Borden Lake is located in a politically safe and mining friendly jurisdiction (Chapleau, Ontario);
and
Borden Lake is well situated, just 9 km from Chapleau and 1 km off Hwy 101.
2. In Q1/12, we expect Probe to deliver an updated resource estimate on its Borden Lake deposit. The
Company reports that the deposit remains open in all directions. With step-out and infill drilling
completed in 2011, we believe that Probe is set to deliver up to 2 million more ounces at Border Lake,
bringing the total resource up to approximately 6 million ounces. The potential for a significant
increase in the total resource size further underscores the valuation gap identified above.
3. Perhaps more significantly, we believe there is a reasonable expectation for another significant
discovery on the project. The deposit at Borden Lake consists of a broad zone of mineralization that
lies within a package of Temiskaming-age metasediments. Gold there is found within a stratigraphic
horizon referred to as the Borden Lake Horizon. Pyrite, and somewhat surprisingly pyrrhotite, is
associated with the gold mineralization. In the Borden Lake Horizon, the Borden Lake gold deposit
appears as a weak AEM anomaly (“Airborne Electro-Magnetic”) largely due to the associated pyrite
and pyrrhotite. The belt is interpreted to have been folded along a northwest-southeast axis with the
Borden Lake deposit situated along the southern limb. Probe’s land position covers the southern limb,
large portions of the northern limb and the all-important “nose” or “hinge” of the fold axis. AEM
anomalies, similar in response to those found coincident with the Borden Lake deposit, have been
detected along the northern limb and especially in the fold-hinge area. We believe that further
discoveries are waiting to be made in the Borden Lake horizon, especially in the fold-hinge area.
While assays from initial drilling in the fold hinge area are yet to be received, we are very encouraged
by the confluence of geology, structure and geophysics and believe this to be one of the best
untested geological targets we have ever seen
Probe is significantly undervalued with respect to its peers, appears set to increase its base resource and
has the potential to make an exciting new gold discovery within the same project area. We believe
Probe’s shares are protected to the downside by its attractive valuation and ought to experience
appreciation with a resource update and potential new exploration discoveries.

SECTOR: METALS AND MINING
SILVERCREST MINES INC.2,3 (TSXV-SVL)
SilverCrest Mines Inc. (TSXV-SVL) Recommendation: SPECULATIVE BUY Stuart McDougall
Previous Close: $2.42 12-Month Target: $5.00 (416) 304-2176
stuart.mcdougall@jenningscapital.com
Potential Return 107% FYE: Dec 31 AgEq Prod (oz) EPS (US$) P/E CFPS (US$) P/CF
Market Cap (MM) $211 2010A - - - - -
52 Week High $2.44 2011E 1,512,942 0.19 12.7x 0.20 12.1x
52 Week Low $1.07 2012E 1,710,530 0.38 6.4x 0.50 4.8x
Adjusted NAV $3.50 2013E 3,653,027 0.56 4.3x 0.68 3.6x
P/NAV 0.7x
SilverCrest Mines is a newly emerging, well-financed junior gold and silver producer focused on Mexico.
The Company operates the high-grade Santa Elena heap-leach mine in Sonora State and is advancing
two other projects, the satellite Cruz de Mayo silver deposit and the standalone La Joya silver-coppergold
skarn discovery in Durango State.
In July 2011, SilverCrest announced the start of commercial operations at Santa Elena, reporting the
production of 74,678 oz silver and 5,476 oz gold. As expected, operations picked up in Q3, with
production totalling 106,636 oz silver and 8,805 oz gold produced. We expect a further increase in Q4,
and we are looking for nearly 500,000 oz silver and 31,000 oz gold in 2012.
Going forward, SVL has begun an underground development program at Santa Elena, with plans to
switch to a larger milling operation. Combined with the development of Cruz de Mayo, the Company
expects the development program to push its annual production rates to over 5.0 million oz silverequivalent
by the end of 2013 (assumes a 55:1 Ag-Au ratio). Capex is estimated at US$84 million,
inclusive of a 25% contingency, and cash costs are expected to average US$9.70/oz silver-equivalent
over the life-of-mine.
Meanwhile, SilverCrest is finalizing an initial resource estimate for the Main Zone at the La Joya project.
We are looking for a minimum of 20 million oz contained silver and 95 million lb contained copper, but
note the potential for a strong beat under the Company’s new-found view of the project as an open-pit,
bulk-tonnage candidate, versus our analysis of the zone as a narrow, high-grade deposit. A 10,000-
metre, second phase of drilling has already begun, with the focus on infilling the known, one kilometre of
mineralized strike extent and testing for extensions along another 1.5 kilometres of projected strike. A
further 4,000 metres of reverse-circulation drilling is planned to follow up several new targets identified by
recent surface work, in conjunction with a review of historic drill data.
Overall, we like SilverCrest at current levels for the following reasons:
1. Re-rating potential: The stock currently trades at a 20% discount to its peers, based on consensus
P/2012 CFPS. In 2012, we expect that gap to eventually reverse as the Company reports further
operational and exploration success;
2. Strong growth potential: We project a threefold increase in silver production from Santa Elena
alone, providing for a 37% increase in estimated cash flow over the 2012-2013 period, despite a
declining price deck; and
3. La Joya blue-sky not priced into the market: Although it is still early days, the discovery is showing
potential to more than double the Company’s silver resources from the known zone while adding appreciable copper credits to the mix. Combined with the exploration upside already demonstrated
from surface and historic work, we consider this one of the most compelling reasons to own the stock,
given that SilverCrest already trades well below the average EV/oz silver among junior silver
producers (US$3.05/oz, versus US$5.44/oz) and at a 50% discount to our adjusted NAV, which
includes just US$0.72/share for La Joya (or 20% of total).

SECTOR: METALS AND MINING
GOLDGROUP MINING INC.2,3 (TSX-GGA)
Goldgroup Mining Inc. (TSX-GGA) Recommendation: SPECULATIVE BUY Ryan Walker
Previous Close: $1.20 12-Month Target: $3.75 (416) 304-2194
ryan.walker@jenningscapital.com
Potential Return: 212.5% FYE: Dec 31 Au Prod (oz) EPS (US$/sh) P/EPS CFPS (US$/sh) P/CF
Market Cap (MM) $154 2010A 20,204 - - - -
52 Week High $1.75 2011E 23,406 0.02 60.0x 0.05 24.0x
52 Week Low $1.03 2012E 27,008 0.09 13.3x 0.10 12.0x
Adj. NAV: $3.13 2013E 111,449 0.48 2.5x 0.56 2.1x
P/NAV 0.37x
Goldgroup Mining Inc. is a Canadian-based gold exploration and development company focused on
advancing into production the 100%-owned flagship Caballo Blanco oxide-gold project in Veracruz,
Mexico. Indicated and Inferred resources at Caballo Blanco total 656,000 oz; an updated resource
estimate and Preliminary Economic Assessment (PEA) are expected in Q1/12. The Company also owns
50% of the narrow-vein, high-grade San José de Gracia gold project in Sinaloa State, Mexico. Indicated
and Inferred resources at this project were recently updated to 1.1mm ounces (100% basis). A PEA is
due in H1/12.
GGA shares have the potential to re-rate higher with continued exploration success; project de-risking via
delivery of a PEA; achievement of permitting and development milestones; and the eventual transition
into low-cost heap-leach production. Importantly, metallurgical test work indicates quick leach kinetics and
high gold recoveries, suggesting a quicker share re-rating than otherwise possible. We await results from
a test run-of-mine heap leach operation (~10,000 tonnes of ore), which is scheduled for construction in
Q2/12. We would review our capex and opex assumptions upon receipt of positive results; we currently
model Caballo Blanco as a more standard crush/agglomerate heap leach operation.
Meanwhile, considerable exploration upside remains at both Caballo Blanco and San José de Gracia.
Existing resources at the former are contained solely in the La Paila zone, which remains open in all
directions. Multiple largely untested lookalike targets remain nearby and elsewhere on the property.
Existing resources at San José are contained in just four veins; the property is home to some
50 prospective anomalies.
An investment in Goldgroup provides investors with a very experienced board and management team,
with operating expertise in Mexico, and a gold production profile expected to ramp up to ~100,000 oz/year
beginning in late 2012 at Caballo Blanco, with the potential to double to 200,000 oz/year via the
development of the San José de Gracia project within three years. All of this is bolstered by substantial
exploration potential at both projects. GGA remains well-funded with ~$30mm in cash and no debt.
Potential 2012 Share Price Catalysts: