power up! dundee's lithium and electric metals conference ......we forecast a 14.4% cagr for...

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Power Up! Dundee's Lithium and Electric Metals Conference Lithium, Graphite, Cobalt and Lead - June 13, 2016

Lithium, graphite, cobalt and lead are key components required for the emerging battery boom. Battery grade raw material supply lags demand and prices have started to rise in response, as demonstrated by the recent 47% surge in lithium prices over the last year. This supply/demand imbalance is set to intensify with construction of up to 12 new mega-factories which is forecasted to triple battery manufacturing capacity by 2020. As the supply shortage for raw materials persists, competition between manufacturers to secure supply should intensity. With little new lithium, graphite, cobalt and lead production on the horizon, emerging and near-term developers are well-positioned to benefit.

Fundamentals remain strong and markets tight. Investment is driven by a lithium market in deficit. Roskill suggests 181,662t of LCE demand was offset by only 171,050t of supply in 2015. Similarly, Benchmark Mineral Intelligence estimated last years' demand at 175,000t LCE with only 150,000t LCE supply. Dundee expects this shortfall in lithium to continue through early next decade. LCE will continue to dominate, but LiOH demand is due to rise more quickly. Therefore, emphasis is placed on the difficulty to procure LiOH, particularly if the next generation of suppliers fails to perform. Dundee expects rapid demand growth for lithium, graphite and cobalt. We forecast a 14.4% CAGR for lithium to 2021, driven by a 26% CAGR in battery demand. This includes a 45% CAGR for EVs and a 110% CAGR for energy storage (albeit from a low starting point). Our supply forecast suggests a 14.5% CAGR over the next five years. This keeps the lithium market in a deficit position for the next two years, before it regains balance for the following three years. This is assuming that projects in our model are built and ramp up as we expect. However, LiOH demand is anticipated to be more rapid than LCE production, which dominates current and past production - and this would have an impact on prices. Beyond 2021, we see the market gain imbalance again, although we seek better visibility on various projects before incorporating them into our forecast. The junior mining sector must step up and fill this void. Cobalt and lead supplies also might be in peril as they are by-products dependent on other commodities and/or suffer from insufficient mine development or political risk. Graphite has begun to dig out of the shadow of steel.

Share price target adjustments - lithium up; graphite down. We have included summaries for eight of the ten companies that are participating at Power Up! Dundee's Lithium and Electric Metals Conference. For those under official research coverage, we maintain our BUY recommendations, based on updated commodity price and FX estimates. On higher commodity price forecasts, we are increasing lithium stock target prices including: Orocobre (ORL-T, from C$3.60 to C$5.10/sh); and Lithium Americas (LAC-T, from C$1.60 to C$1.90/sh). Graphite stocks we maintain our target for Mason Graphite (LLG-V, C$0.90 /sh); and trim Energizer Resources (EGZ-V, from C$0.40 to C$0.35/sh).

Conference Agenda

10:00 - 10:10 AM Introduction & Welcome David A. Talbot, Director, Mining Research, Dundee Capital Markets10:10 - 10:30 AM Orocobre Limited James D. Calaway, Non-Executive Chairman10:30 - 10:50 AM Pure Energy Minerals Ltd. Patrick Highsmith, CEO & Director10:50 - 11:10 AM Nemaska Lithium Inc. Guy Bourassa, President & CEO11:10 - 11:30 AM LeadFX Inc. Rob Scargill, President & CEO11:30 - 11:45 AM Lithium Americas Corp. John Kanellitsas, President, & Tom Hodgson, CEO11:45 - 12:05 PM Lithium X Energy Corp. Dan Kriznic, CFO12:05 - 1:00 PM Lunch and Keynote Joe Lowry, President, Global Lithium LLC1:00 - 1:20 PM Formation Metals Inc. J. Paul Farquharson, President & CEO1:20 - 1:40 PM Neo Lithium Corp. Waldo Perez, President & CEO, Director1:40 - 2:00 PM Enirgi Group Corp. Jessica Helm, VP Corporate Communications and IR2:00 - 2:10 PM Closing Remarks David A. Talbot, Director, Mining Research, Dundee Capital Markets

One-on-One's Mason Graphite, Inc. Benoit Gascon, CEO

Lithium and Electric Metals June 13, 2016

DUNDEE CAPITAL MARKETS Page | 2

Favourable price outlook for all electric metals - this is reflected in our commodity price deck. Lithium prices have bucked commodity price trends over the past year. As such, relative to our previous estimates, lithium price forecasts increase significantly; short-term graphite price forecasts are trimmed before almost returning to our previous estimates; and cobalt and lead price forecasts remain unchanged. Specifically, we increase both lithium carbonate (LCE) and lithium hydroxide (LIOH) prices significantly over the next six years. Our LCE price estimate increases from US$6,200/t to US$7,200/t for F2016, before rising to US$10,000/t over the next six years. Our LiOH price estimate rises from US$7,500/t to US$9,200/t in 2016, before reaching US$1,200/t by 2021. We have trimmed our graphite price estimates, particularly for small size fractions, for the next three years until the battery sector starts making a more significant dent in global graphite consumption, which continues to be dominated by steel. Our large flake price estimate decreases to US$1,300/t before returning to US$1,400/t by 2019. Similarly we trim our medium flake price estimate and small flake graphite prices by US$1,000/t to US$1,300/t and US$1,200/t respectively, before they return to previous levels. We maintain our positive outlook for cobalt (rising from $10.45/lb to $13/lb); and for lead (rising from $0.85 to $0.95/lb).

Massive battery demand, short supply anticipated for the electric metals - lithium, graphite, cobalt and lead. This presents investment opportunities. Declining battery costs and green energy is fueling growth of the new electric vehicle (EV) and energy storage industries. These sectors are being driven by brand name, well capitalized, multi-national corporations. Each seems to be already constructing battery Giga-factories that will require raw materials. Traditional uses for these commodities, which were typically based on GDP and steel manufacturing, are no longer the story; but traditional and non-traditional users will be competing against each other to procure supplies. Think Tesla is non-traditional? Some speculate that we have Apple or Google electric cars travelling the streets without the need of a driver…or even passengers! So much for Uber. Or the need to tip a pizza delivery person. Or long distance truckers.

Tesla to mass market EVs. The Giga-factory is to be the largest battery raw materials buyer, with production moved ahead two years to 2018 and scheduled to reach capacity by 2020. Demand seems likely, although execution on Tesla's part remains to be seen. Model 3 had 276,000 pre-orders in two days. That is the equivalent to over half a years' production capacity, requiring 13,000 t LCE alone. Factory requirements would include 22,000 to 26,000 tpa LCE, equivalent to one large lithium mine; 40,000t spherical graphite suggesting 115,000 t natural graphite; and 6,000 t cobalt. This is 14% of world LCE production and 72% of current LiOH production; 10% of global graphite production but 31% of world flake graphite production; and 7% of world cobalt production. Tesla's ultimate goal is to drive down the cost of batteries, and therefore vehicles. We'd argue that the lithium in a new Model 3, at 48 kg LCE per car, only costs US$480 at US$10,000/t LCE. Any input cost inflation should somewhat be mitigated by the average annual 14% decline in battery costs on a per kWh basis. While some analysts expect battery prices to drop quickly, we expect consumers to accept range, power, and cycle time improvements as technology progresses, without seeing the unit cost of the battery fall much further in the short term.

Government policy key to EV adoption. A Tesla in every driveway? A recent Industrial Minerals talk highlighted various internal, external and financial factors that encourage EV adoption by consumers. Internal factors are vehicle-centric and include battery cost, car purchase price, range, and vehicle style. External factors include fuel prices, availability of charging stations, commute distances, and government policies. Financial factors are often driven by the combination of technologies, such as battery types, manufacturing strategies, and government incentives. We expect government policy mechanisms to be one of the most important drivers. Tougher air quality standards such as greenhouse gas emissions and particulate targets are being mandated. Norway has legislated 100% electric vehicles by 2025. Other governments are mandating the electrification of public transit and providing subsidies to residents for the purchase of EV's or the installation of home charging stations.

Energy Storage offers huge growth potential as electricity can be stored and consumed later. This means decreased power generation capacity is required for peak demand periods. It increases momentum for renewable, non-baseload energy sources, and may help nuclear improve efficiencies by storing electricity that would otherwise be shed. Brand name companies like Tesla simply need to convince consumers that they can save money by shifting their electricity consumption off peak hours by installing home battery back-ups, such as the PowerWall.

Short-term supply restrictions. Lithium production remains a sector in its infancy. Olaroz ramp up took longer than expected, SQM and Chile continue to battle over extraction rights, mines have not proven that they can achieve capacity run rates, and not all new technologies are expected to work commercially. Australia is working on the hard rock concentrate model by delivering into China and letting it absorb the hydromet and capital risks. The drawback is only 85,500 t of conversion capacity, and Australia's exports are almost there. While graphite mining is somewhat more simplistic, there is a wide variety of end products with respect to flake sizes and purity levels, and few likely know what each battery manufacturing firm requires. Much of the industry is convinced that "value added steps" must be taken - purification, micronization; sphericization and



coating - that make their own graphite operations look much more profitable. We'd argue that most, if not all, management teams do not yet have the experience required to build and operate such value added plants.

Investor hype risk. Lithium price assumptions seem to be all over the map. We have increased our LCE and LiOH price forecasts twice this year already. Given the lofty statements from industry insiders, we fear we are already low-balling again. Due to opaque price reporting and a wide range of price assumptions by a global community of analysts, speculation is running rampant. Many stocks are performing extremely well in this bull market. Our peer group of ten hard rock stocks is up an average of almost 500% YoY, including 800% gains by half of them listed on the ASX. The brine peer group, limited to four names, was up almost 550% YoY…or it at least doubled if excluding Lithium X performance. High valuations are perhaps warranted given the LCE price expectations. They might even be required to incentivize junior companies to build new operations. This topic came up time and again at the recent 8th Annual Lithium Supply and Markets Conference. While most companies are fundamentalists, the speculative investors are currently driving the markets. Investors need to understand the value chain. Is there enough manufacturing capacity or conversion capacity to achieve the lofty raw material consumption? This is a difficult business. Last time we saw a false start in the lithium sector (circa 2009/2010), capital destruction was rampant. Many investors bet on horses that didn’t win. It was estimated that $1 billion was raised and that a single 17,500 t producer was the result. This time around, based on the number of battery factories being constructed, end user demand will likely be there. But lithium remains a young industry; new companies are literally popping up overnight, many management teams have little lithium experience, and many promises are being made. There is still the risk of poor capital allocation by the investment community. As suggested by James Calaway of Orocobre, Joe Lowry of Global Lithium and others, there is a need for junior companies to fill the supply gap with credible projects, but "there must be constraint".

Table 1: Changes to Dundee estimates

Source: Dundee Capital Markets

Table 2: Dundee's updated currency and electric metals commodity price deck


Company Name TickerLast Close

(C$/sh)Shares Out

(MM)MCap

(C$MM)Rating Risk

Lift to Target

Target Price (C$/sh)

DCF Multiple

Lithium:Orocobre Limited ORL 4.67 209 978 BUY High 5.10 1.1x 9% 3.60 1.6xNemaska Lithium Inc. NMX 1.35 233 315 Rest. Rest.Lithium Americas Corp. LAC 0.85 295 251 BUY Spec. 1.90 0.4x/0.6x 124% 1.60 0.6x/1.0x

Graphite:Mason Graphite Inc. LLG 0.72 87 62 BUY Spec. 0.90 0.7x 25% 0.90 0.6xEnergizer Resources Inc. EGZ 0.08 365 29 BUY Spec. 0.35 0.6x 338% 0.40 0.6x

New Estimates Previous Estimates

Target (C$/sh) DCF Multiple

Restricted Restricted

2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E LT

CommoditiesLithium Carbonate (US$/t) $7,200 $8,000 $8,500 $9,000 $9,500 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000

previous $6,200 $6,200 $6,200 $6,200 $6,200 $6,200 $6,200 $6,200 $6,200 $6,200 $6,200Lithium Hydroxide (US$/t) $9,200 $10,000 $10,500 $11,000 $11,500 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000

previous $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500Graphite - Large Flake (US$/t) $1,300 $1,300 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400

previous $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400Graphite - Medium Flake (US$/t) $1,000 $1,000 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

previous $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300Grpahite - Fine Flake (US$/t) $1,000 $1,000 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100

previous $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200Cobalt (US$/lb) $10.45 $12.00 $12.50 $13.00 $13.00 $13.00 $13.00 $13.00 $13.00 $13.00 $13.00Lead (US$/lb) $0.85 $0.90 $0.90 $0.95 $0.95 $0.95 $0.95 $0.95 $0.95 $0.95 $0.95CurrencyUS$:CAD$ 0.74 0.75 0.78 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80

previous 0.73 0.75 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80US$:AUS$ 0.73 0.73 0.76 0.78 0.78 0.78 0.78 0.78 0.78 0.78 0.78

previous 0.70 0.73 0.77 0.77 0.77 0.77 0.77 0.77 0.77 0.77 0.77



UPCOMING SURGE IN LI-ION BATTERY PRODUCTION PRESENTS OPPORTUNITY

Consumption by the battery industry was 31% of the lithium market, or 57,000 t, in 2015. Battery demand was driven by consumer electronics. While the amount of raw materials per battery is small (5-7 g LCE/smartphone), the unit sales are large. Cell phones have proven that they have been adopted faster than any other technology in history, including telephone, colour television, computers and even radio. However, electric vehicles and energy storage offer new applications at significantly higher growth rates. Consumer electronics used almost 28,000 t LCE in 2014, whereas the green automotive sector used 27,000 t. Automotive applications are still dominated by hybrids. However, full electric vehicles already require twice as much lithium despite having only 1/6th of the unit sales. Energy storage systems used only 1,000 t LCE in 2014. SignumBox estimates 20-30% CAGR for EV's and +30% for energy storage, versus 8-10% for consumer electronics, through 2024.

Battery production to triple in next four years. Unprecedented consumer appetite for the Model 3 highlights the opportunity for EV's and encouraged Tesla to push its 500,000 total unit build plan (Model S, Model X, Model 3) forward by two years to 2018. Major traditional automotive manufacturers are also looking to launch longer range EV's at prices digestible for the mass market. Similarly, growth in renewable energy capacity, largely instigated by US state policy, has created a need for energy storage systems. In response, major battery manufacturers including Panasonic, LG, Foxconn, BYD, Boston Power, and Samsung, are expected to triple battery production by 2020. There are seven Mega-factories already under construction that will need a combined 89,000 t LCE, versus total 2015 global battery demand of 57,000 t. Five more factories are ready to break ground, making it twelve new battery factories over the next four years. To help encourage EV adoption, batteries do need to improve. Over the past decade the cost of batteries on a kWh basis (performance) has decreased by 14% annually.

Raw material production is not ready for this demand. Such a rapid demand increase for batteries is also applying pressure upstream, especially since cutting-edge applications require larger batteries and more raw materials. Lithium producers are currently experiencing robust earnings on the back of a very tight market that is set to intensify given a lack of near-term supply growth. Similarly, other necessary battery raw material inputs, including graphite, cobalt, and lead also demonstrate compelling near-term fundamentals as supply struggles to keep pace with demand.

Source: Benchmark Mineral Intelligence, Dundee Capital Markets, Nature Climate Change

Driver: Megafactories' Material Needs p.a. Battery Costs Fell 14%/yr for Past 15 Yrs

Note: Assumes 0.9 kg LCE per KWh

InvestmentCompany Size (GWh) Start-Up LCE Needs

$5B

$500 MM$300 MM

$1B

$600 MM

--

$810 MM

$2.5B

35

71.6

--

10

20

15

10

2016

2016Expansion

2017

2020

2020

2016

Expansion

31,500

6,3001,440

9,000

18,000

13,500

9,000

89,0002015 LCE demand for batteries alone was 57 Mt

--



Source: SignumBox, Benchmark Mineral Intelligence, Albemarle

Source: Benchmark Mineral Intelligence, Avicienne

“We need to absorb the entire world’s lithium-ion production. To give you a sense of scale, the Gigafactory will have the largest footprint of any kind anywhere. It will make more lithium-ion batteries than any other factory combined.” - Elon Musk, Fortune, March 2016

Lithium Demand by Application, Bigger Batteries Need More Lithium Demand Outlook - 16% CAGR Base

LCE content/unit

2014 Sales (MM Units)

Avg LCE Cost (US$)

2014 total Li Content (t)

Projected CAGR (2014-2024)

Smartphone 5-7g 1,200 0.06 8,400 8-10%Tablet 20-30 g 260 0.25 7,800 8-10%Notebook 35-45 g 170 0.40 7,650 8-10%Powertools 40-60 g 65 0.50 3,900 >15%

HEV 5 kg 1.8 50 9,000 20-30%

PHEV/BEV 40-80 kg 0.3 600 18,000 20-30%

Stationary (Renewable) 1.5 t650 MWh Installed

15,000 1,000 >30%

EV adoption drives de l ithium compounds, la batteries need more L

Megafactories to Triple Capacity by 2020, Expect Fierce Competition for Raw Materal Avicienne: Battery Demand Forecast

2014-2015 overall CAGR +11%; EV battery needs +16%, increasing to 22% on high China growth



Dundee's lithium demand forecast by use, 2015 to 2025

Source: Dundee Capital Markets, Roskill

Source: Roskill, Avicienne

“At General Motors, we see the future of the automobile and vehicle ownership being far different than it is today. Vehicles will be electric, connected, self-driving and shared.” - Stephen Carlisle, President GM Canada, April 2016

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

LCE

(t)

Traditional 3C Power & Motive ESS Electric Vehicles Other Battery

The Inflection Point: Tech Products Show Steeper Adoption Rates

Source: RoskillLIB Cell Bill of Materials: Cost of the Battery for a Nissan Leaf (left) and GM Volt (right)



LITHIUM: SUPPLY DEFICIT ON QUICKLY GROWING DEMAND.

The most obvious inputs required for Li-ion batteries, lithium carbonate and lithium hydroxide have recently experienced unprecedented price increases with prices for both exceeding US$10,000/t, according to industry participants. With the market currently at a supply deficit, and with demand expected to intensify, prices for both compounds are expected to remain elevated. Key market drivers include: massive demand growth for batteries on the back of increased momentum for electric vehicles and energy storage applications (Roskill est. 17% CAGR through 2020) and supply fears (Roskill est. slower supply growth at 10% CAGR).

Market deficit, particularly for faster growing LiOH. Main lithium based compounds include lithium carbonate (LCE, Li2CO3) and lithium hydroxide (LiOH, LiOH●H2O). The industry is heavily concentrated with four companies (SQM, FMC, Albemarle, Tianqi) controlling over 85% of supply. In 2015, the market was estimated to be at a deficit, with Roskill pegging demand at 181,662 t LCE and supply at 171,050 t LCE. LCE still represents half of lithium production, and production costs range from US$2,900 to US$6,500/t LCE. However, the more expensive LiOH compound is growing more quickly. It is becoming the choice input for battery manufacturers as it requires less energy to produce cathode material over lithium carbonate. LiOH production costs range from US$4,700 to US$6,500/t LiOH. Traditionally, LiOH is converted from LCE, but the next generation of lithium mines is largely looking to create flowsheets which would allow LiOH production directly from hard rock or brine deposits, and at costs that rival brine LCE production costs. This could be a major step change in the cost of lithium production moving forward.

Prices driven by lack of supply. Lithium compounds are predominantly sold on contract, with spot markets essentially non-existent outside of China. One year contracts were industry norm, but some have begun to migrate to multi-year agreements. About 60% of Albemarle's lithium carbonate and lithium hydroxide sales are sold on three, four, or five year contracts with potential price adjustments based on market price, price for supply security, level of competition, and quality. However, with rapidly rising lithium prices, FMC and other producers have started to decrease the contract length to quarterly or less. Price estimates vary widely, but it's commonly accepted that spot sales into China are beginning to exceed US$10,000/t LCE.

Brine and hard rock sources now roughly equal. Lithium is produced from two main sources: brines (51% of world production) and hard rock (49%). Brines generally feature massive resources, concentrated in salars (evaporative salt lakes). They often provide potash or boron by-credits, and tend to yield lower operating costs as solar evaporation does much of the work. Brine operations typically have higher capital costs than hard rock projects, as it's estimated that the evaporation ponds typically make up 50% of the capital. Producing brines are predominately located in South America. Hard rock deposits are typically spodumene-rich pegmatite dykes, predominately located in Australia and Canada. Generally, Opex for Chilean brines is more attractive than Argentinian brines, perhaps due to economies of scale and lower Mg content. Brines are more cost competitive than spodumene, at least when processed into LCE. The majority of hard rock production creates a spodumene concentrate which is then fed into Chinese converters to produce LCE or LiOH. Conversion capacity is estimated at 85,500 t LCE, with 50,100 t LCE expected to have been converted into LCE and LiOH in 2015. Hectorite lithium clays are a third major lithium deposit type; however, they have no history of production and remain somewhat experimental.

Hard rock production growing faster. Though there are many projects in the pipeline, the track record for new development projects is far from pristine. Potential pitfalls include: technological/flow sheet issues, quality issues, and difficulty procuring financing. Quebec Lithium mine started up and failed in 2013/2014. Current near-term supply growth is expected from ramp-up at Olaroz, as well as from two new Australian spodumene mines (Mt. Cattlin and Mt. Marion).



Dundee's lithium supply and demand forecast, 2015 to 2025

Source: Dundee Capital Markets, Roskill

Source: Roskill, USGS, Dundee Capital Markets

Source: Roskill, FMC,SQM, ALB, Dundee Capital Markets

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

LCE

(t)

Existing & Expanded Prod'n Galaxy/Chinese Partners - Mt Cattlin Neometals/Partners - Mt Marion

Nemaska - Whabouchi Orocobre/Partners - Olaroz Lithium Americas/SQM - Cauchari

Other Hardrock Other Brine Total Demand (Roskill/Dundee):

Lithium Production Breakdown (2015E) World Resources Breakdown

Sales by Compound 2015E Hard Rock Conversion Capacity, 85.5 kt Key Supply Headwinds

30%40%

19%13%

8%

6%

● Limited production of LiOH - tranformed from Li2CO3● Li demand projected to grow at double digit rates for next 10 years● Sources of new supply not yet clear; customers pay for security of supply● Chinese demand higher on gov't electrical market subsidies, while Chinese production decreases and suffers start-up delays ● Legal issues in Chile create further supply uncertainty



Source: Roskill, Ehren Gonzalez Ltd, Hatch; Note combined technical and battery grade

"What we're seeing is that [lithium] supply is promised but is not yet delivered. But we're seeing demand continue to grow double digits. It's not a great surprise that customers are becoming more focused on security of supply and are more willing to pay. In fact, they're having to pay because there's just less lithium carbonate around" - FMC

Lithium Hydroxide Cost Curve, 2014 (US$/t) Roskill Lithium Price Forecast

Lithium Carbonate Cost Curve, 2014 (US$/t)



GRAPHITE - FLAKE GRAPHITE YET TO SHED PRCING DOMINANTED BY STEEL AND TRADITIONAL MARKETS

Though lithium-ion batteries typically require more graphite by mass than lithium, graphite prices continue to drop with Benchmark's Graphite Index declining 0.7% in May, 5.6% YTD and 18.4% YoY. The graphite market currently stands at 1,200,000 t Cg. However, as batteries account for 25% of demand for graphite, its proportional share is growing. Benchmark Mineral Intelligence pegs 2015 flake graphite supply at 400,000 t and demand at 375,000 t. Spherical graphite exports out of China, the high value product typically used in Li-ion battery anodes, is increasing rapidly. Benchmark reported a CAGR of 27% since 2009. Prices for uncoated spherical graphite, the semi-processed battery grade material (99.95%C, 15 micron), were actually up 5.3% in April. With robust battery demand and Chinese supply headwinds, graphite fundamentals present an opportunity. Higher value graphite products needed by the battery sector should experience higher prices as end-users seek to secure reliable, consistent, and quality supply.

China dominates the market. China dominates production, controlling 67% of global flake graphite production and 95% of spherical (uncoated) graphite production. India and Brazil produce 15% and 9%, respectively, of world flake supply. Coated spherical graphite production is limited to Japan, South Korea, and China. As margins continue to tighten for flake graphite suppliers, the industry is expected to consolidate, especially in China. Several development projects are currently being advanced in North America and in Africa, however none have begun production. A substitute for natural graphite is synthetic graphite, which has a high purity but at US$7,000/t to US$20,000/t, is far more expensive than flake.

Pricing lagging on traditional and steel demand. The graphite market is 1,200,000 t Cg, but the steel sector still accounts for 35% of graphite demand, and little is being done to ease the current supply glut. Similarly, 1/3 of the market is considered flake graphite - which is dominated by battery demand. Prices for graphite products are highly variable and depend on flake size, purity, and shape. Large flake graphite usually commands a premium, but its uses are confined to small, niche markets. Graphite is not exchange traded and prices are typically negotiated on one year or multi-year supply contracts. Published prices tend to lowball actual observed prices as they're mostly based on refractory contracts, which are more cyclical than prices for material used in electrical and technical applications.

Value added transformation - premium prices but added risk. Medium (+150 mesh) and fine flakes (-150 mesh) are typically used to produce the anode material, undergoing further transformation including purification, micronisation, spheroidization, and coating. Prices increase depending on the level of transformation: average flake prices are US$900-US$1,300/t, uncoated spherical graphite goes for US$3,000 - US$4,000/t, and coated spherical graphite for US$8,000 to US$10,000/t. Battery consumers will likely need value added products, but the jury is out as to whether flake size versus purity is the major concern at the mine site. However, the trend of graphite project developers is to not only mine the graphite, but to add value through the purification, micronisation, spheroidization and coating stages. This requires an entirely different skill set and capital outlay, and likely adds risk to projects that depend on this route to be economic.

China headwinds. Chinese mines are typically older, deep, and suffer from the effects of high grading. Quality is inconsistent as output from several small to medium mines feed into central processing plants. As a result, the Chinese industry has been consolidating for the past two years; attempting to modernize and improve environmental standards which will increase costs further. Benchmark estimates that consolidation will impact ~30% of capacity. While flake production decreases and a greater proportion is allocated to value-added products, Chinese domestic demand for battery grade graphite is increasing on the back of Government subsidies for electric vehicles, and due to the high costs of synthetic graphite. China's EV production was up 147% in Q1, YoY.

Opportunity for North American producers. Due to rising costs, inconsistent quality, poor environmental standards, and +35% taxes charged on graphite exports, Chinese supply seems to not be a viable long-term option for battery manufacturers. US Giga-factories will soon be driving significant growth in demand, yet North American production is limited. The US imports 100% of its natural graphite, and Imerys' Quebec-based mine is expected to be depleted by 2020. Battery end-users need consistent quality product that meets their necessary specs, is low-cost, reliable, and potentially allows for just-in time delivery.



Source: Nouveau Monde

Source: Nouveau Monde, Avicenne Energy

Source: Nouveau Monde, Dundee Capital Markets

Graphite Forms and Applications Spherical (Uncoated) Graphite Prod'n

World Flake Graphite Production and End-Uses

Flake Grpahite Prices Li-Ion Battery Graphite ProductsFlake Graphite (Avg $1,050 - 1,350/t)

Spheronizing & Purification

Uncoated Spherical Graphite (US$3,000 to US$4,000/t)

Carbon Coating

LiB Anode Material US$8,000 to US$10,000/t

Jumbo Flakes(+50 mesh)

Large Flakes(+80 mesh)

Medium Flakes(+150 mesh)

Fine Flakes(-150 mesh)

20-30% 20-30% 20-30% 20-30%

US$1,500-2,000/t US$1,300 - 1,400/t US$1,100 - 1,200/t US$1,000 - 1,100/t



Source: Benchmark Mineral Intelligence

“Our cells should be called Nickel-Graphite, because primarily the cathode is nickel and the anode side is graphite with silicon oxide… [there’s] a little bit of lithium in there, but it’s like the salt on the salad,” - Elon Musk, Tesla - June 2016

Flake Graphite Prices Sphericial Graphite Prices

30%40%

19%13%

8%

6%



COBALT - EMERGING AS STRATEGIC WHILE POLITICS AND BY-PRODUCT PRODUCTION PUTS SUPPLY AT RISK

A necessary input to produce cathode for many Li-ion batteries, cobalt is also facing supply headwinds with the market expected to be in deficit from 2016 onwards. Cobalt is almost entirely produced as a by-product of copper and nickel mining, and is thus suffering cut-backs as base metal miners trim production on sustained depressed prices. These scale-backs pose a threat to the burgeoning Li-ion battery industry which is expected to significantly expand manufacturing capacity in the near-term. Major producers maintain that cobalt-based battery chemistries will remain the industry standard for the foreseeable future, inciting security of supply concerns. But not only is production being scaled back; the majority comes from the politically unstable DRC. With low base metal prices and with a good portion of DRC production likely unsustainable, it is clear that the industry will have a need for new development projects, especially as battery cell production ramps up in 2017 and onwards. The growing EV sector has the potential to more than double cobalt demand over the next 20 years. Battery demand for cobalt increased 11.7% in 2015 and is now the dominant end-use with 45% of the market. Total demand is currently estimated at around 90,000 t, and CRU projects a CAGR of ~7% to 2020 with the market eventually growing to ~130,000 t in the mid-2020's. The United States has started to stockpile cobalt in the form of chemical compounds used in lithium-ion batteries, because it considers them to be strategic.

DRC and China dominate supply. Global mine production is heavily dominated by the DRC at 64%. The world is heavily reliant on China for battery-grade, as it controls 52% of refined cobalt production. CMOC's recent US$2.65B acquisition of 56% of the Tenke Fungurume copper-cobalt mine in the DRC is expected to further increase its stronghold on the market. It is one of the world's lowest cost cobalt producers and contributes ~13.3% of global mine supply annually. According to CRU, the majority of mine production will enter the Chinese chemical market. CMOC also has the option to acquire Freeport's interest in the Kokkola cobalt refinery in Finland for another US$100 MM, further increasing its share of refined cobalt production. Notably, its share of cobalt chemical production (used in batteries) could increase to 84% in 2017.

Long-term contract pricing. Though cobalt has traded on the LME for almost six years, market adoption has been limited. The industry is still largely contract-based with producers hesitant to switch to exchange-based pricing. Cobalt currently trades at around US$10.70/lb, with prices tending to track long-term base metal price patterns.

Supply Headwinds. Not only is the market set to tighten due to a combination of production cut-backs, strong battery demand, and a lack of a project pipeline, but current mine supply is reliant on the politically volatile DRC and refined supply on China, which has its own interests. Chinese imports of mined cobalt increased 30% YoY in 2015 to 60,000 t - much of which was stockpiled. Benchmark estimates that Tesla's first Giga-factory alone will require 7,000 t of cobalt annually by 2020. It has stated that it intends to source its battery materials form North America which currently has minimal cobalt production, but only a couple of potential near- to mid-term deposits. According to the USGS, the US imports 75 to 80% of its ~14,000 t annual cobalt needs with the remainder salvaged from scrap. The US National Defense stockpile, which once stocked inventories of over 24,000 t in the early 90's, is now almost depleted. Despite ENRC's major US$2.2 B expansion (US$700 MM of which was financed by China) to increase production by 15,000 t (~17% of global production), Darton Commodities anticipates that this will largely be offset by mine closures and scale-backs. It expects 2016 production to decrease by 3,200 to 6,400 t.

Conflict Mineral? Amnesty International's report on human rights abuses and artisanal cobalt mining in the DRC, released early 2016, was heavily covered by media outlets globally. Although the SEC does not currently recognize cobalt as a conflict mineral, increasing emphasis on corporate responsibility and supply chain transparency could pose potential brand management issues for companies that do use cobalt sourced from the DRC. This is especially important for green minded consumers who dominate EV consumption. According to Benchmark, cobalt is not included under US legislation to protect the industry from severe supply shortages and price volatility, despite the fact the DRC dominates production.



Source: CRU, Benchmark Mineral Intellgence

Source: Darton Commodities, USGS

Source: CRU Consulting, Formation Metals

CRU Projects Undersupply 2016 to 2020 2014 Global Cobalt Demand

Global Cobalt Production and Reserves

2017 Projected Control of Global Cobalt Production Cobalt Price (>99.8%) in USD/lb



Source: Benchmark Mineral Intelligence, Fortune Minerals

"The stability in price will be a key factor in cobalt's usage in batteries" - Munehisa Ikoma, Senior Executive Engineer - Panasonic Corp

Raw Material to Cathode Lithion-Ion Battery Chemistries



LEAD: LEAD-ACID REMAINS KEY INGREDIENT FOR MICRO-HYBRIDS AND IGNITION BATTERIES

About 70% of lead production is used in lead-acid batteries which remain important to the transportation sector. Most of which are starting, lighting and ignition batteries for vehicles and back-up power sources for stationary energy storage. The growth in electric vehicles isn't necessarily negative for lead demand as many manufacturers, including Tesla and Nissan, include lead-acid batteries in their latest EV models. Furthermore, start-stop batteries used in micro-hybrid cars generally use about 25% more lead than regular lead-acid batteries. These are expected to double in number to 35 million by 2020. Europe and Japan incorporate this technology in 50% to 60% of new cars sold. Additional growth of this technology should be positive for lead demand. Chinese e-bikes are beginning to lose market share to cars as household wealth increases, but remain a major source of lead demand. They account for ~30% of Chinese consumption, ahead of cars at 25% according to ILSG. Overall, lead demand is expected to increase at a 2.5% to 3.5% CAGR through to 2020.

Lead is expected to enter deficit territory in 2017. Demand is anticipated to rebound, while further supply reductions are expected. The last few decades saw little invested in lead exploration and mine development. Few projects are in the pipeline to replace depleting reserves as a result. Furthermore, many lead-silver mines were closed between 1970 to 1990 due to depressed metal prices and increasingly burdensome environmental restrictions. Despite positive fundamentals, sentiment on lead still remains bearish. However, we believe the recent pull-back in prices presents itself as a buying opportunity as supply-demand fundamentals tighten up towards the end of the year.

China supplies half the market. Global lead mine production is dominated by China at 48%, followed by Australia at 15%. A significant portion of Chinese lead is sourced from a number of small mines with variable output, making supply difficult to predict.

Seasonal demand. Prices decreased sharply towards the end of May, falling 13.2% to US$1,644/t from a peak of US$1,895/t reached in early March. LME stock activity has slowed, mainly due to weak seasonal demand for replacement batteries. Wood Mackenzie and Metal Bulletin Research forecast 2017 prices at US$2,300/t and at US$2,005/t respectively.

Supply headwinds - little development pipeline. Lead supply is expected to tighten due to the closure of many large lead-zinc mines, including the Century Mine in Australia and the Lisheen Mine in Ireland which together accounted for 70,000 tpa. No significant lead mines have been approved for production outside of China. Mine output has decreased more than primary refined output. ILZSG estimates that Q1 mine production fell 9% to 1.042 Mt, while global refined production decreased 1.9% to 2.54 Mt - implying that refiners have dipped into stockpiles and that the full brunt of the impact of dwindling mine supply has yet to come. While around 60% of refined lead supply is sourced from recycled batteries, it is not certain where scrap material will come from to feed these plants. Though most fundamentals do point to increased demand for lead due to continuing rise in vehicle demand, there is political risk that some Governments seek what might be considered to be more environmentally friendly alternatives.

Source: USGS, ILZSG, Metal Bulletin Research

"With no new mines outside China due to start production this year and several major smelter expansions, the competition for concentrates will be intense, drive TCs down and LME price upwards. Demand remains steady and driven by the relentless increase in global vehicle numbers. New battery technology will increase the use of lead for automotive batteries and electric vehicles will do little to abate this demand." – Wood Mackenzie

Global Lead Supply Metal Bulletin Lead Price Forecasts ($US/t)



Power Up! Dundee's Lithium and the Electric Metals Conference Lithium, Graphite, Cobalt and Lead - June 13, 2016

Dundee's Lithium and Electric Metals Conference Agenda


Speaker Biographies

David A. Talbot, Director Mining Research, Dundee Capital Markets. David graduated from The University of Western Ontario, with an Honours B.Sc. in geology. He joined Dundee Capital Markets in May 2003 as a research associate, covering gold companies ranging from junior exploration companies, through the senior gold miners. As an analyst, he has focused on the uranium sector since June 2007. He covers 18 uranium stocks and has visited nearly 90 projects on six continents. He regularly Chairs the annual PDAC Uranium Session, is a contributor on BNN and CNBC, and has been quoted in The Economist. He began covering the lithium sector in October 2009, which has since blossomed into other “electric metals”. David is a member of the Society of Economic Geologists, the Prospectors and Developers Association of Canada.

James D. Calaway, Non-Executive Chairman, Orocobre Limited. Mr. Calaway is a graduate of University of Texas and University of Oxford. He has played major roles in development of public and private companies engaged in oil & gas exploration and production and alternative energy development. He currently serves as Chairman of Distributed Power Partners, a leader in clustered distributed solar power development, and has served as a Director on several other U.S. corporate boards.

Patrick Highsmith, CEO and Director, Pure Energy. Mr. Highsmith has BSc and MSc degrees from Colorado School of Mines in Geological Engineering and Economic Geology. He has +25 years’ experience in exploration, operations, business development, and executive roles for companies, including Rio Tinto, BHP Billiton, Newmont, and Lithium One. Mr. Highsmith has evaluated and worked on +250 projects. He has led diverse teams through major engineering and development milestones, including delineating several mineral resources, and a successful PEA on the Sal de Vida lithium brine project in Argentina.

Conference Agenda

10:00 - 10:10 AM Introduction & Welcome David A. Talbot, Director, Mining Research, Dundee Capital Markets10:10 - 10:30 AM Orocobre Limited James D. Calaway, Non-Executive Chairman10:30 - 10:50 AM Pure Energy Minerals Ltd. Patrick Highsmith, CEO & Director10:50 - 11:10 AM Nemaska Lithium Inc. Guy Bourassa, President & CEO11:10 - 11:30 AM LeadFX Inc. Rob Scargill, President & CEO11:30 - 11:45 AM Lithium Americas Corp. John Kanellitsas, President, & Tom Hodgson, CEO11:45 - 12:05 PM Lithium X Energy Corp. Dan Kriznic, CFO12:05 - 1:00 PM Lunch and Keynote Joe Lowry, President, Global Lithium LLC1:00 - 1:20 PM Formation Metals Inc. J. Paul Farquharson, President & CEO1:20 - 1:40 PM Neo Lithium Corp. Waldo Perez, President & CEO, Director1:40 - 2:00 PM Enirgi Group Corp. Jessica Helm, VP Corporate Communications and IR2:00 - 2:10 PM Closing Remarks David A. Talbot, Director, Mining Research, Dundee Capital Markets

One-on-One's Mason Graphite, Inc. Benoit Gascon, CEO



Guy Bourassa, President and CEO, Nemaska Lithium. Mr. Bourassa is a lawyer, graduating from Universite Laval. He has 30 years’ experience in the mining industry, and has been Nemaska’s President and CEO since inception in 2008. Among other things he was instrumental in negotiating the acquisition of the Whabouchi lithium property and securing over $50 million through financings to develop the project.

Rob Scargill, President and CEO, LeadFX. Mr. Scargill is a qualified Mining Engineer with over 25 years’ experience in the Australasian mining industry. He has been led several mine start‐ups and operation turnarounds, including BHP’s Cannington mine, Gympie Gold’s Lewis mine and Perilya’s Broken Hill mining complex.

Tom Hodgson, CEO, Lithium Americas. Mr. Hodgson holds a Bachelor of Arts degree in Economics and Law from Carleton University, and an MBA in Finance and Accounting from Queen’s University. Before becoming actively involved with Lithium Americas, Mr. Hodgson had a career in banking, finance and money management. He has served as a CEO, COO or Director for a number of public and private companies in Canada and the United Kingdom, including Central Guaranty Trustco, GlobalNetFinancial.com, Marathon Asset Management, and Magna Entertainment Corp.

John Kanellitsas, Vice‐Chairman and President, Lithium Americas. Mr. Kanellitsas has an MBA from the University of California and a Bachelor’s degree in Mechanical Engineering from Michigan State University. He has over 25 years’ experience in investment banking and asset management. Mr. Kanellitsas was a co‐founder and partner of Geologic Resource Partners, LLC, service as COO from 2004 until 2014. Prior he was employed by Sun Valley Gold, LLC and Morgan Stanley & Co.

Dan Kriznic, CFO, Lithium X. Mr. Kriznic is a CPA/CA and currently CFO of RIWI Corp., a technology firm trading on the CSE. Prior he was EVP and CFO of an investment company focused on education, commercial real estate, senior care homes and public storage. He has been instrumental in building and exiting companies from start‐ups to those in excess of $500 MM in NAV. Previously he was a Senior Manager at Deloitte responsible for advising both public and private companies for a period of 10 years. He has served on the boards of public, private and non‐profit organizations in the education, mining, and oil and gas sector.

Joe Lowry, President, Global Lithium LLC. Mr. Lowry holds an MBA from the University of Georgia. One of the World's Leading Lithium Market Experts, he leverages more than 20 years of “Big 3” lithium experience in the US, Japan and China. He provides advisory and consulting services to Governments, lithium producers, lithium users, green energy companies, investment houses and hedge funds. Areas of focus are: industry and market analysis, strategy development, marketing and sales support, sourcing, cross cultural training, valuations, recruiting and negotiations.

J. Paul Farquharson, President & CEO, Formation Metals. Mr. Farquharson holds a Bachelor of Accounting degree from Brock University. Formerly CFO for Formation Capital, he has been with the Company for 22 years. He has been integral to the success of numerous financings and strategic acquisitions. Mr. Farquharson has over 30 years’ experience in financial management and regulatory compliance with numerous private and public resource companies across Canada.

Dr. Waldo Perez, President and CEO, Neo Lithium. Dr. Perez has 28 years’ academic and industry experience in mineral exploration in South America. He was the founder and technical leader of the Cauchari project acquired by Lithium Americas Corp.. He serves as LAC’s President and CEO from inception until completion of a positive Definitive Feasibility Study. Previously, he served as CEO of Latin American Minerals Inc., Senior Geologist for Barrick Gold, IAMGOLD, Apex Geoscience, and Opawica Exploration.

Jessica Helm, VP Corporate Communications, Enirgi. Ms. Helm holds a BA (Honours Political Science and Honours Applied Studies) and a Specialization in International Trade from the University of Waterloo. She has +9 years’ experience in Corporate Communications and Investor Relations, Institutional Trading, and Equity Capital Markets. Ms. Helm began her career in Equity Capital Markets where she worked for Macquarie Bank, a leading independent investment dealer, and CIBC.



Company Summaries Table 3: Company summary

Source: FactSet, Dundee Capital Markets

Table 4: Project summary

Source: Company reports, Dundee Capital Markets

Last Close Mrkt Cap S/OCompany Ticker (C$) (C$MM) (MM) Rating Risk Target 1 mo 3 mo 6 mo 1 yr

LithiumEnirgi Group Corp. -- -- -- -- -- -- -- -- -- -- --Lithium Americas Corp. LAC 0.85 251 295 BUY Spec. 1.90 11% 78% 179% 11%Lithium X Energy Corp. LIX 1.74 97 56 -- -- -- 0% 67% 337% 1889%Nemaska Lithium Inc. NMX 1.35 315 233Neo Lithium Corp. -- -- -- -- -- -- -- -- -- -- --Orocobre Limited ORL 4.67 978 209 BUY High 5.10 21% 64% 221% 86%Pure Energy Minerals Ltd. PE 0.69 46 66 -- -- -- 11% (13%) 37% 163%GraphiteEnergizer Resources Inc. EGZ 0.08 29 365 BUY Spec. 0.35 (25%) (6%) (4%) (32%)Mason Graphite, Inc. LLG 0.72 62 87 BUY Spec. 0.90 5% 21% 89% 33%CobaltFormation Metals Inc. FCO 0.58 53 91 -- -- -- 56% 307% 470% 268%LeadLeadFX Inc. LFX 0.35 13 38 -- -- --

Performance

Restricted Restricted

Restricted

Est. Prod'nCompany Project Location Interest Commodity Status Tonnage (Mt) Grade Cg/LCE/Co Start-UpMt

LithiumEnirgi Group Corp. Salar del Rincon Argentina 100% Lithium DFS -- -- 8 Mt --Lithium Americas Corp. Cauchari-Olaroz Argentina 50% Lithium DFS -- 585 mg/l 12 Mt

King's Valley Nevada 100% Lithium PFS 93 0.37% 2 Mt --Lithium X Energy Corp. Sal de Los Angeles* Argentina 80%** Lithium Resource/PEA -- 592 mg/l 3 Mt --

Clayton Valley North Nevada 100% Lithium Resource -- -- -- --Neo Lithium Corp. 3Q Argentina 100% Lithium Resource -- -- --Orocobre Limited Olaroz Argentina 66.50% Lithium Production -- 690 mg/l 6 Mt --Pure Energy Minerals Ltd. Clayton Valley South Nevada 100% Lithium Resource/PEA 102 mg/l 0.816 --GraphiteEnergizer Resources Inc. Molo Madagascar 100% Graphite Post-DFS 141 6.13% 9 Mt --Mason Graphite, Inc. Lac Gueret Quebec 100% Graphite Post-DFS 83 17.20% 14 Mt 2017CobaltFormation Metals Inc. Idaho Cobalt Project Idaho 100% Cobalt DFS 49 0.53% 54 lbs --*Historic resource** Earn-in

Resource



Orocobre Ltd. (ORL-T: C$4.57), (ORE-AU: A$4.85) June 13, 2016

BUY, High Risk Dundee target: C$5.10 (from C$3.60)

David A. Talbot / (416) 350-3082 [email protected]

Lilliana Paoletti / (416) 350-5090 [email protected]

Power Up! Conference: First-Comer Premium With Investors

We recommend Orocobre with a BUY, increasing our target to C$5.10 from C$3.60/sh after incorporating our new lithium and FX price assumptions into our 10% DCF model. The first junior developer to successfully start up a brine operation and produce lithium carbonate, Orocobre receives a premium valuation from investors and deservedly so. Its Olaroz project in Argentina, jointly owned with Toyota Tsusho, hosts resources of 6.44Mt LCE at 690mg/L Li. The facility is currently operating at ~70% of its 17,500tpa LCE design capacity and management has confirmed that it is producing battery grade LCE. Break-even was achieved January 2016. Studies contemplating doubling LCE production to 35,000tpa are currently underway. Bateman LiSX testing has recently wrapped up, likely part of a stand-alone LiOH operation that Orocobre is also considering.

Ramp-up on track to achieve nameplate by Sep-16. April production of ~1,000t LCE is a 15% increase MoM. ORL expects to produce 3,000t June Q - almost a 30% increase QoQ. As ramp-up progresses, execution risk diminishes with initial equipment issues largely resolved. Current Opex is ~US$3,500/t LCE, reducing to US$2,500/t by FY2018E, in line with major South American producers.

Battery grade deliveries began in February. Further battery grade deliveries due in Q2, with additional customers having recently completed product qualification. From May 10th to the 16th, 86% of production was battery grade material and 14% technical grade. Typical specs demonstrate a product low in Mg, Na, Cl and SO4, and devoid of K and Ni. Q3/16 FOB price of over US$10,000/t LCE.

LCE expansion study underway. Scoping studies contemplate an additional 17,500 tpa LCE production at Olaroz. This time around, it's expected that materials would be right-sized during the design stage. Furthermore, political and economic reforms will allow sourcing materials worldwide, rather than making do in Argentina. Construction could potentially begin next May with production by November 2018. This LCE expansion is included in our DCF model.

Potential foray into LiOH may provide upside. A draft study by Bateman Technologies examining a potential LiOH operation was likely due in May. Such an operation might provide further corporate growth and if successful, would be accretive to our NAV estimate, particularly if 100%-owned. Management currently downplays LiOH, highlighting its less risky plans of doubling its existing LCE plant. The LiSX process is expected to have lowest quartile costs and could produce LiOH directly from brine. A 15,000 to 25,000 tpa LiOH mine would further cement ORL's position as the go-to lithium producer stock for investors.

Risks. Ramp up continues, but execution risk remains. We await sales prices, which should now be reported quarterly, although management notes it is producing and delivering battery grade LCE. Lag in the adoption of electric vehicles or sudden influx of new viable lithium projects could impact prices.

Please refer to our latest notes on Orocobre: 12-April-2016 and 9-February-2016

ORL-T: Price/Volume Chart

Source: Factset

Company Description Orocobre is an exploration and development company focused on lithium brine properties. Its flagship is the 66.5% owned Olaroz brine project in Argentina (JV with JEMSE (8.5%) and Toyota Tsusho (25%)). The brine hosts 6.4 MMt LCE, and first production began in Feb 2015.

ORE-AU New LastRating -- BuyTarget C$ 5.10 C$ 3.60Risk -- HighProjected Return 7% (36%)DCF multiple 1.10x 1.60x2017 - 10% DCF Corporate Value 4.42 1.982016 - Cash and Debt 0.22 0.342016 - Additional Resource Value 0.10 0.16NAV 4.74 2.48P/NAV 1.02x 1.96x

Last Price $4.8552-week Range $1.33 - $5.03Market Cap ($MM) $1,022Enterprise Value ($MM) $975Shares Outstanding - Basic (MM) 209.5Shares Outstanding - FD (MM) 211.7Avg Volume - 100d (000 shares/day) 1,182.1Cash (Mar) ($MM) $49.8Debt (Dec) ($MM) $2.2Working Capital (Dec) ($MM) $4.9

Forecast 2015A 2016E 2017E LTSpot LCE (US$/t) 2,786 6,386 7,600 8,750Realized Price (US$/t) 2,786 6,386 7,600 8,750EPS (0.01) (0.23) 0.12P/E n/a n/a 40.4EBITDA ($MM) 0.6 (39.5) 25.4EV/EBITDA 1598.7x n/a 38.4xCF (9.5) (24.9) 25.1CF/share (0.07) (0.14) 0.12Capex ($MM) (2.5) (2.6) (1.4)FCF ($MM) (12.0) (27.5) 23.7FCF Yield n/a n/a 2%All Figures in A$ Unless Otherwise NotedSource: Company Reports , FactSet, Dundee Capita l Markets

Company Data

mailto:[email protected]


http://research.dundeecapitalmarkets.com/en/~/media/Dcm/Publications/CoverageListResearch/2016/April/O/ORL041216.ashx

http://research.dundeecapitalmarkets.com/en/~/media/Dcm/Publications/CoverageListResearch/2016/February/O/ORL020916.ashx

Orocobre Ltd. June 13, 2016


Source: Company Reports, FactSet, Dundee Capital Markets

Orocobre Limited ORE-AU A$ 4.85Rating BUY A$ Target $5.20 Shares O/S (MM) 209.5Risk* High A$ Close $4.85 Fully Diluted Shares (MM) 211.7

C$ Target $5.10 Basic Mkt. Capitalization ($MM) A$ 1,016.012-month return 7% C$ Close $4.57 Enterprise Value ($MM) A$ 974.7All figures in A$, unless stated otherwise

Year-end June (000 A$)EVALUATION DATA BALANCE SHEET 2015A 2016E 2017E 2018EYear-end June 2015A 2016E 2017E 2018E AssetsEPS (0.01)$ (0.23)$ 0.12$ 0.16$ Cash & ST Investments 7,408 49,460 53,573 85,064 P/E n/a n/a 40.4x 30.3x Other Current Assets 20,627 16,864 16,864 16,864 CFPS before changes in WC (0.07)$ (0.14)$ 0.12$ 0.17$ Current Assets 28,035 66,324 70,436 101,928 P/CF N/A 29.5x 21.3xmarket cap/reserve t N/A Mineral Properties 17,104 43,525 61,623 62,891 enterprise value/reserve t N/A Other non-current Assets 204,631 177,227 177,227 177,227 market cap/resource t 226$ Total Assets 249,770 287,076 309,286 342,046 enterprise value/resource t 207$ ASSUMPTIONS 2015A 2016E 2017E 2018E LiabilitiesLithium US$/t 2786 6386 7600 8250 Current Liabilities 21,885 14,236 14,173 12,564 Exchange US$/A$ 0.84 0.73 0.73 0.75 Capital lease / LT Debt 1,609 1,609 - - Dundee Modelled Reserves and Other Mineralization (MM t) Other non-current Liabilities 14,454 2,470 2,470 1,301 RESERVES & RESOURCES Lithium Total Liabilities 37,949 18,315 16,643 13,865

Mg/L 100% Basis ORL ShareOwnership Capital Stock 134,826 217,858 217,858 217,858

Proven and Probable Reserves Retained/Deficit 76,995 50,903 75,954 110,323 Olaroz 66.5% Total Shareholder Equity 211,821 268,761 293,812 328,181 Salinas Grandes 100%

EARNINGS SUMMARY 2015A 2016E 2017E 2018ETotal Reserves RevenueMeasured and Indicated Resources (including reserves) Lithium (460) (15,267) - - Olaroz 66.5% 690 6,400 4,256 Clay + Other 28,483 30,500 31,675 31,114 Salinas Grandes 100% Total Revenue 28,023 15,232 31,675 31,114

Operating Costs 22,865 25,072 26,246 25,718 Total M&I Resources 690 6,400 4,256 Other Costs 228 27,993 - - Inferred Resources DD&A 36 22 61 74 Olaroz 66.5% Exploration - 272 - - Salinas Grandes 100% 795 239 239 S, G&A 14,740 14,875 11,000 11,000

EBITDA 610 (39,460) 25,357 34,566 Total Inferred Resources 795 239 239 FX Gain 10,419 6,913 - - TOTAL RESOURCE 694 6,639 4,495 Interest (2,753) (2,899) (245) (123)

Writedown of min. properties - - - - PRODUCTION ESTIMATES (t) EBT 8,276 (35,446) 25,112 34,443 Year-end Jun. 2015A 2016E 2017E 2018E 2019E less Tax (962) (1,341) - - Olaroz 126 6,932 17,125 17,500 26,250 Earnings from Olaroz - 6,605 30,928 40,170

Net Income (reported) 9,238 (27,500) 56,040 74,613 Average shares (MM) 139.1 181.1 208.6 208.6

Sub total 0 6,932 17,125 17,500 26,250 STATEMENT OF CASH FLOWS (000 A$)TOTAL CASH COST ESTIMATES (US$/t) 2015A 2016E 2017E 2018EYear-end Jun. 2015A 2016E 2017E 2018E 2019E Net Income (000's$) (1,179) (40,972) 25,051 34,370 Olaroz 5,550 4,348 3,076 2,583 2,591 D, D&A 36 22 61 74

Future income taxes - - - - Writedown of min. properties - - - -

Wt. Ave. 0 0 3,076 2,583 2,591 FX Gain - - - - NET ASSET VALUE 0% NAV A$/share 10% NAV A$/share Change in working capital - - - - (beginning 2017) (A$MM) (A$MM) Other Operating (8,354) 16,042 - - Corporate DCF 2,280 10.93 923 4.42 Total Operating CF (9,497) (24,908) 25,112 34,443 Cash and Debt 46 0.22 46 0.22 Short term investments - - - - Exploration & unmodelled Resources 21 0.10 21 0.10 Mineral Properties (2,654) (2,595) (1,370) (1,342) Total 2,347 11.25 990 4.74 Acquisitions - - - - Dundee DCF Target Multiple 1.1x Increase in Investments - - - - Share Price Target A$ 5.20 Other Investing (2,173) (12,040) - - Share Price Target C$ 5.10 Total Investing CF (4,828) (14,636) (1,370) (1,342)

Equity financing 82,300 116,028 - - Debt Issue - - - - Debt Repayment (861) (331) - (1,609)

NAV (C$/share) 6,000 8,000 10,000 12,000 14,000 Other financing (87,378) (48,116) - - 0% Discount 5.23 8.44 11.64 14.83 18.02 Total Financing CF (5,939) 67,581 - (1,609) 5% Discount 3.33 5.33 7.33 9.32 11.31 Foreign Exchange effect 810 (7,646) - - 10% Discount 2.32 3.69 5.05 6.41 7.76 Change in cash (20,264) 28,037 23,742 31,492 15% Discount 1.75 2.75 3.75 4.74 5.73 Cash & ST Inv., end of year 7,408 29,831 53,573 85,064

Contained Li2CO3 (LCE)

000's tonnes

Resources and Reserves (per share)Lithium Carbonate Production and Total Cash Costs

NAV & Price Target Sensitivity to Long-term Lithium Price AssumptionLong Term Lithium Price Assumption (US$/t)

0

1000

2000

3000

4000

5000

6000

7000

8000

0

10

20

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2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

US$/t

000's

t LC

E

Li Carb Production Total Cash Cost

02468

10

2013A 2014A 2015A

Mt L

CE

Inferred M&I (excl reserves) Reserves

0.000.050.100.150.20

2013A 2014A 2015A

t LCE

/ sha

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Inferred / share M&I (excl reserves) / share Reserves / share



Pure Energy Minerals Ltd. (PE-V: C$0.68) June 13, 2016

NOT COVERED, NOT RATED Dundee target: N/R



Power Up! Conference: Sharing A Good Brine With Friends

Pure Energy is not under formal coverage and has no rating or target price. Pure Energy's Clayton Valley South project benefits from existing infrastructure and nearby production. Next door to North America's only producing lithium operation Albemarle's Silver Peak lithium brine mine demonstrates that the basin's shared brine chemistry is suitable for production. These attributes likely attracted Tesla, convincing it to sign a cornerstone supply agreement. Clayton Valley South's resource estimate totals 816,000 t of contained LCE and grades 102 mg/L Li. Testing is currently underway to determine if Bateman's LiSX technology might be a suitable means of extraction. There appears to be potential to improve recoveries, efficiencies, and significantly reduce environmental footprint versus traditional evaporation ponds. Furthermore, CEO Patrick Highsmith brings previous lithium and M&A experience as former CEO of Lithium One. He produced a successful PEA for the Sal de Vida brine project in Argentina, and was involved in its sale to Galaxy Resources (GXY-ASX, Not Rated). Upcoming catalysts include pilot plant results, a resource update, and a PEA.

LiSX - solvent extraction geared for lithium. Pilot plant testing of Bateman's LiSX process is underway. Based on success with lithium and other commodities, this method is expected to offer lower costs, improve sustainability by reduced water consumption, and have a much smaller footprint. Testing has demonstrated recoveries of up to 99.9% LiCl and 99% Li. We believe the trick will be to remove Mg via nano-filter technology, prior to solvent extraction or electrolysis. Evaporation ponds are the traditional means of lithium production at brine operations such as Silver Peak. They are capital and land intensive, generally have poor recoveries, long lead times, and can significantly impact the environment.

Resource growth potential. Drilling is underway. Results from higher grade areas in the north, adjacent to Silver Peak's producing claims, appear better than expected. Northern resource grades average around 216 mg/L Li and management suggests current drilling is comparable. There are also plans to drill deeper into the basal gravels where grades almost twice as high have been found by Albemarle. Some suggest Silver Peak is producing at a grade of 100 mg/L. Three holes drilled well south of this main area underwhelmed and will likely impact resources that were likely stretched too far anyways (366,000 t LCE occur in this area). Tonnage may be reduced, but grades should improve.

Cornerstone supply agreement with Tesla. While details are confidential, a five year fixed price contract covers a portion of potential production. Tesla brings much to the table: a brand name, negotiating clout with suppliers and regulators, technical assistance, access to its lithium processing database and vast network of contacts. There is also potential to lend financial assistance down the road.

Risks. Financing, exploration, process engineering, permitting and commodity price risks prevail. Recent drill results to the south will likely negatively impact the current resource estimate, but shouldn't impact mid-term production plans.

PE-V: Price/Volume Chart

Source: Factset

Company Description Pure Energy Minerals (PE-V) is a lithium exploration and development company focused on its Clayton Valley Project in Nevada. The project is adjacent to Albemarle's (ALB-NYSE, Not Rated) Silver Peak lithium mine and hosts an inferred resource of 816,000 t LCE. Pure Energy is collaborating with global technology partners to develop more efficient brine processing methods, working with Tenova Bateman and POSCO. It also has a lithium supply agreement in place with Tesla Motors (TSLA-NASDAQ, Not Rated).

PE-V New LastRating -- --Target -- --Risk -- --

Last Price $0.6852-week Range $1.15 - $0.21Market Cap ($MM) $47.3Enterprise Value ($MM) $45.7Shares Outstanding - Basic (MM) 69.6Shares Outstanding - FD (MM) 84.9Avg Volume - 100d (000 shares/day) 773.8Cash ($MM) $1.6Debt ($MM) $0.0Working Capital (est.) ($MM) $1.4Forecast 2016E 2017E 2018E LTSpot LCE (US$/t) 7,200 8,000 8,500 10,000Spot Li-OH (US$/t) 9,200 10,000 10,500 12,000All Figures in C$ Unless Otherwise Noted

Source: Company Reports , FactSet, Dundee Capita l Markets

Company Data



Pure Energy Minerals Ltd. June 13, 2016


Figure 1: Adjacent to Albemarle's Silver Peak Mine, North America's only producing lithium operation

Source: Company reports

Figure 2: "Positive preliminary indications for lithium recovery"…




Lithium Americas Corp. (LAC-T: C$0.83) June 13, 2016

BUY, Speculative Risk Dundee target: C$1.90 (from C$1.60)



Power Up! Conference: SQM - Largest, Lowest Cost Brine Miner Buys In 1

We recommend Lithium Americas with a BUY, increasing our target to C$1.90 from C$1.60/sh after incorporating our new lithium and FX price assumptions into our 10% DCF model. Lithium Americas recently partnered with SQM (Not Rated), the world's largest, lowest cost brine producer. This alone has significantly de-risked its fully permitted Cauchari lithium brine project in Argentina. They will now revisit the 2012 Feasibility Study, perhaps considering LiOH production. Kings Valley lithium-bearing hectorite clay project in NV provides a second story in Tesla's backyard. An MOU signed with a global clay leader increases the prospects of generating near-term CF from the hectorite project through production of specialty clay products. Cauchari development seems back on track. The US$25 MM SQM deal for 50% interest in Cauchari, while inclusive of future commitments and below historical expenditures, unlocked much more value for Lithium Americas. It kick-started an otherwise stalled project. It should also help de-risk development, financing and ultimately production, due to SQM's deep technical expertise and pockets. LAC also inherits marketing knowledge, local relationships and splits required capital. There is also speculation of doubling production to 40,000 tpa LCE. Cauchari-Olaroz is fully permitted. While a FS update is underway, start-up appears targeted for 2019. We expect higher Li price assumptions, doubled production rate, lower costs on weaker local currency, removal of export duty, elimination of a demo plant, plus other SQM-cost savings. A 2012 FS suggested Capex of US$270MM, Opex of US$2375/t for a 20,000 tpa LCE operation, excluding potential potash by-product credits. New technology gives new perspective to King's Valley. King's Valley lithium clay boasts the 5th largest lithium resource. Pilot plant tests had been making progress on flowsheet design, but management took a step back due to challenges. It now seeks to create synthetic brine from clay, and process that using new technology. A new PFS is underway which may see cost reductions if testing is successful. Hectatone Organco-Clay business provides opportunity for near-term CF. The MOU with TOLSA (Not Rated), a Spanish-based global leader in specialty clays, contemplates a strategic alliance and LT supply agreement. If formalized, this would serve as a major stamp of approval. Ramp-up has been slow on weak drill mud demand during the oil & gas downturn, though management suggests it has made headway with environmental clay liners, industrial coatings, and cattle feed. A deal would increase confidence in its clay growth prospects, and provide access to a large global distribution chain, improving chances of achieving positive CF by YE16. Risks. While partners on paper, SQM may now take over development and push its own timeline at Cauchari. Commercial lithium clay production is hypothetical. CF from Hectatone appears delayed and rather minor valuation-wise. Lag in adoption of electric vehicles or sudden influx of viable Li projects may impact prices. Please refer to our most recent notes: 11-Apr-16 and 1-Apr-16

LAC-T: Price/Volume Chart

Source: Factset

Company Description Lithium Americas Corp. is developing the Cauchari-Olaroz lithium project in Argentina with new JV partner, SQM, and Kings Valley lithium project in Northwest Nevada. It also plans to generate near-term cash flow from its hectorite clay business (Hectatone), mined from Kings Valley. A Pilot Plant study in Germany should help further de-risk its lithium business plans.

LAC-T New LastRating -- BuyTarget C$ 1.90 C$ 1.60Risk -- SpeculativeProjected Return 129% 93%DCF multiple 0.4x/0.6x 0.6x/1.0x2016 - 10% DCF Corporate Value 1.95 0.982015 - Cash and Debt 0.07 0.022015 - Additional Resource Value 0.26 0.26NAV 2.28 1.27P/NAV 0.36x 0.65x

Last Price C$ 0.8352-week Range C$ 0.25 - C$ 0.36Market Cap (MM) C$ 248.18Enterprise Value (MM) C$ 330.71Shares Outstanding - Basic (MM) 295.3Shares Outstanding - FD (MM) 329.0Avg Volume - 100d (000 shares/day) 1,655.7Cash (MM) $2.71Debt (MM) $2.56Working Capital (MM) $15.30

Forecast 2015A 2016E 2017E LTSpot LCE ($/t) 4,179 6,793 7,800 8,875Realized Price ($/t) 0 0 0 8,875EPS (0.07) (0.05) 0.00P/E N/A N/A N/AEBITDA ($MM) (6.3) (14.6) 1.6EV/EBITDA n/a n/a 208.0xCF ($MM) (6.9) (5.1) 1.0CF/share ($) (0.06) (0.02) 0.00Capex ($MM) (4.8) (0.8) (4.0)All Figures in US$ Unless Otherwise NotedSource: Company Reports, FactSet, Dundee Capital Markets

Company Data



http://research.dundeecapitalmarkets.com/en/~/media/Dcm/Publications/CoverageListResearch/2016/April/L/LAC041116.ashx

http://research.dundeecapitalmarkets.com/en/~/media/Dcm/Publications/CoverageListResearch/2016/April/L/LAC040116.ashx

Lithium Americas Corp. June 13, 2016



Lithium Americas Corp LAC-T C$ 0.83Rating BUY C$ Target $1.90 Shares O/S (MM) 295.3Risk* Speculative C$ Close $0.83 Float (MM) 224.3

Fully Diluted Shares (MM) 329.012-month return 129% Basic Mkt. Capitalization ($MM) C$ 245.1All figures in US$, unless stated otherwise

Year-end Sept. (000$)EVALUATION DATA BALANCE SHEET 2015A 2016E 2017E Q2/16Year-end Sept. 2015A 2016E 2017E 2018E AssetsEPS (0.07)$ (0.05)$ -$ -$ Cash & ST Investments 5,401 22,860 113,757 2,706 P/E N/A N/A N/A N/A Other Current Assets 1,503 14,804 14,804 14,804 CFPS before changes in WC (0.06)$ (0.02)$ -$ -$ Current Assets 6,904 37,664 128,561 17,510 P/CF N/A N/A N/Amarket cap/reserve t 127$ Mineral Properties 61,336 37,327 37,727 37,327 enterprise value/reserve t 127$ Other non-current Assets 150 2,827 2,827 2,827 market cap/resource t 32$ Total Assets 68,390 77,818 169,115 57,664 enterprise value/resource t 32$ ASSUMPTIONS 2015A 2016E 2017E 2018E LiabilitiesLithium Carbonate US$/lb 4,179 6,793 7,800 8,375 Current Liabilities 6,215 3,843 2,287 2,210 Exchange US$/C$ 1.23 1.34 1.33 1.29 Capital lease / LT Debt 3,846 970 96,893 2,559 Dundee Modelled Reserves and Other Mineralization (MM t) Other non-current Liabilities (2,586) (250) (5,047) 272 RESERVES & RESOURCES Li2O Total Liabilities 7,475 4,563 94,133 5,041

Tonnes Grade 100% Basis LAC ShareOwnership MM t % Capital Stock 109,262 136,178 136,871 115,608

Proven and Probable Reserves Retained/Deficit (48,347) (62,923) (61,889) (62,985) Kings Valley 100% 27.1 0.39% 570 570 Total Shareholder Equity 60,915 73,255 74,982 52,623 Cauchari-Olaroz 50% 672 mg/l 2,714 1,357Total Reserves 27.1 0.39% 3,284 1,927 EARNINGS SUMMARY 2015A 2016E 2017E 2018EMeasured and Indicated Resources (including reserves) RevenueKings Valley 100% 56.2 0.38% 1,138 1,138 Lithium - - - - Cauchari-Olaroz 50% 600 mg/l 11,752 5,876 Clay + Other 425 4,458 16,200 16,200 Total M&I Resources 56.2 0.38% 12,890 7,014 Total Revenue 425 4,458 16,200 16,200 Inferred Resources Lithium costs 256 4,515 11,610 11,610 Kings Valley 100% 36.3 0.37% 713 713 Other Costs 853 9,656 - - Cauchari-Olaroz Sal 50% 0 0 DD&A - - - - Total Inferred Resources 36.3 0.37% 713 713 Exploration 2,087 1,929 - - TOTAL RESOURCE 92.5 0.38% 13,604 7,728 S, G&A 3,210 2,814 3,000 5,000 PRODUCTION ESTIMATES (t) EBIT (5,981) (14,456) 1,590 (410)

2015A 2016E 2017E 2018E 2019E FX Gain (284) (119) - - Kings Valley 0 0 0 0 0 Interest - - - - Cauchari-Olaroz 0 0 0 0 5,000 Writedown of min. properties - - - - Sub total 0 0 0 0 5,000 EBT (6,265) (14,575) 1,590 (410) TOTAL CASH COST ESTIMATES ($/t) less Tax - - 557 -

2015A 2016E 2017E 2018E 2019E Net Income (reported) (6,265) (14,575) 1,034 (410) Kings Valley 0 0 0 0 0 Average shares (MM) 123.5 286.0 295.7 383.1Cauchari-Olaroz 0 0 0 0 2,277Wt. Ave. 0 0 0 0 0 STATEMENT OF CASH FLOWS (000$)ORGANOCLAY BUSINESS 2015A 2016E 2017E 2018E

2015A 2016E 2017E 2018E 2019E Net Income (000's$) (8,454) (14,575) 1,034 (410) Production (t) 253 2,100 5,400 5,400 10,000 D, D&A - - - - Cash Cost ($/t) 2,150,000 2,150,000 2,150,000 2,150,000 2,150,000 Future income taxes - - - -

Writedown of min. properties - - - - NET ASSET VALUE 0% NAV $/share 10% NAV $/share FX Gain - - - -

($MM) ($MM) Change in working capital (857) 116 - - Corporate DCF 1,601 5.42 577 1.95 Other Operating 2,447 9,372 - - Cash and Debt 20 0.07 20 0.07 Total Operating CF (6,864) (5,087) 1,034 (410) Exploration & unmodelled resources 77 0.26 77 0.26 Short term investments - - - -

Mineral Properties (4,760) (764) (3,953) (107,437) Total 1,698 5.74 674 2.28 Acquisitions - - - - Dundee DCF Target Multiple 0.4x/0.6x Increase in Investments - - - - Share Price Target C$ 1.90 Other Investing 466 (897) - -

Total Investing CF (4,294) (1,661) (3,953) (107,437) Equity financing 7,433 24,103 693 65,230 Debt Issue 2,800 - 96,000 156,000

NAV (US$/share) 6,000 8,000 10,000 12,000 14,000 Debt Repayment (111) (77) (2,877) (77) 0% Discount 2.81 4.30 5.78 7.27 8.76 Other financing (137) (33) - - 5% Discount 1.76 2.61 3.45 4.30 5.15 Total Financing CF 9,985 23,993 93,816 221,153 10% Discount 1.27 1.79 2.30 2.82 3.34 Foreign Exchange effect (586) 63 - - 15% Discount 1.03 1.36 1.70 2.04 2.37 Change in cash (1,173) 17,245 90,897 113,305

Cash & ST Inv., end of year 5,401 22,860 113,757 227,062

Long Term Lithium Price Assumption (US$/t)

Contained Li2CO3 (LCE)

000's tonnes

Resources and Reserves and Resources and Reserves per shareLithium Carbonate Production and Total Cash Costs

NAV & Price Target Sensitivity to Long-term Lithium Price Assumption

0

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2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

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Cauchari Li Carb Production Total Cash Cost

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101520

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CE


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Lithium X Energy Corp. (LIX-V: C$1.74) June 13, 2016




Power Up! Conference: Delivering on Promises To Create Value

Lithium X is not under formal coverage and has no rating or target price. Management is doing exactly what it promised - buy on the cheap, vend out to realize value. It has acquired three projects, created two JVs to spread risk, moved all three projects forward, and is up 11 fold since December. Boasting a top tier management team, Lithium X is ideally equipped to execute this project generator strategy. Management has extensive experience building and selling companies at a substantial premium. Executive Chairman Paul Matysek was CEO of three such companies sold for a combined $2.4 B, including Lithium One which was sold to Galaxy (GXY-ASX, Not Rated). Fiore Management (Frank Giustra & Gord Keep) is a founding shareholder. It was involved in $5.5 B in mergers including Goldcorp, Wheaton River, and Uranium One. Giustra also founded Lionsgate Entertainment. Sal de los Angeles resurrected. Its new flagship is located near FMC's (FMC-N, Not Rated) producing Hombre Muerto brine mine in Salta, Argentina. Previously known as Diablillos when owned by Rodinia (RM, Not Rated), it saw ~$20 MM in development before funds ran dry. Extensive work included drilling, resource estimates, PEA, and pilot evaporation ponds. The no-longer-compliant 2011 PEA suggested a resource of 2.8 Mt LCE at 562 ppm, which has since been set aside by management. The PEA had suggested potential for long life, low costs, low impurities, good hydrogeology, and scalability. A new resource is due this summer. This will be followed by a Feasibility Study within 18 months of initiating pilot plant construction, anticipated to begin in July upon receipt of permits. Pilot plant JV with SESA - shortcut to production. A consortium of firms with brine development/operation experience will help build and operate a pilot plant at Sal de los Angeles. Capex is US$9.3MM; US$6 MM will be contributed by SESA, while LIX provides brine. Besides providing data for a Feasibility Study, the plant is expected to generate revenue. The goal is creation of a >30% lithium chloride brine concentrate (2,500 tpa LCE), ready for sale to China or elsewhere. Doubling production is an option, once positive CF is achieved for 12 months. Adjacent to North America's only lithium producer. Clayton Valley North and South projects are both contiguous with Albemarle's producing Silver Peak Nevada lithium brine mine, in operation since 1966. It is also within driving distance of Tesla's Giga-factory. Brine chemistry and grades appear suitable for extraction, and hydrogeology is well understood by technical team members from Rodinia with long history on the property. With the largest land position in Clayton Valley, it has optioned the South project to North South Petroleum (NAS.H-V, Not Rated) to put others' money to work and reduce risk. This will allow focus on North property where producing wells operate mere metres from its claims. New processing methods will attempt to eliminate evaporation ponds, increase efficiencies and likelihood of permitting. An initial resource is due by YE. Risks. Financing, exploration, execution and commodity price risk is prevalent for all projects. The stock has run up quickly and risks settling. PEA and resource estimates in Argentina have been nullified pending modern NI 43-101 practices. Please refer to our past notes on LIX: 18-Feb-2016 and 4-Mar-2016

LIX-V: Price/Volume Chart

Source: Factset

Company Description Lithium X Energy Corp (LIX-V) is a lithium exploration company focused on its Argentina-based Sal de los Angeles brine project, and its Nevada-based Clayton Valley Project. Sal de los Angeles has potential for large-scale, low-cost production. It is located near FMC's producing Salar de Hombre Muerto. Clayton Valley is adjacent to Silver Peak, the only producing lithium operation in North America. Lithium X's management team is top tier and includes Paul Matysek and Frank Giustra.

LIX-V New LastRating -- --Target -- --Risk -- --

Last Price $1.7452-week Range $2.85 - $0.05Market Cap ($MM) $103.2Enterprise Value ($MM) $92.9Shares Outstanding - Basic (MM) 59.3Shares Outstanding - FD (MM) 65.5Avg Volume - 100d (000 shares/day) 523.2Cash ($MM) $10.3Debt ($MM) $0.0Working Capital (est.) ($MM) $10.3Forecast 2016E 2017E 2018E LTSpot LCE (US$/t) 7,200 8,000 8,500 10,000Spot Li-OH (US$/t) 9,200 10,000 10,500 12,000All Figures in C$ Unless Otherwise Noted


Company Data



http://research.dundeecapitalmarkets.com/en/~/media/Dcm/Publications/CoverageListResearch/2016/February/L/LIX021816.ashx

http://research.dundeecapitalmarkets.com/en/~/media/Dcm/Publications/CoverageListResearch/2016/March/L/LIX030416.ashx

Lithium X Energy Corp. June 13, 2016


Figure 1: Sal de los Angeles covers 8,156 ha in the Salar de Diablillos in Argentina's mining-friendly Salta Province


Figure 2: Lithium-X Energy controls the largest land package in Clayton Valley, covering approximately 15,020 acres




Formation Metals Inc. (FCO-T: C$0.57) June 13, 2016




Power Up! Conference: Pure-play, North American Cobalt

Formation Metals is not under formal coverage & has no rating or target price. Formation Metals is a pure-play cobalt developer advancing its 100%-owned Idaho Cobalt Project (ICP) towards production. ICP could potentially provide a secure source of domestic cobalt supply for the USA, the world's top consumer. The country has minimal cobalt production, but has declared it a strategic metal and has started stockpiling. The majority of global Co production is as a by-product from nickel and copper mining, thus cobalt is at the mercy of the economics of other commodities. However, ICP will primarily produce cobalt with copper, gold, and magnesium credits. This makes it a surefire way to leverage cobalt price exposure over coming years when cobalt-chemistry lithium ion-battery demand is expected to rise. ICP is fully permitted and may be rapidly advanced towards production. A false construction start will pay dividends. Purchase of a significant amount of processing equipment, ball mill, buildings, etc., was made in 2011 before financing fell through, saving Capex now. A secure, ethically sourced, environmentally conscious supply of battery grade cobalt products should have appeal to North American end-users.

Positive PEA; DFS underway. A 2015 PEA contemplates 13 MM lbs pa of cobalt sulphate production (3 MM lbs pa Co) over 12.5 years. It suggests a post-tax NPV of $113 MM and IRR of 25%, assuming $19.50/lb cobalt (currently at $10.90/lb). Capex was estimated at $147 MM and LOM average production costs at $4.95/lb, net of Au, Cu and Mg credits; $13.25/lb excluding by-products. Trade-off study for location of the production facility is underway. A DFS is due Q4/2016.

Permitted and development ready. DFS and final flowsheet notwithstanding, ICP is permitted. Initial earthworks including access roads, water management ponds, tailings waste storage, and portal bench are completed. This should reduce its start-up period by allowing for underground development to begin immediately upon financing. Key equipment has been purchased including mine site buildings, crusher, flotation cells and a ball mill. Feasibility-level metallurgical work has demonstrated the ability to produce a high purity cobalt sulphate concentrate suitable for the rechargeable battery, stationary storage, and EV sectors.

Resource upside remains. ICP hosts resources of 54 MM lbs at 0.52% Co. An additional 2.5 MM lbs grades 0.50% but is excluded from the mine schedule. Cobalt mineralization remains open at depth and along strike. Drilling has only extended to 274m depth, leaving potential for discovery of additional mineralized horizons.

Risks. DFS is underway and its flowsheet may differ from what was previously envisioned, rendering some purchased equipment unusable. Project financing is still required, and cobalt prices are often dependent on external variables.

FCO-T: Price/Volume Chart

Source: Factset

Company Description Formation Metals is Canadian-based developer advancing its wholly owned Idaho Cobalt Project (ICP) in Idaho. The project is fully permitted and is expected to produce 2.8 MMlbs of Co p.a., as well as copper and gold by-products, over a 12.5 year mine life. ICP is anticipated to produce a high purity cobalt sulphate concentrate that can be used in high growth battery applications.

FCO-T New LastRating -- --Target -- --Risk -- --

Last Price $0.5752-week Range $0.63 - $0.09Market Cap ($MM) $60.3Enterprise Value ($MM) $54.1Shares Outstanding - Basic (MM) 105.7Shares Outstanding - FD (MM) 120.5Avg Volume - 100d (000 shares/day) 168.6Cash ($MM) $6.1Debt ($MM) $0.0Forecast 2016E 2017E 2018E LTCobalt US$/lb 10.45 12.00 12.50 13.00All Figures in C$ Unless Otherwise Noted


Company Data



Formation Metals Inc. June 13, 2016


Figure 1: Idaho Cobalt Project location map


Figure 2: Life of mine production schedule




Neo Lithium Corp. (N/A) June 13, 2016




Power Up! Conference: Li Brine Reservoir Discovery Turning Heads

Neo Lithium is not under formal coverage and has no rating or target price. Neo Lithium owns 100% of the Q3 lithium brine-reservoir (standing water-brine) project in Argentina. It spans an area of 300 km2 in a series of lakes/salars. Initial sampling suggests high lithium grades and low impurities, including sulphate and magnesium. The next phase of exploration is fully permitted. Management and Board are technically capable and experienced in project development and mining, specifically in South America. Waldo Perez, CEO, was the founder of Cauchari, acquired while at Lithium Americas (LAC-T, BUY, C$1.90 target price).

RTO pending; financing complete. An LOI for Neo Lithium and POCML 3 (PWR.R-V, Not Rated) to merge is in place, with closing due June 2016. POCML 3 had no assets except cash and the listing. Neo brings its Q3 project. It subsequently raised $11.4 MM via private placement at C$1/sh. Pro-forma RTO expect $18 MM cash, no debt, 22% insider ownership, and 30% institutional ownership. Combined management history/project is reason for its premium valuation.

Early stage; signs of high grades, great chemistry. 3Q project is a three salar/ brine-reservoir complex. Each salar has its own brine chemistry, apparently flowing, evaporating, and increasing in grade, northward. 250 samples were systematically collected to date, with grades of up to 4,000 mg/L Li and 1.8% K. The Northern Target is host to the highest grades and encompasses a substantial area measuring 14 km by 3 km. Sulfate/lithium and magnesium/lithium ratios are among the lowest of all known brine projects, and should help reduce operating costs. Li grades average 896 mg/L Li, project-wide. This compares well to other Argentinian salars such as the producing Hombre Muerto brine operation at 747ppm; and the Cauchari project at 610 ppm.

Lithium reservoirs not unheard of. Zhabuye reservoir in Tibet is 4,600m above sea level, hosts 149km2 of high purity Li brine. It has been in production since the 90's despite elevated sulphate concentrations which increases costs. Operator Tibet Shigatse Zhabuye Lithium High-Tech Co. is 20%-owned by Tianqi Lithium.

Experienced management. Waldo Perez, CEO has 28 years of experience in South America. He is founder and former technical leader of the Cauchari project, which was acquired through Lithium Americas. He served as LAC's CEO from the project's inception to the completion of a positive DFS in 2012.

Ample infrastructure. Despite its remoteness, 3Q is 30km from the Maricunga salar, and 250 km from Caldera deep sea port, both in Chile. There are no inhabitants or aboriginal communities proximal to the project.

Risks. This is early stage exploration. The series of salars/brine and standing brine will likely have a complex hydrogeological regime and grades are likely to be variable from one end to the other. The project is remote, likely one reason it has never come to light. Standing brine may ultimately be a cause of concern for permitting, although with its high salinity, it's likely a life-less lake.

Company Description Neo Lithium is a lithium exploration company focused on its Q3 project, a lithium-rich brine reservoir complex in Argentina. The project is located near infrastructure and appears to be high grade and low in impurities. The company is led by an experienced team including Waldo Perez, former CEO of Lithium Americas, who advanced the Cauchari-Olaroz project.

Neo Lithium Corp. New LastRating -- --Target -- --Risk -- --

Last Price --52-week Range --Implied Market Cap ($MM) $65.9Enterprise Value ($MM) $47.9Shares Outstanding - Basic (MM) 65.9Shares Outstanding - FD (MM) 70.8Avg Volume - 100d (000 shares/day) --Cash (Post-RTO) ($MM) $18.0Debt ($MM) $0.0Insider Ownership 22%Institutional Ownership 30%All Figures in C$ Unless Otherwise Noted


Company Data



Neo Lithium Corp. June 13, 2016


Figure 1: 3Q Lithium Project location and infrastructure


Figure 2: 3Q Lithium chemistry project comparison




Enirgi Group Corp. (N/A) June 13, 2016




Power Up! Conference: Global Diversified Recognizes Li Opportunities

Enirgi is not under formal coverage & has no rating or target price. Enirgi is a private, global specialty chemical and diversified industrials company backed by The Sentient Group. Its six divisions focus on applying innovative solutions to diverse sectors. These include power storage, chemicals, resources, engineering, environmental services and agriculture. Notably, it has high exposure to rapidly growing sectors including lithium and Li-ion batteries, soda derivatives, and specialty lead. The combination of its capability to develop proprietary technologies and its high quality assets allows efficient and effective use of capital. Its Argentine lithium brine project has potential to be among the cost leaders in the sector. It is already a low cost producer in the soda derivatives sector, and operates a profitable lead recycling operation. Enirgi is geographically diversified with operations in North America, South America, and Australia. It anticipates significant cash flow generation from 2018 onwards, supported by its long life, low cost assets and low capital intensity growth.

Low cost lithium brine potential in Argentina. Salar del Rincon project hosts a massive 8 MM t LCE resource. A Feasibility Study contemplates 50,000 tpa LCE production over 25 years. Key here is the application of a proprietary processing method to produce LCE directly from brine with low reagent consumption, in under 24 hours. Despite low grades (397 mg/L Li) and a high Mg/Li ratio (8.6), Energi's process is expected to significantly lower Capex, Opex and shrink processing time. It has been demonstrated to work using a 1,500 tpa LCE pilot plant. Enirgi anticipates production in 2017, and suggests that it should be profitable at prices below US$8,000/t LCE.

Established Australian battery distribution network. Enirgi has achieved a 7.5% market share with its fully integrated business model that includes Used Lead Acid Battery collection and recycling, 45 retail outlets offering lead-acid batteries for diverse applications such as power storage and automotive, and production of soft lead and specialty lead alloys. Its established battery collections/recycling business controls 85% of the Australian market and can recycle more than 97% of the components from a used lead-acid battery.

Risks. Material risks to this large conglomerate are somewhat mitigated by diversification in terms of products, commodities, sectors and geography. Assets are also spread across the development spectrum, from R&D through mass production. Specifically, Rincon lithium brine project is susceptible to lithium prices, suitability of its proprietary processing technology, and execution risk.

Company Description Enirgi Group is a privately held specialty chemicals and diversified industrials company headquartered in Toronto. The Company is made up of six divisions, focusing on power storage, chemicals, resources, innovation, environmental services, and agriculture. It operates globally, and is backed by The Sentient Group.

Enirgi Group Corp. New LastRating -- --Target -- --Risk -- --

Last Price --52-week Range --Market Cap ($MM) --Enterprise Value ($MM) --Shares Outstanding - Basic (MM) --Shares Outstanding - FD (MM) --Avg Volume - 100d (000 shares/day) --Cash ($MM) --Debt ($MM) --Working Capital (est.) ($MM) --Forecast 2016E 2017E 2018E LTSpot LCE (US$/t) 6,200 6,200 6,200 6,200Spot Li-OH (US$/t) 7,500 7,500 7,500 7,500All Figures in C$ Unless Otherwise Noted


Company Data



Enirgi Group Corp. June 13, 2016


Figure 1: Enirgi has operations globally


Figure 2: Enirgi operates six diversified divisions




Mason Graphite, Inc. (LLG-V: C$0.69) June 13, 2016

BUY, Speculative Risk Dundee target: C$0.90



Power Up! Conference: Management Experience + Grades = Support

We recommend Mason Graphite with a BUY, maintaining our C$0.90 target after incorporating our new graphite price assumptions into our 10% DCF model. Mason Graphite's Lac Guéret deposit in Quebec hosts some of the world's highest grade flake material. A feasibility study suggests impressive economics and upcoming studies should shed light on the viability of producing higher value graphite products for the battery industry. Management is highly experienced, bringing expertise from Statmin/Timcal/Imerys. Despite a current supply glut, room remains for a North American flake producer that can offer stability and large quantities of high quality, consistent technical spec, low-cost graphite.

High grade flake graphite translates to low costs. Lac Guéret hosts 1.3 Mt of graphite at 27.8% Cg. A feasibility study contemplates 51,900tpa of 97.5% purity graphite, and estimates a post-tax NPV (8%) of $352 MM, IRR of 34%, and 2.6 year pay-back. A $376/t opex would place it amongst the lowest-cost producers. High grades minimize trucking costs, and processing is simple and proven.

Benefits from existing infrastructure. Capex of $115.6 MM is helped by existing highways and power, and relocation of the concentrator to Baie-Comeau. The deposit is located 285km north of town and is accessible by highway/logging road.

Wealth of graphite production, sales experience. CEO Benoit Gascon was a former President of Stratmin, operator of one of North America's only graphite mines. Luc Veilleux (VP/CFO) and Jean L’Heureux (VP Process dev.) also bring sales, management and process development experience from Statmin/Timcal/Imerys.

Potential for value-added graphite products could significantly increase margins. A study evaluating value added graphite production for the Li-ion battery industry is expected this year. Mason is working alongside well-known partners including NRC, Hatch, COREM. Production of these products would involve further processing and secondary transformation for battery anode material - purification, micronisation, shaping and coating, but margins improve significantly.

Strong institutional and Government support. Institutions, Quebec and insiders make up over 70% of LLG's shareholder base. Quebec Government support includes investments by Fonds de Solidarite FTQ, RQ, and Sodemex. There is also a possibility to benefit from Plan Nord initiatives such as highway reconstruction. Local support is strong; permits expected Q3/16.

Risks. Project financing, execution and permitting risks are considerations. Sales and marketing are also important. There is no graphite spot market meaning sales are dependent on securing contracts, although it's CEO has extensive experience here. Battery demand and a higher fine flake distribution may also weigh on prices.

Please refer to our latest note on Mason Graphite: 28-September-2015.

LLG-V: Price/Volume Chart

Source: Factset

Company Description Mason Graphite is a Quebec focused graphite developer. Its 100% owned Lac Guéret project is well advanced, surrounded by infrastructure, with investment from three high quality Quebec institutions. The company has complete its DFS and is now focused on project permitting and financing.

LLG-CA New LastRating -- BuyTarget -- C$ 0.90Risk -- SpeculativeProjected Return -- 34%DCF multiple 0.70x 0.60x2016 - 10% DCF Corporate Value 0.88 1.142015 - Cash and Debt -0.03 -0.242015 - Additional Resource Value 0.34 0.34NAV 1.19 1.25P/NAV 0.56x 0.54x

Last Price C$ 0.6952-week Range C$ 0.29 - C$ 0.76Market Cap ($MM) C$ 60Enterprise Value ($MM) C$ 65Shares Outstanding - Basic (MM) 86.7Shares Outstanding - FD (MM) 114.7Avg Volume - 100d (000 shares/day) 266.7Cash est. ($MM) C$ 2.1Debt est. ($MM) C$ 7.0Working Capital ($MM) C$ -1.2Forecast 2016E 2017E 2018E LTGraphite (US$/t) 1,180 1,087 1,144 1,201Realized Price (US$/t) 0 0 1,144 1,201All Figures in C$ Unless Otherwise NotedSource: Company Reports, FactSet, Dundee Capital Markets

Company Data



http://research.dundeecapitalmarkets.com/en/~/media/Dcm/Publications/CoverageListResearch/2015/September/L/LLG092815.ashx

Mason Graphite, Inc. June 13, 2016



Mason Graphite (LLG-T) LLG-T C$ 0.67Rating BUY C$ Target $0.90 Shares O/S (MM) 86.7Risk* Speculative C$ Close $0.69 Fully Diluted Shares (MM) 114.7David A. Talbot, VP, Sr. Mining Analyst 12-month return 30% Basic Mkt. Capitalization ($MM) [email protected] Enterprise Value ($MM) 64.72All figures in C$, unless stated otherwiseEVALUATION DATA BALANCE SHEET (000$)Year-end June 2015A 2016E 2017E 2018E Year-end June 2015A 2016E 2017E Q3/16EPS ($0.0) ($0.0) ($0.0) ($0.0) AssetsP/E N/A N/A N/A N/A Cash & ST Investments 5,655 1,083 15,718 2,112 CFPS before changes in WC ($0.0) ($0.0) ($0.0) ($0.0) Other Current Assets 2,202 269 269 269 P/CF N/A N/A N/A N/A Current Assets 7,857 1,352 15,988 2,381 market cap/reserve t n/aenterprise value/reserve t n/a Mineral Properties - - 170,667 - market cap/resource t $1.05 Other non-current Assets 30,257 32,029 32,029 32,029 enterprise value/resource t $1.11 Total Assets 38,114 33,381 218,683 34,410 ASSUMPTIONS 2015A 2016E 2017E 2018EGraphite US$/t 1,279 1,180 1,087 1,144 LiabilitiesExchange US$/C$ 0.85 0.75 0.75 0.77 Current Liabilities 3,398 3,618 666 3,618 Dundee Modelled Reserves and Other Mineralization (MM t) Capital lease / LT Debt 8,206 4,150 84,150 6,385

Other non-current Liabilities 2,000 4,206 3,460 2,220 RESERVES & RESOURCES Total Liabilities 13,604 11,974 88,276 12,223

Tonnes Grade 100% Basis LLG ShareOwnership MM t % Cg Capital Stock 42,603 42,927 157,927 42,927

Proven and Probable Reserves Retained/Deficit (18,093) (21,520) (27,520) (20,740) Proven 100% 18.9 17.8% 3,370 599,873 Total Shareholder Equity 24,510 21,407 130,407 22,187 Probable 100% 43.9 16.9% 7,426 1,255,027

EARNINGS SUMMARY 2015A 2016E 2017E 2018ETotal Reserves 62.9 17.2% 10,796 1,854,901 Revenue:Measured and Indicated Resources (including reserves) Graphite - - - 15,636 Measured 100% 4.5 15.5% 698 698 Other Revenue 201 18 - 236 Indicated 100% 45.5 15.6% 7,117 7,117 Total Revenue 201 18 - 15,872

Graphite costs - - - 5,480 Total M&I Resources 50.0 15.6% 7,816 7,816 Other Costs 1,131 469 - - Inferred Resources DD&A - - - 1,708 Inferred 100% 11.9 17.8% 2,108 2,108 Exploration - - - -

S, G&A 1,552 2,133 6,000 6,000 EBIT (2,482) (2,584) (6,000) 2,684

Total Inferred Resources 11.9 17.8% 2,108 2,108 FX Gain (575) (163) - - TOTAL RESOURCE 61.9 16.0% 9,923 9,923 Interest 299 (591) - (6,898)

Writedown of min. properties - - - - PRODUCTION ESTIMATES (t) EBT (2,758) (3,339) (6,000) (4,214) Year-end June 2015A 2016E 2017E 2018E 2019E less Tax - - - - Lac Gueret 0 0 0 10,456 49,811 Net Income (reported) (3,653) (3,339) (6,000) (4,214)

Average shares (MM) 85.9 86.4 222.0 228.6

Sub total 0 0 0 10,456 49,811 STATEMENT OF CASH FLOWS (000$)TOTAL CASH COST ESTIMATES (US$/t) 2015A 2016E 2017E 2018EYear-end June 2015A 2016E 2017E 2018E 2019E Net Income (000's$) (3,653) (3,427) (6,000) (4,214) Lac Gueret 0 0 0 416 428 D, D&A - - - 1,708

Future income taxes - - - - Writedown of min. properties - - - -

Wt. Ave. 0 0 0 0 0 FX Gain - - - - Change in working capital (738) 565 - -

NET ASSET VALUE 0% NAV C$/share 10% NAV C$/share Other Operating 1,667 1,140 - - (C$MM) (C$MM) Total Operating CF (2,724) (1,722) (6,000) (2,506)

Corporate DCF 528 2.38 195 0.88 Short term investments - - - - Cash and Debt -6 -0.03 -6 -0.03 Mineral Properties - (2,242) (174,365) (2,614) Exploration & unmodelled Resources 75 0.34 75 0.34 Acquisitions - - - - Total 596 2.69 264 1.19 Increase in Investments - - - - Dundee DCF Target Multiple 0.6x Other Investing (4,456) 993 - - Share Price Target C$ 0.90 Total Investing CF (4,456) (1,249) (174,365) (2,614)

Equity financing - 125 115,000 3,834 Debt Issue - - 80,000 -

NAV (C$/share) 1,000 2,000 3,000 4,000 5,000 Debt Repayment (1,573) - - - 0% Discount 1.96 4.98 8.00 11.02 14.04 Other financing (2) (1,757) - - 5% Discount 1.26 3.07 4.89 6.71 8.53 Total Financing CF (1,575) (1,633) 195,000 3,834 10% Discount 0.92 2.12 3.32 4.52 5.72 Foreign Exchange effect - 32 - - 15% Discount 0.74 1.60 2.45 3.31 4.16 Change in cash (8,755) (4,604) 14,635 (1,287)

Cash & ST Inv., end of year 5,655 1,083 15,718 14,431 Graphite Concentrate Production and Total Cash Costs Resources and Reserves and Resources and Reserves per share

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comprehensive account of all the risks. Investors are directed to read issuer filings which contain a discussion of risk factors specific to the company’s business. Medium and High Risk Ratings Methodology: Medium and High risk ratings are derived using a predetermined methodology based on liquidity and volatility. Analysts will have the discretion to raise but not lower the risk rating if it is deemed a higher risk rating is warranted. Risk in relation to forecasted price volatility is only one method of assessing the risk of a security and actual risk ratings could differ. Securities with poor liquidity or high volatility are considered to be High risk. Liquidity and volatility are measured using the following methodology: a) Price Test: All securities with a price <= $3.00 per share are considered high risk for the purpose of this test. b) Liquidity Test: This is a two-tiered calculation that looks at the market capitalization and trading volumes of a company. Smaller capitalization stocks (<$300MM) are assumed to have less liquidity, and are, therefore, more subject to price volatility. In order to avoid discriminating against smaller cap equities that have higher trading volumes, the risk rating will consider 12 month average trading volumes and if a company has traded >70% of its total shares outstanding it will be considered a liquid stock for the purpose of this test. c) Volatility Test: In this two step process, a stock’s volatility and beta are compared against the diversified equity benchmark. Canadian equities are compared against the TSX while U.S. equities are compared against the S&P 500. Generally, if the volatility of a stock is 20% greater than its benchmark and the beta of the stock is higher than its sector beta, then the security will be considered a high risk security. Otherwise, the security will be deemed to be a medium risk security. Periodically, the equity risk ratings will be compared to downside risk metrics such as Value at Risk and Semi-Variance and appropriate adjustments may be made. All models used for assessing risk incorporate some element of subjectivity. SECURITY ABBREVIATIONS: NVS (non-voting shares); RVS (restricted voting shares); RS (restricted shares); SVS (subordinate voting shares). Dundee Capital Markets Equity Research Ratings

As at March 31, 2016 Source: Dundee Capital Markets

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