Impact: Potentially Positive

Probe announced additional assay results from its ongoing expansion and infill drilling program at its Borden Lake gold project. Drilling in the Hanging Wall provided seven holes with 11 intercepts with a weighted average of 0.77g/t gold over ~11.3m. Infill results included 23 intercepts from 10 holes returning a weighted average of 1.1g/t gold over ~13m. The best results came from depth extension drilling where 18 intercepts in 10 holes returned 1.1g/t over ~26m. The results showed gold mineralization grades above the April 2012 global resource grade of 0.68g/t and the depth extension drilling, while of higher grade, was slightly narrower than the bulk of the previously reported intercepts. Today’s results, however, continue to demonstrate grade continuity of both the overall Borden Lake deposit and the deposit’s higher-grade core. On July 25, Agnico-Eagle (AEM-NYSE, US$44.31, Market Perform, covered by David Haughton) announced the development of two satellite zones at the Goldex mine, including the M Zone, on which Probe holds a 5% net smelter royalty. Production is targeted to commence in early 2014. No value is currently ascribed to the Goldex royalty in BMO Research’s estimates. The next potential catalyst for the company is the release of an initial PEA on the Borden Lake project, which is targeted for completion in Q3/12. Using spot metal prices, Probe’s shares are trading at a 35% discount to our 10% NAV estimate of US$1.61/share, slightly below the emerging producers in BMO Research’s coverage universe.