Best I can do so hope you can decipher

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The information contained in this report was obtained from sources we believe to be reliable. We do not represent that such information is accurate or complete and it should not be relied on as such. Any
opinions expressed herein reflect our judgment at this date and are subject to change. Jennings Capital Inc. and/or employees from time to time may hold shares, options or warrants on any issue included in
this report and may buy or sell such securities. This report is not to be construed as an offer to sell or solicitation to buy securities. Member – CIPF. Jennings Capital (USA) Inc. is a member of SIPC.
TOP PICK UNIVERSE
METALS AND MINING
Company Ticker Recommendation Market Cap
(MM)
Close
Price
Target
Price
% Return
To Target
% Return
YTD
% Return
Since Chosen
Annual
High
Annual
Low
Avg. Daily
Volume
PETER CAMPBELL
New Millenium Iron Corp. TSX:NML SPECULATIVE BUY $303 $1.72 $8.00 365% 15% 31% $4.96 $0.90 309,860
Probe Mines Limited TSXV:PRB SPECULATIVE BUY $155 $2.45 $4.75 94% 20% 20% $2.70 $1.01 140,230
STUART MCDOUGALL
SilverCrest Mines Inc. TSXV:SVL SPECULATIVE BUY $209 $2.42 $5.00 107% 26% 34% $2.44 $1.07 339,210
RYAN WALKER
Goldgroup Mining Inc. TSX:GGA SPECULATIVE BUY $154 $1.20 $3.75 213% 7% 11% $1.75 $1.03 148,930
Sulliden Gold Corporation Ltd. TSX:SUE SPECULATIVE BUY $370 $1.52 $4.50 196% 24% 18% $2.78 $1.17 667,160
OIL AND GAS
Company Ticker Recommendation Market Cap
(MM)
Close
Price
Target
Price
% Return
To Target
% Return
YTD
% Return
Since Chosen
Annual
High
Annual
Low
Avg. Daily
Volume
GREGORY CHORNOBOY
Bankers Petroleum Ltd. TSX:BNK BUY $1,198 $4.83 $10.50 117% 9% 5% $9.92 $2.95 1,605,640
Coastal Energy Company TSX:CEN BUY $1,845 $16.35 $25.75 57% 8% 22% $17.18 $5.67 288,240
JAMES HUMEN
Gran Tierra Energy Inc. TSX:GTE BUY $1,323 $5.08 $10.00 97% 3% 7% $9.37 $4.45 556,181
Tuscany International Drilling Inc. TSX:TID BUY $180 $0.67 $1.40 109% 12% 40% $2.16 $0.46 650,690
SPECIAL SITUATIONS
Company Ticker Recommendation Market Cap
(MM)
Close
Price
Target
Price
% Return
To Target
% Return
YTD
% Return
Since Chosen
Annual
High
Annual
Low
Avg. Daily
Volume
RUSSELL STANLEY
Cardero Resource Corp. TSX:CDU SPECULATIVE BUY $104 $1.14 $3.00 163% 12% 18% $2.35 $0.75 143,880
Energold Drilling Corp. TSXV:EGD BUY $193 $4.65 $8.00 72% 2% 1% $4.94 $3.28 103,800
KEN CHERNIN
Epsilon Energy Limited TSX:EPS BUY $166 $3.34 $7.50 125% 18% 41% $4.43 $1.75 97,480
Orbite Aluminae Inc. TSX:ORT SPECULATIVE BUY $512 $2.87 $11.50 301% 21% 18% $5.69 $0.73 2,045,230
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The information contained in this report was obtained from sources we believe to be reliable. We do not represent that such information is accurate or
complete and it should not be relied on as such. Any opinions expressed herein reflect our judgment at this date and are subject to change. Jennings
Capital Inc. and/or employees from time to time may hold shares, options or warrants on any issue included in this report and may buy or sell such
securities. This report is not to be construed as an offer to sell or solicitation to buy securities. Member – CIPF. Jennings Capital (USA) Inc. is a
member of SIPC.
JCI COMMODITY PRICE AND CURRENCY FORECASTS
Metal Q1 Q2 Q3 Q4 Year Metal Q1 Q2 Q3 Q4 Year
Gold 2011 1,386 1,505 1,703 1,800 1,599 Nickel 2011 12.20 10.96 10.00 8.30 10.37
(US$/oz) 2012 2,000 2,000 2,000 2,000 2,000 (US$/lb) 2012 8.25 8.26 8.26 8.27 8.26
2013 1,800 1,800 1,800 1,800 1,800 2013 8.28 8.27 8.26 8.25 8.27
2014 1,500 1,500 1,500 1,500 1,500 2014 8.24 8.23 8.22 8.21 8.23
2015 1,100 1,100 1,100 1,100 1,100 2015 8.20 8.15 8.10 8.05 8.13
LT 1,100 1,100 1,100 1,100 1,100 LT 8.00 8.00 8.00 8.00 8.00
Silver 2011 31.84 38.25 38.81 40.00 37.23 Aluminum 2011 1.135 1.179 1.088 0.948 1.088
(US$/oz) 2012 50.00 50.00 50.00 50.00 50.00 (US¢/lb) 2012 0.940 0.950 0.955 0.960 0.951
2013 40.00 40.00 40.00 40.00 40.00 2013 0.970 0.980 0.995 1.010 0.989
2014 30.00 30.00 30.00 30.00 30.00 2014 1.020 1.010 0.990 0.980 0.980
2015 30.00 30.00 30.00 30.00 30.00 2015 0.970 0.950 0.900 0.850 0.918
LT 20.00 20.00 20.00 20.00 20.00 LT 0.800 0.800 0.800 0.800 0.800
Copper 2011 4.375 4.145 4.074 3.397 3.998 Moly Oxide 2011 17.33 16.69 14.48 13.33 15.46
(US$/lb) 2012 3.420 3.430 3.440 3.450 3.435 (US$/lb) 2012 13.50 13.60 13.85 14.00 13.74
2013 3.450 3.450 3.440 3.440 3.445 2013 14.15 14.15 14.20 14.20 14.18
2014 3.440 3.350 3.200 3.100 3.273 2014 14.20 14.30 14.40 14.50 14.35
2015 3.000 3.000 2.750 2.750 2.875 2015 14.60 14.70 14.80 14.90 14.75
LT 2.500 2.500 2.500 2.500 2.500 LT 15.00 15.00 15.00 15.00 15.00
Lead 2011 1.182 1.157 1.115 0.899 1.088 Cobalt ‐ 99.8% 2011 20.51 18.61 16.88 15.39 17.85
(US$/lb) 2012 0.920 0.930 0.940 0.950 0.935 (US$/lb) 2012 15.50 16.00 16.50 17.00 16.25
2013 0.960 0.960 0.965 0.970 0.964 2013 17.50 18.00 18.50 19.00 18.25
2014 0.970 0.970 0.965 0.960 0.966 2014 19.50 19.50 20.00 20.00 19.75
2015 0.950 0.900 0.850 0.800 0.875 2015 21.00 21.00 22.00 22.00 21.50
LT 0.800 0.800 0.800 0.800 0.800 LT 22.00 22.00 22.00 22.00 22.00
Zinc 2011 1.086 1.020 1.009 0.861 0.994 USD:CAD 2011 0.971 0.963 1.050 1.021 1.001
(US$/lb) 2012 0.860 0.870 0.880 0.890 0.875 2012 1.000 1.000 1.000 1.000 1.000
2013 0.900 0.903 0.905 0.908 0.904 2013 1.000 1.000 1.005 1.010 1.004
2014 0.910 0.908 0.905 0.903 0.906 2014 1.020 1.030 1.040 1.050 1.035
2015 0.900 0.850 0.800 0.750 0.825 2015 1.050 1.050 1.050 1.050 1.050
LT 0.700 0.700 0.700 0.700 0.700 LT 1.050 1.050 1.050 1.050 1.050
Iron Ore 2011 1.934 2.390 2.336 2.319 2.245 Iron Ore 2011 149.9 178.2 174.8 173.8 169.2
(US$/DMTU) 2012 2.007 2.007 1.774 1.774 1.891 (US$/tonne) 2012 154.5 154.5 140.0 140.0 147.2
*FOB Sept‐Iles 2013 1.935 1.935 1.613 1.613 1.774 *CIF China 2013 150.0 150.0 130.0 130.0 140.0
2014 1.774 1.774 1.532 1.532 1.653 2014 140.0 140.0 125.0 125.0 132.5
2015 1.452 1.452 1.452 1.452 1.452 2015 120.0 120.0 120.0 120.0 120.0
LT 1.452 1.452 1.452 1.452 1.452 LT 120.0 120.0 120.0 120.0 120.0
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The information contained in this report was obtained from sources we believe to be reliable. We do not represent that such information is accurate or
complete and it should not be relied on as such. Any opinions expressed herein reflect our judgment at this date and are subject to change. Jennings
Capital Inc. and/or employees from time to time may hold shares, options or warrants on any issue included in this report and may buy or sell such
securities. This report is not to be construed as an offer to sell or solicitation to buy securities. Member – CIPF. Jennings Capital (USA) Inc. is a
member of SIPC.
SECTOR: METALS AND MINING
NEW MILLENNIUM IRONCORP.2,3 (TSX-NML)
New Millenium Iron Corp. (TSX-NML) Recommendation: SPECULATIVE BUY Peter Campbell
Previous Close:$1.72 12-Month Target: $8.00 (416) 304-3963
peter.campbell@jenningscapital.com
Potential Return: 365.1% Production (Mt) EPS (C$/sh) P/EPS CFPS (C$/sh) P/CF
Market Cap (MM) $303 2008A - - - - -
52 Week High $4.96 2009A - - - - -
52 Week Low $0.90 2010A - - - - -
2011E - -0.03 nm -0.01 nm
For New Millennium, 2012 is going to be a catalyst-rich year. In 2011, its share price peaked at $4.96 on
March 4, just two days before it signed a Binding Heads of Agreement with Tata Steel for the
development of its 100%-owned, giant taconite deposits, LabMag and KéMag. With this kind of response
to just one major catalyst in 2011, we believe that the response to three major catalysts in 2012 ought to
be even greater.
Catalyst #1:
The Company has executed a significant exploration drill program in 2011, for which we believe the
Company will deliver one, or even two brand new multi-billion tonne resource estimates. For
example, based on recent drill results reported by the Company, we now estimate the potential for a
2.1 billion tonne resource at its Lac Ritchie project. The Company has eight other exploration targets
in the Millennium Iron Range that are equally prospective for deposits similar in size to LabMag, KéMag
and Lac Ritchie. Here is the best part: These new taconite deposits are not subject to the Heads of
Agreement it signed with Tata. Any new taconite deposits remain 100%-owned by New Millennium, which
it may freely vend to Tata or any other interested third party. It could also choose to proceed with
development of any of these projects on its own.
Catalyst #2:
New Millennium is scheduled to become Canada’s newest iron ore producer in late Q3/12 or early
Q4/12, with its DSO operation in Schefferville, Québec. Anecdotally, for companies we cover at
Jennings Capital, we have observed that companies approaching first production typically
experience a re-rating in their shares six to eight months prior. We cite as examples Consolidated
Thompson, Copper Mountain (TSX-CUM, SPECULATIVE BUY $8.00) and Labrador Iron Mines Holdings
(TSX-LIM, BUY $11.00). Assuming New Millennium’s DSO project commences production in October
2012, we would expect to start to see a re-rating in NML’s share price some time between February and
April 2012. New Millennium’s DSO project is a 20:80 joint venture with Tata that will produce 4.2 mtpa of
sinter fines, for which Tata will pay 100% of the capital cost, up to a maximum of $300 million. We
estimate $50.1 million in cash flow to NML’s account in 2013, from the DSO project.
Catalyst #3:
In October 2012, we expect New Millennium to deliver a Definitive Feasibility Study (“DFS”) on its
LabMag and KéMag taconite projects. Delivery of the DFS starts the clock ticking on Tata’s
exclusive right to form a JV on the projects. Under the terms of the Binding Heads of Agreement with
Tata Steel, NML will receive a 20% free-carried interest on the capital expenditure to build the project, up
to a maximum of $4.85 billion. Beyond that, New Millennium may optionally increase its equity in the
PETER CAMPBELL, P.ENG
Research Analyst
peter.campbell@jenningscapital.com
+1.416.304.3963
SPENCER LANGLEY
Research Associate
spencer.langley@jenningscapital.com
+1.416.304.3894
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The information contained in this report was obtained from sources we believe to be reliable. We do not represent that such information is accurate or
complete and it should not be relied on as such. Any opinions expressed herein reflect our judgment at this date and are subject to change. Jennings
Capital Inc. and/or employees from time to time may hold shares, options or warrants on any issue included in this report and may buy or sell such
securities. This report is not to be construed as an offer to sell or solicitation to buy securities. Member – CIPF. Jennings Capital (USA) Inc. is a
member of SIPC.
project to 36% by contributing 16% of the equity. Assuming a total capex of $4.85 billion and a debt:equity
ratio of 70:30, NML needs only contribute $232.8 million to gain a 36% interest in the taconite project,
which is projected to produce approximately 25 mtpa of iron ore products. As at September 30, 2011,
New Millennium’s balance in cash and investments was $87.8 million. Beginning in Q4/12, the Company
expects initial cash flows to its account from commencement of production at its DSO operation.
We have observed that NML’s share price responds well to significant catalysts and with three significant
catalysts to come in 2012, we believe New Millennium’s share price is poised for rapid growth in 2012.
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The information contained in this report was obtained from sources we believe to be reliable. We do not represent that such information is accurate or
complete and it should not be relied on as such. Any opinions expressed herein reflect our judgment at this date and are subject to change. Jennings
Capital Inc. and/or employees from time to time may hold shares, options or warrants on any issue included in this report and may buy or sell such
securities. This report is not to be construed as an offer to sell or solicitation to buy securities. Member – CIPF. Jennings Capital (USA) Inc. is a
member of SIPC.
PROBE MINES LIMITED2,3 (TSXV-PRB)
Probe Mining Limited (TSXV-PRB) Recommendation: SPECULATIVE BUY Peter Campbell
Previous Close:$2.45 12-Month Target: $4.75 (416) 304-3963
peter.campbell@jenningscapital.com
Potential Return: 93.9% Au Prod (oz) EPS (C$/sh) P/EPS CFPS (C$/sh) P/CF
Market Cap (MM) $155 2009A - - - - -
52 Week High $2.70 2010A - - - - -
52 Week Low $1.01 2011E - - - - -
2012E - - - - -
Probe Mines easily makes our 2012 Top Picks for three reasons:
1. Our gold comps for Exploration & Development companies are trading at an EV/oz of US$66, as
compared to Probe, which is currently trading at US$28/oz. This alone ought to be compelling
enough to qualify it as a Top Pick. We believe Probe’s resource is a “premium-quality” resource that
ought to demand a premium valuation: