Resource World Magazine

INSIGHTS & INVESTMENTS E r ic H oe sg e n & D e nnis H oe s g e n 2012 year-end review and 2013 HIP TOP 10 B efore we talk about 2013, and what our future holds, let's review 2012, the year 9% of Canadians believe the world will come to an end. While at Hoesgen Investment Partners we do not believe the Mayan Calendar signifies a doomsday, it certainly was a year of important events in many different arenas, from politics, to sport, to technology and mining. In politics, 2012 was a very big year with many very important elections around the globe. As expected, President Barack Obama safely secured a second term in the United States. In France, it was a different story as Nicolas Sarkozy was not able to do the same. He lost the battle to François Hollande, who is only the second Socialist to hold the post since direct elections started in 1958. Hugo Chavez retained power again in Venezuela after 14 years in office and we note Vladimir Putin won back the Russian presidency earlier this year as well. Also important, the European Union announced plans to officially disband as of January 1, 2013, and revert to the agrarian economy and lifestyle that defined the continent for centuries before the Industrial Revolution. Formally established in 1995, the ennui came to a head recently with member nations of the unified Europe unanimously voting to end the "experiment". On a more positive note, in sport, 2012 marked the Games of the XXX Olympiad, held in London, United Kingdom. More than 10,000 athletes from 204 countries participated. Another major sporting event recorded in 2012 was the 2012 UEFA Euro Cup, where Spain overpowered Italy for the title. Stay tuned for Germany's vindication in the 2014 World Cup in Brazil. We cannot summarize 2012 without at least mentioning the highly anticipated, and somewhat anticlimactic, Facebook IPO. The IPO was one of the biggest in technology, and the biggest in Internet history, but things went sour amid technical problems 30 www.resourceworld.com on the NASDAQ and high expectations. The stock has not surpassed its $38 IPO price since its first trading day in May. The biggest events in the resource market? While this may be up for speculation, here are some of the biggest takeouts of the year (note that none have closed yet): 1) Glencore International PLC acquired grain handler Viterra for $6.1 billion 2) B2 Gold Corp and CGA Mining merger, valued at $1.1 billion 3) China National Offshore Oil Company takeover of Calgary based Nexen Inc. for $15.1 billion 4) Malaysian state owned oil company Petronas takeover of Progress Energy Resources valued at $6 billion 5) US energy giant ExxonMobil takeover of Calgary's Celtic Exploration Ltd. for $3.1 billion Let's move on to our 2013 HIP TOP TEN. This year, there was a change in regulatory requirements which disallows us from picking companies which are not already covered by Canaccord's Research Department. This also means we cannot update our readers on the 2012 list. Our 2013 HIP TOP TEN is a list of 10 companies we feel are well poised for growth in 2013 and all are covered and rated by a Canaccord Genuity Analyst. This is a mix of mining, energy, and real estate, with some carrying a dividend yield as well. Here they are, in no particular order: Endeavour Mining Corp. [EDV-TSX] is a mid-tier gold producer with a portfolio of mines in Burkina Faso, Ghana, Mali and Cote d'Iviore, Africa. Canaccord Genuity (CG) forecasts production of 324,000 oz of gold in 2012 growing to 431,000 oz in 2014. According to our analyst, there is clear potential to develop into a 600,000-oz producer over the next 3-5 years through organic growth. Colossus Mining Inc.'s [CSI-TSX] primary asset is the Serra Pelada Project, an extremely high-grade gold-platinum-pal- ladium project in northern Brazil, host to one of the highest grade gold and platinum group metals deposits in the world. The project is fully permitted and financed with construction well underway for production in 2013. SilverCrest Mines Inc. [SVL-TSXV] is a junior, silver producer with a 100% interests in the Santa Elena silver-gold mine and the La Joya silver-gold-copper project in Mexico. Santa Elena will produce an estimated average of 1.5 million oz silver equivalent per year and development of an underground operation and facility should increase production to 4.6 million oz by 2014 (est.). Based on recent drilling, CG analyst Nicholas Campbell sees the potential for the company to double the current 101 million oz silver equivalent resource. The updated resource is anticipated before the end of 2012. SantaCruz Silver Mining Ltd. [SCZTSXV] is a junior, silver developer focused on the advancement of the Rosario Project (100%, Mexico); the San Felipe Project (100%, Mexico) and the Gavilanes Project (100%, Mexico). Through the development of the Rosario Project, Canaccord Genuity forecasts production of 1.3 million oz silver equivalent in 2013, growing to 4.7 million oz silver equivalent in 2015 through the development of the San Felipe Project. Atna Resources Ltd. [ATN-TSX] is a Western US gold producer with a portfolio of advanced stage growth projects and a significant gold resource and reserve base at 5.2 million oz gold. Production from their Briggs Mine should exit 2012 at 40,000 oz (cash cost $986/oz) and they anticipate commencement of production at their Pinson Mine in early 2013, followed by production at their Reward Mine in 2015. Canaccord Genuity analyst Rahul Paul anticipates 158,000 oz/annum production in 2014 with a cash cost of $886/oz. Belo Sun Mining Corp. [BSX-TSX] is a gold exploration and development comDECEMBER 2012/JANUARY 2013

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