A New Paradigm For Silver: Demand Is Expected To Outstrip Production Growth

Global Mining
Research
April 3, 2011 A New Paradigm for Silver

Demand Is Expected to Outstrip Production Growth
FRES.LSE Market Perform BMO Research analysis indicates silver demand & supply fundamentals
should remain positive to the end of 2012E. Moreover, the prospects of
Price: £15.64 Target Price: £15.50
further quantitative easing combined with ongoing sovereign debt
SLW.NYSE Outperform concerns could result in investment demand for silver exceeding BMO
Price: US$43.36 Target Price: $52.00↑ Research’s supply projections through 2014E.
HOC.LSE Outperform 1: BMO expects silver production to grow 55% through 2015E, with
Price: £6.49 Target Price: £7.75 64% of new production forecast to come from early stage projects,
underscoring the downside risk associated with this projection.
CDE.NYSE Outperform
Price: US$34.78 Target Price: $40.00↑ 2: Assuming realistic growth projections, industrial demand for silver
is forecast to grow 22% through 2015E; investment demand is key
PAAS.NASDAQ Outperform to making up the balance.
Price: US$37.13 Target Price: $51.00
3: Preferred silver stocks are: senior producer PAAS; SLW for its low-
HL.NYSE Outperform risk and growing royalty stream; intermediate producers FR and
Price: US$9.08 Target Price: $11.00 SSRI; and junior explorers THO and BCM.
SSRI.NASDAQ Outperform
Fig 1: BMO Research Silver Supply and Demand Projections to 2015E
Price: US$31.38 Target Price: $40.00↑
800
Silver Supply/Demand Balance (Moz)
SVM.TSX Outperform Surplus Forecast
Price: C$14.11 Target Price: C$16.00↑ 600
FR.TSX Outperform↑ 400

Price: C$20.61 Target Price: C$25.00↑
200
EDR.TSX Underperform
0
Price: C$9.50 Target Price: C$6.50
BCM.TSXV Outperform (S) -200
Price: C$10.15 Target Price: C$13.00↑ Deficit

-400
2005A 2006A 2007A 2008A 2009A 2010A 2011 2012 2013 2014 2015
FVI.TSX Outperform High Case BMO Case Low Case
Price: C$5.30 Target Price: C$6.50↑
OK.TSX Market Perform(S) Source: BMO Capital Markets
Price: C$2.53 Target Price: C$2.50

Fig 2: BMO Universe Silver Equities Relative Value
MSV.TSX Outperform (S)
100,000
Price: C$5.75 Target Price: C$7.50 Cheap
Market Capitalization (US$M)
MAG.TSX Outperform (S) SLW FRES alue -

Silver
Fair V
Price: C$11.57 Target Price: N/A 10,000
HOC CDE
PAAS HL
THO.TSX Outperform (S) SSRI THO SVM
BCM FR
Price: C$19.60 Target Price: C$24.00↑ 1,000
MAG FVI
(S) in rating denotes Speculative, Prices as of OK
EDR
MSV
March 31, 2011
100
Andrew Kaip, 416-359-7224
andrew.kaip@bmo.com Spot Prices: US$37.65/oz Ag and US$1,433/oz Au
10% Nominal Discount Rate Expensive
David Haughton, 416-359-4052 10
david.haughton@bmo.com 0.5 1.0 1.5 2.0 2.5
Share Price to NPV per Share
John Hayes, 416-359-6189 Source: BMO Capital Markets
johnp.hayes@bmo.com
This report was prepared by an analyst(s) employed by BMO Nesbitt Burns Inc., and who is (are) not registered as a research analyst(s)
under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 57 to 59
Global Mining Research
Silver Miners
April 3, 2011
1. A Paradigm Shift
BMO Research has reviewed a number of supply and demand scenarios for
silver through 2015E. The analysis suggests that the projected rise in mine
supply should largely be consumed by rising industrial demand through to
The long-term relationship the end of 2012E.
between gold and silver has
broken down due to The prospects of further quantitative easing combined with sovereign debt
constrained physical supply concerns, competitive ‘fiat’ currency devaluation in western economies, and
and strong demand. the return of inflation could result in investment demand exceeding BMO
Research’s projections and extending the supply deficit through 2014E.
This shift in the supply/demand dynamic lies in contrast to the broader
investment perception for silver, which is rooted in the 1990’s when the
metal was in abundance, driven by the demise of the photographic industry
and Chinese selling.
The paradigm shift for silver suggests that the traditional benchmarks for
silver, such as the long-term historical ratio with gold, are no longer valid.
Accordingly, the markets are searching for a new set of criteria against
which to benchmark the price of silver, with a bias to the upside.
Fig 3: Silver Versus Gold Ratio

110
The gold to silver ratio has 100
declined to below 40 to 1, a 90
Gold to Silver Ratio
level reminiscent of high silver 80
prices last seen in the early 70
1980’s. 60 Long-term Average

50
40
30
20
10
8
0
9
t-8
n- 7
b-7
r-7
y-7
n-8
l-8
g-8
p-8
v-9
c -9
n- 9
b-9
r-0
y-0
n-0
l-0
g-0
r-7
r-9
Ju
Ju
Oc
Ap
Ap
Ma
Ma
Ma
Ma
No
De
Au
Au
Ja
Fe
Ju
Se
Ja
Fe
Ju
Gold to Silver Ratio Average
Source: BMO Capital Markets
Fig 4: BMO Base Case Demand and Supply Forecast, 2005 to 2015E (Moz)
800
Silver Supply/Demand Balance (Moz)
Surplus Forecast
BMO Research’s analysis 600
highlights the potential for
growing industrial and 400
investment demand for silver to
200
exceed supply through 2012E.
0
-200
Deficit
Investment demand above -400
2005A 2006A 2007A 2008A 2009A 2010A 2011 2012 2013 2014 2015
BMO Research forecasts could High Case BMO Case Low Case
extend the projected supply
deficit to 2014E. Source: BMO Capital Markets
Page 2 of 59
Silver Miners
April 3, 2011
Fig 5: BMO Base Case Demand versus Supply Forecasts, 2005 to 2015E (Moz)
Forecast Silver Production Growth (Moz)

2000
Forecast
1500
Assuming robust global growth
and a stronger rebound in the
1000
U.S. economy, BMO Research
expects demand to exceed
supply through 2012E. 500
0
2005A 2006A 2007A 2008A 2009A 2010E 2011E 2012E 2013E 2014E 2015E
High Case Supply BMO Case Supply Low Case Supply BMO Case Silver Demand
Fig 6: BMO High Case Demand versus Supply Forecast, 2005 to 2015E (Moz)
2000
Forecast
1500
Including the prospects of
further quantitative easing and
1000
higher inflation, BMO Research
expects demand to outstrip
supply through 2014E. 500
0
2005A 2006A 2007A 2008A 2009A 2010E 2011E 2012E 2013E 2014E 2015E
High Case Supply BMO Case Supply Low Case Supply High Case Silver Demand
Fig 7: BMO Low Case Demand versus Supply Forecast, 2005 to 2015E (Moz)
2000
Forecast
1500
BMO Research views the
downside risk for the price of
1000
silver as low, as it is predicated
on a reversal of current global
macro-economic conditions. 500
0
2005A 2006A 2007A 2008A 2009A 2010E 2011E 2012E 2013E 2014E 2015E
High Case Supply BMO Case Supply Low Case Supply Low Case Silver Demand
Page 3 of 59
Silver Miners
April 3, 2011
2. Silver Price Performance

On account of silver’s relative strength, the gold to silver ratio has declined
to below 40 to 1, a level last seen briefly in early 1998, but more
reminiscent of levels seen in the early 1980’s. Year to date, silver has
The price of silver has increased 20% and averaged US$31.80/oz, compared to gold, which has
averaged US$31.80/oz YTD. traded sideways in 2011.
While the sustainability of a gold to silver ratio well below the historical
average of 55 to 1 comes into question, BMO Research supply and demand
analysis reveals that the ratio could head lower still, allowing silver to
continue to outperform gold.
Fig 8: BMO Research Metal Price Assumptions

Metal Unit 2010A 2011E 2012E 2013E 2014E Long Term
BMO Research metal price

Precious Metal
assumptions assume an
Gold US$/oz 1,224 1,450 1,400 1,250 1,100 1,000
average silver price of
Silver US$/oz 20.16 30.00 27.00 23.00 19.00 17.50
US$30/oz in 2011E and
US$27/oz in 2012E.
Base Metals
Copper US$/lb 3.42 4.50 4.20 3.00 2.75 2.50
Lead US$/lb 0.97 1.15 1.00 0.90 0.90 0.90
Zinc US$/lb 0.98 1.10 1.00 1.00 1.00 1.00
Fig 9: Silver and Gold Price (US$/oz)
40 1600
35 1400
30 1200
The price of silver has doubled
Silver (US$/oz)
Gold (US$/oz)
since last August, significantly 25 1000
outpacing a 22% rise in the 20 800

price of gold. 15 600
10 400
5 200
0 0
Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10
Silver Gold
Page 4 of 59
Silver Miners
April 3, 2011
Fig 10: Silver and Gold Price Performance (%)
125%
The surge in silver prices 100%
partially reflects a return to
levels (relative to gold) that 75%
existed prior to the global
3-Year Return
50%
financial crisis.
25%
Since the beginning of 2011, 0%

silver’s ascent has been driven -25%
by increasing concerns of
-50%
physical scarcity.
-75%
Mar-08 Jul-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10
Silver Gold
Fig 11: Forward Curve for Silver (US$/oz)
38 18.00
Forward Silver Price (US$/oz)
Silver Price 1-Yr Ago (US$/oz)

37
17.70
The forward curve for silver is 36
currently in backwardation, 35 17.40

reflecting investor unease with
the recent surge in the silver 34
17.10
price. 33
32 16.80
1 2 3 4 5 6 7 8 9 10 11 12
Today (lhs) Week ago (lhs) Month ago (lhs) Year ago (rhs)
Source: Comex
Fig 12: Silver Sector Implied Prices (US$/oz)
40 100%
Discount to Spot Silver Price (%)

Spot Silver Price (US$/oz)
35
95%
Investor unease with the high 30
price of silver is reflected in
silver equities, with the 25 90%
discount between the imputed
20
and spot silver price increasing 85%
since September. 15
10 80%
Feb-10
Mar-10
Apr-10
May-10
June-10
July-10
Aug-10
Sept-10
Nov-10
Jan-11
Feb-11
Mar-11
Oct-10
Dec-10
Spot Silver Price Percent of Spot
Page 5 of 59
Silver Miners
April 3, 2011
3. Ranking Equities
Top Picks – SLW, PAAS, SSRI, FR, THO & BCM
BMO Research has updated the results of a silver sector analysis entitled “The
Silver Sector Offers More Than a Rising Price” published on October 31, 2010,
highlighting an optimal investment strategy. The review evaluates individual
companies’ relative performance using a series of financial and operational
indicators, and then ranks companies based on their respective scores.
Fig 13: Company Ranking – Identifies Preferred Silver Stocks
35
PAAS ranks highest among
senior producers. 30
BMO Research Ranking
25
FR and FVI rank highest among
intermediate and junior 20
producers.
15
Emerging producer BCM ranks
10
first among junior companies.
5
MAG and THO score low due to
a longer time frame to 0
RI
I
W
M
OK
S
AG
C
HL
R
S
SV
FR
O
FV
production.
CD
E
ED
A
HO
TH
BC
SV
SL
SS
FR
M
PA
M
Financial Project
Fig 14: BMO Research Silver Coverage

Company Ticker Analyst* Share Price Rating Target Return
(31-Mar-11) Price
Incorporating the results of the Fresnillo FRES.LSE AK GBp £15.64 Mkt £15.50 -1%
sector review, BMO Research Silver Wheaton SLW.NYSE DH USD $43.36 OP $52.00 20%
Pan American Silver PAAS.NDQ AK USD $37.13 OP $51.00 37%
has made changes to company
Coeur D'Alene CDE.NYSE AK USD $34.78 OP $40.00 15%
targets and ratings. Hochschild Mining HOC.LSE AK GBp £6.49 OP £7.75 19%
Hecla Mining HL.NYSE AK USD $9.08 OP $11.00 21%
Silvercorp Metals SVM.TSX AK CAD C$14.11 OP C$16.00 13%
Silver Standard SSRI.NDQ AK USD $31.38 OP $40.00 27%
First Majestic FR.TSX AK CAD C$20.61 OP C$25.00 21%
BMO Research’s preferred Endeavour Silver EDR.TSX AK CAD C$9.50 Und C$6.50 -32%
Fortuna Silver FVI.TSX AK CAD C$5.30 OP C$6.50 23%
silver companies include:
Bear Creek Mining BCM.TSX AK CAN C$10.15 OP(S) C$13.00 28%
Orko Silver OK.TSX AK CAD C$2.53 Mkt(S) C$2.50 -1%
 Seniors: PAAS, SLW Minco Silver MSV.TSX AK CAD C$5.75 OP(S) C$7.50 30%
Tahoe Resources THO.TSX AK CAD C$19.60 OP(S) C$24.00 22%
MAG Silver MAG.TSX JPH CAD C$11.57 OP(S) n/a n/a
 Intermediates: FR, SSRI
* Analyst Legend: AK - Andrew Kaip, JPH - John Hayes, DH - David Haugton
 Juniors: BCM, THO Source: BMO Capital Markets
Page 6 of 59
Silver Miners
April 3, 2011
Silver Wheaton (SLW.NYSE; US$43.36)

Outperform; Target Increased to US$52.00
SLW is well-funded to consider
further opportunities and is SLW is expected to demonstrate impressive near-term sales growth, driven
poised to capitalize on rising by the ramp-up of Peñasquito. The company is well-funded to consider further
silver prices. SLW’s target has opportunities and is poised to capitalize on rising silver prices.
been increased to US$52.00. Silver Wheaton offers attractive value, minimal operational risk and the
lowest exposure to non-silver revenue relative to other listed silver producers.
Pan American Silver (PAAS.NYSE; US$37.13)

Outperform; Target - US$51.00
PAAS is well-funded to execute
on future development plans, During 2009, PAAS made two potentially transformative transactions that,
which BMO Research expects once in production, provide long-lived, low-cost production to secure future
will position it as the premiere growth and offset the company’s portfolio of smaller mines.
senior growth company. Combined, the La Preciosa project in Mexico and the Navidad project in
Argentina could position PAAS as the number-two primary silver producer
with annual production of 54.9Moz silver-equivalent ounces (40.6Moz of
silver) by 2015E.
First Majestic (FR.TSX; C$20.61)

Outperform; Target Increased to C$25.00
Incorporating expansion plans
for La Parilla and the Through the ongoing expansion of the La Parilla mine and the development of
development of Del Toro, BMO the adjacent Del Toro project, FR has established an impressive growth
Research has increased the FR trajectory that is projected to grow silver production to 21Moz by 2015E.
target price to C$25.00. FR has also increased exploration and development activities at La Encantada
and the San Martin mines.
Silver Standard (SSRI.NDQ; US$31.38)

Outperform; Target Increased to US$40.00
SSRI’s strong balance sheet
and development pipeline has The improving performance of the Pirquitas mine in Argentina, combined with
positioned the company to the sale of the Snowfields/Brucejack project in late 2010 has positioned SSRI
begin its next phase of to begin its next stage of expansion. SSRI is currently working toward permit
development. BMO Research approval for the San Luis mine in Peru and is nearing completion of a
has increased the SSRI target feasibility study for the Pitarilla project in Mexico. Development of these two
price to US$40.00. projects is projected to increase SSRI’s silver equivalent production from
9.2Moz to 48.8Moz by 2015E.
Tahoe Resources (THO.TSX; C$19.60)

Outperform (S); Target Increased to C$24.00
The upper-quartile grade
profile of Escobal suggests the Tahoe is a junior silver company focused on exploring and developing the
potential for below-average Escobal Project in Guatemala. The company has a proven management team
cash costs and resource with a positive track record of mine development in Guatemala. The upper-
growth through exploration. quartile grade profile of Escobal suggests the potential for below-average
THO’s target price has been cash costs, and the early stage of delineation could translate into future
increased to C$24.00. resource growth through exploration.
Page 7 of 59
Silver Miners
April 3, 2011
Contingent on a H2/11 Bear Creek Mining (BCM.TSX; C$10.15)

construction start-up and
Outperform (S); Target Increased to C$13.00
execution through
construction, BMO Research Bear Creek is a junior silver explorer that is in final permitting stages to
forecasts production at Santa develop the Santa Ana project in south-eastern Peru. Contingent on a H2/11
Ana to commence in H1/12 construction start-up and execution through construction, BMO Research
ramping up to annual forecasts production to commence in H1/12, ramping up to annual production
production of ~4Moz of silver. of ~4Moz of silver at life-of-mine annual co-product costs of US$8.14/oz
silver (over a 13.5-year mine life).
Fig 15: BMO Research Target and Rating Revisions

Company Ticker Analyst* Share Price MC Target Rating Return
(31-Mar-11) US$M Previous New %Chg. Previous New NewTarget

Seni or Producers
Fresnillo FRES.LSE AK £15.64 18,031 £15.50 £15.50 0% Mkt Mkt -1%
Silver Wheaton SLW.NYSE DH $43.36 14,955 $46.00 $52.00 13% OP OP 20%

Pan American Silver PAAS.NASDQ AK $37.13 3,883 $51.00 $51.00 0% OP OP 38%
Hochschild Mining HOC.LSE AK £6.49 3,575 £7. 75 £7.75 0% OP OP 26%
Coeur D'Alene CDE.NYSE AK $34.78 3,045 $34.50 $40.00 16% OP OP 17%
IntermediateProducers
Hecla Mining HL.NYSE AK $9.08 2,275 $11.00 $11.00 0% OP OP 22%
Silvercorp Metal s SVM.TSX AK C$14.11 2,437 C$15.00 C$16.00 7% OP OP 12%
Silver Standard SSRI.NASDQ AK $31.38 2,346 $35.50 $40.00 13% OP OP 35%
First Majestic FR.TSX AK C$20.61 1,835 C$15.00 C$25.00 67% Mkt OP 20%
Junior&Emerging
Endeavour Silver EDR.TSX AK C$9.50 746 C$6.50 C$6.50 0% Und Und -31%
Fortuna Silver FVI-TSX AK C$5.30 576 C$6.00 C$6.50 8% OP OP 23%
Bear Creek Mining BCM.TSXV AK C$10.15 748 C$11.50 C$13.00 13% OP(S) OP(S) 29%
MAG Silver MAG.TSX JPH C$11.57 651 n/ a n/a OP(S) OP(S)
Mi nco Silver MSV.TSX AK C$5.75 258 C$7.50 C$7.50 0% OP(S) OP(S) 28%
Orko Silver OK.TSX AK C$2.53 309 C$2.50 C$2.50 0% Mkt(S) Mkt(S) 1%

Tahoe Resources THO.TSX AK C$19.60 2,328 C$19.00 C$24.00 26% OP(S) OP(S) 24%
* Analyst Legend: AK - Andrew Kai p, JPH - John Hayes, DH- David Haugton
Page 8 of 59
Silver Miners
April 3, 2011
4. Supply on the Rise

BMO Research has evaluated three scenarios for global silver production. To
BMO Research has calibrated calibrate BMO Research modeled production, silver production modeled by
silver production forecasts BMO Research is compared with global silver production estimates by region
relative to historical data. and deposit type (primary, gold and base metal by-product).
 A High Case scenario sees 1. In order to formulate a High Case scenario for global silver
silver production doubling production, BMO Research compares internal estimates for
production growth relative to published estimates on a regional
to 1,572Moz per annum by
basis. Future mine production is based on BMO Research forecasts
2018E.
in mine supply and the 10-year CAGR in mine production. This
scenario projects global silver production will grow 104% and rise to
 The BMO Research Base 1,572Moz annually by 2018E.
Case projects silver
production will peak at 2. The BMO Research Base Case for global silver production is based
1,200Moz per annum by on internal estimates for production relative to published estimates,
2015E. with future mine production based on BMO Research forecasts of
mine supply. Based on this scenario, global silver production is
projected to rise at a CAGR of 9% and peak at 1,200Moz by 2015E.
 A Low Case scenario has
silver production rising to 3. A Low Case scenario is based on the High Case scenario, but
1,110Moz per annum by excludes the high growth rate countries to determine the 10-year
2015E CAGR, on the assumption that these growth rates are unsustainable.
The Low Case scenario also applies a 5% production loss in
anticipation of future project delay. Using these parameters, global
silver production is forecast to increase at a CAGR of 8% and peak
at 1,110Moz by 2015E.
Fig 16: BMO Research Silver Production Forecasts (Moz)
1800
Forecast
BMO Research sees global 1600
silver production increasing at
Silver Production (Moz)
1400
~6% per annum through 2012E.
1200
1000
800
Silver production is projected
to increase rapidly between 600
2013E and 2015E. 400

2005A 2006A 2007A 2008A 2009A 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
High Case Production BMO Case Production Low Case Production
All three scenarios forecast growth in global silver production in the range of
4% to 8%, with BMO Research predicting an annual growth rate of 6%
through to the end of 2012E. An annual growth rate of 6% is appreciably
BMO Research growth higher than the 3.5% average growth rate experienced over the last several
estimates through 2012E are years. Silver production is projected to increase rapidly between 2013E and
higher than the average growth 2015E. BMO Forecasts YoY growth of 16% in 2013E followed by 12% in
rate in global silver production 2014E and 9% in 2015E. Accelerated growth through this time frame is
since 2007. based on BMO Research’s analysis, which sees a large number of projects
moving towards commercial production.
Page 9 of 59
Silver Miners
April 3, 2011
BMO Research Models 55% of Global Silver Production

To gauge future production increases, BMO Research has compiled silver
production from more than 150 mines and development projects within the
global coverage universe. The analysis highlights several trends:
1. Primary silver production covered by BMO Research is projected to
BMO Research covers 150 increase 90% to 311Moz by 2015E, based on new project
mines and development development.
projects globally. 2. Silver production from gold sources is projected to increase 160%
to 154Moz by 2015E. The increase is largely attributed to
Silver production modeled is expanding silver production at Peñasquito (27Moz in 2011E) and
projected to increase 55% by production from Pascua Llama (planned start-up in H1/2013E with
2015E. annual production of ~33Moz).
3. Silver production from base metal sources is expected to remain
flat, beginning to decline in 2019E with the shutdown of Cannington
(BHP, 37.3Moz in FY2010) based on the current mine plan.
Fig 17: BMO Research Silver Production Forecast, 2009 to 2020E (Moz)
700
Forecast
BMO Research forecasts a 90% 600
increase in primary silver
production by 2015E. 500
400
300
Silver production from gold is 200

projected to rise 160% between 100
2010 and 2015E.
0
2009A 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E
BM Current BM New Gold Current Gold New Primary Current Primary New
Fig 18: BMO Research Silver Production Forecast, 2009 to 2020E (%)
100%
80%
Silver Production (%)
Silver production from base

metal miners is projected to 60%
gradually rise through 2016E,

but decline in relative terms 40%
due to a lack of new

development. 20%
0%
2009A 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E
BM Current BM New Gold Current Gold New Primary Current Primanry New
Page 10 of 59
Silver Miners
April 3, 2011
Looking Global – Silver Production Will Rise

The BMO Research coverage universe accounts for ~55% of 2009 global
BMO Research covers ~55% of silver production. Clarity on production levels is biased toward primary
global mine production. production, as BMO Research tracks ~72% of global primary silver
production, versus 58% and 45% of global silver production as a by-product
of gold and base metal mines, respectively.
Increased reliability in by-product silver production forecasts would require

clarity on Chinese, Russian and Polish production, which currently account
for 24% of global mine production.
Incorporating internal production estimates, BMO Research forecasts global

Incorporating BMO Research silver production could increase 60% to ~1,2000Moz annually by 2015E.
estimates, global silver The analysis highlights increasing primary production, as well as silver
production is projected to production as a by-product from expanding gold production. Silver
increase 60% to 1,200Moz production from base metal sources is projected to rise gradually through
annually through 2015E. 2016E and decline thereafter as Cannington production wanes.
Fig 19: BMO Research Forecast of Global Silver Production (Moz)
1400
Forecast
Looking at mines modeled by 1200
BMO Research, silver
production is expected to 1000
increase at a CAGR of 9% by 800

2015E.
600
400
200
0
05
A
06
A
07
A
08
A
09
A 10 11 12 13 14 15 16 17 18 19 20
20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
Base Metal Gold Primary
Source: GFMS, BMO Capital Markets
Fig 20: BMO Research Forecast of Global Silver Production (%)
100%
Combined, primary and silver
production as a by-product of 80%
gold is expected to outstrip

traditional base metal sources 60%
due to a lack of new lead and
zinc mine development. 40%
20%
0%
05
A
06
A
07
A
08
A
09
A 10 11 12 13 14 15 16 17 18 19 20
20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
Base Metal Gold Primary
Page 11 of 59
Silver Miners
April 3, 2011
Incorporating growth projections by region, BMO Research expects mine

BMO Research predicts a 9% production to increase at a CAGR of 9% through 2015E.
CAGR in global silver
production through 2015E.
Fig 21: BMO Research Forecast of Global Silver Production by Region (Moz)
1400
Forecast
Global silver production is 1200
projected to expand

1000
significantly in the Americas,
driven by new projects in Peru, 800
Mexico, Argentina and 600

Guatemala.
400
Peru and Mexico are ranked as 200
the 1st and 2nd largest silver 0

A A A A A 10 11 12 13 14 15 16 17 18 19 20
producing nations. 20
05
20
06
20
07
20
08
20
09 20 20 20 20 20 20 20 20 20 20 20
Europe North America Latin America Asia CIS Oceania Africa
Fig 22: BMO Research Forecast of Global Silver Production by Region (%)
100%
By 2015E, the Americas are

forecast to account for ~60% of 80%
global silver production.

60%
40%
rd
Lead by the 3 largest silver 20%
producing nation, China, Asia
is forecast to account for 15% 0%
A A A A A 10 11 12 13 14 15 16 17 18 19 20
of global production by 2015E. 20
05
20
06
20
07
20
08
20
09 20 20 20 20 20 20 20 20 20 20 20
Europe North America Latin America Asia CIS Oceania Africa
Fig 23: BMO Research Forecast of Global Silver Production by Region (%)
1400 20%
Forecast
1200
10%
1000
Production growth appears to
800
be unsustainable with levels 0%
declining post-2016E. 600
400
-10%
200
0 -20%
05
A
06
A
07
A
08
A
09
A 10 11 12 13 14 15 16 17 18 19 20
20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
Europe North America Latin America Asia CIS Oceania Africa Y/Y Chg.
Page 12 of 59
Silver Miners
April 3, 2011
Risks to BMO Research Production Analysis

To assess the predictability of new projects development, BMO Research has
reviewed new project development based on stage and capital requirements.
Fig 24: Project Stage of Potential New Silver Production (Moz)

250
Forecast
200

BMO Research analysis
150
indicates that new silver
production is weighted toward 100
early stage projects that have
yet to receive permitting and 50
are at the exploration or pre-
feasibility stage. 0
2009A 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Construction Feasibility Pre-feasibilty Exploration
Fig 25: New Silver Production by Sector (Moz)

250
Forecast
New silver production is
weighted toward primary and 200
by-product production from the

150
gold sector.
100
50
Little new production is
expected from the base-metal 0
2009A 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
sector. Base By-product Gold By-product Primary
Fig 26: Capital Requirements for New Silver Production (Moz)
2000
BMO Research models Forecast

Project Capital Costs (US$M)
US$5.9B in capital
1500
requirements for primary silver
mine development through
2015E. 1000
500
The primary silver sector is

estimated to grow net cash to 0
US$13.7B over the same time 2009A 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E
New Project Capex
frame.
Page 13 of 59
Silver Miners
April 3, 2011
5. Double-Barrelled Demand
BMO Research has calibrated three scenarios for global silver demand based
BMO Research has calibrated on current macro-economic trends.
silver demand forecasts
relative to current 1. The High Case for silver demand is supported by further quantitative
macroeconomic trends. easing and growing inflationary concerns (that are expected to fuel
investment appetite for silver), combined with robust industrial
 The High Case scenario demand. The scenario assumes physical investment rises sharply, as
investors hedge against inflation and sovereign debt. China remains
sees silver demand rising
a very strong buyer of physical metal. Global growth is forecast to
31% to 1,304Moz annually
remain robust, supporting increases in industrial demand as the
by 2014E.
developing world continues to industrialize. BMO Research also
expects a cheap U.S. dollar to spur better-than-expected
 The BMO Research Base manufacturing activity in the United States.
Case projects silver
demand will peak at 2. The BMO Research Base Case for silver demand is premised on
1,148Moz per annum by continued industrial demand growth for silver on the back of further
2012E. recovery in the global economic activity. This scenario assumes that
western governments will gradually raise interest rates to combat
inflation and will not implement further quantitative easing
 The Low Case scenario has
schemes. In this scenario, physical investment demand remains
silver demand peaking at robust, particularly in Asia, supported by inflationary concerns and
1,003Moz in 2011E and asset diversification away from fiat currencies.
declining thereafter.
3. A Low Case scenario for silver considers low inflationary risk in
western economies and Asia. In this scenario, slowing global growth
tempers industrial demand and producer hedging intensifies,
sending a further bearish signal.
Fig 27: BMO Research Silver Demand Forecasts (Moz)
1400
Forecast
Silver demand forecasts vary 1300
significantly and are dependant
Silver Demand (Moz)
1200
on the impact of:
1100
 Further quantitative easing 1000

supporting investment
900
demand.
800
 The strength of the global 700

2005A 2006A 2007A 2008A 2009A 2010A 2011 2012 2013 2014 2015
economy. High Case Demand BMO Case Demand Low Case Demand
Page 14 of 59
Silver Miners
April 3, 2011
Silver Has Performed Well in 2011

BMO Research expects that silver will continue to perform well through
BMO Research expects silver 2011, supported by its dual industrial-precious metal status. Following a
will continue to perform well brief correction in January on profit taking coincident with stronger-than-
through 2011. expected U.S. economic data, silver resumed its ascent in February as the
global economy continued to expand and due to a sudden spike in global
political risk in North Africa and the Middle East.
The Japanese earthquake in mid-March heightened uncertainty surrounding

Silver hit a recent high of the impact on demand for industrial precious metals (silver, platinum, and
US$38.17/oz, a level not seen palladium). However, silver prices have remained robust, trading at or near
since February 1980. current highs (US$38.17/oz ), given sustained investment demand and
reduced exposure to Japanese consumption (9% of global consumption in
2009 versus 12% for palladium and 18% for platinum).
Near term, silver could encounter increasing volatility after doubling in price
Near term, silver could since mid-Q3/10. However, the silver market supply/demand fundamentals
encounter increasing volatility are not very price elastic and the market is relatively illiquid. As such,
after doubling in price since unanticipated increases in industrial or investor demand can move the price
mid-Q3/10. materially above its marginal cost, especially at a time when a physical
deficit is projected. BMO Research expects an 88Moz deficit in 2011.
Further upside for the price of silver is fuelled by the metals performance
relative to its January 1980 high of US$50.35/oz (gold to silver ratio of ~16
to 1), a year after the Hunt brothers tried to corner the market. In real
terms (2011 dollars), the silver peak was nearly US$141/oz in January
1980, which is roughly ~275% above the current price.
Fig 28: Historical Silver and Gold Prices, Nominal versus Real (US$/oz)
2,000 100
1,600 80
Silver Price (US$/oz)

Silver continues to look cheap
Gold Price (US$/oz)
relative to the 1980 peak in real 1,200 60

terms.
800 40
400 20
0 0
75
77
81
87
93
79
97
83
85
04
89
10
91
95
00
02
06
08
19
19
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
Gold Price Real Gold Price Silver Price Real Silver Price
Page 15 of 59
Silver Miners
April 3, 2011
What Drives Silver Investment

Despite the strength of silver’s near-term supply/demand fundamentals, the
metal is tightly linked to gold and is unlikely to perform well unless the gold
market is in a bull run. Like gold, silver is expected to continue benefiting
from its quasi-money status with near-term investment demand driven by:
 Investor concerns surrounding the viability of western world
currencies, such as the Euro and the U.S dollar.
 Concerns that aggressive quantitative easing will lead to public debt
monetization and currency debasement, as the Federal Reserve has
BMO Research believes the become the largest buyer and holder of U.S. government debt.
industrial precious metals are  The possibility that the Fed could introduce further quantitative
likely to outperform gold easing projects (irrespective of economic performance), in order to
through 2011E. finance new U.S. government debt issues or keep yields low.
 The arrival of a higher inflationary environment in western
economies.
 The resurgence of significant political unrest in the Middle East and
North Africa.
Fig 29: BMO Research Silver Investment Demand Scenarios
250
Forecast
Silver Investment Demand (Moz)
200
Silver continues to look cheap

150
relative to the 1980 peak in real
terms.
100
50
0
2005A 2006A 2007A 2008A 2009A 2010A 2011 2012 2013 2014 2015
High Case Demand BMO Case Demand Low Case Demand
The downgrade of Portugal and Greece’s credit rating in February indicates

that problems facing the ECB and PIIGS member countries are far from
over. In the U.S., the Federal Reserve remains fully committed to
Sovereign debt risk remains completing the US$600B quantitative easing (QE2) scheme, despite recent
material. indications of a healthier U.S. economy. Officials have indicated that the
introduction of QE3 is still a possibility, if the current round of quantitative
easing does not sufficiently stimulate the economic recovery.
Signs of inflationary pressure and a possibility of interest rate hikes have

The risk of inflation is surfaced in the United Kingdom and the Eurozone. Both recorded a rise in
increasing. inflation rates in February (UK: 4.7%; Eurozone: 2.4%), the highest either
has experienced since autumn 2008. Meanwhile, India and China grabbed
headlines and have taken monetary action to battle ‘food inflation’, amid
high commodity prices.
Page 16 of 59
Silver Miners
April 3, 2011
Investment Flows Remain Robust

Silver bullion sales remain robust. The U.S. Mint sold nearly 10Moz in the
Investment demand remains first two months of 2011, up 43% from the same period last year. If sales
robust. continue at this pace, the mint could experience another record year of
bullion sales, solidly beating the 36Moz sold during 2010 and 29Moz in 2009.
Strong investor appetite for silver-backed exchange traded funds (ETFs) and
falling exchange inventories are also expected to support a higher silver
price environment. Indeed, COMEX silver inventories have continued to
trend lower, falling by nearly 2.5Moz since the beginning of the year, while
simultaneously, exchange traded funds have attracted net inflows of 4Moz.
Silver-backed ETFs attracted 104Moz of silver in 2010, a 25% increase on

the year. Assuming the inflow was to halve during 2011, the investment
interest alone would entirely consume BMO Research’s projected marginal
increase in global silver production, which currently stands at 38Moz.
Fig 30: Silver CFTC Net Non-Commercial Positions Fig 31: Silver ETF Holdings Hit Record High (Moz)
60000 540
$36 $40
50000 480
$35
$30
420
Silver Price (US$/oz)

40000 $30
Silver (Moz)
$24 360
30000 $25
ETF Holdings
Silver Price
$18 300 (lhs)
(rhs)
20000 $20
$12 240
$15
10000
Jan-09 Jun-09 Nov-09 Apr-10 Sep-10 Feb-11 180
$10
Net Contracts (lhs) US$/oz (rhs)
Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Feb-11
Source: BMO Capital Markets Source: ETF Securities, iShares, Reuters, BMO Capital Markets
Net imports of silver to China have surged nearly 300% to 115Moz in 2010,
Asian demand for silver according to official customs statistics. In BMO Research’s view, it is likely
continues to rise, with net that imports of large quantities of silver will continue through 2011, driven
imports of silver to China by inflation protection and ownership as a cheaper alternative to gold.
surging 300% to 115Moz in
2010. Central banks in China, India, and other emerging markets could further
increase holdings of gold and silver, as part of their diversification strategy
to limit exposure to depreciating western currencies and as a protection
against ‘food’ inflation.
Page 17 of 59
Silver Miners
April 3, 2011
Fig 32: Comex Inventory Trend Suggests Scarcity (Moz) Fig 33: Global Silver Stocks Breakdown (Moz)
150 1200
140 1000
800
130
Silver (Moz)
600
120 Seven
Weeks
Suppy 400
110
200
100
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
90 Other Stocks Government Comex European Dealers Total
Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11
Source: BMO Capital Markets Source: ETF Securities, iShares, Reuters, BMO Capital Markets
Industrial Demand Set To Surge

Following a 21% decline in 2009, stemming from lower industrial production
Industrial demand for silver is and de-stocking during the global financial crisis (GFC), industrial silver
forecast to have returned to demand is forecast to have rebounded 38% in 2010. BMO Research
levels seen before the Global forecasts Base Case industrial demand will increase at a CAGR of 6%
Financial Crisis in 2010. through 2015E, driven by growing demand from emerging economies.
A case for more tempered global industrial demand (Low Case) is premised
BMO Research forecasts on monetary tightening by western governments, which is forecast to
industrial demand to grow at temper global growth and industrial demand. In the High Case, global
CAGR rate of 6% through growth is forecast to remain robust, supporting growth in industrial demand
2015E. as the developing world continues to industrialize, while a cheap U.S. dollar
spurs better-than-expected manufacturing activity in the United States.
Fig 34: BMO Research Industrial Silver Demand Scenarios (Moz)

Demand growth above these
levels incorporates better than 700
Forecast
expected U.S. manufacturing
Silver Industrial Demand (Moz)
activity. 600
Downside risk to BMO

500
Research’s forecast
incorporates lower global
growth as western 400
governments implement
monetary tightening. 300
2005A 2006A 2007A 2008A 2009A 2010A 2011 2012 2013 2014 2015
High Case Demand BMO Case Demand Low Case Demand
Page 18 of 59
Silver Miners
April 3, 2011
Developing Economies Drive Silver Demand

The factors contributing to global industrial demand, which currently
accounts for 50% of global silver demand, have undergone a transformation
over the last decade. While western demand (driven by growing industrial
Growth in industrial demand production and consumer electronics) has lead to robust growth, increases in
for silver has begun to shift industrial demand over the last decade has been dominated by developing
from western to developing economies, and in particular China and India.
economies.
The shift in industrial demand is highlighted by GDP growth in China and
India, which averaged 9.9% and 7.1%, respectively between 2000 and
2008. In contrast, GDP growth in western economies has been more
modest, with the European Union growing at an average rate of 2.7% and
the United States at 2.2% over the same time frame.
The long-term growth prospects for industrial silver demand are supported
by the large population base of developing economies (China and India), the
drive towards modernization and current low per capita use relative to
western economies.
Fig 35: 2009A Per Capita Fabrication Demand for Silver (grams)
12
2009A Per Captia Fabrication (grams)
10
Growth prospects for industrial 8

silver demand are supported by
modernization in developing 6
economies and their current 4

low per capita use relative to
western economies. 2
0
World US Japan Germany China India
Source: GFMS
The shift in industrial demand toward developing economies is apparent

when comparing Chinese and India silver demand relative to western
economies prior to the GFC. Between 2000 and 2008, China and India
Increasing demand for silver is electronic and electrical fabrication grew at a CAGR of 5% and 7%,
a product of increased silver respectively, compared to 2% in the U.S. and Japan. Growth rates for silver
consumption through in brazing and alloy have been even more impressive, increasing at a CAGR
industrial, infrastructure and of 8% and 16% for India and China, respectively, compared to flat or
consumer demand. declining rates in the U.S. and Japan.
Increasing demand for silver in developing economies is a product of rapid
industrialization and urbanization and increased consumer spending through
the emergence of the middle-class with an increasing appetite for consumer
electronics.
Page 19 of 59
Silver Miners
April 3, 2011
Fig 36: Industrial Demand for Silver (Moz) Fig 37: Top 4 Industrial Consumers (Moz)
1000 120
Total Industrial Demand (Moz)

Silver Industrial Demand (Moz)
100
800
80
600
60
400 40
200 20
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
0
2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A US Japan China India
Industrial Photographic Jewelry Silverware Coins & Medals
Source: GFMS Source: GFMS
Fig 38: Electronics and Electrical Demand (Moz) Fig 39: Brazing and Alloy Demand (Moz)
70 20
Electrical & Electronics Demand (Moz)
60 Brazing & Alloy Demand (Moz)

15
50
40
10
30
20
5
10
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
US Japan China India US Japan China India
Source: GFMS Source: GFMS
Growing industrial demand for silver is supported by established uses

(electronic, electrical, brazing and soldering). Growing demand within the
electronic and electrical sectors is the product of increasing volumes and
technological advances. Silver’s properties (superior connectivity and
reflectivity) combined with the low silver content required per unit,
provides low price elasticity of demand. However, potential downside risk
exists for silver use in the brazing and solder sector, where rising prices
have the potential to increase substitution.
Demand from new (nano-technology) or renewed interest in existing

applications (photo voltaic) has the potential to offset the decline from
traditional uses (photographic) through 2015E. A global move towards grid
parity for the solar industry could position photo voltaic as a key driver of
future demand.
Page 20 of 59
Silver Miners
April 3, 2011
Fig 40: Silver Consumption per unit Fig 41: Brazing and Soldering (Moz)
Source: GFMS
Source: GFMS
Page 21 of 59
Silver Miners
April 3, 2011
6. Sector Comparison
Fig 42: Market Capitalization Versus P/NPV 10%, at Spot Metal Prices
100,000
Cheap
Comparing market
Market Capitalization (US$M)

capitalization versus P/NPV SLW FRES alue -
Silver
Fair V
(10% at spot): 10,000
HOC CDE
PAAS HL
SSRI THO
 Senior producers PAAS BCM FR SVM
1,000
and HOC and intermediate MAG FVI
EDR
SSRI are attractively MSV OK
valued relative to peers. 100
 Juniors BCM and THO are Spot Prices: US$37.65/oz Ag and US$1,433/oz Au
10% Nominal Discount Rate Expensive
attractively valued. 10
0.5 1.0 1.5 2.0 2.5
Share Price to NPV per Share
Fig 43: Price Versus 10% Nominal NPV, at Spot Metal Prices
2.5
10% nominal project NPV (US$M)
Cheaper,
2.0
Higher Risk
A lower P/NPV multiple
reflects a more attractive 1.5
valuation, but higher project

risk profile. 1.0
0.5
0.0
I
SV O M K
PA
A
Av
g O
Av
g C
AG
E
FV HL FR vg M W ES R
M SS BC O
. TH H
O
M CD .A SV SL FR ED
Jr t. Sr
In
Fig 44: 10% Corporate NPV by Project Stage (%)
100%
HL and EDR exhibit the

10% nominal project NPV (%)
lowest risk profile for 80%
producers.
60%
PAAS and FVI exhibit the

highest risk profiles among 40%
current producers.
20%
Junior developer MSV has

reached a key de-risking 0%
EDR HL CDE HOC SVM SSRI FRES FR PAAS FVI BCM MSV OK THO MAG
stage through completion of Production Development Feasibility Exploration
feasibility. Source: BMO Capital Markets
Page 22 of 59
Silver Miners
April 3, 2011
Fig 45: Internal Rate of Return (%)

Companies that provide a
superior IRR relative to peers 25%
include:
20%
r
 Senior producers CDE ape
Che
and PAAS. 15%
IRR (%)
 Intermediate producer 10%
SSRI.
5%
 Junior developers
BCM, MSV and OK. 0%
RI
M
OK
M
C
vg
O
SV
E
ES
vg
AS
R
AG
g
FR
HL
FV
CD
Av
HO
ED
TH
BC
SV
SL
SS
.A
.A
FR
M
PA
t.
Jr
Sr
In
*Defined as the discount rate required for NPV=Market Cap
NPV Sensitivity
Fig 46: Revenue by Metal (%)
100%
% Contribution of Metal to Revenue, 2011E
SLW and FR are expected to

derive >95% of 2011E revenue 80%
from silver, offering the
highest exposures within the 60%
BMO Research universe.
40%
HL, FVI and SVM have
significant exposure to base 20%
metals.
0%
CDE has a large exposure to HL FVI CDE SVM FRES PAA HOC EDR SSRI FR SLW
gold. Source: BMO Capital Markets
Fig 47: NPV Sensitivity to a 10% Increase in Silver Price (%)
14%
NPV Sensitivity to 10% Chg in Silver
12%
FR, OK and EDR provide 10%
above-average leverage to the 8%

price of silver.
6%
4%
2%
0%
MAG HL SVM FVI BCM FRES SSRI THO CDE HOC PAA SLW MSV EDR OK FR
Page 23 of 59
Silver Miners
April 3, 2011
Fig 48: NPV Sensitivity to a 10% Increase in Gold Price (%)
5%
NPV Sensitivity to 10% Chg in Gold

4%
3%
Companies with above-
average leverage to gold
2%
prices include CDE and HOC.
1%
0%
SVM BCM FR MSV THO SLW OK MAG PAA SSRI HL EDR FVI FRES HOC CDE
Fig 49: NPV Sensitivity to a 10% increase in Base Metal Prices (%)
6%
NPV Sensitivity to 10% Chg in Base Metals
5%
4%
Companies with above 3%

average leverage to base
metal prices include SVM and 2%
HL.
1%
0%
EDR OK CDE HOC SLW MSV THO FRES SSRI MAG PAA FR FVI BCM HL SVM
Earnings and Cash Flow Growth

Fig 50: EV/EBITDA, 2011E (x)
24
Senior producers CDE and

HOC appear most attractively 20
valued on 2011E EV/EBITDA.

2011E EV/EBITDA (x)
16
Amongst intermediate
producers, HL offers the most 12
attractive valuation on 2011E

EV/EBITDA. 8
SSRI trades at a higher 4
EV/EBITDA multiple due to

future production growth. 0
I RI
E C HL AS FV vg R FR vg Av
g ES M W
CD HO PA .A ED .A FR SV SS SL
Jr Sr t.
In
Page 24 of 59
Silver Miners
April 3, 2011
Fig 51: Earnings 2010A Versus 2011E at BMO Metal Prices (US$/sh)
Silver producer earnings are
expected to benefit from the 3.50
current high silver price. 3.00
Companies exhibiting above 2.50
Earnings Per Share (US$)

average YoY earnings growth 2.00
include CDE, PAAS, SLW and
FR. 1.50
1.00
Juniors THO, MAG, BCM,
MSV, and OK’s negative 0.50
earnings reflect their non- 0.00

producer status.
-0.50
THO MAG BCM MSV OK FVI SVM EDR HL HOC SSRI FRES FR SLW PAAS CDE
2010A 2011E
Fig 52: 2011E P/E at BMO Metal Prices (x)
50
45
40
Seniors CDE, HOC and PAAS,
35
and intermediates HL and FR
2011E P/E (x)
30
appear attractively valued on
2011E P/E. 25
20
While EDR is attractively 15

valued on 2011E EPS, the 10
company’s short reserve life
5
is a concern.
0
I RI
E HL C AS FR vg R vg FV ES W
Av
g M
CD HO PA .A ED .A FR SL SV SS
Sr Jr t.
In
Fig 53: Cash Flow 2010A Versus 2011E at BMO Metal Prices (US$/sh)
6.00
5.00
Cash Flow Per Share (US$)
4.00
Companies with above- 3.00
average growth in cash flow

2.00
include CDE, PAAS, SLW and
SSRI. 1.00
0.00
-1.00
THO MAG BCM MSV OK FVI SVM HL EDR HOC FRES FR SSRI SLW PAAS CDE
2010A 2011E
Page 25 of 59
Silver Miners
April 3, 2011
Fig 54: 2011E P/CF at BMO Metal Prices (x)
25
Seniors CDE and HOC and

intermediate HL appear 20
attractively valued on 2011E
P/CF.
2011E P/CF (x)

15
While EDR is attractively

valued on 2011E P/CF, the 10
company’s short reserve life
is a concern.
5
0
E C HL R AS vg vg FR FV
I g ES W RI M
CD HO ED PA .A .A Av FR SL SS SV
Sr Jr t.
In
Fig 55: Free Cash Flow 2010A Versus 2011E at BMO Metal Prices (US$/sh)
Seniors CDE and PAAS are
expected to post significant 3.00
gains in FCF in 2011E, with

CDE moving into positive 2.00
Free Cash Flow Per Share (US$)
territory.
1.00
Intermediate producer SSRI is
forecast to post positive FCF
in 2011E. 0.00
FVI’s negative FCF position in -1.00

2011E reflects capex
spending for the San Jose
project (start-up in Q3/11). -2.00
BCM THO MSV MAG FVI OK HOC SVM FR EDR HL SLW FRES SSRI PAAS CDE
2010A 2011E
Fig 56: 2011E P/FCF at BMO Metal Prices (x)
60
Seniors CDE and PAAS

screen well among senior 50
peers on a near-term P/FCF

basis. 40
2011E P/FCF (x)
Intermediates HL and SSRI 30
appear attractively valued on

a near-term P/FCF basis 20
relative to their peers.

10
0
E HL A S R RI vg C ES vg M FR W
CD PA ED SS .A HO FR t.
A SV SL
Sr In
Page 26 of 59
Silver Miners
April 3, 2011
Improving Margins
Fig 57: EBIT Margin, 2010A and 2011E (%)
80%
Companies with superior EBIT

margins include SLW, SVM, 60%
FRES and FR.
EBIT Margin (%)

40%
20%
SSRI’s low relative 2011E EBIT
margin reflects ongoing
0%
optimization at the Pirquitas
mine.
-20%
SSRI EDR CDE PAAS HL FVI HOC FR FRES SVM SLW
2010A 2011E
Fig 58: Return on Equity, 2010A and 2011E (%)

40%
FR, FRES and SLW rank 30%

highest on 2011E ROE.
20%
Return on Equity (%)
SSRI is expected produce a 10%
positive ROE in 2011 due to 0%

improving operations at
-10%
Pirquitas.
-20%
Negative ROE for OK, BCM, -30%

MAG, MSV and THO reflect
-40%
their non-producer status. OK MAG BCM MSV THO SSRI CDE PAAS HL HOC FVI SVM EDR SLW FRES FR
2010A 2011E
Fig 59: Return on Invested Capital, 2010A and 2011E (%)

40%
FRES, FR and EDR have the 35%

highest 2011E ROIC.
Return on Invested Capital (%)
30%
25%
20%
CDE and SSRI have the lowest

15%
2011E ROIC.
10%
5%
0%
MAG THO MSV BCM OK SSRI CDE PAAS HL SLW FVI HOC SVM EDR FR FRES
2010A 2011E
Page 27 of 59
Silver Miners
April 3, 2011
Growing Net Cash

BMO Research analysis forecasts a significant rise in cash generating
capabilities within the silver sector based on robust metal prices, a trend
toward improving operational performance at existing mines and the
introduction of larger, more robust projects.
Accounting for forecast sustaining and development capital, and using long-
Silver sector net cash is term metal price assumptions, BMO Research estimates that the silver
projected to grow +400% to sector average net cash position could grow +400% to US$13.7B by 2015E.
US$13.7B by 2015E.
Fig 60: Silver Sector Net Cash Growth, 2010A to 2015E (US$B)
16
Sector net cash growth is 14
expected to be driven by robust 12

metal prices, a trend toward
10
improving operational
performance at existing mines 8
US$B
and the introduction of larger, 6
more robust projects. 4
-2
2010A 2011E 2012E 2013E 2014E 2015E
Cash Debt Net Cash (Debt)
Fig 61: Company Net Cash, 2010A and 2011E (US$B)
1.1
FRES and HOC are expected to 1.0
experience the highest YoY 0.9
growth in their net cash 0.8

Net Cash (Debt) (US$B)
position in 2011E. 0.7
0.6
CDE is expected to move to a 0.5
positive net cash position of 0.4
~US$75M in 2011E. 0.3
0.2
Among intermediate producers, 0.1
SVM and SSRI are forecast to 0.0
show superior net cash growth OK MSV BCM FVI CDE MAG FR EDR SVM HL SSRI THO HOC SLW PAAS FRES
2010A 2011E
in 2011E.
Page 28 of 59
Silver Miners
April 3, 2011
Production and Costs

Fig 62: Silver Equivalent Production 2010A and 2011E (Moz)
SSRI, CDE and SLW show the 70
largest YoY growth in silver

60
equivalent production in 2011E.
Silver Equivalent Production (Moz)

50
SSRI should benefit from the 40

continued ramp-up of Pirquitas,
while CDE should gain from a 30
full year of production at the 20

new Kensington mine.
10
0
FVI EDR FR SSRI SVM HL HOC SLW PAAS CDE FRES
2010A 2011E
Fig 63: Silver Production 2010A and 2011E (Moz)
FRES and SLW are forecast to 50
show the highest YoY growth

in silver production. 40
30
Among intermediate producers, 20
SSRI and FR are expected to

provide superior YoY growth in 10
silver production.
0
FVI EDR SVM SSRI FR HL CDE PAAS HOC SLW FRES
2010A 2011E
Fig 64: Silver Equivalent Production, 2010A Versus 2013E (Moz)

Senior producers FRES and
CDE are forecast to grow silver
equivalent production by 80
12.5Moz and 11.2Moz, 70

respectively by 2013E.
Silver Equiv. Production (Moz)
60
SSRI is expected to be the 50
fastest growing intermediate 40
producer. 30
By 2013E, emerging producers 20
OK, BCM, and MSV are forecast 10
to add a combined +13Moz 0

OK BCM EDR MSV FVI SVM FR SSRI HL HOC SLW PAAS CDE FRES
silver equivalent production. 2011E 2013E
Page 29 of 59
Silver Miners
April 3, 2011
Fig 65: Cumulative Silver Co-product Cash Cost Curve (US$/oz)
$20
2010A
Silver sector co-product cash $18 SSRI
Co-Product Cash Costs (US$/oz)

costs are forecast to increase $16
from an average of US$7.28/oz $14 PAAS CDE
in 2010 to US$8.18/oz in 2011E. SSRI
$12 2011E
EDR CDE
$10 FVI HL PAAS
HOC EDR
$8 FR
FR
SVM
FVI HOC
$6
Higher YoY cash costs reflect SLW FRES HL
SVM
inflationary pressures $4
SLW FRES
(particularly at South American $2
operations), and the ramp-up of $0
0 25 50 75 100 125 150 175 200 225 250
new projects. Cumulative Production (000 oz)
Fig 66: Cumulative Silver Co-product Production Cost Curve (US$/oz)
$24
SSRI 2010A
$20 CDE
Production Costs (US$/oz)
SSRI
Silver sector co-product 2011E
$16
production costs are forecast HL
PAAS CDE
to increase from an average of FVI

HOC PAAS
$12
US$9.76/oz in 2010 to EDR
US$11.22/oz in 2011E. $8 SVM

FR EDR
FVI
HOC
SLW
FRES HL FR
SLW
$4 SVM FRES
$0
0 25 50 75 100 125 150 175 200 225 250
Cumulative Production (000 oz)
Fig 67: Cumulative Silver Co-product Total Cash Expenditure Curve (US$/oz)
BMO Research defines total
cash expenditure costs $35
Total Cumulative Cash Expenditure (US$/oz)
2010A
(US$/oz) as the total cost of
$30 SSRI
production, including capex, 2011E
FVI
exploration and G&A. $25 HOC
SSRI
EDR
SLW HOC
Co-product total cash $20 EDR
FVI
HL CDE CDE
expenditure costs are forecast $15 PAAS FRES
FR
to increase from an average of FR PAAS

SLW FRES
US$15.11/oz in 2010 to $10
HL
SVM
US$17.47/oz in 2011E. SVM
$5
The YoY increase reflects $0

0 25 50 75 100 125 150 175 200 225 250 275 300 325
rising capital expenditures and Cumulative Production (000 oz)
operating costs inflation.
Page 30 of 59
Silver Miners
April 3, 2011
Enterprise Value Analysis

Fig 68: EV/oz of Silver-Equivalent Reserve (US$/oz)
50
CDE and PAAS trade at a low
EV/oz relative to the senior
EV/oz Reserves (US$/oz)

40
producer average.
30
SSRI is attractively valued 20

relative to intermediate peers.
10 No Reserves
BCM and MSV trade at low 0
vg
G
OK
Avg
SLW
C
M
FR
ES
g
O
RI
HL
R
I
EV/oz multiples, reflecting
FV
Av
CD
MS
PAA
ED
HO
MA
TH
BC
SV
SS
.A
FR
Jr.
Sr.
development risk.
Int
Fig 69: EV/oz of Silver-Equivalent Resource (US$/oz)
12
Companies that are attractively
valued based on total 10
EV/oz Resources (US$/oz)
resources include:
8
 Senior PAAS
6
 Intermediates SSRI and HL
4
 Junior silver explorers
MSV, BCM, OK and THO, 2
reflecting future
development risk. 0
S
V
C
M
OK
FR
g
vg
ES
W
O
HL
R
E
RI
I
FV
Av
Av
CD
PAA
MS
ED
HO
MA
TH
SV
BC
SL
SS
.A
FR
Jr.
Sr.
Int
Page 31 of 59
Silver Miners
April 3, 2011
7. Production Profiles
Fig 70: FRES Silver Equiv. Production, 2009A-2019E Fig 71: SLW Silver Equiv. Production, 2009A-2019E
120.0 60.0
Forecast Forecast
Annual Silver Eq. Production (Moz)

Noche Buena
100.0 Junicipio JV 50.0
Sabinas
Str eam San Julian
80.0 40.0
Soledad
Saucito
60.0 30.0 HPG &
Cienega LM Mines
TLP Mine
40.0 Herradur a 20.0
Silvertip
Fresnillo GC Project
20.0 10.0
Ying Mine
0.0 0.0
2009A 2010A 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2009A 2010A 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E
Production Development Feasibility Exploration
lS
Production Development Exploration
Source: BMO Capital Markets Source: BMO Capital Markets
Fig 72: PAAS Silver Equiv. Production, 2009A-2019E Fig 73: CDE Silver Equiv. Production, 2009A-2019E
120.0 120.0
Forecast Forecast
100.0 100.0
San Vicente La Colorada

80.0 80.0
Quirivilca
60.0 60.0
Alamo Dorado Martha
40.0 Navidad 40.0

Rochester
La Preciosa Kensington
20.0 Manatial 20.0 San Bartolome
Morococha Palmarejo
0.0 Huaron 0.0
Production Exploration Production
Fig 74: HOC Silver Equiv. Production, 2009A-2019E

120.0
Forecast
100.0
80.0
60.0
Selene Ares Crespo

40.0
Moris
Inmaculada
20.0 San Jose Azuca
Pallancata
Arcata
0.0
2009A 2010A 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E
Production Feasibility
Page 32 of 59
Silver Miners
April 3, 2011
Fig 75: HL Silver Equiv. Production, 2009A-2019E Fig 76: SSRI Silver Equiv. Production, 2009A-2019E
60.0 60.0

Forecast Forecast
50.0 50.0
40.0 40.0
Diablillos
30.0 30.0
Pitarilla
20.0 Lucky Friday 20.0 San Luis
10.0 10.0
Greens Creek Pirquitas
0.0 0.0
Production Production Development Feasibility Exploration
Fig 77: SVM Silver Equiv. Production, 2009A-2019E Fig 78: FR Silver Equiv. Production, 2009A-2019E
60.0 60.0
Forecast

Forecast
50.0 50.0
40.0 40.0
30.0 HPG & 30.0

LM Mines
TLP Mine San Martin
20.0 20.0
Silvertip Real de Catorce
GC Project Del Toro
10.0 10.0
Encantada
Ying Mine La Parrilla
0.0 0.0
Production Development Exploration Production Development Exploration
Fig 79: EDR Silver Equiv. Production, 2009A-2019E Fig 80: FVI Silver Equiv. Production, 2009A-2019E
30.0 30.0
Forecast Forecast
25.0 25.0
20.0 20.0
15.0 15.0
10.0 10.0
5.0 5.0 San Jose

Guanacevi
Guanajuato Caylloma
0.0 0.0
Production Production Development
Page 33 of 59
Silver Miners
April 3, 2011
Fig 81: MSV Silver Equiv. Production, 2009A-2019E Fig 82: THO Silver Equiv. Production, 2009A-2019E
30.0 25.0

Forecast Forecast
25.0
20.0
20.0
15.0
15.0 Escobal
10.0
10.0
5.0
5.0
Fuwan
0.0 0.0
Development Feasibility
Source: BMO Capital Markets Source: BMO Capital Markets Capital Markets
Fig 83: BCM Silver Equiv. Production, 2009A-2019E Fig 84: MAG Silver Equiv. Production, 2009A-2019E
35.0 30.0
Forecast

Forecast
30.0 25.0
25.0
20.0
20.0
Corani 15.0
15.0
10.0
10.0
5.0
5.0
Santa Ana Juanicipio JV
0.0 0.0
2009A 2010A 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2009A 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E
Feasibility Exploration
Source: BMO Capital Markets Source: BMO Capital Markets Capital Markets
Fig 85: OK Silver Equiv. Production, 2009A-2019E
30.0
Forecast
25.0
20.0
15.0
10.0
5.0
La Preciosa
0.0
2009A 2010A 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E
Exploration
Page 34 of 59
Silver Miners
April 3, 2011
Fig 86: BMO Research Base Case Supply and Demand and Model
2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E
Supply
Primary Mining Production 168 157 169 192 178 195 199 215 228 241 258 283 330 405
Secondary Mining Production 425 440 444 445 463 470 485 495 521 554 587 697 763 792
Mining Production 594 597 613 637 641 664 685 710 749 795 845 980 1,093 1,197
Net Official Sector Sales 59 89 62 66 78 43 28 14 10 -5 -15 -30 -60 -90
Scrap Silver Supply 188 184 184 186 188 182 176 166 176 184 186 184 188 188
Total Supply 841 869 858 889 907 889 888 889 935 974 1,016 1,134 1,221 1,295
Demand
Fabrication Demand
Industrial 340 351 368 407 427 456 443 352 487 536 579 614 641 669
Jewellery 169 179 175 174 166 164 158 157 170 179 186 193 203 213
Silverware 84 84 67 68 61 58 57 60 50 54 58 60 62 64
Coins & Medals 32 36 42 40 40 40 65 79 98 115 138 111 100 80
Photography 204 193 179 160 142 125 105 83 75 67 60 55 50 50
Producer De-Hedging (Hedging) 25 21 (10) (28) 7 25 12 22 10 (3) (10) (25) (30) (25)
ETPs Net Investment - - - - 100 60 52 133 104 114 137 82 82 90
Total Demand 853 863 821 821 943 927 891 885 994 1,062 1,148 1,090 1,107 1,141
Balance -13 6 37 68 -36 -39 -3 5 -58 -88 -132 44 114 154
Source: BMO Capital Markets, GFMS
Page 35 of 59
Silver Miners
April 3, 2011
Fig 87: BMO Research High Case Supply and Demand and Model
2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E
Supply
Net Official Sector Sales 59 89 62 66 78 43 28 14 10 -5 -15 -60 -90 -120
Total Supply 841 869 858 889 907 889 888 889 935 974 1,006 1,104 1,200 1,322
Demand
Fabrication Demand
Industrial 340 351 368 407 427 456 443 352 487 536 579 608 626 645
Jewellery 169 179 175 174 166 164 158 157 170 179 184 186 186 186
Silverware 84 84 67 68 61 58 57 60 50 54 58 60 62 64
Coins & Medals 32 36 42 40 40 40 65 79 98 130 150 175 200 150
Photography 204 193 179 160 142 125 105 83 75 67 60 55 50 45
Total Demand 853 863 821 821 943 927 891 885 994 1,093 1,171 1,268 1,304 1,280
Balance -13 6 37 68 -36 -39 -3 5 -58 -119 -165 -165 -104 42
Page 36 of 59
Silver Miners
April 3, 2011
Fig 88: BMO Research Low Case Supply and Demand and Model
2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E
Supply
Net Official Sector Sales 59 89 62 66 78 43 28 14 10 -5 10 15 30 45
Total Supply 841 869 858 889 907 889 888 889 935 978 1,060 1,225 1,393 1,582
Demand
Fabrication Demand
Industrial 340 351 368 407 427 456 443 352 487 511 527 568 613 677
Jewellery 169 179 175 174 166 164 158 157 170 179 184 186 186 186
Silverware 84 84 67 68 61 58 57 60 50 54 58 60 62 64
Coins & Medals 32 36 42 40 40 40 65 79 98 115 90 50 50 40
Photography 204 193 179 160 142 125 105 83 75 67 60 55 50 45
Total Demand 853 863 821 821 943 927 891 885 994 1,003 979 938 950 952
Balance -13 6 37 68 -36 -39 -3 5 -58 -25 82 287 442 630
Page 37 of 59
Silver Miners
April 3, 2011
Fig 89: Silver Sector Target Price and NAV Comparables
Company Ticker Analyst Share Price MC Rating Target Return NAV US$ Multiple to NAV
BMO, Spot, BMO,
03/31/2011 US$M Spot, 10% BMO, 0% BMO, 0%
10% 10% 10%
Senior Producers
Fresnillo FRES.LSE AK £15.64 18,031 Mkt £15.50 -1% 12.82 17.42 8.68 2.0x 1.4x 2.9x
Silver Wheaton SLW.NYSE DH 43.36 14,955 OP 52.00 20% 26.33 28.40 13.06 1.6x 1.5x 3.3x
Pan American Silver PAAS.NASDQ AK 37.13 3,883 OP 51.00 37% 31.21 31.29 17.18 1.2x 1.2x 2.2x
Hochschild Mining HOC.LSE AK £6.49 3,575 OP £7.75 19% 7.58 6.36 4.39 1.4x 1.6x 2.4x
Coeur D'Alene Mining CDE.NYSE AK 34.78 3,045 OP 40.00 15% 25.41 21.93 13.49 1.4x 1.6x 2.6x
Average 1.5x 1.5x 2.7x
Intermediate Producers
Hecla Mining HL.NYSE AK 9.08 2,275 OP 11.00 21% 6.24 7.37 4.40 1.5x 1.2x 2.1x
Silvercorp SVM.TSX AK C$ 14.11 2,449 OP C$ 16.00 13% 9.32 12.09 6.42 1.6x 1.2x 2.3x
Silver Standard SSRI.NASDQ AK 31.38 2,346 OP 40.00 27% 33.18 37.67 20.96 1.0x 0.9x 1.5x
First Majestic FR.TSX AK C$ 20.61 1,844 OP C$ 25.00 21% 14.16 13.02 7.18 1.5x 1.6x 3.0x
Junior & Emerging Producers
Endeavour Silver EDR.TSX AK C$ 9.50 750 Und C$ 6.50 -32% 4.72 3.27 2.55 2.1x 3.0x 3.8x
Fortuna Silver FVI-TSX AK C$ 5.30 579 OP C$ 6.50 23% 3.95 4.68 2.68 1.4x 1.2x 2.0x
Bear Creek Mining BCM.TSXV AK C$ 10.15 748 OP(S) C$ 13.00 28% 11.50 17.35 7.19 0.9x 0.6x 1.5x
MAG Silver MAG.TSX JPH C$ 11.57 651 OP(S) n/a n/a 8.71 16.90 7.84 1.4x 0.7x 1.5x
Minco Silver MSV.TSX AK C$ 5.75 259 OP(S) C$ 7.50 30% 7.41 8.67 3.99 0.8x 0.7x 1.5x
Orko Silver OK.TSX AK C$ 2.53 309 Mkt(S) C$ 2.50 -1% 2.57 2.51 1.28 1.0x 1.0x 2.0x
Tahoe Resources THO.TSX AK C$ 19.60 2,328 OP(S) C$ 24.00 22% 14.95 22.77 9.29 1.4x 0.9x 2.2x
*Analyst Legend: AK - Andrew Kaip, JPH - John Hayes, DH - David Haughton
Page 38 of 59
Silver Miners
April 3, 2011
Fig 90: Silver Sector PE, PCF and EV/EBITDA Comparables
Company Ticker Analyst Share Price MC 2011E 2012E

EPS (US$) P/E CFPS (US$) P/CF EV/ EPS P/E CFPS (US$) P/CF EV/ IRR, Spot
03/31/2011 US$M EBITDA (US$) EBITDA
Senior Producers
Fresnillo FRES.LSE AK £15.64 17,983 1.04 24.0x 1.30 19.3x 13.3x 1.15 21.8x 1.47 17.0x 11.7x 4.7%
Silver Wheaton SLW.NYSE DH 43.36 14,955 1.64 26.4x 1.85 23.4x 22.4x 1.55 28.0x 1.77 24.5x 22.6x 3.9%
Pan American Silver PAAS.NASDQ AK 37.13 3,948 2.21 16.8x 3.02 12.3x 7.7x 2.25 16.5x 3.08 12.0x 6.4x 11.3%
Hochschild Mining HOC.LSE AK £6.49 3,592 0.63 16.5x 1.24 8.4x 5.8x 0.56 18.5x 1.16 8.9x 5.2x 8.4%
Coeur D'Alene Mining CDE.NYSE AK 34.78 3,014 3.28 10.6x 5.37 6.5x 5.7x 3.33 10.4x 5.61 6.2x 4.2x 11.3%
Average 18.9x 14.0x 11.0x 19.0x 13.7x 10.0x 7.9%
Hecla Mining HL.NYSE AK 9.08 2,259 0.58 15.6x 0.86 10.5x 6.2x 0.47 19.2x 0.77 11.8x 7.2x 8.4%
Silvercorp SVM.TSX AK C$ 14.11 2,561 0.44 32.9x 0.62 23.5x 16.4x 0.65 22.5x 0.92 15.8x 9.3x 8.8%
Silver Standard SSRI.NASDQ AK 31.38 2,471 0.64 49.1x 1.35 23.2x 17.9x 0.78 40.0x 1.49 21.1x 16.3x 19.9%
First Majestic FR.TSX AK C$ 20.61 1,997 1.18 17.9x 1.31 16.2x 10.8x 1.24 17.1x 1.44 14.7x 9.1x 9.4%
Average 28.9x 18.4x 12.8x 24.7x 15.9x 10.5x 11.6%
Endeavour Silver EDR.TSX AK C$ 9.50 785 0.47 20.8x 0.88 11.1x 10.0x 0.47 20.9x 0.94 10.4x 7.8x 4.2%
Fortuna Silver FVI-TSX AK C$ 5.30 603 0.25 22.3x 0.32 17.0x 8.5x 0.40 13.5x 0.49 11.1x 5.6x 14.6%
Bear Creek Mining BCM.TSXV AK C$ 10.15 730 (0.10) nap (0.09) nap nap 0.01 >50 0.02 >50 >30 20.1%
MAG Silver MAG.TSX JPH C$ 11.57 651 0.00 nap (0.12) nap nap (0.21) nap (0.12) nap nap
Minco Silver MSV.TSX AK C$ 5.75 261 (0.04) nap (0.04) nap nap 0.16 36.5x 0.17 34.1x >30 20.4%
Orko Silver OK.TSX AK C$ 2.53 293 (0.02) nap (0.03) nap nap 0.03 >50 0.02 >50 >30 18.1%
Tahoe Resources THO.TSX AK C$ 19.60 2,326 (0.14) nap (0.15) nap nap (0.14) nap (0.15) nap nap 13.7%
Average 21.5x 14.0x 9.3x 23.6x 18.5x 6.7x 15.2%
Page 39 of 59
Silver Miners
April 3, 2011
Fig 91: Silver Sector Operational Comparables

Company Ticker Analyst Share Price MC Net to Company EV / Silver oz 2011E Production 2012E Production 3-Yr Growth
Reserve Resource Silver Silver Cash MC/oz Silver Silver Cash Costs MC/oz Silver (%)
03/31/2011 US$M Silver Silver Reserves Resource (Moz) Equiv. Costs Production (Moz) Equiv. Production Equiv.
(Moz) (Moz) (Moz) (Moz) (Moz)
Senior Producers
Fresnillo FRES.LSE AK £15.64 17,983 640 2,068 26.83 8.30 42.6 59.1 4.40 304 48.5 66.7 4.19 269 13.0 22%
Silver Wheaton SLW.NYSE DH 43.36 14,955 971 1,566 15.09 9.36 25.2 25.9 4.06 577 27.1 28.0 4.13 534 2.1 8%
Pan American Silver PAAS.NASDQ AK 37.13 3,948 345 1,603 10.56 2.27 21.5 29.5 12.58 134 22.3 31.9 11.78 124 6.7 23%
Hochschild Mining HOC.LSE AK £6.49 3,592 74 437 44.16 7.46 16.8 22.7 8.55 158 16.7 21.5 7.54 167 -0.3 -1%
Coeur D'Alene Mining CDE.NYSE AK 34.78 3,014 325 729 9.96 4.43 19.7 31.8 12.70 95 22.3 38.5 11.35 78 6.6 21%
Average 21.32 6.36 8.46 254 7.80 234 5.6 14%
Hecla Mining HL.NYSE AK 9.08 2,259 260 653 7.64 3.04 8.5 17.9 9.29 126 8.5 17.9 9.18 126 1.3 7%
Silvercorp SVM.TSX AK C$ 14.11 2,561 97 410 22.54 5.35 6.0 9.9 8.25 259 8.6 15.1 9.08 169 7.7 78%
Silver Standard SSRI.NASDQ AK 31.38 2,471 425 2,347 5.42 0.98 8.2 9.2 12.46 269 9.0 11.8 12.43 210 8.8 95%
First Majestic FR.TSX AK C$ 20.61 1,997 64 337 30.48 5.78 8.4 8.7 6.99 229 10.1 11.1 7.30 180 7.4 85%
Average 16.52 3.79 9.25 221 9.50 171 6.3 66%
Endeavour Silver EDR.TSX AK C$ 9.50 785 15 84 44.84 7.98 3.8 4.7 11.09 166 4.1 5.4 10.71 146 0.5 12%
Fortuna Silver FVI.TSX AK C$ 5.30 603 65 116 8.55 4.77 2.2 4.1 9.16 146 3.3 6.0 8.72 101 2.8 68%
MAG Silver MAG.TSX JPH C$ 10.15 651 0 154 nap 3.84 - - - nap - - - nap 0.0 nap
Bear Creek Mining BCM.TSXV AK C$ 11.57 730 451 811 1.78 0.99 - - - nap 1.4 1.4 16.01 532 4.9 nap
Orko Silver OK.TSX AK C$ 5.75 293 0 142 nap 2.18 - - - nap - - - nap 7.5 nap
Minco Silver MSV.TSX AK C$ 2.53 261 62 227 3.64 0.99 - - - nap - - - nap 5.3 nap
Tahoe Resources THO.TSX AK C$ 19.60 2,326 0 363 nap 2.41 - - - nap - - - nap 5.3 nap
Average 14.70 3.31 10.13 156 9.72 260 3.8 40%
Page 40 of 59
Silver Miners
April 3, 2011
FRESNILLO As at: 31-Mar-11 FRES CASH FLOW ANALYSIS - US$M

(December Year End) 2009A 2010A 2011E 2012E 2013E
Project(s): Location:
Net Income 358.3 749.4 748.3 826.0 711.3
Recommendation Mkt Analyst: Andrew Kaip Non-Cash Items 32.4 (48.7) 311.0 236.6 220.1
Target Price (C$) £ 15.50 Cash Flows From Operating Activities 390.7 700.7 1,059.4 1,062.6 931.4
Share Price (US$) 25.08 Share Price (GBp) 15.64 Property, Plant and Equip. (250.4) (314.7) (481.6) (260.4) (416.3)
Net Investment and Asset Sales 1.0 0.1 - - 0.0
Common Shares O/S (M) 717 Other 44.2 52.6 84.0 75.0 54.0
Market Cap (US$M) 17,983 Market Cap (GBp) 11,215 Cash Flows From Investing Activities (205.2) (262.1) (397.6) (185.4) (362.3)
Proceeds From Borrowings - - - - 0.0

0% NPV (US$/share) 17.42 Premium/(Discount) 44% Repayment of Borrowings - - - - 0.0
3% NPV (US$/share) 13.32 Premium/(Discount) 88% Stock, Warrants, Options - - - - 0.0
5% NPV (US$/share) 11.64 Premium/(Discount) 115% Other (92.8) (188.5) (212.1) (234.8) (201.9)
10% NPV (US$/share) 8.68 Premium/(Discount) 189% Cash Flows From Financing Activities (92.8) (188.5) (212.1) (234.8) (201.9)
Net Increase In Cash

Cash At Beginning of Year 212.0 312.2 559.5 1,009.2 1651.6
Cash At End of Year 312.2 559.5 1,009.2 1,651.6 2018.8
PRICE ASSUMPTIONS
(December Year End) 2009A 2010A 2011E 2012E 2013E Free Cash Flow 140.3 386.0 577.8 802.2 515.1
Exchange Rate C$/US$ 0.88 0.97 1.02 1.02 0.96

Gold US$/oz 972 1224 1450 1400 1250
Silver US$/oz 14.63 20.16 30.00 27.00 23.00 BALANCE SHEET ANALYSIS - US$M
Gold:Silver Ratio 66 61 48 52 54 (December Year End) 2009A 2010A 2011E 2012E 2013E
Copper US$/lb 2.34 3.42 4.50 4.20 3.00
Lead US$/lb 0.78 0.97 1.15 1.00 0.90 Cash and Investments 312.9 559.5 1,009.2 1,651.6 2018.8
Zinc US$/lb 0.75 0.98 1.10 1.00 1.00 Inventories 33.8 63.1 52.4 49.9 49.8
Other 174.3 307.7 132.0 133.5 127.9
Current Assets 521.0 930.4 1,193.5 1,835.0 2196.5
FINANCIAL SUMMARY - ANNUAL Fixed Assets 688.7 895.8 1,270.5 1,382.6 1652.6
(December Year End) 2009A 2010A 2011E 2012E 2013E Other 334.4 521.7 437.7 362.7 308.7
Total Assets 1,544.1 2,347.9 2,901.8 3,580.3 4157.8
EV/EBITDA 33.7 15.5 13.2 12.0 13.5 Payables 48.3 70.8 25.9 27.9 28.4
EPS (US$) 0.43 0.74 1.04 1.15 0.99 Short Term Debt - - - - 0.0
P/E (x) nap 33.73 24.03 21.77 25.28 Other 25.9 94.3 82.0 84.8 81.2
CFPS (US$) 0.77 1.37 1.30 1.47 1.29 Current Liabilities 74.2 165.0 107.9 112.7 109.6
P/CF 32.77 18.28 19.34 17.02 19.36
FCFPS (US$) 0.20 0.54 0.81 1.12 0.72 Long Term Debt - - - - 0.0
P/FCF 128.22 46.60 31.13 22.42 34.91 Other 166.1 263.6 338.4 421.0 492.1
Total Liabilities 240.2 428.6 446.3 533.7 601.7
Common Shares O/S (M) 717.2 717.2 717.2 717.2 717.2
SHAREHOLDERS EQUITY 1,303.1 1,919.3 2,455.5 3,046.6 3,556.1
Net Debt to Equity -24% -29% -41% -54% -57%
QUARTERLY
H1/11E H2/11E
EPS (US$) 0.53 0.51
CFPS (US$) 0.66 0.64 PRODUCTION AND COSTS
FCFPS (US$) 0.51 0.30 (December Year End) 2009A 2010A 2011E 2012E 2013E
Saucito
Total Silver Production (Moz) - - 4.2 8.0 10.3
Total Silver Equiv. Production (Moz) - - 5.0 9.5 12.4
PROFIT AND LOSS STATEMENT - US$M Total Cash Costs (US$/oz)* - - 6.23 5.58 5.07
(December Year End) 2009A 2010A 2011E 2012E 2013E Juanicipio JV
Total Silver Production (Moz) - - - - 0.0
Mining Revenue 849.9 1,409.6 1,766.7 1,774.5 1604.59 Total Silver Equiv. Production (Moz) - - - - 0.0
Production Costs 254.4 329.9 279.8 308.9 322.82 Total Cash Costs (US$/oz)* - - - - 0.00
G&A 49.9 52.6 55.2 55.2 57.98 Herradura
Exploration and Other Expenses 49.1 82.1 142.2 51.6 40.48 Total Silver Production (Moz) 0.3 0.4 0.1 0.1 0.1
Other Income 28.3 182.6 - - 0.00 Total Gold Production (koz) 264.5 291.0 236.9 235.5 235
EBITDA 524.9 1,127.6 1,289.5 1,358.7 ##### Total Cash Costs (US$/oz)** 332 253 312 315 315
Depreciation 67.2 105.2 106.8 148.3 146.34 Soledad & Dipolos
EBIT 457.7 1,022.4 1,182.6 1,210.4 1037.0 Total Gold Production (koz) - 109.6 126.6 126.6 126.6
Interest expense (0.2) - 3.7 20.9 29.07 Total Cash Costs (US$/oz)* - 363 350 350 311
EBT 457.4 1,022.4 1,186.3 1,231.4 1066.0 Noche Buena
Tax (99.2) (273.0) (346.0) (306.9) (256.77) Total Gold Production (koz) - - - 44.4 92.6
NPAT (pre-Adjustments) (36.3) (84.3) (91.9) (98.5) (97.9) Total Cash Costs (US$/oz)* - - - 359 248.0
Minority Interest 0.1 (84.3) (91.9) (98.5) (97.94) Cienega
After-Tax Non-Operating Items - - - - - Total Silver Production (Moz) 1.6 1.2 2.4 2.5 2.5
Net Income (reported) 322.0 665.1 748.3 826.0 711.3 Total Silver Equiv. Production (Moz) 10.1 10.0 8.4 8.9 9.3
Net Income (adjusted) 338.4 533.2 748.3 826.0 711.3 Total Cash Costs (US$/oz)* 90 389 348 354 356
Fresnillo Total Attributable

Silver Production (Moz) 37.6 38.6 42.6 48.5 51.7
REVENUE SPLIT Gold Production (koz) 255.1 336.5 333.1 367.7 399.7
(December Year End) 2009A 2010A 2011E 2012E 2013E Silver Equiv. Production (Moz) 55.0 59.5 59.1 66.7 72.0
Total Cash Costs (U$/oz)* 4.26 4.07 4.40 4.19 3.91
Silver 63% 60% 67% 66% 63% Total Production Costs ($/oz)* 5.39 5.49 6.08 6.20 5.68
Gold 31% 34% 27% 29% 31%
Lead 2% 3% 3% 2% 3%
Zinc 0% 0% 0% 0% 0%
Source: Company reports and BMO Capital Markets
Page 41 of 59
Silver Miners
April 3, 2011
Silver Wheaton SLW CASH FLOW ANALYSIS - US$M

(December Year End) 2010A 2011E 2012E 2013E
Recommendation OP Analyst Cash Flows From Operating Activities

Net Income 290.1 577.5 547.8 600.7
As at 31-Mar-11 David Haughton Non-Cash Items 31.7 76.8 76.6 113.0
Re-invested in Working Capital (2.0) 0.0 0.0 0.0
Year End December
Share Price $43.36 US$/share $42.07 C$/share Cash Flows From Investing Activities
Property and Business Activities 25.0 (0.0) (0.0) (0.0)
Target Price $52.00 US$/share $50.46 C$/share Acq.of Property, Plant and Equip. (172.4) (369.0) (138.5) (0.8)
Net Present Value $13.06 US$/share 10%Nom $12.67 C$/share Other (51.1) 0.0 0.0 0.0
$28.40 US$/share 0% $27.56 C$/share
Cash Flows From Financing Activities
Proceeds From Borrowings 0.0 0.0 0.0 0.0
Market Cap (US$M) 15,412 14,954 C$M Repayment of Borrowings (28.6) (28.5) (28.5) (28.5)
Ordinary Shares (M) 355.4 Other 108.3 (21.3) (42.7) 9.5
Options & Warrants 2.7
Net Increase In Cash Held 201.1 235.5 414.8 693.9
Cash At Beginning of Year 227.6 428.7 664.2 1079.0
PRICE ASSUMPTIONS Cash At End of Year 428.7 664.2 1079.0 1772.9
Exchange Rate C$/US$ (CAD) 0.97 1.02 1.02 0.96

Gold US$/oz 1224 1450 1400 1250 BALANCE SHEET ANALYSIS - US$M
Silver US$/oz 20.16 30.00 27.00 23.00 (December Year End) 2010A 2011E 2012E 2013E
Copper UScents/lb 342 450 420 300
Nickel UScents/lb 991 1050 1000 950 Current Assets
Platinum US$/oz 1611 1850 1850 1850 Cash and Bullion 428.6 664.1 1078.9 1772.9
Other 7.8 7.8 7.8 7.8
Non-Current Assets
Investments 284.4 284.4 284.4 284.4
FINANCIAL SUMMARY Fixed Assets 1912.9 2210.1 2271.9 2159.7
(December Year End) 2010A 2011E 2012E 2013E Other 1.3 1.3 1.3 1.3
NPAT (pre-Abs) (US$M) 273.5 582.5 547.8 600.7 Current Liabilities

EPS (¢ps) 78.2 162.7 153.0 167.8 Borrowings 28.6 0.0 0.0 0.0
PER (x) +>50.0 26.7 28.3 25.8 Creditors 1.1 1.1 1.1 1.1
EBITDA (US$M) 333.2 654.5 624.6 713.8 Other 141.6 146.6 146.6 146.6
EBITDA/share (¢ps) 95.1 182.8 174.4 199.3
EV/EBITDA (x) 43.8 22.7 23.0 19.2 Non-Current Liabilities
Cash Gen (US$M) 332.5 654.5 624.6 713.8 Borrowings 78.6 78.7 50.2 21.7
Cash Gen/share (¢ps) 94.9 182.8 174.4 199.3 Other 123.2 123.2 123.2 123.2
P/Cash Gen (x) 45.7 23.7 24.9 21.8
Dividend (¢ps) 0.0 12.0 12.0 12.0 SHAREHOLDERS FUNDS 2261.9 2818.2 3323.3 3933.5
Ordinary Shares (M) 344.3 355.4 355.4 356.8 Net Debt to Equity -14.2% -20.8% -31.0% -44.5%
PROFIT AND LOSS STATEMENT - US$M PROJECT ATTRIBUTABLE PRODUCTION (000oz)

(December Year End) 2010A 2011E 2012E 2013E 0% 10%Nom 2010A 2011E 2012E 2013E
NPV NPV
Sales Revenue 423.4 776.6 756.3 884.5 US$M US$M
Other Revenue 7.4 3.0 3.8 13.4 CANADA 285.3 193.2 169 595 388 726
Operating Costs 83.7 105.3 115.7 164.3 USA 1012.2 231.8 320 459 1249 3032
Interest 0.8 0.0 0.0 0.0 MEXICO 4804.5 2283.6 10901 15757 16486 16834
Depreciation 58.6 71.8 76.6 113.0 PERU 383.9 275.6 1655 2600 2892 2892
Royalties 0.0 0.0 0.0 0.0 EUROPE 731.8 456.9 3568 3412 3986 3968
Exploration, R & D 0.0 0.0 0.0 0.0 BARRICK 2621.6 703.3 2525 2332 2148 7650
Other Costs 14.2 20.0 20.0 20.0
Prof Pre Tax & Abnormals 273.5 582.5 547.8 600.7
Tax Excluding Abnormals 0.0 0.0 0.0 0.0 TOTAL PRODUCTION 19139 25155 27150 35103
Operating Profit after Tax 273.5 582.5 547.8 600.7 Silver Equivalent 20999 25909 28011 38458
Less Minor. & Conv.Deb.Eq & Pref.Div 0.0 0.0 0.0 0.0
NPAT (pre-Abs) 273.5 582.5 547.8 600.7 Hedge Book 0.0 0.0 0.0 Moz Hedged
Plus Abnormals - Pre Tax 3.0 -5.0 0.0 0.0 Net Cash & Corp. 332.0 532.9
Less Tax on Abnormals -13.6 0.0 0.0 0.0 TOTAL NPV 10171.4 4677.4
Reported Profit 290.1 577.5 547.8 600.7 Per Share $28.40 $13.06
Reserves/Resources Ounces Mine Life DIVISIONAL EBIT 2010A 2011E 2012E 2013E
Silver Wheaton (Millions) (Years) US$M
Published Reserves 1150.5 21.9 CANADA 24.7 27.7 18.4 45.0
Published Resources 1546.7 29.4 USA 4.0 9.9 26.8 55.9
Guesstimate 1285.7 24.4 MEXICO 154.9 372.5 341.6 280.9
Sector PERU 19.6 58.5 56.2 44.4
Published Reserves 545.3 10.5 EUROPE 59.7 88.8 90.4 73.1
Published Resources 740.9 14.5 BARRICK 30.9 52.6 42.0 119.0
Guesstimate 716.9 14.0
Silver Wheaton 2010A 2011E 2012E 2013E

Cash Operating Costs US$/oz 3.99 4.06 4.13 4.27
Silver Price Received US$/oz 20.44 29.98 27.00 23.00 PROJECT EBIT 293.8 610.0 575.5 618.2
EBIT to TOTAL ASSETS 10.4% 18.4% 15.0% 14.2%

NPAT to SHAREHOLDERS EQUITY 12.8% 20.5% 16.5% 15.3%
Page 42 of 59
Silver Miners
April 3, 2011
PAN AMERICAN SILVER As at: 31-Mar-11 PAAS CASH FLOW ANALYSIS - US$M
Net Income 62.0 118.8 238.6 243.5 215.5

Recommendation OP Analyst: Andrew Kaip Non-Cash Items 54.0 117.8 51.0 86.6 93.9
Target Price (US$) 51.00 Cash Flows from Operating Activities 116.0 236.6 289.5 330.0 309.4
Share Price (US$) 37.13 Property, Plant and Equip. (52.8) (77.6) (47.1) (36.2) (36.2)
Net Investment and Asset Sales (93.6) (78.8) - - -
Common Shares O/S (M) 107 Other - (11.9) (10.8) (10.8) (423.0)
Market Cap (US$M) 3,970 Cash Flows from Investing Activities (146.3) (168.3) (57.9) (47.0) (459.2)
Proceeds from Borrowings - - - - -

0% NPV (US$/share) 31.29 Premium/(Discount) 19% Repayment of Borrowings - - - - -
3% NPV (US$/share) 24.94 Premium/(Discount) 49% Stock, Warrants, Options 98.3 11.9 5.6 9.1 9.1
5% NPV (US$/share) 21.79 Premium/(Discount) 70% Other 5.7 (1.3) - - (1.2)
10% NPV (US$/share) 17.18 Premium/(Discount) 116% Cash Flows from Financing Activities 104.1 10.6 5.6 9.1 7.9

Cash At Beginning of Year 26.8 100.5 179.9 417.2 709.3
Cash At End of Year 100.5 179.9 417.2 709.3 567.4
PRICE ASSUMPTIONS
(December Year End) 2009A 2010A 2011E 2012E 2013E Free Cash Flow 63.2 159.0 242.4 293.9 (139.0)

Gold US$/oz 972 1,224 1,450 1,400 1250
Copper US$/lb 2.34 3.42 4.50 4.20 3.00
Lead US$/lb 0.78 0.97 1.15 1.00 0.90 Cash and Investments 193.1 360.5 597.8 889.9 748.0
Other 85.9 81.7 66.5 71.5 67.4
Current Assets 372.5 549.0 771.1 1068.3 922.2
FINANCIAL SUMMARY - ANNUAL Fixed Assets 1457.7 1492.5 1456.2 1407.7 1770.4
Total Assets 1848.6 2072.6 2258.4 2507.0 2723.7
EPS (US$) 0.72 1.03 2.21 2.25 1.99 Short Term Debt - - - - -
P/E (x) nap 36.1 16.8 16.5 18.6x Other 4.0 34.0 34.0 34.0 34.0
P/CF 22.0 18.2 12.3 12.0 13.2x
FCFPS (US$) 0.72 1.49 2.25 2.72 (1.28) Long Term Debt 20.8 - - - -
P/FCF 51.4 25.0 16.5 13.6 N/M Other 368.6 429.3 429.3 429.3 429.3
SHAREHOLDERS EQUITY 1359.0 1528.1 1765.5 2011.9 2227.8
QUARTERLY Net Debt to Equity -13% -24% -34% -44% -34%

Q1/11E Q2/11E Q3/11E Q4/11E
EPS (US$) 0.63 0.62 0.48 0.48
CFPS (US$) 0.84 0.82 0.68 0.68
FCFPS (US$) 0.33 0.71 0.64 0.57 PRODUCTION AND COSTS
Huaron
PROFIT AND LOSS STATEMENT - US$M Total Silver Production (Moz) 3.6 3.0 3.2 3.4 3.4
(December Year End) 2009A 2010A 2011E 2012E 2013E Total Cash Costs (US$/oz)* 12.88 16.05 15.79 14.57 14.10
Morococha
Mining Revenue 454.8 631.9 879.5 858.2 827.5 Total Silver Production (Moz) 2.8 2.7 2.6 3.4 3.4
Production Costs 245.6 305.7 336.9 345.0 371.0 Total Cash Costs (US$/oz)* 12.71 14.25 14.93 12.32 11.95
G&A 15.8 18.5 18.9 19.3 19.7 Quiruvilca
Other Income (0.7) 17.0 - - - Total Cash Costs (US$/oz)* 13.20 14.19 17.87 13.07 12.59
EBITDA 172.9 298.3 494.9 473.0 422.3 Alamo Dorado
Depreciation - - - - - Total Silver Production (Moz) 2.6 3.1 3.0 3.0 3.0
EBIT 89.8 211.8 411.5 388.2 336.6 Total Cash Costs (US$/oz)* 5.98 7.63 7.82 7.65 7.51
Interest expense - (2.1) - - - La Colorada
EBT 89.8 209.8 411.5 388.2 336.6 Total Silver Production (Moz) 5.3 6.7 5.0 3.8 3.8
Tax (27.8) (91.0) (172.9) (144.7) (121.2) Total Cash Costs (US$/oz)* 5.96 5.99 7.99 8.48 8.31
NPAT (pre-Adjustments) 62.0 118.8 238.6 243.5 215.5 Quiruvilca
Minority Interest (1.1) (1.8) (4.1) (4.7) (3.4) Total Silver Production (Moz) 3.5 3.7 4.0 4.0 4.0
After-Tax Non-Operating Items - - - - - Total Cash Costs (US$/oz)* 8.64 10.68 11.01 10.84 10.58
Net Income (reported) 62.0 118.8 238.6 243.5 215.5 Manantial Espejo
Net Income (adjusted) 62.7 111.2 238.6 243.5 215.5 Total Silver Production (Moz) 3.8 4.0 4.0 4.0 4.0
Total Cash Costs (US$/oz)* 7.79 9.70 11.91 10.93 10.59
Navidad
Total Silver Production (Moz) - - - - -
REVENUE SPLIT Total Cash Costs (US$/oz)* - - - - -
(December Year End) 2009A 2010A 2011E 2012E 2013E La Preciosa
Total Silver Production (Moz) - - - 1.0 7.0
Silver 63% 67% 72% 69% 70% Total Cash Costs (US$/oz)* - - - 10.59 7.19
Gold 19% 16% 11% 12% 12% Total Production, Silver (Moz) 21.9 23.2 21.5 22.3 25.6
Copper 5% 5% 5% 5% 4% Total Production, Gold (koz) 99 89 69 75 79
Lead 3% 3% 3% 2% 2% Total Production, Copper (kt) 4.9 4.3 4.5 4.6 4.6
Zinc 11% 10% 9% 12% 13% Total Production, Zinc (klbs) 33.3 33.1 34.7 48.2 48.2
Total Production, Lead (klbs) 12.2 10.6 11.8 11.9 11.9
Cash Costs, Silver Co-Product (US$/oz) 9.85 11.17 12.58 11.78 11.01
Production Costs, Silver Co-Product (US$/oz) 12.19 13.73 15.39 14.42 13.37
Page 43 of 59
Silver Miners
April 3, 2011
COEUR D'ALENE As at: 31-Mar-11 CDE CASH FLOW ANALYSIS - US$M

Net Income (31.9) (91.3) 287.4 292.1 187.9
Target Price (US$) 40.00 Cash Flows From Operating Activities 64.5 165.6 382.0 491.8 442.4
Share Price (US$) 33.75 Share Price (C$) 32.74 Property, Plant and Equip. (219.1) (161.9) (120.5) (41.2) (40.9)
Net Investment and Asset Sales 71.9 30.5 - - -
Common Shares O/S (M) 89 Other (1.5) (0.3) - 1.0 -
Market Cap (US$M) 3,014 Market Cap (C$M) 2,924 Cash Flows From Investing Activities (148.7) (131.7) (120.5) (40.2) (40.9)
Proceeds From Borrowings 40.8 176.2 (1.9) - 0.0

0% NPV (US$/share) 21.93 Premium/(Discount) 54% Repayment of Borrowings (26.2) (104.6) (30.0) - 0.0
3% NPV (US$/share) 19.01 Premium/(Discount) 77% Stock, Warrants, Options - - - - -
5% NPV (US$/share) 17.17 Premium/(Discount) 97% Other 71.6 (62.1) (59.1) (70.6) (62.2)
10% NPV (US$/share) 13.49 Premium/(Discount) 150% Cash Flows From Financing Activities 86.2 9.5 (90.9) (70.6) (62.2)

PRICE ASSUMPTIONS
(December Year End) 2009A 2010A 2011E 2012E 2013E Free Cash Flow (180.8) (100.9) 231.5 450.6 401.5

Gold US$/oz 972 1224 1450 1400 1250
Copper US$/lb 2.34 3.42 4.50 4.20 3.00
Other 95.5 81.8 199.2 215.6 192.8
Current Assets 186.0 266.2 541.8 940.0 1259.2
Total Assets 3054.0 3157.5 3361.6 3590.7 3724.4
EV/EBITDA na 39.7 5.2 4.3 4.7 Payables 77.0 88.3 88.3 88.3 88.3
EPS (US$) (1.14) 0.36 3.28 3.33 2.16 Short Term Debt 15.4 63.3 63.3 63.3 63.3
P/E (x) nap nap 10.3 10.1 15.60 Other 96.2 119.1 179.4 184.3 167.6
CFPS (US$) (0.35) 0.61 5.37 5.61 4.63 Current Liabilities 188.6 270.7 331.1 336.0 319.3
P/CF nap nap 6.3 6.0 7.29
FCFPS (US$) (2.25) (1.13) 2.59 5.05 4.49 Long Term Debt 185.4 130.1 98.2 98.2 98.2
P/FCF nap nap 13.0 6.7 7.52 Other 686.8 716.0 596.6 521.1 475.6
Net Debt to Equity 9% 6% -3% -17% -28%
QUARTERLY
Q1/11E Q2/11E Q3/11E Q4/11E
EPS (US$) 0.85 0.95 0.79 0.68
CFPS (US$) 1.35 1.45 1.29 1.28 PRODUCTION AND COSTS
FCFPS (US$) (0.18) 0.92 1.07 0.77 (December Year End) 2009A 2010A 2011E 2012E 2013E
Palmarejo
Total Silver Production (Moz) 3.0 5.9 7.8 9.6 9.9
Total Gold Production (koz) 54.7 102.4 112.5 141.2 146.3
PROFIT AND LOSS STATEMENT - US$M Total Cash Costs (US$/oz)* 15.73 12.93 13.56 10.85 9.64
(December Year End) 2009A 2010A 2011E 2012E 2013E San Bartolome
Mining Revenue 300.6 515.5 926.9 985.1 867.2 Total Cash Costs (US$/oz) 12.98 9.48 10.97 11.03 11.02
Production Costs 191.1 257.6 318.8 348.0 356.86 Rochester
G&A 34.0 27.1 28.5 28.5 28.92 Total Silver Production (Moz) 2.2 2.0 2.0 3.5 4.3
Exploration and Other Expenses 15.2 14.2 14.5 15.5 13.00 Total Gold Production (koz) 12.7 9.2 8.1 31.7 34.3
Other Income (133.4) (137.4) - - 0.00 Total Cash Costs (US$/oz)* 7.21 7.27 10.39 13.30 11.48
EBITDA (73.1) 79.1 565.0 593.1 468.40 Kensington
Depreciation 85.6 141.6 192.0 209.3 226.45 Total Gold Production (koz) - 43.1 128.1 131.7 117.1
EBIT (158.6) (62.5) 373.0 383.8 241.9 Total Cash Costs (US$/oz)* - 989 651 538 631
Interest expense (14.9) (30.2) (11.6) (3.9) 3.40 Mina Martha
EBT (173.5) (92.7) 361.4 379.8 245.3 Total Silver Production (Moz) 3.7 1.6 1.1 - -
Tax 25.9 9.5 (73.9) (87.7) (57.48) Total Gold Production (koz) 4.7 1.8 1.2 - -
NPAT (pre-Adjustments) (114.6) (91.3) 287.4 292.1 187.9 Total Cash Costs (US$/oz)* 6.16 16.29 16.47 - -
Minority Interest - - - - - Endeavour
After-Tax Non-Operating Items 0.0 114.9 5.3 5.3 5.59 Total Silver Production (Moz) 0.5 0.6 0.8 0.8 0.8
Net Income (reported) (114.6) (91.3) 287.4 292.1 187.9 Total Cash Costs (US$/oz)* 6.80 7.26 5.34 5.34 5.34
Net Income (adjusted) (81.6) 31.7 292.8 297.4 193.5
Coeur D'Alene Total
Silver Equiv. Production (Moz) 21.6 27.3 31.8 37.3 38.5
REVENUE SPLIT Total Cash Costs (U$/oz)* 11.71 11.51 12.70 11.80 11.35
(December Year End) 2009A 2010A 2011E 2012E 2013E Total Production Costs ($/oz)* 15.64 16.50 18.72 17.41 17.24
Silver 78% 59% 62% 58% 58%

Gold 22% 41% 38% 42% 42%
Page 44 of 59
Silver Miners
April 3, 2011
HOCHSCHILD MINING As at: 31-Mar-11 HOC CASH FLOW ANALYSIS - US$M

Net Income 121.4 - 306.7 279.8 217.1
Target Price £7.75 Cash Flows From Operating Activities 200.5 304.2 367.0 398.3 321.2
Share Price (US$) 10.62 Share Price (GB£) 6.49 Property, Plant and Equip. (122.5) (158.0) (137.9) (158.9) (235.8)
Net Investment and Asset Sales (234.2) 354.4 76.5 - -
Common Shares O/S (M) 338 Other (16.3) 2.5 - - -
Market Cap (US$M) 3,592 Market Cap (GB£M) 2,194 Cash Flows From Investing Activities (373.0) 199.0 (61.4) (158.9) (235.8)
Proceeds From Borrowings 285.5 37.7 - - 0.0

0% NPV (US$/share) 6.36 Premium/(Discount) 67% Repayment of Borrowings (277.2) (52.4) (114.2) - -
3% NPV (US$/share) 5.84 Premium/(Discount) 82% Stock, Warrants, Options 140.2 - - - -
10% NPV (US$/share) 4.39 Premium/(Discount) 142% Cash Flows From Financing Activities 134.4 (55.0) (141.3) (27.0) (27.0)

PRICE ASSUMPTIONS
(December Year End) 2009A 2010A 2011E 2012E 2013E Free Cash Flow (220.6) 93.0 114.9 239.4 85.4
Exchange Rate GB£/US$ 0.61 0.64 0.64 0.63 0.96

Gold US$/oz 972 1224 1450 1400 1250
Copper US$/lb 2.34 3.42 4.50 4.20 3.00
Other 174.8 167.5 233.4 231.1 227.0
Current Assets 298.5 748.1 963.5 1170.8 1228.0
Total Assets 1305.9 1664.4 1837.0 2096.4 2293.1
EPS (US$) 0.17 0.30 0.63 0.56 0.45 Short Term Debt 112.9 69.3 69.3 69.3 69.3
P/E (x) nap 35.0 16.8 18.9 23.77 Other 35.4 58.1 58.1 58.1 58.1
P/CF 33.4 10.3 8.6 9.1 11.22
FCFPS (US$) (0.65) 0.27 0.34 0.71 0.95 Long Term Debt 219.7 248.4 141.3 147.9 154.6
P/FCF nap 38.6 31.3 15.0 11.22 Other 65.9 117.4 117.4 117.4 117.4
Common Shares O/S (M) 338.1 338.1 338.1 338.1 338
Net Debt to Equity 35% -23% -40% -48% -45%
QUARTERLY
H1/11E H2/11E
Adj. EPS (US$) 0.36 0.27
CFPS (US$) 0.69 0.55 PRODUCTION AND COSTS
FCFPS (US$) -0.16 0.50 (December Year End) 2010A 2010A 2011E 2012E 2013E
Arcata
Total Gold Production (koz) 28.6 25.8 21.5 19.9 7.2
(December Year End) 2009A 2010A 2011E 2012E 2013E Pallancata (100%)
Mining Revenue 539.7 752.3 955.0 837.9 741.82 Total Gold Production (koz) 32.0 35.9 37.0 39.1 38.1
G&A 51.1 66.2 69.5 69.5 73.01 San Jose (100%)
Other Income - - - - - Total Gold Production (koz) 77.1 84.3 98.4 98.4 98.4
EBITDA 234.0 365.6 565.7 527.9 424.6 Total Cash Costs (US$/oz)* 8.46 8.51 9.64 9.19 8.74
Depreciation 60.5 102.4 106.6 119.3 111.27 Moris
EBIT 173.4 305.7 459.1 408.6 313.3 Total Silver Production (Moz) 0.1 0.1 0.1 - -
Interest expense (18.6) (17.0) (4.7) 5.9 8.28 Total Gold Production (koz) 28.3 21.5 16.0 - -
EBT 154.8 288.7 454.4 414.5 321.6 Total Cash Costs (US$/oz)** 729 779 857 - -
Tax (33.5) (72.0) (147.7) (134.7) (104.52) Inmaculada (100%)
NPAT (pre-Adjustments) 98.1 156.6 213.7 189.9 151.1 Total Silver Production (Moz) - - - - 0.3
Minority Interest (23.3) (60.1) (93.0) (89.9) (65.99) Total Gold Production (koz) - - - - 9.7
After-Tax Non-Operating Items - (54.0) - - 0.00 Total Cash Costs (US$/oz)* - - - - 8.84
Net Income (reported) 98.1 156.6 213.7 189.9 151.1 Azuca
Net Income (adjusted) 52.9 102.6 213.7 189.9 151.1 Total Silver Production (Moz) - - - - 0.3
Total Gold Production (koz) - - - - 1.2
Total Cash Costs (US$/oz)* - - - - 4.43
REVENUE SPLIT Hochschild Attributable Total

(December Year End) 2009A 2010A 2011E 2012E 2013E Silver Equiv. Production (Moz) 28.0 26.1 22.7 21.5 22.4
Total Cash Costs (U$/oz)* 7.11 7.09 8.55 7.54 7.44
Silver 63% 67% 73% 75% 73% Total Production Costs ($/oz)* 9.35 10.19 11.81 11.26 10.78
Gold 37% 33% 27% 25% 27% *Silver co-product cash costs unless otherwise indicated
**Gold co-product cash costs
Page 45 of 59
Silver Miners
April 3, 2011
SILVER STANDARD As at: 31-Mar-11 SSRI CASH FLOW ANALYSIS - US$M

Project(s): Pirquitas, San Luis, Diabillos, Pitarilla Location: Argentina, Peru, Mexico
Net Income (13.2) 346.2 44.6 57.8 102.8
Recommendation OP Analyst: Andrew Kaip Non-Cash Items (26.9) (357.3) 116.4 55.2 70.5
Target Price (US$) 40.00 Cash Flows From Operating Activities (40.1) (11.1) 161.0 113.0 173.3
Common Shares O/S (M) 79 Other (47.9) (19.3) 108.2 - -
Market Cap (US$M) 2,471 Market Cap (C$M) 2,429 Cash Flows From Investing Activities (151.8) 92.7 45.5 (228.5) (297.9)

0% NPV (US$/share) 37.67 Premium/(Discount) -17% Repayment of Borrowings - - - - (138.0)
3% NPV (US$/share) 31.05 Premium/(Discount) 1% Stock, Warrants, Options 146.4 124.1 - 2.5 0.0
5% NPV (US$/share) 27.46 Premium/(Discount) 14% Other - - - - -
10% NPV (US$/share) 20.96 Premium/(Discount) 50% Cash Flows From Financing Activities 146.4 124.1 - 2.5 2.0

PRICE ASSUMPTIONS
(December Year End) Free Cash Flow (192.3) (114.6) 98.4 (115.5) (262.5)

Gold US$/oz 972 1224 1450 1400 1250
Copper US$/lb 2.34 3.42 4.50 4.20 3.00
Other 28.0 69.6 41.8 45.2 46.1
Current Assets 77.1 342.1 495.4 389.6 269.7
Total Assets 749.9 1262.0 1324.4 1402.5 1519.2
EV/EBITDA (177.32) 5.75 16.81 16.22 10.87 Payables 48.3 32.1 32.1 32.1 32.1
EPS (US$) (0.12) (0.29) 0.64 0.81 1.37 Short Term Debt - - - - 0.0
P/E (x) nap nap 48.9 38.9 22.97 Other 2.4 6.1 6.1 6.1 4.0
CFPS (US$) (0.58) 0.05 1.35 1.51 2.19 Current Liabilities 50.7 38.2 38.2 38.2 36.1
P/CF nap nap 23.2 20.8 14.31
FCFPS (US$) (2.67) (1.44) 1.24 (1.45) (3.27) Long Term Debt 110.7 118.2 126.7 135.2 141.4
P/FCF nap nap 25.40 nap nap Other 51.8 74.3 74.3 74.3 74.3
Net Debt to Equity 15% -11% -29% -17% -5%
QUARTERLY
Q1/11E Q2/11E Q3/11E Q4/11E
EPS (US$) 0.15 0.19 0.14 0.16
FCFPS (US$) 0.95 0.20 0.04 0.05 (December Year End) 2009A 2010A 2011E 2012E 2013E
Pirquitas
(December Year End) 2009A 2010A 2011E 2012E 2013E San Luis
Total Silver Production (Moz) - - - 0.3 1.86
Mining Revenue 5.4 112.3 246.7 288.3 390.73 Total Gold Production (koz) - - - 12.2 78
Production Costs 5.9 76.0 86.6 116.0 135.98 Total Cash Costs, Gold co-product (US$/oz - - - 385 216
G&A 17.0 31.4 31.2 31.2 32.77 Diablillos
Exploration and Other Expenses 0.5 2.4 0.5 0.5 0.50 Total Silver Production (Moz) - - - - 0.0
Other Income - - - - 0.00 Total Gold Production (koz) - - - - 0
EBITDA (14.4) 409.8 128.3 140.5 221.5 Silver Equiv. Production (Moz) - - - - 0.0
Depreciation 2.0 26.3 45.4 44.6 61.28 Total Cash Costs (US$/oz)* - - - - 0.00
EBIT (16.4) 383.5 83.0 96.0 160.2 Pitarrilla
Interest expense (1.1) (13.9) (3.9) 0.4 2.49 Total Silver Production (Moz) - - - - 0.0
EBT (17.5) 369.5 79.0 96.4 162.7 Silver Equiv. Production (Moz) - - - - 0.0
Tax 4.3 (23.3) (34.4) (38.6) 102.80 Total Cash Costs (US$/oz)* - - - - 0.00
NPAT (pre-Adjustments) (13.2) 346.2 44.6 57.8 102.8
Minority Interest 2.1 (20.7) - - -
After-Tax Non-Operating Items - (368.5) 6.5 6.5 6.84 Silver Standard Attributable Total
Net Income (reported) (13.2) 346.2 44.6 57.8 102.8 Silver Equiv. Production (Moz) 0.6 5.9 9.2 11.8 17.9
Net Income (adjusted) (8.3) (22.3) 51.2 64.3 109.6 Total Cash Costs (U$/oz)* 17.18 18.50 12.46 12.43 8.80
Total Production Costs ($/oz)* 21.61 23.13 17.42 16.23 12.21
*Co-Product Cash Costs

REVENUE SPLIT
Silver 100% 100% 90% 77% 60%

Gold 0% 0% 0% 5% 24%
Copper 0% 0% 0% 0% 0%
Lead 0% 0% 0% 0% 0%
Zinc 0% 0% 4% 8% 7%
Tin 0% 0% 6% 10% 10%
Page 46 of 59
Silver Miners
April 3, 2011
HECLA MINING As at: 31-Mar-11 HL CASH FLOW ANALYSIS - US$M

Net Income 67.8 49.0 160.0 130.2 106.6
Recommendation OP Analyst: Andrew Kaip Non-Cash Items 47.1 148.8 (66.0) 56.9 67.6
Target Price (US$) 11.00 Cash Flows From Operating Activities 115.0 197.8 94.1 187.1 174.3
Share Price (US$) 8.81 Share Price (US$) 8.81 Property, Plant and Equip. (23.5) (67.4) (73.1) (72.4) (73.2)
Common Shares O/S (M) 256 Other 3.5 1.5 - - 0.0

0% NPV (US$/share) 7.37 Premium/(Discount) 20% Repayment of Borrowings (162.7) (2.0) - - 0.0
3% NPV (US$/share) 5.78 Premium/(Discount) 52% Stock, Warrants, Options 128.3 53.1 - - 0.0
5% NPV (US$/share) 5.18 Premium/(Discount) 70% Other (4.5) (5.2) - - 0.0
10% NPV (US$/share) 4.40 Premium/(Discount) 100% Cash Flows From Financing Activities (38.9) 45.9 - - 0.0

PRICE ASSUMPTIONS

Gold US$/oz 972 1224 1450 1400 1250
Copper US$/lb 2.34 3.42 4.50 4.20 3.00
Other 40.3 129.3 108.8 108.3 107.6
Current Assets 166.5 432.0 438.8 553.2 654.3
Total Assets 1,046.8 1,382.5 1,385.0 1,490.2 1571.8
EV/EBITDA 18.3 na 6.1 6.7 7.0 Payables 14.0 31.7 31.7 31.7 31.7
P/E (x) 36.40 24.81 15.16 18.64 22.75 Other 26.2 222.3 64.8 46.8 46.8
P/CF 15.89 11.71 10.22 11.45 12.17
FCFPS (US$) (0.29) 0.50 0.65 0.51 0.46 Long Term Debt 3.3 3.8 3.8 3.8 3.8
P/FCF nap 17.59 13.59 17.37 19.24 Other 136.3 159.9 159.9 152.9 127.9
SHAREHOLDERS EQUITY 865.5 962.3 1,122.3 1,252.4 1359.1
QUARTERLY
Q1/11E Q2/11E Q3/11E Q4/11E
EPS (US$) 0.16 0.16 0.13 0.13
FCFPS (US$) 0.21 0.16 0.14 0.13 (December Year End) 2009A 2010A 2011E 2012E 2013E
Greens Creek
Lead Production (kt) 21.2 25.3 20.0 20.0 20.1
PROFIT AND LOSS STATEMENT - US$M Zinc Production (kt) 71.6 74.5 66.2 66.2 66.2
(December Year End) 2009A 2010A 2011E 2012E 2013E Gold Production (koz) 67.3 68.8 50.3 50.3 50.3
Mining Revenue 312.5 418.8 535.1 487.9 457.55 Silver Equiv. Production (Moz) 22.2 20.4 15.2 15.2 16.4
Production Costs 148.6 164.0 170.8 170.8 170.21 Cash Costs (U$/oz)* 5.13 5.92 9.20 9.17 8.54
G&A 31.7 224.7 24.7 24.7 25.98
Exploration and Other Expenses 9.2 21.6 17.5 16.0 12.00 Lucky Friday
Other Income - - - - 0.00 Lead Production (kt) 22.0 21.6 20.2 20.2 20.2
EBITDA 118.0 (12.5) 322.1 276.3 249.4 Zinc Production (kt) 10.6 9.3 9.2 9.2 9.2
Depreciation 62.8 60.0 77.3 81.7 92.64 Silver Production (Moz) 3.5 3.4 3.2 3.2 3.2
EBIT 70.4 (72.5) 244.7 194.7 156.7 Silver Equiv. Production (Moz) 7.1 6.2 5.4 5.4 5.7
Interest expense (10.2) (2.1) 1.4 5.6 7.32 Cash Costs (U$/oz)* 6.5 6.9 9.5 9.5 9.0
EBT 60.1 (74.5) 246.2 200.2 164.0
Tax 7.7 123.5 (86.2) (70.1) (57.41) Hecla Attributable Total
NPAT (pre-Adjustments) 67.8 49.0 160.0 130.2 106.6 Silver Production (Moz) 10.1 9.4 8.5 8.5 8.9
Minority Interest - - - - - Silver Equiv. Production (Moz) 27.1 22.1 17.9 17.9 19.2
After-Tax Non-Operating Items - - - - - Cash Costs (U$/oz)* 5.66 5.54 9.29 9.18 8.36
Net Income (reported) 67.8 49.0 160.0 130.2 106.6
Net Income (adjusted) 54.2 97.9 160.0 130.2 106.6 LOM ESTIMATES Silver Production Silver Eq. Production
(Moz) (Moz)
Greens Creek 76.0 214.9
Lucky Friday 57.2 111.5
REVENUE SPLIT TOTAL 133.1 326.5
* Silver co-product cash costs
Silver 39% 40% 47% 47% 45%
Gold 14% 15% 12% 13% 12%
Copper 0% 0% 0% 0% 0%
Lead 18% 19% 16% 16% 17%
Zinc 30% 26% 24% 24% 26%
Page 47 of 59
Silver Miners
April 3, 2011
SILVERCORP As at: 31-Mar-11 SVM CASH FLOW ANALYSIS - US$M

(March Year End) 2009A 2010A 2011E 2012E 2013E
Project(s): Ying, GC, Silvertip Location: China, Canada
Net Income (16.0) 38.5 78.4 153.7 217.6
Recommendation OP Analyst: Andrew Kaip Non-Cash Items 63.4 27.4 29.2 7.0 (2.7)
Target Price (C$) C$ 16.00 Cash Flows From Operating Activities 47.4 66.0 107.6 160.7 214.9
Net Investment and Asset Sales (24.0) (37.2) 4.2 0.0 0.0
Common Shares O/S (M) 175 Other 0.2 (0.1) 0.0 0.0 0.0
Proceeds From Borrowings 0.0 0.0 0.0 0.0 0.0

0% NPV (US$/share) 12.09 Premium/(Discount) 20% Repayment of Borrowings (0.0) (2.2) 0.3 0.0 0.0
10% NPV (US$/share) 6.42 Premium/(Discount) 127% Cash Flows From Financing Activities (4.8) (17.2) 89.0 (14.0) (9.0)

PRICE ASSUMPTIONS

Gold US$/oz 972 1224 1450 1400 1250
Gold:Silver Ratio 66 61 48 52 54 (March Year End) 2009A 2010A 2011E 2012E 2013E
Copper US$/lb 2.34 3.42 4.50 4.20 3.00
Other 3.3 2.7 5.9 6.2 7.1
Current Assets 71.0 100.6 257.2 350.1 502.6
(March Year End) 2009A 2010A 2011E 2012E 2013E Other 15.7 16.6 47.0 46.8 46.6
Total Assets 205.2 279.5 506.4 644.0 824.7
EV/EBITDA na 37.8 17.2 9.7 6.7 Payables 8.5 7.5 16.6 17.3 20.1
P/E (x) nap nap 32.9 22.5 16.7x Other 14.9 13.4 14.3 14.6 15.5
P/CF 49.1 38.6 23.5 15.8 12.0x
FCFPS (US$) (0.02) 0.24 0.38 0.61 0.91 LT Debt 0.0 0.0 0.0 0.0 0.0
P/FCF nap 59.8 37.9 23.9 15.9x Other 29.3 43.6 62.3 100.0 133.5

Q1/11A Q2/11A Q3/11A Q4/11E
Adjusted EPS (US$) 0.09 0.08 0.15 0.12
CFPS (US$) 0.13 0.11 0.19 0.19
Ying Mine, China

PROFIT AND LOSS STATEMENT - US$M Total Silver Eq. Production (Moz) 6.0 7.7 7.3 7.2 7.2
(March Year End) 2009A 2010A 2011E 2012E 2013E Total Cash Costs (US$/oz)* 3.83 3.63 4.61 6.60 6.00
HPG & LM Mines, China
Mining Revenue 83.5 107.2 180.2 283.9 394.1 Total Silver Eq. Production (Moz) 0.6 0.4 0.6 0.7 0.7
G&A 11.4 11.7 16.2 13.9 14.6 TLP Mine, China
Exploration and Other Expenses 2.4 5.0 4.0 3.2 3.2 Total Silver Eq. Production (Moz) 0.4 0.2 1.2 1.4 1.4
Other Income (50.0) (1.9) 8.4 0.0 0.0 Total Cash Costs (US$/oz)* 10.89 11.88 11.28 13.28 12.95
EBITDA (9.4) 64.7 133.7 226.0 304.3 GC Mine, China
Depreciation 7.2 4.8 7.1 9.5 26.8 Total Silver Eq. Production (Moz) - - - 0.3 4.0
EBIT (16.7) 59.7 126.4 216.4 277.3 Total Cash Costs (US$/oz)* - - - 14.49 7.56
Interest expense 0.0 (0.1) (0.0) 0.0 0.0 Silvertip, Canada
EBT (15.4) 60.4 127.6 218.4 283.3 Total Silver Eq. Production (Moz) - - - 0.2 1.8
Tax 0.9 (8.6) (23.5) (27.1) (32.2) Total Silver Eq. Production (koz) - - - 13.37 13.19
NPAT (pre-Adjustments) (16.0) 38.5 78.4 153.7 217.6
Minority Interest (1.5) (13.3) (25.8) (37.6) (33.6) Total Production, Silver (Moz) 3.8 4.3 5.4 6.0 8.6
After-Tax Non-Operating Items 0.0 0.0 0.0 0.0 0.0 Total Production, Zinc (kt) 5.5 6.3 6.2 9.2 62.6
Net Income (reported) (16.0) 38.5 78.4 153.7 217.6 Total Production, Lead (kt) 23.9 27.5 31.7 37.0 110.8
Net Income (adjusted) 34.7 39.2 74.5 113.0 152.5 Total Production, Silver Eq. (Moz) 7.8 9.1 9.5 9.9 15.1
Cash Costs, Silver Co-Product (US$/oz) $5.36 $4.89 $6.66 $8.25 $9.08
Production Costs, Silver Co-Product (US$/oz) $6.24 $5.32 $7.41 $9.20 $10.85
REVENUE SPLIT
Silver 0% 50% 50% 63% 61%

Gold 100% 2% 2% 1% 0%
Lead 0% 41% 40% 31% 32%
Zinc 0% 7% 8% 6% 8%
Page 48 of 59
Silver Miners
April 3, 2011
FIRST MAJESTIC As at: 31-Mar-11 FR CASH FLOW ANALYSIS - US$M

Project(s): Encantada, San Martin, La Parilla, Del Toro Location: Mexico
Net Income 6.0 35.6 114.0 122.5 137.2
Target Price (C$) C$ 25.00 Cash Flows From Operating Activities 6.3 57.6 116.5 144.3 172.6
Net Investment and Asset Sales (0.8) 0.1 0.0 0.0 0.0
Common Shares O/S (M) 93 Other (1.1) 0.6 0.0 0.0 0.0
Proceeds From Borrowings 4.1 (4.3) 0.0 0.0 0.0

0% NPV (US$/share) 13.02 Premium/(Discount) 65% Repayment of Borrowings (2.6) (2.2) 0.0 0.0 0.0
5% NPV (US$/share) 9.46 Premium/(Discount) 127% Other (13.1) (0.4) 0.0 0.0 0.0
10% NPV (US$/share) 7.18 Premium/(Discount) 199% Cash Flows From Financing Activities 16.2 8.3 12.3 14.4 6.8

PRICE ASSUMPTIONS

Gold US$/oz 972 1224 1450 1400 1250
Copper US$/lb 2.34 3.42 4.50 4.20 3.00
Other 9.8 12.4 18.1 22.0 23.9
Current Assets 19.0 61.3 121.7 227.8 324.4
Total Assets 238.1 317.4 440.8 584.3 734.8
EV/EBITDA nap 33.9 10.5 9.0 7.4 Payables 10.7 12.0 4.4 6.4 7.9
P/E (x) nap nap 18.1 17.3 15.8 Other 0.3 0.5 0.5 0.5 0.5
P/CF nap 35.1 16.4 14.9 12.8
FCFPS (US$) (0.30) 0.28 0.43 0.86 0.85 LT Debt 3.7 2.3 2.3 2.3 2.3
P/FCF nap 78.1 50.3 24.9 25.2 Other 31.7 48.7 48.7 48.7 48.7
QUARTERLY Net Debt to Equity 1% -15% -24% -37% -43%

Q1/11E Q2/11E Q3/11E Q4/11E
EPS (US$) 0.27 0.29 0.30 0.32
CFPS (US$) 0.30 0.33 0.33 0.35
San Martin (100%)
PROFIT AND LOSS STATEMENT - US$M Total Cash Costs (U$/oz)* 6.98 8.35 8.09 7.81 8.14
(December Year End) 2009A 2010A 2011E 2012E 2013E La Parilla (100%)
Mining Revenue 56.3 119.2 259.1 299.9 370.2 Total Cash Costs (U$/oz)* 6.60 9.74 7.68 9.06 8.72
Production Costs 32.5 49.2 60.9 81.2 120.0 Del Toro (100%)
G&A 7.7 10.7 11.2 11.2 11.7 Silver Equiv. Production (Moz) 0.0 0.0 0.0 0.7 5.3
Exploration and Other Expenses 0.0 0.0 1.2 3.3 3.4 Total Cash Costs (U$/oz)* 0.00 na na 10.10 8.19
Other Income 0.0 0.0 0.0 0.0 0.0 Encantada (100%)
EBITDA 10.8 57.5 180.7 199.1 229.6 Silver Equiv. Production (Moz) 1.4 3.7 4.9 5.6 5.6
Depreciation 5.9 9.3 10.7 18.6 30.4 Total Cash Costs (U$/oz)* 12.08 6.30 6.05 5.54 5.54
EBIT 4.9 48.3 170.0 180.5 199.2 Real de Catorce (100%)
Interest expense (2.0) (1.8) 0.3 2.0 3.7 Silver Equiv. Production (koz) 0.0 0.0 0.0 0.0 0.2
EBT 2.9 46.4 170.3 182.5 202.9 Total Cash Costs (U$/oz)* na na na na 7.85
Tax 3.1 (10.8) (56.3) (60.0) (382.6)
NPAT (pre-Adjustments) 6.0 35.6 114.0 122.5 137.2 First Majestic Total
Minority Interest 0.0 0.0 0.0 0.0 0.0 Silver Equiv. Production (Moz) 4.2 6.7 8.7 11.1 16.1
After-Tax Non-Operating Items 0.0 0.0 0.0 0.0 0.0 Total Cash Costs (U$/oz)* 8.35 7.81 6.99 7.30 7.46
Net Income (reported) 6.0 35.6 114.0 122.5 137.2 Total Production Costs ($/oz)* 8.71 8.50 8.22 8.97 9.35
Net Income (adjusted) 8.2 38.8 117.3 125.8 140.6
*Co-product (silver) cash costs
Page 49 of 59
Silver Miners
April 3, 2011
ENDEAVOUR SILVER As at: 31-Mar-11 EDR CASH FLOW ANALYSIS - US$M

Project(s): Guanajuato, Guanacevi Location: Mexico
Net Income (1.9) 7.1 34.8 36.6 24.1
Recommendation Und Analyst: Andrew Kaip Non-Cash Items 14.2 25.6 39.8 44.0 36.5
Target Price (C$) C$ 6.50 Cash Flows from Operating Activities 12.2 32.7 74.6 80.6 60.6
Common Shares O/S (M) 81 Other (0.2) 0.4 - - -
Market Cap (US$M) 790 Market Cap (C$M) 767 Cash Flows from Investing Activities (19.1) (47.6) (31.9) (11.2) (11.2)
Proceeds from Borrowings 11.2 - - - -

0% NPV (US$/share) 3.27 Premium/(Discount) 200% Repayment of Borrowings (1.2) - - - -
3% NPV (US$/share) 3.00 Premium/(Discount) 226% Stock, Warrants, Options 20.7 57.3 3.0 0.3 -
5% NPV (US$/share) 2.85 Premium/(Discount) 243% Other (0.8) (1.0) - - -
10% NPV (US$/share) 2.55 Premium/(Discount) 283% Cash Flows from Financing Activities 30.0 56.3 3.0 0.3 -

PRICE ASSUMPTIONS

Gold US$/oz 972 1224 1450 1400 1250
Copper US$/lb 2.34 3.42 4.50 4.20 3.00
Other 10.2 14.1 11.2 10.9 9.7
Current Assets 45.0 115.2 158.0 227.4 275.8
Total Assets 105.9 188.4 250.1 311.5 354.0
EV/EBITDA nap 22.6 10.2 8.3 10.6 Payables 5.2 9.5 9.2 8.9 7.4
P/E (x) nap nap 20.8 20.9 34.8 Other 0.5 3.3 3.3 3.3 3.3
P/CF (x) 35.3 19.6 11.1 10.4 13.7
FCFPS (US$) (0.09) 0.00 0.52 0.81 0.58 LT Debt 8.4 0.1 0.1 0.1 0.1
P/FCF (x) nap 2249.6 18.7 12.1 16.9 Other 9.8 16.4 35.6 55.5 70.3

Q1/11E Q2/11E Q3/11E Q4/11E
EPS (US$) 0.03 0.02 0.01 0.08
CFPS (US$) 0.13 0.10 0.11 0.16
FCFPS (US$) -0.04 -0.07 -0.07 0.19 PRODUCTION AND COSTS
Guanajuato
PROFIT AND LOSS STATEMENT - US$M Total Silver Production (Moz) 0.7 0.8 1.1 1.4 1,404
(December Year End) 2009A 2010A 2011E 2012E 2013E Total Cash Costs (U$/oz) 6.64 8.03 9.97 9.75 9.56
Mining Revenue 50.8 86.5 140.7 145.0 121.1

Production Costs 29.5 41.5 47.8 53.1 53.1 Guanacevi
G&A 7.6 11.3 9.9 9.9 10.4 Total Silver Production (Moz) 1.9 2.4 2.7 2.7 2,594
Exploration and Other Expenses 2.4 4.3 13.7 6.0 3.0 Total Cash Costs (U$/oz) 9.81 10.25 12.18 12.02 12.52
Other Income - - - - -
EBITDA 13.4 32.0 66.6 73.6 52.6 Total Silver Production (Moz) 2.6 3.3 3.8 4.1 3,998
Depreciation 11.3 15.4 13.0 19.3 16.9 Attributable production 2.6 3.3 3.8 4.1 3,998
EBIT 2.2 16.5 53.6 54.3 35.7
Interest expense - - - - - Total Cash Cost 8.77 9.59 11.09 10.71 10.84
EBT 2.2 16.5 53.9 56.5 38.9
Tax (4.1) (9.5) (19.2) (19.9) (14.8) LOM ESTIMATES Silver Production Total Cash Cost
NPAT (pre-Adjustments) (1.9) 7.1 34.8 36.6 24.1 (Moz) (US$/oz)
Minority Interest - - - - -
After-Tax Non-Operating Items - - - - - Guanajuato 8.9 9.42
Net Income (reported) (1.9) 7.1 34.8 36.6 24.1 Guanacevi 25.4 10.74
Net Income (adjusted) 0.1 8.9 38.2 40.0 27.7 TOTAL 34 10.15
Page 50 of 59
Silver Miners
April 3, 2011
FORTUNA SILVER As at: 31-Mar-11 FVI CASH FLOW ANALYSIS - US$M

Project(s): Caylloma, San Jose Location: Peru, Mexico
Net Income 0.6 13.0 28.0 47.4 44.6
Target Price (C$) C$ 6.50 Cash Flows from Operating Activities 13.7 22.9 39.4 60.0 58.9
Net Investment and Asset Sales (5.9) (4.4) - 0.0 -
Common Shares O/S (M) 110 Other 3.0 (1.8) - 0.0 -
Market Cap (US$M) 603 Market Cap (C$M) 585 Cash Flows from Investing Activities (17.0) (53.4) (57.5) (20.1) (14.0)
Proceeds from Borrowings - - - - -

3% NPV (US$/share) 3.88 Premium/(Discount) 41% Stock, Warrants, Options 1.0 74.0 - - -
5% NPV (US$/share) 3.46 Premium/(Discount) 58% Other (1.0) (0.9) - - -
10% NPV (US$/share) 2.68 Premium/(Discount) 103% Cash Flows from Financing Activities 0.0 73.1 - - -

PRICE ASSUMPTIONS
(December Year End) 2009A 2010A 2011E 2012E 2013E Free Cash Flow (0.4) (24.4) (18.1) 39.9 44.9

Gold US$/oz 972 1224 1450 1400 1250
Copper US$/lb 2.34 3.42 4.50 4.20 3.00
Other 9.2 9.2 13.3 14.6 13.6
Current Assets 48.4 97.7 83.7 124.9 168.8
Total Assets 139.7 231.8 266.8 318.2 364.4
P/E (x) nap nap 22.3 13.5 14.3x Other 3.1 0.5 0.5 0.5 0.5
P/CF 31.3 25.6 17.0 11.1 11.3x
FCFPS (US$) (0.00) (0.23) (0.15) 0.33 0.37 LT Debt 1.5 2.7 2.7 2.7 2.7
P/FCF nap nap nap 16.6 14.8x Other 13.5 16.7 16.7 16.7 16.7

Q1/11E Q2/11E Q3/11E Q4/11E
EPS (US$) 0.05 0.05 0.06 0.09
CFPS (US$) 0.07 0.07 0.08 0.11
FCFPS (US$) -0.11 -0.11 -0.01 0.08 PRODUCTION AND COSTS
Caylloma
PROFIT AND LOSS STATEMENT - US$M Silver Production (Moz) 1.7 1.9 1.8 1.2 1.2
(December Year End) 2009A 2010A 2011E 2012E 2013E Copper Production (kt) - 0.5 0.4 0.3
Lead Production (kt) 11.4 9.7 6.8 6.0 6.1
Mining Revenue 51.4 74.1 122.0 159.8 158.7 Zinc Production (kt) 12.9 11.9 10.5 9.4 9.7
Production Costs 17.8 22.3 36.8 49.9 53.0 Silver Equiv. Production (Moz) 4.6 4.5 3.6 2.8 3.0
G&A 12.3 14.4 17.4 17.4 17.4 Cash Costs (U$/oz)* 7.84 7.01 9.09 10.59 9.95
Exploration and Other Expenses 1.1 0.4 2.5 2.5 2.5 San Jose
Other Income - - - - - Silver Production (Mkoz) - - 0.5 2.1 2.7
EBITDA 12.2 34.2 65.3 89.9 85.9 Gold Production (koz) - - 5.0 20.6 24.1
Depreciation 5.9 6.9 8.5 9.9 11.8 Total Cash Costs (U$/oz) - - 9.6 7.1 6.4
EBIT 6.2 27.4 56.8 80.1 74.1
Interest expense 0.3 (0.4) 0.3 1.1 1.8 Total Attributable AgEq Production 3.4 3.9 4.1 6.0 6.9
EBT 6.5 27.0 57.1 81.1 75.8 Total Cash Cost 6.57 7.03 9.16 8.72 7.92
Tax (5.9) (14.0) (29.0) (33.7) (31.2)
NPAT (pre-Adjustments) 0.6 13.0 28.0 47.4 44.6 LOM ESTIMATES Silver Equiv. Prod'n Total Cash Cost*
Minority Interest 0.2 - - - - (Moz) (US$/oz)
After-Tax Non-Operating Items - - - - -
Net Income (reported) 0.6 13.0 28.0 47.4 44.6 Caylloma 28.8 9.73
Net Income (adjusted) 8.1 11.7 29.9 49.3 46.4 San Jose 51.0 5.82
TOTAL 79.8 7.20
* Silver co-product cash costs
Page 51 of 59
Silver Miners
April 3, 2011
MAG Silver As at: 31-Mar-11 MAG CASH FLOW ANALYSIS - US$M

Project: Juanicipio JV Location: Canada
Net Income (9.3) (7.3) (7.3) (7.6)
Recommendation OP(S) Analyst: John Hayes Non-Cash Items 3.4 0.0 0.0 0.0
Target Price (C$) na Operating Cash Flow (5.9) (7.3) (7.3) (7.6)
Change in Working Capital (0.1) 0.0 0.0 0.0
Share Price (US$) $11.93 Share Price (C$) $11.57 Cash Flows From Operating Activities (6.0) (7.3) (7.3) (7.6)
Common Shares O/S (M) 55.2 Property, Plant and Equip. (14.6) (10.9) (21.7) (10.9)
Market Cap (US$M) $658.1 Market Cap (C$M) $638.2 Net Investment and Asset Sales (0.1) 0.0 0.0 0.0
Enterprise Value (US$M) $596.8 Other 0.0 0.0 0.0 0.0
Cash Flows From Investing Activities (14.7) (10.9) (21.7) (10.9)
0% NAV (US$/share) $16.78 Premium/(Discount) -29%
5% NAV (US$/share) $11.15 Premium/(Discount) 7% Proceeds From Borrowings 0.0 0.0 0.0 0.0
10% NAV (US$/share) $7.96 Premium/(Discount) 50% Repayment of Borrowings 0.0 0.0 0.0 0.0
15% NAV (US$/share) $6.08 Premium/(Discount) 96% Stock, Warrants, Options 51.2 40.0 0.0 0.0
Other 0.0 0.0 0.0 0.0
Cash Flows From Financing Activities 51.2 40.0 0.0 0.0
Net Increase In Cash 30.5 21.8 (29.1) (18.4)

PRICE ASSUMPTIONS Cash At Beginning of Year 25.7 56.1 77.9 48.8
(December Year End) 2010A 2011E 2012E 2013E Cash At End of Year 56.3 77.9 48.8 30.4
Exchange Rate C$/US$ 0.97 1.01 1.02 0.96 Free Cash Flow -20.6 -18.2 -29.1 -18.4
Gold US$/oz 1224 1450 1400 1250
Silver US$/oz 20.16 30.00 27.00 23.00
Platinum US$/oz 1,611 1,850 1,850 1,850
Copper US$/lb 3.42 4.50 4.20 3.00 BALANCE SHEET ANALYSIS - US$M
Nickel US$/lb 9.91 10.50 10.00 9.50 (December Year End) 2010A 2011E 2012E 2013E
Zinc US$/lb 0.98 1.10 1.00 1.00
Cash and Investments 56.4 78.2 49.1 30.7
Receivables and Inventories 2.2 2.2 2.2 2.2
Other 0.2 0.2 0.2 0.2
FINANCIAL SUMMARY - ANNUAL Current Assets 58.7 80.5 51.5 33.0
Fixed Assets 65.2 76.1 97.8 108.7
Enterprise Value (US$M) 579.0 637.1 673.2 648.7 Deferred Taxes 0.0 0.0 0.0 0.0
EV/EBITDA nap nap nap nap Other 0.0 0.0 0.0 0.0
Total Assets 123.9 156.6 149.3 141.7
EPS (US$) -0.24 -0.21 -0.21 -0.21
P/E (x) nap nap nap nap Payables 2.1 2.1 2.1 2.1
Short Term Debt 0.0 0.0 0.0 0.0
CFPS (US$) -0.13 -0.12 -0.12 -0.12 Other 0.0 0.0 0.0 0.0
P/CF nap nap nap nap Current Liabilities 2.1 2.1 2.1 2.1
FCFPS (US$) -0.42 -0.29 -0.47 -0.30 LT Debt 0.0 0.0 0.0 0.0
P/FCF nap nap nap nap Other 0.0 0.0 0.0 0.0
Total Liabilities 2.1 2.1 2.1 2.1
Common Shares O/S (M) 55.2 61.8 61.8 61.8
SHAREHOLDERS EQUITY 121.9 154.6 147.2 139.7
QUARTERLY Q1/11E Q2/11E Q3/11E Net Debt / (Cash) (56.6) (78.5) (49.4) (31.0)
Net Debt to Equity -46.5% -50.8% -33.6% -22.2%
EPS (US$) -0.06 -0.05 -0.05
CFPS (US$) -0.03 -0.03 -0.03
FCFPS (US$) -0.03 -0.08 -0.07
PRODUCTION AND COSTS
PROFIT AND LOSS STATEMENT - US$M Valdecañas Vein (44.0%)

(December Year End) 2010A 2011E 2012E 2013E BMO Estimated Start Date: Q1/2015
Total Silver Production (Koz) 0 0 0 0
Mining Revenue 0.0 0.0 0.0 0.0 Ag Total Cash Costs (co-product, US$/oz) 0.00 0.00 0.00 0.00
Production Costs 0.0 0.0 0.0 0.0
G&A -6.1 -8.0 -8.0 -8.0 Total Gold Production (Koz) 0 0 0.0 0.0
Writedowns and Other Expenses -3.6 0.0 0.0 0.0 Au Total Cash Costs (co-product, US$/oz) 0 0 0 0
Other Income 0.3 0.7 0.7 0.4
EBITDA -9.4 -7.3 -7.3 -7.6 Total Lead Production (Mlb) 0 0 0.0 0.0
Depreciation 0.0 0.0 0.0 0.0 Pb Total Cash Costs (co-product, US$/lb) 0.00 0.00 0.00 0.00
EBIT -9.4 -7.3 -7.3 -7.6
Interest expense 0.0 0.0 0.0 0.0 Total Zinc Production (Mlb) 0 0 0.0 0.0
EBT -9.4 -7.3 -7.3 -7.6 Zn Total Cash Costs (co-product, US$/lb) 0.00 0.00 0.00 0.00
Tax 0.0 0.0 0.0 0.0
NPAT (pre-Adjustments) -9.4 -7.3 -7.3 -7.6 MAG Atributable Production
Minority Interest 0.0 0.0 0.0 0.0 Silver Koz 0 0 0 0
Foreign Exchange -0.1 0.0 0.0 0.0 Gold Koz 0 0 0 0
After-Tax Non-Operating Items -4.2 0.1 0.0 0.0 Lead Mlb 0 0 0 0
Net Income (reported) -9.3 -7.3 -7.3 -7.6 Zinc Mlb 0 0 0 0
Net Income (adjusted) -7.5 -7.3 -7.3 -7.6
Total (100%) Co-product

LOM ESTIMATES Production Total cash Cost
NAV VALUATION RESERVES & RESOURCES Valdecañas Vein
Silver (Moz; US$/oz) 151.0 3.07
0% NAV US$M Global Reserve/Re Gold (Koz; US$/oz) 362.0 174
Reserve/R source in Lead (Kt; US$/lb) 176.4 0.16
JUANICIPIO JV (44%), Mexico 859 esource DCF Zinc (Kt; US$/lb) 231.5 0.16
Exploration properties 77
Basic Working Capital 61 Valdecañas Vein
Equity Additions 40 Tonnes (Mt) 12.9 9.1
Long-Term Debt 0 Ag Grade 491 566
TOTAL NAV (US$M) 1,037 Ag (Moz) 204.2 165.2
Au Grade 1.70 1.56
NAVPS (US$) 16.78 Au (Moz) 0.71 0.45
Premium / (Discount) to NAV -29% Pb Grade 1.63% 2.03%
Pb (Kt) 211 185
Common Shares in NAV (M) 61.79 Zn Grade 3.29% 3.28%
Zn (Kt) 425 298
TOTAL COST OF ACQUISITION

(BMO metals price forecast)
Total Cost of Acquisition (US$/oz AgEq)

TCA as % of Spot Silver
Page 52 of 59
Silver Miners
April 3, 2011
MINCO SILVER As at: 31-Mar-11 MSV CASH FLOW ANALYSIS - US$M

Project(s): Fuwan Location: China
Net Income (3.72) (2.98) (3.59) 8.47 62.21
Recommendation OP(S) Analyst: Andrew Kaip Non-Cash Items 1.53 (1.02) 1.57 (1.95) 1.60
Target Price (C$) C$ 7.50 Cash Flows From Operating Activities (2.20) (4.00) (2.03) 6.52 63.81
Common Shares O/S (M) 44.1 Other (2.21) 9.10 - - -
Market Cap (US$M) 261 Market Cap (C$M) 254 Cash Flows From Investing Activities (10.29) 3.25 (18.00) (66.65) (7.55)
Proceeds From Borrowings - - 44.17 - -

0% NPV (US$/share) 8.67 Premium/(Discount) -32% Repayment of Borrowings - (2.05) - (4.42) (8.83)
3% NPV (US$/share) 6.61 Premium/(Discount) -10% Stock, Warrants, Options 12.20 16.05 45.71 - 5.82
10% NPV (US$/share) 3.99 Premium/(Discount) 49% Cash Flows From Financing Activities 12.20 13.99 89.88 (4.42) (3.01)

PRICE ASSUMPTIONS
(December Year End) 2009A 2010A 2011E 2012E 2013E Free Cash Flow (4.51) (5.66) (20.03) (64.55) 47.43

Gold US$/oz 972 1224 1450 1400 1250
Copper US$/lb 2.34 3.42 4.50 4.20 3.00
Zinc US$/lb 0.75 0.98 1.10 1.00 1.00 Inventories - - - - -
Other 9.36 16.32 16.32 23.73 35.85
Current Assets 10.10 30.43 100.28 43.14 108.51
(December Year End) 2009A 2010A 2011E 2012E 2013E Other 7.27 - - - -
Total Assets 25.44 41.72 129.57 138.89 205.79
EV/EBITDA na na na 25.5 2.5 Payables 0.26 - - 3.70 9.76

EPS (US$) (0.10) (0.04) (0.04) 0.16 1.06 Short Term Debt 1.85 0.55 0.55 0.55 0.55
P/E (x) nap nap nap 36.50 5.61 Other - - - - (0.00)
CFPS (US$) (0.08) (0.06) (0.04) 0.17 1.17 Current Liabilities 2.11 0.55 0.55 4.25 10.31
P/CF nap nap nap 34.15 5.08
FCFPS (US$) (0.13) (0.13) (0.37) (1.10) 0.79 Long Term Debt - - 44.17 39.75 30.92
P/FCF nap nap nap nap 7.53 Other - - - - -
Net Debt to Equity 5% -33% -46% 22% -25%
QUARTERLY
Q1/11E Q2/11E Q3/11E Q4/11E
EPS (US$) -0.01 -0.01 -0.01 -0.01
CFPS (US$) -0.01 -0.01 -0.01 -0.01 PRODUCTION AND COSTS
FCFPS (US$) (0.01) (0.04) (0.11) (0.18) (December Year End) 2009A 2010A 2011E 2012E 2013E
Fuwan
Lead Production (kt) - - - 0.0 0.3
PROFIT AND LOSS STATEMENT - US$M Zinc Production (kt) - - - 0.5 3.2
(December Year End) 2009A 2010A 2011E 2012E 2013E Gold Production (koz) - - - 0.0 0.0
Silver Production (Moz) - - - 0.7 4.9
Mining Revenue - - - 21.74 127.11 Silver Equiv. Production (Moz) - - - 0.8 5.3
Production Costs - - - 6.82 36.10 Cash Costs (U$/oz)* - - - 9.84 7.70
G&A 1.82 3.66 3.84 3.84 4.03 MSV Attributable Total
Exploration and Other Expenses 1.24 0.38 - - 0.50 Silver Production (Moz) - - - 0.7 4.9
Other Income (0.92) 0.85 - - - Silver Equiv. Production (Moz) - - - 0.8 5.3
EBITDA (3.98) (3.19) (3.84) 11.08 86.48 Cash Costs (U$/oz)* - - - 9.81 7.64
Depreciation 0.04 0.03 - 0.19 6.01
EBIT (4.03) (3.22) (3.84) 10.90 80.46 LOM ESTIMATES Silver Production Silver Eq. Production
Interest expense (0.01) 0.04 0.25 0.85 0.51 (Moz) (koz)
EBT (4.03) (3.18) (3.59) 11.75 80.97 Fuwan 69.5 77.9
Tax - 0.04 - (3.28) (18.76) TOTAL 69.5 77.9
NPAT (pre-Adjustments) (3.72) (2.98) (3.59) 8.47 62.21
Minority Interest - - - - - * Silver co-product cash costs
After-Tax Non-Operating Items - - - - -
Net Income (reported) (3.72) (2.98) (3.59) 8.47 62.21
Net Income (adjusted) (3.23) (1.72) (2.50) 9.56 63.36 REVENUE SPLIT
Silver 0% 0% 0% 93% 92%

Gold 0% 0% 0% 1% 1%
Lead 0% 0% 0% 0% 1%
Zinc 0% 0% 0% 5% 6%
Page 53 of 59
Silver Miners
April 3, 2011
ORKO SILVER As at: 31-Mar-11 OK CASH FLOW ANALYSIS - US$M

Project(s): La Preciosa Location: Mexico
Net Income (10.67) (2.75) (3.71) 2.88 31.33
Recommendation Mkt(S) Analyst: Andrew Kaip Non-Cash Items 4.94 0.05 0.19 (1.46) 4.03
Target Price (C$) C$ 2.50 Cash Flows From Operating Activities (5.73) (2.70) (3.52) 1.42 35.35
Share Price (US$) 2.61 Share Price (C$) 2.53 Property, Plant and Equip. - - - (0.13) (1.73)
Net Investment and Asset Sales 1.05 (11.47) - - -
Common Shares O/S (M) 115 Other - - - - -
Market Cap (US$M) 301 Market Cap (C$M) 292 Cash Flows From Investing Activities 1.05 (11.47) - (0.13) (1.73)
Proceeds From Borrowings - - - - -

10% NPV (US$/share) 1.28 Premium/(Discount) 104% Cash Flows From Financing Activities 4.49 14.34 1.98 3.86 3.05

Cash At Beginning of Year 0.37 0.21 0.38 (1.16) 4.00
Cash At End of Year 0.19 0.38 (1.16) 4.00 40.67
PRICE ASSUMPTIONS
(December Year End) 2009A 2010A 2011E 2012E 2013E Free Cash Flow (5.73) (2.70) (3.52) 1.29 33.62

Gold US$/oz 972 1224 1450 1400 1250
Copper US$/lb 2.34 3.42 4.50 4.20 3.00
Lead US$/lb 0.78 0.97 1.15 1.00 0.90 Cash and Investments 0.19 0.38 (1.16) 4.00 40.67
Zinc US$/lb 0.75 0.98 1.10 1.00 1.00 Inventories - - - - -
Other 1.74 13.45 13.29 14.78 15.96
Current Assets 1.92 13.83 12.13 18.78 56.63
FINANCIAL SUMMARY - ANNUAL Fixed Assets 0.33 0.35 0.35 0.45 (2.28)
Total Assets 5.18 17.78 16.08 22.83 57.94
EV/EBITDA nap nap nap nap 5.0 Payables 0.05 0.06 0.09 0.09 0.83
EPS (US$) (0.07) (0.02) (0.02) 0.03 0.24 Short Term Debt - - - - -
P/E (x) nap nap nap nap 10.89 Other 0.00 0.04 0.04 0.04 0.04
CFPS (US$) (0.05) (0.02) (0.03) 0.02 0.27 Current Liabilities 0.05 0.10 0.13 0.13 0.87
P/CF nap nap nap nap 9.76
FCFPS (US$) (0.05) (0.02) (0.03) 0.01 0.25 Long Term Debt - - - - -
P/FCF nap nap nap 257.68 10.43 Other - - - - -
QUARTERLY
Q1/11E Q2/11E Q3/11E Q4/11E
EPS (US$) -0.01 -0.01 -0.01 -0.01
FCFPS (US$) -0.01 -0.01 -0.01 -0.01 (December Year End) 2009A 2010A 2011E 2012E 2013E
La Preciosa
PROFIT AND LOSS STATEMENT - US$M Silver Production (koz) - - - 961 7,048
(December Year End) 2009A 2010A 2011E 2012E 2013E Gold Production (koz) - - - 1.2 8.0
Silver Equivalent Production (koz) - - - 1,026 7,481
Mining Revenue - - - 12.46 77.43 Total Cash Costs (U$/oz)* - - - 10.59 7.19
Production Costs - - - 4.89 24.21 Total Production Costs (U$/oz)* - - - 10.65 8.52
G&A 7.81 2.93 3.71 3.71 3.89
Exploration and Other Expenses 1.52 0.13 - - 0.23 Total Attributable Production (55%)
Other Income - - - - - Silver Production (koz) - - - 432 3,171
EBITDA (10.66) (2.75) (3.71) 3.87 49.11 Gold Production (koz) - - - 0.6 3.6
Depreciation 0.02 0.02 - 0.03 4.46 Silver Equivalent Production (koz) - - - 462 3,366
EBIT (10.68) (2.77) (3.71) 3.84 44.64 Total Cash Costs (U$/oz)* - - - 10.59 7.19
Interest expense 0.01 0.02 (0.00) (0.04) 0.27 Total Production Costs (U$/oz)* - - - 10.65 8.51
EBT (10.67) (2.75) (3.71) 3.80 44.92
Tax - - - (0.92) (13.59) LOM ESTIMATES Silver Equiv. Prod'n Total Cash Cost*
NPAT (pre-Adjustments) (10.67) (2.75) (3.71) 2.88 31.33 (Moz) (US$/oz)
Minority Interest - - - - -
After-Tax Non-Operating Items - - - - - La Preciosa 100.0 6.00
Net Income (reported) (10.67) (2.75) (3.71) 2.88 31.33 * co-product cash costs
Net Income (adjusted) (8.02) (2.50) (3.01) 3.58 32.06
Page 54 of 59
Silver Miners
April 3, 2011
BEAR CREEK MINING As at: 31-Mar-11 BCM CASH FLOW ANALYSIS - US$M
Project(s): Corani, Santa Ana Location: Peru
Net Income (8.7) (17.3) (9.8) 0.8 29.0
Recommendation OP(S) Analyst: Andrew Kaip Non-Cash Items 3.1 2.7 0.7 (1.0) 7.2
Target Price (C$) C$ 13.00 Cash Flows from Operating Activities (5.6) (14.6) (9.1) (0.3) 36.1
Net Investment and Asset Sales (11.6) (5.3) (10.0) (15.0) -
Common Shares O/S (M) 70 Cash Flows from Investing Activities (11.7) (5.4) (53.0) (149.7) (213.9)
Market Cap (US$M) 733 Market Cap (C$M) 711
Proceeds from Borrowings - - - 273.0 -
Repayment of Borrowings - - (24.8) - (21.8)
0% NPV (US$/share) 17.28 Premium/(Discount) -39% Stock, Warrants, Options 40.8 127.4 4.0 177.4 3.0
3% NPV (US$/share) 10.44 Premium/(Discount) 0% Other - - 0.7 - -
5% NPV (US$/share) 8.30 Premium/(Discount) 26% Cash Flows from Financing Activities 40.8 127.4 (20.1) 450.4 (18.8)
10% NPV (US$/share) 7.15 Premium/(Discount) 46%
PRICE ASSUMPTIONS Free Cash Flow (10.6) (26.8) (86.9) (149.9) (199.6)

Gold US$/oz 972 1224 1450 1400 1250 BALANCE SHEET ANALYSIS - US$M
Silver US$/oz 14.63 20.16 30.00 27.00 23.00 (December Year End) 2009A 2010A 2011E 2012E 2013E
Gold:Silver Ratio 66 61 48 52 54
Copper US$/lb 2.34 3.42 4.50 4.20 3.00 Cash and Investments 43.0 143.8 61.6 362.1 165.5
Lead US$/lb 0.78 0.97 1.15 1.00 0.90 Inventories - - - - -
Zinc US$/lb 0.75 0.98 1.10 1.00 1.00 Other 0.2 0.3 - 4.5 5.7
Current Assets 43.2 144.1 61.6 366.6 171.2
Fixed Assets 88.3 92.8 145.8 294.4 501.9

FINANCIAL SUMMARY - ANNUAL Other - - - - -
(December Year End) 2009A 2010A 2011E 2012E 2013E Total Assets 131.6 236.9 207.4 661.0 673.1
Payables 0.2 1.3 0.4 1.5 2.1

EV/EBITDA nap nap na nap 13.4 Short Term Debt 10.0 11.1 - 21.8 43.7
EPS (US$) (0.13) (0.22) (0.10) 0.01 0.27 Other 0.0 - - - -
P/E (x) nap nap nap nap 38.6x Current Liabilities 10.2 12.4 0.4 23.3 45.8
CFPS (US$) (0.10) (0.21) (0.09) 0.02 0.33
P/CF nap nap nap nap 31.4x LT Debt 23.1 13.7 - 251.2 207.5
FCFPS (US$) (0.18) (0.36) (0.94) (1.48) (1.81) Other 21.0 22.3 22.3 22.3 22.3
P/FCF nap nap nap nap N/M Total Liabilities 54.4 48.4 22.7 296.8 275.6
Common Shares O/S (M) 70.0 92.0 92.4 109.8 110.8 SHAREHOLDERS EQUITY 77.2 188.5 184.7 364.2 397.5
Net Debt to Equity -13% -63% -33% -24% 22%

QUARTERLY
Q1/11E Q2/11E Q3/11E Q4/11E
EPS (US$) -0.02 -0.02 -0.02 -0.02
FCFPS (US$) -0.02 -0.02 -0.02 -0.02 (December Year End) 2009A 2010A 2011E 2012E 2013E
CORANI (Start-up Q2'14 )

Total Silver Equivalent Production (Mo - - - - -
PROFIT AND LOSS STATEMENT - US$M Total Cash Costs (U$/oz)** - - - - -
Mining Revenue - - - 36.3 111.0 SANTA ANA (Start-up Q2'12 )

Production Costs - - - 21.4 38.9 Total Silver Equivalent Production (Mo - - - 1.37 4.91
G&A 2.7 3.0 4.3 5.3 8.7 Total Cash Costs (U$/oz)** - - - 15.87 8.15
Exploration and Other Expenses 6.1 14.1 6.0 2.0 2.5
Other Income 0.2 0.7 - - - Total Production - - - 1.37 4.91
EBITDA (9.0) (17.9) (10.3) 7.6 60.9 Total Cash Cost - - - 15.87 8.21
Depreciation 0.0 - - 1.1 6.4
EBIT (9.0) (17.9) (10.3) 6.6 54.5 LOM ESTIMATES Silver Equiv. Production Total Cash Cost**
Interest expense 0.1 0.1 0.5 (0.4) (2.0) (Moz) (US$/oz)

EBT (8.9) (17.8) (9.8) 6.2 52.5
Tax - - - - - CORANI 279 8.02
NPAT (pre-Adjustments) (8.7) (17.3) (9.8) 0.8 29.0 SANTA ANA 56 8.06
Minority Interest - - - - - TOTAL 335 8.21
After-Tax Non-Operating Items - - - - - ** Co-product cash costs
Net Income (reported) (8.7) (17.3) (9.8) 0.8 29.0
Net Income (adjusted) (7.4) (15.9) (8.9) 1.7 29.9
Page 55 of 59
Silver Miners
April 3, 2011
TAHOE RESOURCES As at: 31-Mar-11 THO CASH FLOW ANALYSIS - US$M

Project(s): Escobal Location: Guatemala
Net Income (8.0) (21.1) (12.8) (10.3)
Recommendation OP(S) Analyst: Andrew Kaip Non-Cash Items (2.4) 0.5 (3.9) (2.1)
Target Price (C$) C$ 24.00 Cash Flows From Operating Activities (10.4) (20.7) (16.7) (12.4)
Share Price (US$) 20.20 Share Price (C$) 19.60 Property, Plant and Equip. (0.9) (5.0) (58.4) (155.0)
Net Investment and Asset Sales (246.4) - - -
Common Shares O/S (M) 115 Other - - - -
Market Cap (US$M) 2,326 Market Cap (C$M) 2,257 Cash Flows From Investing Activities (247.3) (5.0) (58.4) (155.0)
Proceeds From Borrowings - - - -

0% NPV (US$/share) 22.77 Premium/(Discount) -11% Repayment of Borrowings - - - -
3% NPV (US$/share) 17.55 Premium/(Discount) 15% Stock, Warrants, Options 680.1 - 21.1 -
5% NPV (US$/share) 11.96 Premium/(Discount) 69% Other 3.3 - - -
10% NPV (US$/share) 9.29 Premium/(Discount) 117% Cash Flows From Financing Activities 683.4 - 21.1 -

Cash At Beginning of Year 0.0 436.5 410.8 356.7
Cash At End of Year 436.5 410.8 356.7 189.4
PRICE ASSUMPTIONS
(December Year End) 2010A 2011E 2012E 2013E Free Cash Flow (11.3) (25.7) (75.1) (167.4)
Exchange Rate C$/US$ 0.97 1.02 1.02 0.96

Gold US$/oz 1224 1450 1400 1250
Silver US$/oz 20.16 30.00 27.00 23.00 BALANCE SHEET ANALYSIS - US$M
Gold:Silver Ratio 61 48 52 54 (December Year End) 2010A 2011E 2012E 2013E
Copper US$/lb 3.42 4.50 4.20 3.00
Lead US$/lb 0.97 1.15 1.00 0.90 Cash and Investments 436.5 410.8 356.7 189.4
Zinc US$/lb 0.98 1.10 1.00 1.00 Inventories - - - -
Other 0.2 0.3 0.2 0.2
Current Assets 436.7 411.1 356.9 189.5
FINANCIAL SUMMARY - ANNUAL Fixed Assets 521.4 526.4 584.9 739.9

(December Year End) 2010A 2011E 2012E 2013E Other 0.0 0.0 0.0 0.0
Total Assets 958.1 937.5 941.8 929.4
EV/EBITDA nap nap nap nap
EPS (US$) (0.15) (0.14) (0.08) (0.06) Payables 2.6 2.6 2.6 2.6
P/E (x) nap nap nap nap Short Term Debt - - - -
CFPS (US$) (0.31) (0.15) (0.12) (0.09) Other 0.2 0.2 0.2 0.2
P/CF nap nap nap nap Current Liabilities 2.8 2.8 2.8 2.8
FCFPS (US$) (0.08) (0.18) (0.52) (1.16)
P/FCF nap nap nap nap Long Term Debt - - - -
Other 0.3 0.3 0.3 0.3
Common Shares O/S (M) 140.9 140.9 144.4 144.4 Total Liabilities 3.1 3.1 3.1 3.1
QUARTERLY SHAREHOLDERS EQUITY 955.1 934.5 938.8 926.4

Q1/10A Q2/10A Q3/10A Q4/10EQ4/10E Net Debt to Equity -46% -44% -38% -20%
EPS (US$) (0.16) (0.09) (0.03) 0.13 0.13
CFPS (US$) (0.16) (0.07) (0.03) (0.04) (0.04)
FCFPS (US$) (0.19) (1.98) (0.05) (0.03) (0.03)
PRODUCTION AND COSTS
PROFIT AND LOSS STATEMENT - US$M

(December Year End) 2010A 2011E 2012E 2013E Escobal
Silver Production (Moz) - - - -
Mining Revenue - - - - Gold Production (koz) - - - -
Production Costs - - - - Lead Production (kt) - - - -
G&A 17.2 15.1 14.3 15.0 Zinc Production (kt) - - - -
Exploration and Other Expenses 2.1 8.0 5.0 - Silver Equivalent Production (koz) - - - -
Other Income 10.7 - - - Total Cash Costs (U$/oz)* - - - -
EBITDA (8.5) (23.1) (19.3) (15.0) Total Production Costs (U$/oz)* - - - -
Depreciation 0.0 - - -
EBIT (8.5) (23.1) (19.3) (15.0) Total Attributable Production
Interest expense 0.7 1.9 6.5 4.7 Silver Production (Moz) - - - -
EBT (7.8) (21.1) (12.8) (10.3) Gold Production (koz) - - - -
Tax (0.2) - - - Lead Production (kt) - - - -
NPAT (pre-Adjustments) (8.0) (21.1) (12.8) (10.3) Zinc Production (kt) - - - -
Minority Interest - - - - Silver Equivalent Production (koz) - - - -
After-Tax Non-Operating Items - - - - Total Cash Costs (U$/oz)* - - - -
Net Income (reported) (8.0) (21.1) (12.8) (10.3) Total Production Costs (U$/oz)* - - - -
Net Income (adjusted) (10.2) (19.4) (11.0) (8.5)
LOM ESTIMATES Total Cash Cost*
(US$/oz)
REVENUE SPLIT Escobal 5.87

(December Year End) 2010A 2011E 2012E 2013E * co-product cash costs
Silver 0% 0% 0% 0%
Gold 0% 0% 0% 0%
Base Metal 0% 0% 0% 0%
Page 56 of 59
Silver Miners
April 3, 2011
IMPORTANT DISCLOSURES
Analysts' Certification
Each analyst whose name appears on the front page of this report hereby certifies that the views expressed in this report accurately reflect
the analyst’s personal views about the subject securities or issuers. Each analyst also certifies that no part of his compensation was, is or
will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and
their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness
in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and
service to clients.
Sector Risk Disclosure
In addition to the risks involved in investing in common stocks generally, we also highlight the following risks that pertain to the mining
sector. Feasibility Study: Mine plans, mining schedules and production are based on reserve and resource estimates. These plans involve
inherent uncertainties. Resource estimates contain statistical computations and judgments by geologists. Reserve estimations and mine
plans contain technical and commercial judgments by engineers that are optimized on the basis of estimates for mining costs, ore haulage
costs, processing costs and recoveries, as well as gold price assumptions. Expected metal recoveries are based on test work carried out on
representative samples of the ore and treatment processes at the laboratory, sometimes involving bench tests or pilot plant scales. It is
not possible economically to obtain absolute certainty as to the representative nature of the sample or the laboratory results when applied
to the full-scale operations. Mining and processing costs estimates are historically based and may change as a result of changed physical
conditions, market conditions and transportation costs, or changed economic conditions in general.
Technical: Mining and processing may be affected by unexpected events, such as pit failures, dike failures or equipment breakdowns, which
may result in significantly higher costs, revisions to mine plans, sterilization of reserves or ultimate closure of the mine.
Operating: Mining operations can be affected by a number of risk factors, including: unexpected geological conditions; unusual mining
conditions, unexpected processing problems, unexpected metallurgical problems, shortages in skilled workforce; environmental issues and
a lack of availability of support infrastructure.
Permits and Approvals: Operations and development activities are contingent on the receipt and maintenance of various permits and
approvals from appropriate governmental authorities. There is no guarantee that any company will be successful in obtaining the necessary
permits or acceptances for its planned development, or that it will be successful in obtaining renewals of existing permits and approvals on
a timely basis or at all.
Litigation / Political risk: Mining operations are exposed to various levels of political risks and uncertainties. Changes, if any, in mining or
investment policies or shifts in the political landscape may adversely affect any mining company’s operations or profitability. Operations
may be affected in varying degrees by government regulations or unanticipated changes to regulations with respect to, but not limited to,
restrictions on production, income taxes, royalties, maintenance of claims, environmental legislation, land use, land claims of local people,
water use and mine safety. Failure to comply with applicable laws and regulations could result in financial losses, litigation, revocation of
permits or other negative consequences. The occurrence of these or other various factors and uncertainties cannot be accurately predicted
and could have an adverse effect on any mining company’s operations or profitability.
Metal Prices: Any reduction in the price of copper, gold, or silver could adversely affect any mining company’s share price performance.
There are no guarantees that future metals prices will be sustained at levels that enable any mining company to operate its planned
operations at a profit. The company’s cash flows are exposed, among other things, to fluctuations in the gold and silver prices.
Financing: Any mining company could require additional funding for future operations. Funding of operations or projects could take the
form of debt and/or equity financing. There are no guarantees that debt or equity for the project will be available, arranged, or offered on
terms acceptable to any mining company.
Company Specific Disclosures

For Important Disclosures on the stocks discussed in this report, please go to
http://researchglobal.bmocapitalmarkets.com/Company_Disclosure_Public.asp
Page 57 of 59
Silver Miners
April 3, 2011
Distribution of Ratings (December 31, 2010)
Rating BMOCM US BMOCM US BMOCM US BMOCM BMOCM Starmine
Category BMO Rating Universe* IB Clients** IB Clients*** Universe**** IB Clients***** Universe
Buy Outperform 35.3% 14.0% 39.1% 38.6% 45.1% 53.2%
Hold Market Perform 62.3% 12.0% 59.4% 57.5% 51.8% 41.7%
Sell Underperform 2.4% 8.3% 1.6% 3.9% 3.1% 5.1%
* Reflects rating distribution of all companies covered by BMO Capital Markets Corp. equity research analysts.
** Reflects rating distribution of all companies from which BMO Capital Markets Corp. has received compensation for Investment
Banking services as percentage within ratings category.
*** Reflects rating distribution of all companies from which BMO Capital Markets Corp. has received compensation for Investment
Banking services as percentage of Investment Banking clients.
**** Reflects rating distribution of all companies covered by BMO Capital Markets equity research analysts.
***** Reflects rating distribution of all companies from which BMO Capital Markets has received compensation for Investment Banking
services as percentage of Investment Banking clients.
Ratings and Sector Key

We use the following ratings system definitions:
OP = Outperform - Forecast to outperform the market;
Mkt = Market Perform - Forecast to perform roughly in line with the market;
Und = Underperform - Forecast to underperform the market;
(S) = speculative investment;
NR = No rating at this time;
R = Restricted – Dissemination of research is currently restricted.
Market performance is measured by a benchmark index such as the S&P/TSX Composite Index, S&P 500, Nasdaq Composite, as
appropriate for each company. BMO Capital Markets eight Top 15 lists guide investors to our best ideas according to different objectives
(Canadian large, small, growth, value, income, quantitative; and US large, US small) have replaced the Top Pick rating.
Other Important Disclosures

For Important Disclosures on the stocks discussed in this report, please go to
http://researchglobal.bmocapitalmarkets.com/Company_Disclosure_Public.asp or write to Editorial Department, BMO Capital Markets, 3
Times Square, New York, NY 10036 or Editorial Department, BMO Capital Markets, 1 First Canadian Place, Toronto, Ontario, M5X 1H3.
Prior BMO Capital Markets Ratings Systems

http://researchglobal.bmocapitalmarkets.com/documents/2009/prior_rating_systems.pdf
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managing conflicts of interest in connection with investment research which is available at
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Page 58 of 59
Silver Miners
April 3, 2011
Additional Matters
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Page 59 of 59

A New Paradigm For Silver: Demand Is Expected To Outstrip Production Growth

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Global Mining

April 3, 2011 A New Paradigm for Silver

SVM.TSX Outperform Surplus Forecast

Price: C$14.11 Target Price: C$16.00↑ 600

FR.TSX Outperform↑ 400

BCM.TSXV Outperform (S) -200

Price: C$10.15 Target Price: C$13.00↑ Deficit

OK.TSX Market Perform(S) Source: BMO Capital Markets

Price: C$2.53 Target Price: C$2.50

MAG.TSX Outperform (S) SLW FRES alue -

Fig 3: Silver Versus Gold Ratio

The gold to silver ratio has 100

level reminiscent of high silver 80

prices last seen in the early 70

1980’s. 60 Long-term Average

Gold to Silver Ratio Average

Source: BMO Capital Markets

Forecast Silver Production Growth (Moz)

Source: BMO Capital Markets

Source: BMO Capital Markets

Source: BMO Capital Markets

2. Silver Price Performance

Fig 8: BMO Research Metal Price Assumptions

BMO Research metal price

Source: BMO Capital Markets

Fig 9: Silver and Gold Price (US$/oz)

outpacing a 22% rise in the 20 800

Source: BMO Capital Markets

Fig 10: Silver and Gold Price Performance (%)

existed prior to the global

Since the beginning of 2011, 0%

Source: BMO Capital Markets

Fig 11: Forward Curve for Silver (US$/oz)

Silver Price 1-Yr Ago (US$/oz)

currently in backwardation, 35 17.40

Fig 12: Silver Sector Implied Prices (US$/oz)

Discount to Spot Silver Price (%)

Spot Silver Price Percent of Spot

Source: BMO Capital Markets

Fig 13: Company Ranking – Identifies Preferred Silver Stocks

Source: BMO Capital Markets

Fig 14: BMO Research Silver Coverage

 Juniors: BCM, THO Source: BMO Capital Markets

Silver Wheaton (SLW.NYSE; US$43.36)

Pan American Silver (PAAS.NYSE; US$37.13)

First Majestic (FR.TSX; C$20.61)

Silver Standard (SSRI.NDQ; US$31.38)

Tahoe Resources (THO.TSX; C$19.60)

Contingent on a H2/11 Bear Creek Mining (BCM.TSX; C$10.15)

Fig 15: BMO Research Target and Rating Revisions

(31-Mar-11) US$M Previous New %Chg. Previous New NewTarget

Silver Wheaton SLW.NYSE DH $43.36 14,955 $46.00 $52.00 13% OP OP 20%

Hochschild Mining HOC.LSE AK £6.49 3,575 £7. 75 £7.75 0% OP OP 26%

Coeur D'Alene CDE.NYSE AK $34.78 3,045 $34.50 $40.00 16% OP OP 17%

Silver Standard SSRI.NASDQ AK $31.38 2,346 $35.50 $40.00 13% OP OP 35%

Fortuna Silver FVI-TSX AK C$5.30 576 C$6.00 C$6.50 8% OP OP 23%

MAG Silver MAG.TSX JPH C$11.57 651 n/ a n/a OP(S) OP(S)

Orko Silver OK.TSX AK C$2.53 309 C$2.50 C$2.50 0% Mkt(S) Mkt(S) 1%

Source: BMO Capital Markets

4. Supply on the Rise

Fig 16: BMO Research Silver Production Forecasts (Moz)

2013E and 2015E. 400