Atlantic Gold Corporation

Precious Metals - Producer   

Rahul Paul | Analyst |  Canaccord Genuity Corp. (Canada) |  rpaul@canaccordgenuity.com |  1.416.869.7289

Canadian Equity Research Matthew MacPhail, P.Eng | Associate |  Canaccord Genuity Corp. (Canada) |  mmacphail@canaccordgenuity.com |
22 April 2018  1.416.867.2649

SPECULATIVE BUY
unchanged Raising Target Price
PRICE TARGET C$3.50↑
from C$2.25
Price (19-Apr)
Ticker
C$1.87 ; US$0.6652
AGB-TSXV; SPVEF-OTC
On the path to +200 koz/year; Raising target price
to C$3.50 (from C$2.25)
52-Week Range (C$): 0.76 - 1.97
Avg Daily Vol (M)  : 0.3
We reiterate our SPECULATIVE BUY rating but are raising our target to C$3.50 (from
Market Cap  (C$M): 362 C$2.25) based on 0.95x (up from 0.85x) P/NAV. The increased target reflects 1) higher
Shares Out. (M)  : 176.6 gold prices in our updated forward-curve based deck (+C$0.15/sh), 2) increased
EV /oz  (C$): 110.06 mineable resource assumption for MRC to 2.5 Moz (from 1.8 Moz) based on successful
Enterprise Value  (C$M): 509 results from the Phase 3 drill program (+C$0.65/sh), 3) a higher multiple reflecting the
Cash  (C$M): 108.9
Long-Term Debt  (C$M): 100.7
de-risking of the Phase 2 expansion through a PFS (+C$0.45/share).
Net Debt/EBITDA  : 1.18 We forecast 250% production growth at the Moose River Consolidated Operation
P/NAV (x)  (C$): 0.49 (MRC) to an estimated 221 koz by 2023 at lowest quartile AISC of $658/oz. The growth
FYE Dec 2018E 2019E 2020E
is driven by the Phase 2 expansion, which involves the staged development of the
Gold Production
Fifteen Mile Stream (start-up 2022E) and Cochrane Hill (start-up in 2023E) deposits in
86 87 87
(000oz)  conjunction with a major expansion in processing capacity to 6 Mpta (from 2 Mtpa).
Total Cash Cost
By-Prod.(Gold) 424 436 438 Phase 3 drill results highlight significant upside to reserves/resources at MRC. Now
(US$/oz)  complete, the program included 24.3 km of drilling at FMS and 6,9 km at Cochrane
EPS  Adj&Dil 0.29 0.34 0.30 Hill. Results suggest the potential to materially expand FMS reserves along strike and
 (C$)
Cash & Equiv. 
Cochrane Hill at depth, although additional drilling may be required to fully upgrade the
108.9 160.5 144.2 identified mineralization into reserves. Reflecting the upside, our modeled mineable
(C$)
2.2 resource has been increased to 2.5 Moz @ 1.26 g/t, from 1.80 Moz @ 1.32 g/t
previously (and is higher than current reserves of 1.59 Moz @1.28 g/t).
2
We forecast that the Phase 2 expansion could be completed through internal cash
1.8 flows while re-paying the debt facility as scheduled (by 2021E), with a trough cash
balance of $41 M in Q4/22 (under our forward curve based deck). We forecast no
1.6 shortfalls through 2023 provided the gold price were to stay over $1,230/oz. Our
1.4
medium-term (2019-21E) forecasts are slightly more conservative due to an assumed
smoother grade profile at Touquoy, a longer development timeline for Beaver Dam (+1
1.2 year) and Cochrane Hill (+0.5 years), in order to provide for sufficient funding flexibility.
However, refinancing of the debt facility could provide for an accelerated development
1
timeline (for Beaver Dam and Cochrane Hill) and a more proactive mining/stockpiling
May-17

Aug-17

Nov-17

Dec-17
Sep-17

Mar-18
Feb-18
Oct -17

Apr-18
Jun-17

Jan-18
Jul-17

strategy (possibly higher grades) which could provide for upside to our forecasts.
AGB Solid ramp-up performance so far. With the recent PFS derisking the production/
Junior Gold Miners Index (rebased)
growth profile and the Phase 3 drill program helping confirm reserve upside, we believe
Source: Fact Set
execution on the ramp-up remains the key catalyst to further re-rating. Ramp-up
Priced as of close of business 19 April 2018 
performance has been impressive so far with higher-than-expected Q1/18 production
Vancouver-based Atlantic Gold is is a well-financed, growth- despite weather-related downtime. While we forecast Q1/18 AISC above the FY guided
oriented developer with a long term strategy to create a range of $540 - $588/oz ($794/oz, due to the lower production), but AISC should ramp
mid-tier gold producer focused on manageable, executable
projects in mining-friendly jurisdictions. Atlantic Gold's first
down through the year (our FY18 forecast of $574/oz is in line with guidance).
project is development of the Touquoy and Beaver Dam gold A scarcity premium should begin to emerge. Atlantic Gold currently trades at 0.51x
deposits in Nova Scotia. P/NAV, in line with the mid-cap average. That said, producing open-pit gold operations
in Canada, not owned by a larger producer and capable of over 200 koz in annual
production at sub-$700/oz AISC are increasingly scarce. As such we see the potential for
a premium to emerge pending continued execution on the ramp-up.

Canaccord Genuity is the global capital markets group of Canaccord Genuity Group Inc. (CF : TSX)
The recommendations and opinions expressed in this research report accurately reflect the research analyst's personal, independent and objective views about any and all
the companies and securities that are the subject of this report discussed herein.

For important information, please see the Important Disclosures beginning on page 12 of this document.
 Atlantic Gold Corporation
Raising Target Price

Upcoming potential catalysts:

• Q1/18 Financial results (expected May 23, 2018 pre-market)
• Initial drill results from regional program along 80km mineralized trend (timing
unknown)

Speculative Buy unchanged Target Price C$3.50 from C$2.25 | 22 April 2018 Precious Metals - Producer 2
 Atlantic Gold Corporation
Raising Target Price

Figure 1: Investment Summary

Priced as of Sunday, April 22, 2018

Atlantic Gold Corp. Rahul Paul +1 (416) 869 - 7289

SPEC BUY Rpaul@CanaccordGenuity.com
AGB : TSXV : C$1.87 Target: C$3.50 M atthew M acPhail, P.Eng +1 (416) 867 - 2649
Implied return: 87% MMacPhail@CanaccordGenuity.com

OVERVIEW

Vancouver-based Atlantic Gold is a growth-oriented gold mining company with a long-term

strategy to create a mid-tier gold producer focused on manageable, executable projects in
mining friendly jurisdictions. The company is headed by Chairman and CEO Steven Dean, the
former President of Teck Cominco Limited (now Teck Resources Ltd.) and a founding member of
management of the Normandy Poseidon Group (which became Normandy Mining). Atlantic
Gold's first mine is the Moose River Consoldiated gold mine in Nova Scotia.

INVESTMENT THESIS

• Following the acquisitions of Lakeshore Gold, Claude Resources, and more recently Richmont
Mines, high-margin producing gold mines in Canada are becoming increasingly rare. As such, we
see the potential for significant re-rating pending successful execution on the ramp-up at MRC.

CO M P ANY STATISTICS • At current levels, we believe Atlantic Gold continues to be an attractive M&A target for a larger
Shares outstanding (M): 202 producer, seeking to add a potential 200 kozpa asset, with sector leading AISC in a low-risk
Shares fully diluted (M): 258 jurisdiciton.
Market capitalization (C$M): $297
Enterprise value (C$M): $476 • Recently released Expansion PFS evaluates a signfificant expansion to mill capacity to 6 Mtpa
52-week trading range (C$): $1.3 - $1.97 (from approximately 2 Mtpa currently), and production ramping up to over 200,000 oz (avg
Average daily trading volume (3 Month): 320,896 annual production of 162 koz over approximately 8-year mine-life).
Dividend Yield (%): 0%
Return to Target (%): 87%
• Recent Phase 3 drill results highlight upside beyong Expansion PFS. Drilling continues to show
ATTRIB. RE SE RVE S AND RE SO URCE S ( YE 2017) mineralization beyond current resource, highlighting upside to PFS economics.
G ol d/G ol d E q Ton n es ( M ) Gr a de (g/t) Oz (M)
Proven & Probable Reserves 38.41 1.28 1.59 La te st p ubl i she d r e se a r ch:
Total Resources (Measured, Indicated & Inferred) 52.30 1.32 2.22 Final Phase 3 drill results reinforce resource growth potential
CG Modeled Reserves 61.90 1.26 2.50 Atlantic Gold declares commercial production at the MRC gold operation
Promising drill results continue to highlight resource growth potential, upside to Expansion PFS economics
O P E RATING & FINANCIAL SUM M ARY Expansion PFS provides significant boost to scale and mine life at MRC
FYE D ec 31 2018 2019 2020 2021 2022
P RO D UCTIO N & CO STS
Moose River Consolidated Operation (100%), Canada
Production (koz) 86 87 87 87 146
Cash Costs (US$/oz) $424 $436 $438 $427 $506
AISC (US$/oz) $524 $536 $538 $477 $613
Tot al P rodu c t i on ( koz Au ) 86 87 87 87 146
Tot al Cas h c os t s , ( US$/oz) $424 $436 $438 $427 $506
AISC, ( US$/oz) $574 $582 $584 $523 $641
Tot al Capex, C$M $10 $11 $52 $112 $155
INCO M E STATE M E NT
EBITDA, C$M $73 $86 $87 $109 $177
EBITDA Margin (%) 57% 58% 56% 68% 65%
EPS - FD, C$ $0.29 $0.34 $0.30 $0.29 $0.46 UP CO M ING CATALYSTS
CASH FLO W STATE M E NT
Cash Flow - Operating, C$M $66 $79 $74 $75 $129 • Results from regional exploration program along 80kms of prospective structure (March, 2018 onwards)
Cash Flow - Investing, C$M ($10) ($11) ($52) ($112) ($155) • Revised resource estimate at Fifteen Mile Stream and Cochrane Hill (H2/18E)
Cash Flow - Financing, C$M $31 ($17) ($38) ($38) $0
Free Cash Flow, C$M $56 $68 $22 ($37) ($26)
CFPS - FD, C$ $0.35 $0.38 $0.34 $0.34 $0.60
FCFPS - FD, C$ $0.30 $0.33 $0.10 ($0.17) ($0.12)
BALANCE SH E E T NAV SUM M ARY
Cash Balance, C$M $109 $160 $144 $68 $42 D i s c ou n t rat e 5% 5% % O perat i n g
Working Capital, C$M $57 $108 $92 $55 $18 US$M US$/Share C$M C$/Share NAV
Current Debt, C$M $38 $38 $38 $0 $11
Long Term Debt, C$M $101 $62 $24 $24 $0 Moose River Consolidated Operation (100%), Canada $897 $3.29 $1,119 $4.10 102.5%
Total Debt, C$M $139 $101 $62 $24 $11
Fully-diluted shares M 189 208 217 217 217
Book value/share, C$ $0.87 $1.23 $1.53 $1.81 $2.33
Other Assets ($22) ($0.08) ($27) ($0.10) -2.5%
O perat i n g NAV $875 $3.21 $1,091 $4.00 100.0%

Corporate G&A ($10) ($0.04) ($11,949) ($0.04) -1.2%

Net Working Capital/Other ($50) ($0.18) $11,874 ($0.23) -6.1%
RATIO S
FYE D ec . 31 2018 2019 2020 2021 2022 Tot al NAV ( US$) $816 $2.99 $1,017 $3.73
EV/EBITDA 6.7x 4.7x 3.7x 2.7x 1.9x Target Multiple (x) 0.95x
P/E 6.4x 5.6x 6.2x 6.5x 4.1x P ri c e Target ( C$) $3.50
P/CF 5.4x 4.9x 5.5x 5.4x 3.1x
FCF Yield (%) 15.9% 17.6% 5.4% -9.2% -6.4% VALUATIO N - NAVP S ( FO RWARD CURVE )
Net Debt/NTM EBITDA 0.3x -0.7x -0.8x -0.3x -0.1x NAVPS (Current Fwd Curve), C$/Share $3.73 P/NAV 0.50x
LT Gold Price (Current Fwd Curve), US$/oz $1,499 P/NAV - Large Cap Avg R
CANACCO RD G E NUITY P RICE D E CK LT Silver Price (Current Fwd Curve), US$/oz $18.51 P/NAV - Producer Avg R
US$ 2018 2019 2020 2021 2022 Lon g t erm
Gold ($/oz) $1,344 $1,384 $1,431 $1,473 $1,513 $1,553 NAVP S SE NSITIVITY ( TO % CH ANG E IN G O LD P RICE )
Silver ($/oz) $16.64 $17.20 $17.73 $18.23 $18.34 $18.34 Gold Price Chg (%) -10% -5% 0% 5% 10% 15%
US$/C$ $0.80 $0.80 $0.80 $0.81 $0.81 $0.81 Change in NAV (%) (17.3%) (8.5%) 0.0% 8.5% 17.3% 25.7%

Chairman & CEO: Steven Dean Website: www.atlanticgoldcorporation.com Tel: +1.604.689.5564

Source: Canaccord Genuity, FactSet, Company Reports

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Speculative Buy unchanged Target Price C$3.50 from C$2.25 | 22 April 2018 Precious Metals - Producer 3
 Atlantic Gold Corporation
Raising Target Price

Figure 2: Operating summary

(C$M except per share data)

F Y E De c 31 2018E 2019E 2020E

Production & C ost Sum m ary

Moose River Consolidated Operation (100%), Canada Production Au (000 oz) 86 87 87
Sales Au (000 oz) 76 87 87
Cash Operating Costs (US$/oz) $397 $408 $409
Total Cash Costs (US$/oz) $424 $436 $438
All-in-sustaining Costs (US$/oz) $524 $536 $538
Co nso l i da te d Pr o ducti o n Au (000 o z ) 86 87 87
Sa l e s Au (000 o z ) 76 87 87
Ca sh Ope r a ti ng Co sts (U S$/o z ) $397 $408 $409
To ta l Ca sh Co sts (U S$/o z ) $424 $436 $438
Al l - i n- susta i ni ng Co sts (U S$/o z ) $574 $582 $584

C apital Ex penditures (US$ M )

Moose River Consolidated Operation (100%), Canada Sustaining Capex $8 $9 $9
Growth Capex $0 $0 $33
Total Capex $8 $9 $42
Co nso l i da te d Susta i ni ng Ca pe x $10 $11 $11
Gr o wth Ca pe x $0 $0 $41
To ta l Ca pe x $10 $11 $52

Operating Param eters

Moose River Consolidated Operation (100%), Canada Throughput (tpd) 5,431 5,479 5,479
Tonnes processed (000 t) 1,982 2,000 2,000
Grade processed, Au (g/t) 1.44 1.44 1.44
Recovery, Au (%) 93.9% 94.0% 94.0%
Open-pit Strip Ratio (Waste : Ore) 2.35 2.35 2.35
Unit site costs (US$/tonne processed) $21.56 $17.42 $17.47
Co nso l i da te d Thr o ughput (tpd) 5, 431 5, 479 5, 479
To nne s pr o ce sse d (000 t) 1, 982 2, 000 2, 000
Gr a de pr o ce sse d, Au (g/t) 1. 44 1. 44 1. 44
R e co ve r y , Au (%) 93. 9% 94. 0% 94. 0%
Ope n- pi t Str i p R a ti o (Wa ste : Or e ) 2. 35 2. 35 2. 35
Source: Company Reports, Canaccord Genuity estimates

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Speculative Buy unchanged Target Price C$3.50 from C$2.25 | 22 April 2018 Precious Metals - Producer 4
 Atlantic Gold Corporation
Raising Target Price

Figure 3: Income statement

(C$M except per share data)

F Y E De c 31 2018E 2019E 2020E

Revenue $128 $150 $155
Operating Costs ($40) ($47) ($47)
Gross Margin $88 $103 $107
Corporate G&A, Other ($15) ($17) ($20)
EB I TDA $73 $86 $87
Depreciation ($10) ($10) ($9)
EB I T $63 $77 $78
Interest Expense, Net ($8) ($7) ($5)
Other $0 $0 $0
Ea r ni ngs B e fo r e Ta x e s (EB T) $55 $70 $73
Taxes $0 $0 ($8)
Other $0 $0 $0
Ea r ni ngs (R e po r te d) $55 $70 $65
Ea r ni ngs (Adj uste d) $55 $70 $65

We i ghte d Avg Sha r e s O/S (Di l ute d) 189 208 217

EPS (R e po r te d), B a si c $0. 29 $0. 34 $0. 30

EPS (Adj uste d), Di l ute d $0. 29 $0. 34 $0. 30

Gross Operating Margin (%) 68% 68% 69%

EBITDA Margin (%) 57% 58% 56%
Source: Company Reports, Canaccord Genuity estimates

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Speculative Buy unchanged Target Price C$3.50 from C$2.25 | 22 April 2018 Precious Metals - Producer 5
 Atlantic Gold Corporation
Raising Target Price

Figure 4: Cash flow statement

(C$M except per share data)

F Y E De c 31 2018E 2019E 2020E

Earnings (Adjusted) $55 $70 $65
Depreciation ($10) ($10) ($9)
Other $21 $19 $18
Operating Cash Flow $66 $79 $74
Working Capital Changes $0 $0 $0
Ca sh F l o w F r o m Op e r a ti o ns $66 $79 $74

Capital Expenditures ($10) ($11) ($52)

Other Net Investments $0 $0 $0
Ca sh F l o w F r o m I nve sti ng Acti vi ti e s ($10) ($11) ($52)

Debt Additions $0 $0 $0
Debt Repayments $0 ($38) ($38)
Equity Financing $0 $21 $0
Dividends $0 $0 $0
Other Net Financing $31 $0 $0
Ca sh F l o w F r o m F i na nci ng Acti vi ti e s $31 ($17) ($38)

Foreign Exchange Changes $0 $0 $0

Ca sh B a l a nce , B e gi nni ng $22 $109 $160
Ne t I ncr e a se I n Ca sh $87 $52 ($16)
Ca sh B a l a nce , End $109 $160 $144

F r e e Ca sh F l o w $56 $68 $22

Ne t F r e e Ca sh F l o w $56 $30 ($16)

F r e e Ca sh F l o w/ Sha r e $0. 30 $0. 33 $0. 10

Ne t F r e e Ca sh F l o w /Sha r e $0. 30 $0. 15 ($0. 07)

Op e r a ti ng Ca sh F l o w (a dj uste d) $66 $79 $74

CF PS (Adj uste d) $0. 35 $0. 38 $0. 34

Margins
Gross Margin (%) 68.5% 68.5% 69.4%
EBITDA Margin (%) 57.0% 57.5% 56.2%
OCF Margin (%) 51.3% 52.8% 47.7%
FCF Margin (%) 43.9% 45.6% 14.3%

Valuation
EV/EBITDA 5.6x 3.8x 2.7x
P/CF 5.4x 4.9x 5.5x
FCF Yield (%) 19% 23% 7%
ROE (%) 33% 27% 20%
ROIC (%) 27% 34% 26%

Source: Company Reports, Canaccord Genuity estimates

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Speculative Buy unchanged Target Price C$3.50 from C$2.25 | 22 April 2018 Precious Metals - Producer 6
 Atlantic Gold Corporation
Raising Target Price

Figure 5: Balance sheet

(C$M except per share data)

F Y E De c 31 2018E 2019E 2020E

Cash & Equivalents $109 $160 $144
Other Current Assets $12 $12 $12
To ta l Cur r e nt Asse ts $121 $172 $156

Long-term Assets $224 $225 $268

To ta l Asse ts $345 $398 $424

Current Debt $38 $38 $38

Other Current Liabilities $26 $26 $26
To ta l Cur r e nt Li a bi l i ti e s $64 $64 $64

Long-term Debt $101 $62 $24

Other long-term liabilities $4 $4 $4
To ta l Li a bi l i ti e s $169 $130 $92

Shareholder's Equity $175 $266 $331

To ta l Li a bi l i ti e s & Sha r e ho l de r 's Equi ty $344 $397 $423

Sha r e s (End o f Pe r i o d), M 202 217 217

B o o k Va l ue pe r Sha r e $0. 87 $1. 23 $1. 53
Ne t De bt/NTM EB I TDA $0. 35 NA NA
Ne t De bt/TTM EB I TDA $0. 41 NA NA
Source: Company Reports, Canaccord Genuity estimates

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Speculative Buy unchanged Target Price C$3.50 from C$2.25 | 22 April 2018 Precious Metals - Producer 7
 Atlantic Gold Corporation
Raising Target Price

Figure 6: Previous forecasts

F Y E De c 31 2018E 2019E 2020E

Production & C osts

Consolidated (Previous) Production Au (000 oz) 85 87 87
Sales Au (000 oz) 85 87 87
Cash Operating Costs (US$/oz) $416 $408 $409
Total Cash Costs (US$/oz) $443 $436 $438
All-in-sustaining Costs (US$/oz) $590 $581 $583
% Change (Current vs Previous) Production Au (000 oz) 1% 0% 0%
Sales Au (000 oz) -11% 0% 0%
Cash Operating Costs (US$/oz) -5% 0% 0%
Total Cash Costs (US$/oz) -4% 0% 0%
All-in-sustaining Costs (US$/oz) -3% 0% 0%
F inancial Sum m ary (C $ )
Consolidated (Previous) EBITDA ($M) $83 $86 $87
EPS (Adjusted), Diluted $0.33 $0.31 $0.27
CFPS (Adjusted), Diluted $0.39 $0.38 $0.36
Total Capex ($M) $11 $131 $36
Free Cash Flow ($M) $64 ($51) $42
% Change (Current vs Previous) EBITDA ($M) -11% 0% 0%
EPS (Adjusted), Diluted -13% 8% 13%
CFPS (Adjusted), Diluted -12% 0% -5%
Total Capex ($M) -10% -92% 44%
Free Cash Flow ($M) -12% -233% -47%
Source: Company Reports, Canaccord Genuity estimates

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Speculative Buy unchanged Target Price C$3.50 from C$2.25 | 22 April 2018 Precious Metals - Producer 8
 Atlantic Gold Corporation
Raising Target Price

Figure 7: NAV Summary

Go l d Pr i ce (LT), U S$/o z $1, 553
Si l ve r Pr i ce (LT), U S$/o z $18. 34
US$/C$ (LT), US$/lb $0.81

Sha r e s Outsta ndi ng (F D, I ncl . F i na nci ngs), 000s 272, 656

5% % Co ntr i buti o n
to
to Ope r a ti ng
U S$000 U S$/Sha r e C$000 C$/Sha r e Co nso l i da te d
NAV
NAV

GOLD/SI LVER ASSETS

Go l d/Si l ve r Mi ne s/Adva nce d Pr o j e cts

Moose River Consolidated Operation (100%), Canada $897,357 $3.29 $1,118,674 $4.10 102% 110%
To ta l Go l d/Si l ve r NAV $875, 489 $3. 21 $1, 091, 413 $4. 00 100% 107%

TOTAL OPER ATI NG NAV $875, 489 $3. 21 $1, 091, 413 $4. 00 100% 107%

COR POR ATE ADJU STMENTS/OTHER

Corporate G&A ($9,585) ($0.04) ($11,949) ($0.04) -1%

Working Capital (Basic) $45,488 $0.17 $56,706 $0.21 6%
Long Term Debt ($111,500) ($0.41) ($139,000) ($0.51) -14%
Value of Dilutive Instruments (Options & Warrants) $16,088 $0.06 $20,056 $0.07 2%

To ta l Co r po r a te Adj ustme nts/Othe r ($59, 509) ($0. 22) ($74, 186) ($0. 27) - 7%

TOTAL NAV $815, 980 $2. 99 $1, 017, 227 $3. 73 100%
Source: Company Reports, Canaccord Genuity estimates

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Speculative Buy unchanged Target Price C$3.50 from C$2.25 | 22 April 2018 Precious Metals - Producer 9
 Atlantic Gold Corporation
Raising Target Price

Figure 8: Asset Summary

M oose River C onsolidated Operation (1 0 0 %), C anada
Type: Open-Pit
Location: Nova Scotia, Canada
Status: Producing
2018 Guidance CG Estimates
Production (koz Au) 82 - 90 86
Cash costs (US$/oz) $400 - $448 $397
AISC (US$/oz) $540 - $588 $524
● Recently released Expansion PFS provides significant boost to scale and mine life at MRC. The study
highlights a plant expansion to 6 Mtpa (vs approx 2 Mtpa currently) and production ramping up to over
200,000 oz
● Open-Pit mines are owner operated with a CG modelled blended strip ratio of 2.69:1
Geology and M ineraliz ation
Gold mineralization at Beaver Dam is found both within quartz veins and within the argillite and greywacke
host rocks. At Touquoy, mineralization is predominantly disseminated in the host argillites rather than
associated with quartz veining.
Reserves and Resources Tonnes (Mt) Grade (g/t) Ounces (Moz)
2P reserves 38.41 1.28 1.58
Measured, Indicated and Inferred (incl. of reserves) 52.30 1.32 2.22
CG Mineable resource estimate, LoM 61.90 1.26 2.50
Ex pansion C ase PEA vs C G estim ates
PEA CG Estimates
Production, LoM (koz Au) 1,460 2,316
Mining cost, LoM (C$/t) $2.40 $2.26
G&A , LoM (C$/t) $1.90 $2.80
Processing cost, LoM (C$/t) $8.90 $9.16
Cash costs, LoM (US$/oz) $516 $477
AISC, LoM (US$/oz) $555 $618
Mine Life (years) 10 19
Sust. Capital, LoM (US$M) $57 $222
Avg Sust. Capital (US$M/yr) $5.7 $11.7
Growth CapEx, LoM (US$M) $208 $254

M RC - C anaccord Genuity m odelled production and cost profile

MRC Production and cost profile

250 $800
Production (koz Au)

200
AISC (US$/oz)

$600
150
$400
100
$200
50
0 $0
2018 2019 2020 2021 2022 2023 2024 2025

Production (Touquoy) Production (Beaver Dam) Production (FMS)

Production (Cochrane Hill) AISC (US$/oz)

Source: Company Reports, Canaccord Genuity estimates

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Speculative Buy unchanged Target Price C$3.50 from C$2.25 | 22 April 2018 Precious Metals - Producer 10
 Atlantic Gold Corporation
Raising Target Price

Figure 9: FCF and ending cash balance

$300 $600

$250 $500

$200 $178 $400

$175
Free Cash Flow (C$M)

Ending Cash (C$M)

$157
$150 $300

$100 $200
$68
$56
$50 $100
$22

$0 $0

($26)
($50) ($37) ($100)
2018 2019 2020 2021 2022 2023 2024 2025

FCF (C$M) Ending Cash Balance (C$M)

Source: Company Reports, Canaccord Genuity estimates

Figure 10: Net Cash Profile

Net Cash Profile

$600
$542

$500

$385
$400
Net Debt (C$M)

$300
$207
$200

$82
$100 $60 $44 $31
$0
($30)
($100)
2018 2019 2020 2021 2022 2023 2024 2025
Source: Company Reports, Canaccord Genuity estimates

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Speculative Buy unchanged Target Price C$3.50 from C$2.25 | 22 April 2018 Precious Metals - Producer 11
 Atlantic Gold Corporation
Raising Target Price

Appendix: Important Disclosures

Analyst Certification
Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the
recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and
objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring
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Investment Recommendation
Date and time of first dissemination: April 22, 2018, 22:41 ET
Date and time of production: April 22, 2018, 22:41 ET
Target Price / Valuation Methodology:
Atlantic Gold Corporation - AGB
Our target price of C$3.50 is based on 0.95x our operating NAVPS estimate plus net working capital and other corporate adjustments.
Risks to achieving Target Price / Valuation:
Atlantic Gold Corporation - AGB
The price of gold is Atlantic Gold’s primary risk. In addition, key risks to our target price and/or recommendation include ramp-up risks
as the MRC operation ramps up. Our valuation also incorporates a Phase 2 expansion at MRC, which has yet to be substantiated by
a Feasibility Study - actual economics could be weaker than our forecasts and could have an adverse impact on our valuation and
recommendation. Although the company’s approach to assessing grade is conservative, residual risk remains. Atlantic Gold must also
continue to build on its positive relationships with the Government of Nova Scotia and the Assembly of Nova Scotia Mi’kmaq Chiefs.

Distribution of Ratings:
Global Stock Ratings (as of 04/22/18)
Rating Coverage Universe IB Clients
# % %
Buy 569 61.12% 40.25%
Hold 239 25.67% 25.94%
Sell 18 1.93% 11.11%
Speculative Buy 105 11.28% 61.90%
931* 100.0%
*Total includes stocks that are Under Review

Canaccord Genuity Ratings System

BUY: The stock is expected to generate risk-adjusted returns of over 10% during the next 12 months.
HOLD: The stock is expected to generate risk-adjusted returns of 0-10% during the next 12 months.
SELL: The stock is expected to generate negative risk-adjusted returns during the next 12 months.
NOT RATED: Canaccord Genuity does not provide research coverage of the relevant issuer.
“Risk-adjusted return” refers to the expected return in relation to the amount of risk associated with the designated investment or the
relevant issuer.
Risk Qualifier
SPECULATIVE: Stocks bear significantly higher risk that typically cannot be valued by normal fundamental criteria. Investments in the
stock may result in material loss.
12-Month Recommendation History (as of date same as the Global Stock Ratings table)

Speculative Buy unchanged Target Price C$3.50 from C$2.25 | 22 April 2018 Precious Metals - Producer 12
 Atlantic Gold Corporation
Raising Target Price

A list of all the recommendations on any issuer under coverage that was disseminated during the preceding 12-month period
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mar.canaccordgenuity.com/EN/Pages/default.aspx

Required Company-Specific Disclosures (as of date of this publication)

Atlantic Gold Corporation currently is, or in the past 12 months was, a client of Canaccord Genuity or its affiliated companies. During this
period, Canaccord Genuity or its affiliated companies provided investment banking services to Atlantic Gold Corporation.
In the past 12 months, Canaccord Genuity or its affiliated companies have received compensation for Investment Banking services from
Atlantic Gold Corporation .
In the past 12 months, Canaccord Genuity or any of its affiliated companies have been lead manager, co-lead manager or co-manager
of a public offering of securities of Atlantic Gold Corporation or any publicly disclosed offer of securities of Atlantic Gold Corporation or in
any related derivatives.
Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking
services from Atlantic Gold Corporation in the next three months.
An analyst has visited the material operations of Atlantic Gold Corporation. Partial payment was received for the related travel costs.

Atlantic Gold Corporation Rating History as of 04/20/2018

I:SB:C$0.70 SB:C$0.50 SB:C$0.60 SB:C$0.80 SB:C$1.20 SB:C$1.00 SB:C$1.20 SB:C$1.40 SB:C$1.50 SB:C$2.00 SB:C$2.25
05/04/15 07/10/15 10/22/15 02/17/16 03/30/16 04/28/16 08/11/16 09/20/16 10/06/16 05/02/17 07/17/17

C$2.50

C$2.00

C$1.50

C$1.00

C$0.50

C$0.00
Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 Apr 16 Jul 16 Oct 16 Jan 17 Apr 17 Jul 17 Oct 17 Jan 18 Apr 18

Closing Price Price Target

Buy (B); Speculative Buy (SB); Sell (S); Hold (H); Suspended (SU); Under Review (UR); Restricted (RE); Not Rated (NR)

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Speculative Buy unchanged Target Price C$3.50 from C$2.25 | 22 April 2018 Precious Metals - Producer 13
 Atlantic Gold Corporation
Raising Target Price

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Speculative Buy unchanged Target Price C$3.50 from C$2.25 | 22 April 2018 Precious Metals - Producer 14
 Atlantic Gold Corporation
Raising Target Price

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Speculative Buy unchanged Target Price C$3.50 from C$2.25 | 22 April 2018 Precious Metals - Producer 15