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Message: BMO analysis on Silver - 4/3/11

BMO Research analysis indicates silver demand & supply fundamentals should remain positive to the end of 2012E. Moreover, the prospects of further quantitative easing combined with ongoing sovereign debt concerns could result in investment demand for silver exceeding BMO Research’s supply projections through 2014E. 1: BMO expects silver production to grow 55% through 2015E, with 64% of new production forecast to come from early stage projects, underscoring the downside risk associated with this projection. 2: Assuming realistic growth projections, industrial demand for silver is forecast to grow 22% through 2015E; investment demand is key to making up the balance. 3: Preferred silver stocks are: senior producer PAAS; SLW for its lowrisk and growing royalty stream; intermediate producers FR and SSRI; and junior explorers THO and BCM.

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