q3/17 loss of $0.04. Our EBITDA forecast of $10 million is 18% below consensus of $13 million but flat relative to the Q3/17 level. We forecast cash costs of $1.55/lb, up 6% from the Q3/17 level of $1.47/lb.

We expect the market to remain focused on Ero’s development progress at the Vermelhos mine. Ero’s Q4/17 conference call timing and dial-in details have not yet been released.

Sherritt International – February 7 After Market Close

We expect Sherritt to release Q4/17 financial results on February 7 after market close. However, following the recent release of Q4/17 production results, 2018 guidance, and the recent equity offering, we expect financial results to be less meaningful. In addition, we expect that the Q4/17 restructuring of Sherritt’s Ambatovy ownership interest could make for a very messy accounting quarter. We forecast an EPS loss of C$0.10, slightly below consensus loss of C$0.08 but well above the C$0.29 loss in Q3/17, largely reflecting improved commodity prices. Our EBITDA forecast of C$54 million is 22% below consensus of C$69 million but 58% above the C$34 million realized in Q3/17.

We will look for any updates on the ongoing bond repurchase program and the company’s Block 10 oil and gas drilling program in Cuba. Sherritt’s conference call timing and dial-in number have not yet been released.

Sierra Metals – Analyst Workshop on February 8; Q4/17 Timing TBD

SMT is scheduled to host an analyst workshop on February 8 from 8:30am EST to 1:00pm EST. In advance of the workshop, we expect SMT to release an updated resource for its Bolivar copper mine and potentially to release the updated 43-101 technical report for its Cusi silver mine. We expect the workshop to focus on recent exploration results at all three of SMT’s assets, as well as potential expansion opportunities to advance the company’s brownfield growth strategy.

Given the investor workshop scheduled and recently released Q4/17 production results and 2018 guidance, we expect SMT’s Q4/17 financial results to be less meaningful. We forecast EPS of $0.02 and EBITDA of $25 million, which are both improved QoQ from an EPS loss of $0.01 and EBITDA of $19 million. The sequential improvements reflect a combination of improved operations at Bolivar and higher base metals prices. SMT has not yet announced Q4 conference call timing or dial-in details.

Taseko Mines – Q4/17 Timing TBD

We expect TKO to report Q4/17 results in mid- to late February. We forecast EPS of C$0.12, slightly above consensus of C$0.10, but well above the C$0.06 earned in Q3/17. Our EBITDA forecast of C$60 million is 16% above consensus of C$52 million, although we note that we assume another relatively significant quarter of capitalized stripping of C$13 million (TKO does not provide capitalized stripping guidance) which may skew our EBITDA forecast versus other estimates. We forecast copper production of 37m lbs, up 5% on a QoQ basis. We forecast cash costs of $1.38/lb, 17% above the $1.18/lb realized in Q3/17. We anticipate the market will focus on Gibraltar’s operating performance, any 2018 guidance provided (although we expect this will be limited) and planned project spending at Florence. TKO has not yet announced Q4 conference call timing or dial-in details.

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EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

Altius Minerals – Q3/CY17 March 14 After Market Close

ALS is scheduled to report financial results for the two-month period ended December 31, 2017 on March 14 after market close. However, ALS has pre-released attributable royalty revenues for the period and, as a result, we expect full financial results to be less meaningful. We forecast EPS of C$0.07, in-line with consensus of C$0.09 but down from the C$0.13 earned in the prior quarter, largely reflecting the two-month stub reporting period. Similarly, we forecast adjusted EBITDA of C$8 million, down from C$15 million in the prior quarter. ALS will host an investor call on March 15 at 9:00am EST. The dial-in is +1 (844) 473-0974.

Labrador Iron Ore Royalty – March 8 After Market Close

We anticipate LIF to release financial results on March 8 after market close. However, Rio Tinto (RIO:L – not covered) is scheduled to release its 2017 financial results, including for the Iron Ore Company of Canada, on February 7. We expect this to provide additional detail on IOC’s profitability in the current iron ore price environment. Rio has already issued 2018 operating guidance for IOC.

For LIF, we forecast Q4/17 EPS of C$0.69 per share, modestly above consensus of C$0.64 but in-line with the C$0.69 earned in Q3/17. Our adjusted CFPS estimate of C$0.69 (including C$0.30/sh in IOC partner dividends) is down from the C$0.85 realized in Q3/17 (C$0.50/sh in IOC partner dividends). We believe the market will focus on IOC’s financial performance during the quarter and any updates to LIF’s dividend outlook (although we are not expecting any changes). LIF does not host earnings conference calls.

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EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

n/a

17%

87%

58%

62%

11%

47%

-62%

-73%

-20%

YoY %

Variance

ively.

n/a

Q4/16

Actual

C$0.59

C$0.23

C$0.07

C$0.02

C$1.61

(C$0.04)

US$0.02

(C$0.27)

US$0.08

US$0.05

US$0.09

US$0.25

US$0.04

US$0.30

(US$0.07)

(US$0.05)

64%

97%

20%

26%

60%

47%

-45%

-52%

-32%

-65%

-41%

-19%

-53%

QoQ % QoQ

Variance

Q3/17

Actual

C$0.69

C$0.13

C$0.06

C$0.10

C$1.08

(C$0.13)

(C$0.29)

US$0.04

US$0.01

US$0.62

US$0.18

US$0.21

US$0.34

US$0.29

(US$0.01)

(US$0.04)

(US$0.03)

(US$0.00)

(US$0.04)

/16A

-8%

22%

17%

53%

54%

62%

18%

11%

-20%

-30%

Variance

/17A, and/17A,Q

Q4/17

C$0.64

C$0.09

C$0.35

C$0.10

C$0.05

C$1.22

US$0.02

(C$0.08)

US$0.02

US$0.00

US$0.07

US$0.40

US$0.02

US$0.14

US$0.23

US$0.49

US$0.04

US$0.42

(US$0.00)

Consensus

C$0.69

C$0.07

C$0.43

C$0.12

C$0.07

C$1.29

US$0.02

(C$0.10)

US$0.03

US$0.01

US$0.03

US$0.37

US$0.01

US$0.15

US$0.27

US$0.54

US$0.43

Estimate

(US$0.06)

Q4/17 Scotia

years ended December31, 2017, June 30, 2017,andDecember 31, 2016, respectively.

monthperiod ended December 31,2017. Prior periods reflect thequarters ended October 31, 2017 andJanuary 31, 2017, respect

17 Adjusted EPS Estimates vs. Consensus, Estimates Q Consensus, vs. EPS 17Adjusted

thetwo ompanyreports; Scotiabank GBM estimates.

: Q :

Altius figuresAltius for

Labrador Iron Ore Royalty

Altius Minerals**

Cameco Corporation

Uranium Producers & Royalties

Taseko Mines

Sierra Metals

Sherritt International

Ero Copper

Copper Mountain

Capstone Mining

Small-cap Base Producers Metals

Turquoise Hill Resources

Trevali Mining Trevali

Teck Resources

Nexa ResourcesNexa

Nevsun Resources

Lundin Mining

Hudbay Minerals

Freeport-McMoRan

First Quantum Minerals

Antofagasta*

Large/Mid-cap Large/Mid-cap Base Producers Metals

Adjusted EPS (Attributable) Adjusted

Exhibit *Antofagasta results forthe half * Source: FactSet;c

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EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

22%

51%

35%

57%

43%

64%

21%

55%

30%

45%

39%

-25%

-37%

-13%

YoY %

Variance

C$11

C$44

C$37

C$26

Q4/16

C$193

US$16

US$67

US$41

US$24

US$27

Actual

(US$3)

C$0.57

C$1829

US$230

US$142

US$218

US$1681

US$1055

-6%

42%

33%

58%

27%

12%

28%

47%

27%

36%

-19%

-42%

-10%

-15%

QoQ % QoQ

Variance

/16A

C$15

C$98

C$42

C$34

C$31

Q3/17

US$19

US$10

US$34

US$71

US$20

Actual

C$0.85

C$1420

US$161

US$327

US$173

US$304

October 31, 2017 andJanuary 31, 2017, respectively.

US$1614

US$1080

/17A, and /17A, Q

11%

16%

19%

26%

13%

-11%

-22%

-18%

-20%

-12%

Variance

C$52

C$69

C$24

Q4/17

C$263

US$25

US$13

US$36

US$53

US$79

US$33

C$0.78

C$1540

US$203

US$268

US$194

US$309

Consensus, Q Consensus,

US$2063

US$1361

Consensus

C$8

C$60

C$54

C$27

C$291

US$25

US$10

US$43

US$67

US$64

US$29

C$0.69

C$1595

US$207

US$278

US$219

US$317

US$2192

US$1465

Estimate

Estimates vs.

Q4/17 Scotia

EBITDA

years ended December31, 2017, June 30, 2017,andDecember 31, 2016, respectively.

monthperiod ended December 31,2017. Prior periods reflect thequarters ended

Consolidated

ompanyreports; Scotiabank GBM estimates.

/17

: Q :

*LIF figures *LIF are adjustedcash flow per share rather thanEBITDA

*Altiusfigures for the two *

Labrador Iron Ore Royalty***

Altius Minerals**

Cameco Corporation

Uranium Producers & Royalties

Taseko Mines

Sierra Metals

Sherritt Intl (incl. Moa/Ambatovy)

Ero Copper

Copper Mountain

Capstone Mining

Small-cap Base Producers Metals

Turquoise Hill Resources

Trevali Mining Trevali

Teck Resources

Nexa ResourcesNexa

Nevsun Resources

Lundin Mining

Hudbay Minerals

Freeport-McMoRan

First Quantum Minerals

Antofagasta*

Large/Mid-cap Large/Mid-cap Base Producers Metals

Adjusted EBITDA (Consolidated) EBITDA Adjusted

In millions of US$ or C$ (as In noted) of C$ millions or US$

Exhibit *Antofagasta results forthe half * * Source: FactSet;

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EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

Exhibit 3: Forecast Operating Results – Large Cap Base Metals, Bulks, and Uranium Forecast Reported Variance Reported Variance Units Q4/17E Q3/17A QoQ (%) Q4/16A YoY (%) Antofagasta Copper production kt 176.1 180.1 -2% 205.5 -14% Gold production koz 56.0 59.6 -6% 91.1 -39% Net cash costs US$/lb $1.31 $1.18 11% $1.13 16%

First Quantum Copper production kt 149.4 145.4 3% 146.1 2% Gold production koz 52.3 47.2 11% 54.2 -3% Copper cash costs US$/lb $1.28 $1.21 6% $1.16 10%

Freeport McMoRan Copper production Mlbs 1,026 996 3% 1,200 -14% Copper sales Mlbs 1,026 932 10% 1,186 -13% Gold production koz 629 418 51% 430 46% Gold sales koz 629 355 77% 405 55% Copper cash costs US$/lb $0.92 $1.21 -24% $1.20 -23%

Teck Resources Coal production Mt 7.2 6.8 6% 7.3 -1% Coal sales Mt 6.5 7.5 -14% 6.9 -6% Realized coal price US$/t $168 $159 6% $207 -19% Coal costs (incl. transportation) C$/t $90 $87 3% $78 15% Copper production kt 77.6 74.7 4% 72.0 8% Copper cash costs US$/lb $1.21 $1.27 -4% $1.45 -16% Mined zinc production* kt 176.0 183.6 -4% 152.0 16% *Includes Antamina

Turquoise Hill Copper production kt 45.3 36.9 23% 45.5 0% Gold production koz 35.0 31.0 13% 49.0 -29% Copper cash costs US$/lb $1.79 $1.83 -2% $1.57 NM

Cameco U3O8 Production Mlbs 7.1 3.1 128% 7.1 -1% U3O8 Deliveries Mlbs 11.5 9.2 25% 11.7 -2% Realized uranium price US$/lb $41.50 $32.42 28% $38.04 9% Realized uranium price C$/lb $53.02 $41.66 27% $50.51 5% Cash production costs C$/lb $15.19 $24.40 -38% $15.00 1%

Uranium unit cost of sales C$/lb $35.79 $36.12 -1% $38.29 -7% Note: TRQ reflects reported Q4/17 production.

Source: Company reports; Scotiabank GBM estimates.

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Exhibit 4: Forecast Operating Results – Mid-Cap Base Metals Forecast Reported Variance Reported Variance Units Q4/17E Q3/17A QoQ (%) Q4/16A YoY (%) HudBay Minerals Copper production kt 43.2 40.4 7% 43.8 -1% Zinc production kt 33.1 36.6 -10% 29.1 13% Copper cash costs US$/lb $0.83 $0.86 -3% $0.85 -2%

Lundin Mining Copper production (attributable) kt 45.7 52.9 -14% 56.0 -18% Zinc production kt 37.3 38.5 -3% 35.7 5% Nickel production kt 4.3 5.6 -23% 5.2 -18% Copper cash costs US$/lb $1.38 $1.12 24% $1.36 2% Zinc cash costs US$/lb $0.27 $0.30 -9% $0.38 -28% Nickel cash costs US$/lb $1.02 $0.63 61% $1.38 -26%

Nevsun Resources Copper production Mlbs 4.1 4.0 3% 0.0 nm Zinc production Mlbs 55.1 58.0 -5% 46.5 18% Copper cash costs (co-product) US$/lb $0.72 $1.70 nm nm nm Zinc cash costs (co-product) US$/lb $0.85 $0.84 1% $1.06 nm

Nexa Resources Mined zinc production kt 91.0 89.4 2% 104.3 nm Mined copper production kt 9.5 11.9 -20% 10.9 nm Cash costs US$/lb $0.32 $0.34 -8% na nm Refined zinc sales kt 148.8 151.8 -2% na nm Smelting EBITDA US$mm $61 $41 50% na nm

Trevali Mining Zinc production Mlbs 104.8 100.4 4% 36.8 185%

Cash costs (by-product) US$/lb $0.70 $0.49 43% $0.85 -17% Note: Q4/17 production reflects reported results for HBM, LUN, NSU, and TV.

Source: Company reports; Scotiabank GBM estimates.

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Exhibit 5: Forecast Operating Results – Small Cap Base Metals Forecast Reported Variance Reported Variance Units Q4/17E Q3/17A QoQ (%) Q4/16A YoY (%) Capstone Mining Copper production kt 23.4 22.0 6% 29.9 -22% Copper cash costs US$/lb $1.86 $2.00 -7% $1.26 47%

Copper Mountain Copper production Mlbs 19.5 20.9 -7% 20.8 -6% Copper cash costs US$/lb $1.91 $1.62 18% $1.64 17%

Ero Copper Copper production kt 5.8 5.7 3% nm nm Copper cash costs US$/lb $1.55 $1.47 6% nm nm

Sherritt Finished nickel production kt 7.8 7.3 7% 8.9 -12% Cobalt production kt 0.8 0.8 -5% 0.8 -4% Nickel cash costs US$/lb $2.68 $3.08 -13% $3.41 -22% Oil production (NWI) bopd 6,119 7,658 -20% 8,163 -25% Oil cash costs (Cuba) US$/bbl $10.00 $8.98 11% $10.95 -9%

Sierra Metals Zinc production Mlbs 19.5 19.9 -2% 17.0 15% Copper production Mlbs 7.5 6.7 12% 6.2 21% Silver production koz 496 507.0 -2% 788.0 -37% Yauricocha costs US$/t $63 $62 1% $56 12%

Taseko Copper production Mlbs 36.8 35.1 5% 40.7 -10%

Copper cash costs US$/lb $1.38 $1.18 17% $1.48 -7% Note: Q4/17 production reflects reported results for CS, CMMC, S, and SMT.

Source: Company reports; Scotiabank GBM estimates.

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Exhibit 6: Q4/17 Reporting Calendar and Conference Call Details

Ticker Report Date Conf Call Date Conf Call time Dial-in Large Caps ANTO Jan 24 BMO* 13-Mar-18 TBD TBD FM TBD TBD TBD TBD FCX Jan 25 BMO 25-Jan-18 10:00 AM +1 (800) 403-5770** TECK Feb 14 BMO 14-Feb-18 11:00 AM +1 (866) 225-0198 TRQ TBD TBD TBD TBD

Mid Caps HBM Feb 21 AMC 22-Feb-18 TBD TBD LUN Feb 15 AMC 16-Feb-18 8:00 AM +1 (877) 648-7976 NSU Mar 1 AMC 2-Mar-18 11:00 AM +1 (888) 390-0546 NEXA Feb 15 AMC 16-Feb-18 TBD TBD TV Mar 8 AMC 9-Mar-18 TBD TBD

Small Caps CS Feb 14 AMC 15-Feb-18 11:30 AM +1 (888) 390-0546 CMMC TBD TBD TBD TBD ERO TBD TBD TBD TBD S Feb 7 AMC 8-Feb-18 TBD TBD SMT TBD TBD TBD TBD TKO TBD TBD TBD TBD

Uranium / Royalty CCO Feb 9 BMO 9-Feb-18 TBD TBD ALS Mar 14 AMC 15-Mar-18 9:00 AM +1 (844) 473-0974

LIF Feb 7 BMO*** n/a - no call n/a - no call n/a - no call *ANTO: Reflects Q4/17 production report. Financial results to be released March 13, 2018 before market open. **FCX: Conference call passcode is #9571339. ***LIF: Timing reflects Rio’s 2017 financial results, including results for the Iron Ore Company of Canada. We expect LIF to report financial results on March 8. BMO = before market open; AMC = after market close; TBD = to be determined, n/a = not applicable.

Source: FactSet; company reports; Scotiabank GBM estimates.

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Pertinent Data and Revisions

Price Rating 1-Yr. Target 1-Yr. Return

ALS-T C$14.25 SP C$15.25 8.1% ANTO-L GBP 9.95 SP GBP 11.00 12.9% CCO-T C$12.01 SU C$11.00 -7.7% CMMC-T* C$1.37 SP C$1.70 24.1% CS-T C$1.45 SO C$2.00 37.9% ERO-T C$7.73 SO C$9.25 19.7% FCX-N US$19.99 SP US$19.00 -5.0% FM-T C$19.03 SO C$22.00 15.6% HBM-T C$11.64 FS C$14.50 24.7% LIF-T C$26.90 SO C$30.00 19.9% LUN-T C$8.75 SO C$9.50 9.9% NEXA-N US$20.21 SO US$25.50 27.8% NSU-T C$2.93 SO C$4.75 63.8% SMT-T C$3.30 SP C$3.50 6.1% S-T C$1.31 SP C$1.60 22.1% TECK.B-T C$36.27 FS C$42.00 16.3% TI-T* C$1.41 SO C$1.90 34.8% TKO-T* C$2.25 SU C$2.25 0.0% TRQ-T* C$4.18 SO C$5.75 37.6% TV-T* C$1.52 SO C$2.00 31.6% *Speculative risk ranking.

Capstone Mining Corp. (CS-T;C$1.45)

Valuation: 50/50 weighting of 4.0x average 2018/19 EV/EBITDA and 0.9x 8% NAV Key Risks: Commodity price, operating, technical, environmental, and legal risks

Ero Copper Corp. (ERO-T;C$7.73)

Valuation: 50/50 weighting of 7.0x our 2019E EV/EBITDA and 1.2x our 8% NAVPS estimate Key Risks: Commodity price, exchange rate, geopolitical, resource conversion, operating, development, and technical risks.

First Quantum Minerals Ltd. (FM-T;C$19.03)

Valuation: 50/50 weighting of 6.5x 2019 EBITDA and 1.0x 8% NAVPS Key Risks: Political, commodity, operating, development, currency, and balance sheet

Freeport-McMoRan Inc. (FCX-N;US$19.99)

New Old Key Data Adj EPS17E: $1.20 Adj EPS17E: $1.25 NAVPS: $13.44 NAVPS: $13.48

Hudbay Minerals Inc. (HBM-T;C$11.64)

Valuation: 50/50 weighting of 5.0x average 2018/19 EBITDA and 1.0x 8% NAVPS Key Risks: Commodity, operating, development, financing, political New Old Key Data Adj EPS17E: $0.61 Adj EPS17E: $0.62

Labrador Iron Ore Royalty Corp. (LIF-T;C$26.90)

Valuation: 50/50 weighting of 15x average 2018/19 Dividends and 1.0x 8% NAVPS Key Risks: Commodity price, third-party operating and technical risks, environmental and legal risks

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Lundin Mining Corporation (LUN-T;C$8.75)

Valuation: 50/50 weighting of 5.5x average 2018/19 EV/EBITDA and 1.1x 8% NAVPS Key Risks: Commodity, operating, financing, development, political

Nevsun Resources Ltd. (NSU-T;C$2.93)

Valuation: 0.85x 10% NAVPS Key Risks: Commodity price, permitting, construction, operating, and technical risks, environmental, political and legal risks

Nexa Resources S.A. (NEXA-N;US$20.21)

Valuation: 50/50 weighting of 5.0x average 2018/19 EV/EBITDA and 1.0x 8% NAVPS Key Risks: Commodity price, exchange rate, geopolitical, resource conversion, operating, development, and technical risks.

Teck Resources Limited (TECK.B-T;C$36.27)

Valuation: 50/50 weighting of 5.5x average 2018/19 EV/EBITDA and 1.0x 8% NAVPS Key Risks: Commodity prices, currency, operating, development, balance sheet and environmental New Old 1-Yr. Target C$42.00 C$43.00 Key Data Adj EPS17E: C$4.52 Adj EPS17E: C$4.63 Adj EPS18E: C$4.42 Adj EPS18E: C$4.66 Adj EPS19E: C$3.88 Adj EPS19E: C$3.92 NAVPS: C$38.08 NAVPS: C$38.36

Titan Mining Corporation (TI-T;C$1.41)

Valuation: 50/50 weighting of 3.0x 2019E EV/EBITDA and 0.8x our 8% NAVPS Key Risks: Commodity prices, operating and technical, resource conversion, share liquidity.

Trevali Mining Corporation (TV-T;C$1.52)

Valuation: 50/50 weighting of 4.5x average 2018/19 EV/EBITDA and 1.0x 8% NAVPS Key Risks: Commodity price, operating, and technical risks; environmental and legal risks

Turquoise Hill Resources Ltd. (TRQ-T;C$4.18)

Valuation: 1.0x 10% NAVPS Key Risks: Political, Development, Commodity, Operational

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Appendix A: Important Disclosures

Company Disclosures (see legend below)*

Antofagasta plc M14, M9, VS0449, VS0450 Cameco Corporation VS0300, VS0410 Capstone Mining Corp. VS0387 Copper Mountain Mining Corporation VS0478 Ero Copper Corp. G, I, U, VS0503 First Quantum Minerals Ltd. VS0124, VS0351, VS0388 Freeport-McMoRan Inc. HH Hudbay Minerals Inc. G, I, U, V25, VS0066, VS0101, VS0174, VS0221, VS0339 Labrador Iron Ore Royalty Corp. I, V42, VS0475, VS0476 Lundin Mining Corporation VS0067, VS0195, VS0340, VS0468 Nevsun Resources Ltd. J, VS0404, VS0435, VS0510 Nexa Resources S.A. G, I, U, VS0421, VS0511 Sherritt International Corporation VS0141 Sierra Metals Inc. VS0479, VS0480, VS0481 Teck Resources Limited D42, VS0068, VS0495 Titan Mining Corporation G, I, U, VS0502, VS0504 Trevali Mining Corporation G, I, U, VS0494 Turquoise Hill Resources Ltd. VS0434

We, Orest Wowkodaw and Ian Grundy, certify that (1) the views expressed in this report in connection with securities or issuers that we analyze accurately reflect our personal views and (2) no part of our compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by us in this report. This research report was prepared by employees of Scotia Capital Inc. and/or its affiliates who have the title of Analyst. All pricing of securities in reports is based on the closing price of the securities’ principal marketplace on the night before the publication date, unless otherwise explicitly stated. All Equity Research Analysts report to the Head of Equity Research. The Head of Equity Research reports to the Managing Director and Co-Head, Global Capital Markets, who is not and does not report to the Head of the Investment Banking Department. Scotiabank, Global Banking and Markets has policies that are reasonably designed to prevent or control the sharing of material non-public information across internal information barriers, such as between Investment Banking and Research. The compensation of the research analyst who prepared this report is based on several factors, including but not limited to, the overall profitability of Scotiabank, Global Banking and Markets, and the revenues generated from its various departments, including investment banking, trading fees and other types of transactions. Furthermore, the research analyst’s compensation is charged as an expense to various Scotiabank, Global Banking and Markets departments, including investment banking. Research Analysts may not receive compensation from the companies they cover. Non-U.S. analysts may not be associated persons of Scotia Capital (USA) Inc. and therefore may not be subject to FINRA Rule 2241 restrictions on communications with subject company, public appearances and trading securities held by the analysts. For Scotiabank, Global Banking and Markets Research analyst standards and disclosure policies, please visit gbm.scotiabank.com/ disclosures. Scotiabank, Global Banking and Markets Research, 40 King Street West, 33rd Floor, Toronto, Ontario, M5H 1H1.

Time of dissemination: January 23, 2018, 04:49 ET. Time of production: January 22, 2018, 19:36 ET. Note: Time of dissemination is defined as the time at which the document was disseminated to clients. Time of production is defined as the time at which the Supervisory Analyst approved the document.

*Legend

D42 Una M. Power, a Director of the Bank of Nova Scotia, is a member of the Board of Directors of Teck Resources Limited. G Scotia Capital (USA) Inc. or its affiliates has managed or co-managed a public offering in the past 12 months. HH The Head of Equity Research or a Supervisory Analyst owns securities of this issuer in his or her own account or in a related account. I Scotia Capital (USA) Inc. or its affiliates has received compensation for investment banking services in the past 12 months.

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J Scotia Capital (USA) Inc. or its affiliates expects to receive or intends to seek compensation for investment banking services in the next 3 months. M14 Christian C. Landi, an analyst, prepared this report and is an employee of the Research Department of Scotiabank Inverlat S.A., which forms a part of Grupo Financiero Scotiabank Inverlat. M9 Alfonso Salazar, an analyst, prepared this report and is an employee of the Research Department of Scotiabank Inverlat S.A., which forms a part of Grupo Financiero Scotiabank Inverlat. U Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to, this issuer. V25 Scotiabank acted as a financial advisor for HudBay Minerals Inc. in a precious metals stream transaction with Wheaton Precious Metals Corp. V42 Scotia Capital Inc. has been retained by Labrador Iron Ore Royalty Corporation as financial advisor relating to Rio Tinto's possible sale of its interest in Iron Ore Company of Canada. VS0066 Research Analyst Orest Wowkodaw visited mining assets at Flin Flon, Manitoba, on April 15-17, 2013. No payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0067 Research Analyst Orest Wowkodaw visited the Eagle project, a development mine, on September 26, 2013. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0068 Research Analyst Orest Wowkodaw visited Highland Valley, an operating mine, on September 4, 2013. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0101 Research Analyst Orest Wowkodaw visited Constancia, a mine under development, on October 2, 2013. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0124 Research Analyst Orest Wowkodaw visited the Kansanshi and Sentinel mines, a copper mine and mine under development, respectively, on February 6-7, 2014. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0141 Research Analyst Orest Wowkodaw visited Ambatovy, a nickel mine, on March 28-29, 2014. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0174 Research Analyst Orest Wowkodaw visited the Constancia project, a copper mine, on September 8, 2014. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0195 Research Analyst Orest Wowkodaw visited Eagle, a nickel-copper mine, on November 4, 2014. Full payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0221 Research Analyst Orest Wowkodaw visited the Rosemont project, an undeveloped copper asset, in April 2014. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0300 Research Analyst Orest Wowkodaw visited the McArthur River mine, an operating mine, in 2012. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0339 Research Analyst Orest Wowkodaw visited the Constancia mine, a copper mine, on September 23, 2015. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0340 Research Analyst Orest Wowkodaw visited Candelaria, a copper mine, on September 22, 2015. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0351 Research Analyst Orest Wowkodaw visited the Kansanshi and Sentinel mines and the Kansanshi smelter, operating mines and a smelter, on October 6-8, 2015. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0387 Research Analyst Orest Wowkodaw visited Pinto Valley, a copper mine, on May 4, 2016. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0388 Research Analyst Orest Wowkodaw visited Cobre Panama, a copper-gold mine, on March 4, 2016. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0404 Research analyst Orest Wowkodaw visited the Timok Cu-Au Project, a Cu-Au development project, on June 9, 2016. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0410 Research Associate Ian Grundy visited the Cigar Lake mine, an operating mine, on September 15, 2016. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Associate to visit this site.

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VS0421 Research Analyst Alfonso Salazar visited the Cerro Lindo Mining Unit, an operating mine under expansion in Peru, on October 4, 2016. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0434 Research Analyst Orest Wowkodaw visited Oyu Tolgoi, a Copper/Gold mine in Mongolia, on November 8, 2016. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0435 Research Associate Ian Grundy visited the Bisha mine, an operating copper/zinc mine, on November 22 and 23, 2016. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Associate to visit this site. VS0449 Research Analyst Alfonso Salazar visited Centinela, an operating copper mine, in April 2015. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0450 Research Analyst Orest Wowkodaw visited Centinela, an operating copper mine, in April 2015. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site.. VS0468 Research Analyst Orest Wowkodaw visited Neves-Corvo, an operating copper-zinc mine, on May 15, 2017. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0475 Research Associate Ian Grundy visited Iron Ore Company of Canada’s operating mine in Labrador City and port facilities in Sept-Iles on July 13 and 14, 2017. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Associate to visit this site. VS0476 Research Analyst Orest Wowkodaw visited Iron Ore Company of Canada’s operating mine in Labrador City and port facilities in Sept-Iles on July 13 and 14, 2017. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0478 Research Associate Ian Grundy visited Copper Mountain Mine, an operating mine in Princeton, British Columbia on August 18, 2017. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Associate to visit this site. VS0479 Research Associate Ian Grundy visited Bolivar, an operating copper mine in Chihuahua, Mexico on August 10, 2017. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Associate to visit this site. VS0480 Research Associate Ian Grundy visited Yauricocha, a Polymetallic Zn-Cu-Pb-Ag mine in Yauyos Province, Peru on August 7-8, 2017. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Associate to visit this site. VS0481 Research Associate Ian Grundy visited Cusi, an operating silver mine in Chihuahua, Mexico on August 9, 2017. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Associate to visit this site. VS0494 Research Analyst Orest Wowkodaw visited the Rosh Pinah mine, an operating zinc mine, on September 21, 2017. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0495 Research Analyst Orest Wowkodaw visited the Red Dog mine, an operating zinc mine, on September 20, 2017. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0502 Research Analyst Orest Wowkodaw visited Titan Mining Corporation’s Empire Mines, a zinc project in Upstate New York, USA, on August 1, 2017. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0503 Research Analyst Orest Wowkodaw visited Ero Copper Corporation’s MSCA copper complex, an operating copper mine in Curaca Valley, Bahia State, Brazil, on June 12 -15, 2017. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0504 Research Associate Ian Grundy visited Titan Mining Corporation’s Empire Mines, a zinc project in Upstate New York, USA, on May 2, 2017. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Associate to visit this site. VS0510 Research Analyst Orest Wowkodaw visited the Timik project, an undeveloped Cu-Au project, on November 9, 2017. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site. VS0511 Research Analyst Orest Wowkodaw visited Nexa Resources’ Cerro Lindo and Vasante operating zinc mines and Cajamarquilla and Tres Marias operating zinc smelters in Peru and Brazil on August 22-26, 2017. Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site.

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Rating and Price Target History

Capstone Mining Corp. (CS-T) as of January 22, 2018 (in CAD)

02-19-2015 07-09-2015 07-17-2015 09-09-2015 09-17-2015 09-29-2015 01-11-2016 04-14-2016 04-25-2016 04-27-2016 07-13-2016 07-22-2016 Price: 1.38 Price: 1.15 Price: 1.12 Price: 0.66 Price: 0.61 Price: 0.44 Price: 0.32 Price: 0.54 Price: 0.71 Price: 0.74 Price: 0.91 Price: 0.90 Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: CS* Rating: SO* Rating: SO Rating: SO Rating: SO Target: 3.15 Target: 3.00* Target: 2.70* Target: 2.50* Target: 1.40* Target: 1.60* Target: 1.20* Target: 0.00* Target: 1.30* Target: 1.40* Target: 1.50* Target: 1.25*

3.50

3.00

2.50

2.00

1.50 Price (CAD) Price

1.00

0.50

0.00 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 10-05-2016 10-13-2016 11-10-2016 01-10-2017 04-11-2017 04-26-2017 07-05-2017 09-05-2017 11-13-2017 01-08-2018 01-10-2018 Price: 0.76 Price: 0.70 Price: 0.91 Price: 1.41 Price: 1.17 Price: 0.95 Price: 0.91 Price: 1.53 Price: 1.48 Price: 1.53 Price: 1.52 Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Target: 1.05* Target: 1.10* Target: 1.20* Target: 1.60* Target: 1.50* Target: 1.60* Target: 1.50* Target: 1.75* Target: 1.85* Target: 2.25* Target: 2.00*

*Represents the value(s) that changed. Powered by: BlueMatrix Ratings Legend: FS=Focus Stock; SO=Sector Outperform; SP=Sector Perform; SU=Sector Underperform; T=Tender; UR=Under Review; CS=Coverage Suspended; DC=Discontinued Coverage Source: Scotiabank GBM estimates/Scotia Howard Weil estimates; FactSet.

Ero Copper Corp. (ERO-T) as of January 22, 2018 (in CAD)

11-06-2017 11-13-2017 12-21-2017 01-08-2018 Price: 5.81 Price: 6.35 Price: 6.99 Price: 8.96 Rating: SO Rating: SO Rating: SO Rating: SO Target: 6.25 Target: 7.00* Target: 7.25* Target: 9.25*

7 Price (CAD) Price 6

4 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18

19 This report is intended for [email protected]. Unauthorized distribution of this prohibited. EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

First Quantum Minerals Ltd. (FM-T) as of January 22, 2018 (in CAD)

01-28-2015 04-10-2015 05-21-2015 07-30-2015 09-29-2015 10-09-2015 12-18-2015 01-11-2016 02-17-2016 02-19-2016 03-22-2016 Price: 11.94 Price: 16.19 Price: 16.26 Price: 10.12 Price: 4.65 Price: 8.63 Price: 4.60 Price: 3.84 Price: 4.91 Price: 4.58 Price: 8.27 Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SO* Rating: SO Rating: SO Rating: SO Rating: SO Target: 20.00 Target: 20.50* Target: 20.00* Target: 14.50* Target: 10.50* Target: 11.00* Target: 11.00 Target: 10.50* Target: 10.00* Target: 11.00* Target: 10.50*

15 Price (CAD) Price 10

0 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 04-07-2016 05-02-2016 05-19-2016 07-22-2016 10-05-2016 10-31-2016 01-10-2017 01-26-2017 04-28-2017 07-05-2017 09-05-2017 Price: 5.54 Price: 10.64 Price: 8.62 Price: 9.99 Price: 10.48 Price: 12.74 Price: 15.87 Price: 16.63 Price: 13.01 Price: 11.46 Price: 14.68 Rating: SO Rating: SO Rating: SO Rating: FS* Rating: FS Rating: FS Rating: SO* Rating: SO Rating: SO Rating: SO Rating: SO Target: 10.00* Target: 11.50* Target: 12.50* Target: 15.00* Target: 14.50* Target: 15.00* Target: 17.00* Target: 18.00* Target: 17.00* Target: 16.00* Target: 18.00*

10-03-2017 11-13-2017 01-08-2018 Price: 14.99 Price: 16.22 Price: 18.74 Rating: SO Rating: SO Rating: SO Target: 17.00* Target: 18.00* Target: 22.00*

Hudbay Minerals Inc. (HBM-T) as of January 22, 2018 (in CAD)

04-10-2015 05-11-2015 07-17-2015 09-29-2015 01-11-2016 01-14-2016 04-07-2016 04-29-2016 07-22-2016 09-19-2016 10-05-2016 Price: 11.06 Price: 11.86 Price: 9.33 Price: 4.90 Price: 4.09 Price: 3.03 Price: 3.94 Price: 6.26 Price: 6.31 Price: 4.88 Price: 5.16 Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: SO* Rating: SO Rating: SO Target: 13.50 Target: 14.00* Target: 13.00* Target: 10.50* Target: 9.50* Target: 8.50* Target: 8.00* Target: 7.50* Target: 8.00* Target: 7.50* Target: 7.00*

8 Price (CAD) Price 6

2 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 11-03-2016 11-21-2016 01-10-2017 01-17-2017 03-31-2017 04-17-2017 05-04-2017 07-05-2017 08-04-2017 09-05-2017 10-03-2017 Price: 6.00 Price: 8.08 Price: 9.11 Price: 9.03 Price: 8.74 Price: 8.18 Price: 7.41 Price: 7.38 Price: 9.38 Price: 11.21 Price: 9.71 Rating: SO Rating: SO Rating: FS* Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Target: 7.75* Target: 8.75* Target: 12.00* Target: 12.25* Target: 12.75* Target: 12.50* Target: 12.00* Target: 11.00* Target: 11.50* Target: 13.00* Target: 12.50*

11-02-2017 11-13-2017 01-08-2018 Price: 9.88 Price: 10.12 Price: 11.68 Rating: FS Rating: FS Rating: FS Target: 12.00* Target: 13.00* Target: 14.50*

20 This report is intended for [email protected]. Unauthorized distribution of this prohibited. EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

Labrador Iron Ore Royalty Corp. (LIF-T) as of January 22, 2018 (in CAD)

04-10-2015 07-17-2015 09-17-2015 09-29-2015 10-15-2015 01-11-2016 04-14-2016 05-26-2016 05-27-2016 07-19-2016 10-05-2016 Price: 11.82 Price: 14.01 Price: 16.57 Price: 13.88 Price: 16.55 Price: 8.58 Price: 13.90 Price: 11.47 Price: 11.54 Price: 14.53 Price: 13.22 Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: CS* Rating: SO* Rating: SO Rating: SP* Rating: SP Target: 20.00 Target: 18.00* Target: 20.50* Target: 18.00* Target: 18.50* Target: 15.00* Target: 0.00* Target: 14.50* Target: 14.50 Target: 15.00* Target: 15.50*

20 Price (CAD) Price

5 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 10-20-2016 11-07-2016 11-23-2016 01-10-2017 02-23-2017 03-03-2017 03-09-2017 07-05-2017 08-02-2017 09-07-2017 09-18-2017 Price: 13.62 Price: 14.80 Price: 17.30 Price: 18.53 Price: 19.01 Price: 19.07 Price: 17.95 Price: 15.39 Price: 16.59 Price: 20.23 Price: 21.43 Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SO* Rating: SO Target: 15.00* Target: 16.00* Target: 17.00* Target: 17.50* Target: 18.00* Target: 18.50* Target: 20.00* Target: 18.00* Target: 20.00* Target: 23.00* Target: 25.00*

10-03-2017 11-06-2017 11-13-2017 01-08-2018 Price: 20.37 Price: 21.09 Price: 21.54 Price: 28.02 Rating: SO Rating: SO Rating: SO Rating: SO Target: 24.50* Target: 25.00* Target: 26.50* Target: 30.00*

Lundin Mining Corporation (LUN-T) as of January 22, 2018 (in CAD)

05-01-2015 07-17-2015 07-30-2015 09-29-2015 01-11-2016 01-22-2016 04-07-2016 04-28-2016 05-09-2016 06-30-2016 07-22-2016 09-01-2016 Price: 6.30 Price: 4.95 Price: 4.52 Price: 3.68 Price: 3.18 Price: 3.29 Price: 3.73 Price: 4.74 Price: 3.94 Price: 4.36 Price: 5.31 Price: 5.12 Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Target: 8.00 Target: 7.75* Target: 8.00* Target: 6.00* Target: 5.25* Target: 5.50* Target: 5.00* Target: 5.50* Target: 5.25* Target: 5.50* Target: 6.00* Target: 6.25*

6 (CAD) Price

2 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 10-05-2016 11-15-2016 12-01-2016 01-10-2017 04-27-2017 07-05-2017 09-05-2017 11-13-2017 11-30-2017 01-08-2018 Price: 5.16 Price: 6.38 Price: 6.91 Price: 7.78 Price: 7.01 Price: 7.20 Price: 9.64 Price: 9.95 Price: 7.52 Price: 8.49 Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: FS Rating: SO* Rating: SO Target: 6.00* Target: 6.75* Target: 7.75* Target: 9.00* Target: 9.50* Target: 9.25* Target: 10.50* Target: 11.00* Target: 9.00* Target: 9.50*

21 This report is intended for [email protected]. Unauthorized distribution of this prohibited. EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

Nexa Resources S.A. (NEXA-N) as of January 22, 2018 (in USD)

12-04-2017 01-08-2018 Price: 17.18 Price: 20.00 Rating: SO Rating: SO Target: 23.00 Target: 25.50*

18 Price (USD) Price 17

15 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18

Nevsun Resources Ltd. (NSU-T) as of January 22, 2018 (in CAD)

07-17-2015 07-31-2015 09-17-2015 09-29-2015 12-17-2015 01-11-2016 02-26-2016 04-14-2016 08-17-2016 11-23-2016 01-10-2017 02-23-2017 Price: 4.51 Price: 4.20 Price: 3.96 Price: 3.88 Price: 3.39 Price: 3.44 Price: 4.42 Price: 4.25 Price: 4.09 Price: 4.39 Price: 4.32 Price: 3.85 Rating: SP Rating: SP Rating: SP Rating: SO* Rating: SO Rating: SO Rating: SP* Rating: CS* Rating: SP* Rating: SP Rating: SP Rating: SP Target: 5.00 Target: 4.80* Target: 4.60* Target: 4.50* Target: 3.00* Target: 4.10* Target: 4.30* Target: 0.00* Target: 5.00* Target: 4.50* Target: 5.00* Target: 4.25*

5.50

5.00

4.50

4.00 Price (CAD) Price 3.50

3.00

2.50 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 07-05-2017 08-10-2017 09-07-2017 10-27-2017 11-13-2017 Price: 3.15 Price: 2.75 Price: 2.75 Price: 2.96 Price: 3.13 Rating: SP Rating: SP Rating: SO* Rating: SO Rating: SO Target: 4.00* Target: 3.50* Target: 3.50 Target: 4.50* Target: 4.75*

22 This report is intended for [email protected]. Unauthorized distribution of this prohibited. EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

Teck Resources Limited (TECK.B-T) as of January 22, 2018 (in CAD)

04-10-2015 04-22-2015 04-29-2015 06-01-2015 06-19-2015 07-17-2015 09-29-2015 10-13-2015 12-03-2015 01-11-2016 02-11-2016 Price: 17.30 Price: 15.74 Price: 17.90 Price: 14.44 Price: 13.37 Price: 11.29 Price: 6.31 Price: 8.73 Price: 5.42 Price: 4.18 Price: 5.15 Rating: SO Rating: SO Rating: SP* Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Target: 20.00 Target: 19.50* Target: 19.50 Target: 19.00* Target: 15.00* Target: 14.00* Target: 10.00* Target: 10.50* Target: 9.50* Target: 8.50* Target: 8.00*

15 (CAD) Price

0 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 02-29-2016 03-24-2016 04-20-2016 04-26-2016 06-27-2016 07-22-2016 07-28-2016 09-08-2016 10-05-2016 10-27-2016 11-23-2016 Price: 7.83 Price: 9.75 Price: 13.95 Price: 13.69 Price: 14.91 Price: 17.85 Price: 20.19 Price: 21.90 Price: 23.48 Price: 27.94 Price: 34.91 Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Target: 7.50* Target: 9.00* Target: 10.00* Target: 12.00* Target: 13.00* Target: 17.00* Target: 18.00* Target: 24.00* Target: 27.00* Target: 29.00* Target: 34.00*

12-13-2016 01-10-2017 02-15-2017 04-17-2017 04-18-2017 05-11-2017 05-12-2017 06-16-2017 07-05-2017 07-27-2017 08-28-2017 Price: 28.65 Price: 29.63 Price: 29.32 Price: 29.80 Price: 28.80 Price: 24.80 Price: 25.26 Price: 19.73 Price: 22.92 Price: 26.63 Price: 31.26 Rating: SP Rating: SO* Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Target: 35.00* Target: 37.00* Target: 36.00* Target: 37.00* Target: 39.00* Target: 37.50* Target: 38.50* Target: 38.00* Target: 32.00* Target: 33.00* Target: 38.00*

10-03-2017 10-26-2017 11-13-2017 01-08-2018 Price: 28.00 Price: 26.81 Price: 27.80 Price: 35.48 Rating: SO Rating: SO Rating: SO Rating: FS* Target: 36.00* Target: 35.00* Target: 38.00* Target: 43.00*

Titan Mining Corporation (TI-T) as of January 22, 2018 (in CAD)

11-08-2017 11-13-2017 Price: 1.33 Price: 1.34 Rating: SO Rating: SO Target: 1.80 Target: 1.90*

1.70

1.60

1.50

1.40

1.30 Price (CAD) Price

1.20

1.10

1.00 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18

23 This report is intended for [email protected]. Unauthorized distribution of this prohibited. EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

Turquoise Hill Resources Ltd. (TRQ-T) as of January 22, 2018 (in CAD)

03-02-2015 05-13-2015 05-20-2015 09-29-2015 11-06-2015 12-16-2015 04-07-2016 07-22-2016 11-10-2016 01-10-2017 04-17-2017 10-03-2017 Price: 3.90 Price: 5.15 Price: 5.49 Price: 3.31 Price: 3.81 Price: 3.29 Price: 3.24 Price: 4.58 Price: 4.51 Price: 4.71 Price: 3.82 Price: 4.05 Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SP Rating: SO* Rating: SO Rating: SO Rating: SO Target: 4.00 Target: 5.00* Target: 5.75* Target: 5.00* Target: 5.50* Target: 5.25* Target: 5.00* Target: 5.50* Target: 6.00* Target: 6.25* Target: 6.00* Target: 5.50*

5 Price (CAD) Price 4

2 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 11-13-2017 Price: 3.93 Rating: SO Target: 5.75*

Trevali Mining Corporation (TV-T) as of January 22, 2018 (in CAD)

07-17-2015 09-29-2015 01-11-2016 03-18-2016 03-28-2016 03-31-2016 04-14-2016 04-25-2016 07-22-2016 10-05-2016 11-14-2016 01-10-2017 Price: 0.92 Price: 0.31 Price: 0.38 Price: 0.38 Price: 0.37 Price: 0.37 Price: 0.44 Price: 0.53 Price: 0.92 Price: 1.06 Price: 1.17 Price: 1.30 Rating: SP Rating: SP Rating: SP Rating: SO* Rating: SP* Rating: SO* Rating: CS* Rating: SO* Rating: SO Rating: SO Rating: SO Rating: SO Target: 1.10 Target: 0.70* Target: 0.80* Target: 0.80 Target: 0.80 Target: 0.80 Target: NA Target: 0.75* Target: 1.20* Target: 1.30* Target: 1.35* Target: 1.50*

1.80

1.60

1.40

1.20

1.00

0.80 (CAD) Price

0.60

0.40

0.20 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 03-29-2017 04-17-2017 07-05-2017 11-13-2017 11-15-2017 01-08-2018 01-15-2018 Price: 1.30 Price: 1.18 Price: 1.26 Price: 1.51 Price: 1.38 Price: 1.53 Price: 1.65 Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Rating: SO Target: 2.00* Target: 2.25* Target: 2.00* Target: 2.25* Target: 2.00* Target: 2.15* Target: 2.00*

24 This report is intended for [email protected]. Unauthorized distribution of this prohibited. EQUITY RESEARCH | DAILY EDGE Tuesday, January 23, 2018, Pre-market

Definition of Scotiabank, Global Banking and Markets Equity Research Ratings We have a four-tiered rating system, with ratings of Focus Stock, Sector Outperform, Sector Perform, and Sector Underperform. Each analyst assigns a rating that is relative to his or her coverage universe or an index identified by the analyst that includes, but is not limited to, stocks covered by the analyst. The rating assigned to each security covered in this report is based on the Scotiabank, Global Banking and Markets research analyst’s 12-month view on the security. Analysts may sometimes express to traders, salespeople and certain clients their shorter-term views on these securities that differ from their 12-month view due to several factors, including but not limited to the inherent volatility of the marketplace. Ratings

Focus Stock (FS) Other Ratings The stock represents an analyst’s best idea(s); stocks in this Tender – Investors are guided to tender to the terms category are expected to significantly outperform the average of the takeover offer. 12-month total return of the analyst’s coverage universe or an index identified by the analyst that includes, but is not limited to, Under Review – The rating has been temporarily stocks covered by the analyst. placed under review, until sufficient information has been received and assessed by the analyst. Sector Outperform (SO) The stock is expected to outperform the average 12-month total Risk Ranking return of the analyst’s coverage universe or an index identified As of June 22, 2015, Scotiabank, Global Banking by the analyst that includes, but is not limited to, stocks covered and Markets discontinued its Low, Medium, and High by the analyst. risk rankings. The Speculative risk ranking reflects exceptionally high financial and/or operational risk, Sector Perform (SP) exceptionally low predictability of financial results, The stock is expected to perform approximately in line with and exceptionally high stock volatility. The Director the average 12-month total return of the analyst’s coverage of Research and the Supervisory Analyst jointly universe or an index identified by the analyst that includes, but make the final determination of the Speculative risk is not limited to, stocks covered by the analyst. ranking. Sector Underperform (SU) The stock is expected to underperform the average 12-month total return of the analyst’s coverage universe or an index identified by the analyst that includes, but is not limited to, stocks covered by the analyst. Scotiabank, Global Banking and Markets Equity Research Ratings Distribution*

Distribution by Ratings and Equity and Equity-Related Financings* 60% Percentage of companies covered by

46.4% 47.9% Scotiabank, Global Banking and Markets Equity Research within each rating category. 40% Percentage of companies within each rating category for which Scotiabank, Global Banking

20% and Markets has undertaken an underwriting liability or has provided advice for a fee within 5.8% the last 12 months. 44.0% 38.1% 7.4% 0% Sector Outperform Sector Perform Sector Underperform

* As of December 31, 2017. Source: Scotiabank GBM.

For the purposes of the ratings distribution disclosure FINRA requires members who use a ratings system with terms different than “buy,” “hold/neutral” and “sell,” to equate their own ratings into these categories. Our Focus Stock, Sector Outperform, Sector Perform, and Sector Underperform ratings are based on the criteria above, but for this purpose could be equated to strong buy, buy, neutral and sell ratings, respectively.

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General Disclosures

This report has been prepared by analysts who are employed by the Research Department of Scotiabank, Global Banking and Markets. Scotiabank, Global Banking and Markets Research produces research reports under a single marketing identity referred to as “globally branded research” under U.S. rules. This research is produced on a single global research platform with one set of rules which meet the most stringent standards set by regulators in the various jurisdictions in which the research reports are produced. In addition, the analysts who produce the research reports, regardless of location, are subject to one set of policies designed to meet the most stringent rules established by regulators in the various jurisdictions where the research reports are produced. The frequency of reports is determined by the analyst on a case-by-case basis, driven by external market factors and issuer announcements. Analysts will endeavour to review and publish such estimates and recommendations as soon as possible after the release of material information by the issuer or the occurrence of other relevant events. This will typically involve, at a minimum, a summary of quarterly earnings releases. Scotia Capital Inc. ("SCI"), as principal, and Alberta Investment Management Corporation ("AIMCo"), on behalf of certain of its clients, have each agreed to sell 2,750,000 common shares ("Common Shares") of TMX Group Limited ("TMX") representing an aggregate of approximately 9.9% of the issued and outstanding Common Shares of TMX as of October 2, 2017. The Common Shares are being sold by SCI and AIMCo by way of a trade carried out under exemptive relief from certain provisions of the Universal Market Integrity Rules granted by the Investment Industry Regulatory Organization of Canada at a gross price of $67.00 per Common Share. After giving effect to the trade, SCI and AIMCo will each hold less than 5% of the issued and outstanding Common Shares of TMX and will no longer be entitled to appoint nominees to the board of directors of TMX. This report is provided to you for informational purposes only. This report is not, and is not to be construed as, an offer to sell or solicitation of an offer to buy any securities and/or commodity futures contracts. If you are affected by MiFID II, you must advise us in writing at [email protected] Past performance or simulated past performance is not a reliable indicator of future results. Forecasts are not a reliable indicator of future performance. The securities mentioned in this report may neither be suitable for all investors nor eligible for sale in some jurisdictions where the report is distributed. The information and opinions contained herein have been compiled or arrived at from sources believed reliable, however, Scotiabank, Global Banking and Markets makes no representation or warranty, express or implied, as to their accuracy or completeness. Scotiabank, Global Banking and Markets has policies designed to make best efforts to ensure that the information contained in this report is current as of the date of this report, unless otherwise specified. Any prices that are stated in this report are for informational purposes only. Scotiabank, Global Banking and Markets makes no representation that any transaction may be or could have been effected at those prices. Any opinions expressed herein are those of the author(s) and are subject to change without notice and may differ or be contrary from the opinions expressed by other departments of Scotiabank, Global Banking and Markets or any of its affiliates. Neither Scotiabank, Global Banking and Markets nor its affiliates accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. Equity research reports published by Scotiabank, Global Banking and Markets are available electronically via: Bloomberg, Thomson Financial/First Call - Research Direct, Reuters, Capital IQ, and FactSet. Institutional clients with questions regarding distribution of equity research or who wish to access the proprietary model used to produce this report should contact Scotiabank at 1-800-208-7666. A list of all investment recommendations in any financial instrument or issuer that have been disseminated during the preceding 12 months is available at the following location: gbm.scotiabank.com/disclosures This report and all the information, opinions, and conclusions contained in it are protected by copyright. This report may not be reproduced in whole or in part, or referred to in any manner whatsoever, nor may the information, opinions, and conclusions contained in it be referred to without the prior express consent of Scotiabank, Global Banking and Markets.

Additional Disclosures

Canada: This report is distributed by Scotia Capital Inc., a subsidiary of The Bank of Nova Scotia. Chile: This report is distributed by Scotia Corredora de Bolsa Chile S.A., a subsidiary of The Bank of Nova Scotia. Colombia: This report is distributed in Colombia by Banco Colpatria Multibanca Colpatria S.A. as authorized by the Superintendencia Financiera de Colombia to The Bank of Nova Scotia (“Scotiabank”) by Resolution 058 of 2014 and to Scotia Capital Inc. by Resolution 0226 of 2015. Said Resolutions authorize Scotiabank and Scotia Capital Inc. to promote and advertise their products and services through Banco Colpatria Multibanca Colpatria S.A. This report is prepared by analysts employed by The Bank of Nova Scotia and certain of its affiliates including Scotia Capital Inc.

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Hong Kong: This report is distributed by The Bank of Nova Scotia Hong Kong Branch, which is authorized by the Securities and Future Commission to conduct Type 1, Type 4 and Type 6 regulated activities and regulated by the Hong Kong Monetary Authority. Japan: This report is provided simply as advice and investment decisions shall be made at each investor’s own risk. Scotia Securities Asia Limited and any of its affiliates shall not provide compensation for any loss incurred by the reader. Mexico: The information contained in this report is for informational purposes only and is not intended to influence the decision of the addressee in any way whatsoever with respect to an investment in a certain type of security, financial instrument, commodity, futures contract, issuer, or market, and is not to be construed as an offer to sell or a solicitation of an offer to buy any securities or commodities futures contracts. Scotiabank Inverlat Casa de Bolsa, S.A. de C.V. is not responsible for the outcome of any investment performed based on the contents of this research report. Peru: This report is distributed by Scotia Sociedad Agente de Bolsa S.A., a subsidiary of The Bank of Nova Scotia. Singapore: For investors in the Republic of Singapore, this document is provided via an arrangement with BNS Asia Limited pursuant to Regulation 32C of the Financial Advisers Regulations. The material contained in this document is intended solely for accredited, expert or institutional investors, as defined under the Securities and Futures Act (Chapter 289 of Singapore). If there are any matters arising from, or in connection with this material, please contact BNS Asia, located at 1 Raffles Quay, #20-01 North Tower, One Raffles Quay, Singapore 048583, telephone: +65 6305 8388. This document is intended for general circulation only and any recommendation that may be contained in this document concerning an investment product does not take into account the specific investment objectives, financial situation, or particular needs of any particular person, and advice should be sought from a financial adviser based in Singapore regarding the suitability of the investment product, taking into account the specific investment objectives, financial situation, or particular needs of any person in receipt of the recommendation, before the person makes a commitment to purchase the investment product. United Kingdom and the rest of the European Economic Area: Except as otherwise specified herein, this report is distributed by Scotiabank Europe plc, a subsidiary of The Bank of Nova Scotia. Scotiabank Europe plc complies with all requirements under the EU Market Abuse Regulation concerning investment recommendations. United States: This report is distributed by Scotia Capital (USA) Inc., a subsidiary of Scotia Capital Inc., and a registered U.S. broker- dealer. All transactions by a U.S. investor of securities mentioned in this report must be effected through Scotia Capital (USA) Inc. Non-U.S. investors wishing to effect a transaction in the securities discussed in this report should contact a Scotiabank, Global Banking and Markets entity in their local jurisdiction unless governing law permits otherwise. ™ Trademark of The Bank of Nova Scotia. Used under license, where applicable. Scotiabank, together with "Global Banking and Markets," is a marketing name for the global corporate and investment banking and capital markets businesses of The Bank of Nova Scotia and certain of its affiliates in the countries where they operate, including Scotia Capital Inc., Scotia Capital (USA) Inc., Scotiabanc Inc., Citadel Hill Advisors L.L.C., The Bank of Nova Scotia Trust Company of New York, Scotiabank Europe plc, Scotiabank (Ireland) Designated Activity Company, Scotiabank Inverlat S.A., Institución de Banca Múltiple, Scotia Inverlat Casa de Bolsa S.A. de C.V., Scotia Inverlat Derivados S.A. de C.V. – all members of the Scotiabank Group and authorized users of the mark. The Bank of Nova Scotia is incorporated in Canada with limited liability. Scotia Capital Inc. is a member of the Canadian Investor Protection Fund and regulated by the Investment Industry Regulatory Organization of Canada. Scotia Capital (USA) Inc. is a broker-dealer registered with the SEC and is a member of FINRA, NYSE, NFA and SIPC. Scotiabank Europe plc is authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Scotiabank Inverlat, S.A., Scotia Inverlat Casa de Bolsa, S.A. de C.V., and Scotia Derivados, S.A. de C.V., are each authorized and regulated by the Mexican financial authorities.

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