TD Comment On Merger TodayEvent On October 25, NewCastle, Trek Mining (TREK-V), and Anfield Gold (ANF-V) announced a merger to form Equinox Gold (EQX-V). The new company will be led by famed mining entrepreneur Ross Beaty as Chairman (who is investing US$20mm at the deal price) and Christian Milau as CEO (from Trek previously). Impact: POSITIVE We view the transaction positively. It seems to us to be a classic case of the combined company being more than the sum of its parts. In essence, we have what we view to be two unfunded and poorly understood development stories merging with a cash shell to create a higher profile company, both in terms of its leadership and market size, with a fully funded path to eventual mid-tier production. The re-rating potential is very attractive to us. Developers in our coverage universe are trading at 0.3x-0.6x NAV, with the companies at the higher-end of the range reflecting greater market visibility and confidence in their paths to production, particularly with respect to funding. Junior and mid-tier producers are trading at 0.8x-1.3x NAV, with multi-mine producers at the higher-end. Christian Milau has suggested opportunities for portfolio rationalization, including the sale of assets from Anfield potentially raising $40mm in Q4/17 and the spin-out of copper assets in Mexico (La Verde 746 Mt @ 0.4% CuEq M&I+I), Ecuador (Warintza 195 Mt @ 0.6% Inf.) and Chile (Ricardo concept/exploration) in 2018. The combined company is expected to have $98mm in cash plus a US$85mm credit facility with Sprott and a US$200mm development facility. A 2017 Feasibility Study estimated pre-production capex for the Aurizona project (startup: late-2018) at US $131mm. A Pre-Feasibility Study for Castle Mountain is expected in Q1/18. TD Investment Conclusion Our valuation is based on 0.9x our Equinox ("Newco") NAVPS. We view the combination to form Equinox Gold positively as it offers up re-rating and portfolio optimization potential in a higher visibility and more liquid vehicle led by Ross Beaty that is fully funded to eventual mid-tier production. As such, we have changed our recommendation to TENDER from Speculative Buy, reflecting our view that shareholders should support the proposed combination (see page 5 for definitions/ our rating framework). 1.2 1.2 1 1 0.8 0.8 0.6 0.6 0.4 0.4 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 NCA-T: Price Company Profile NewCastle is a small-cap gold company focused on the exploration and redevelopment of the past-producing permitted Castle Mountain Mine (100%) in San Bernardino County, California. M&I Resources at Castle Mountain were estimated at 4.0 Moz at 0.64 g/t and Inferred Resources of 1.6 Moz. Gold and Precious Minerals - Mid-and Small-Cap Golds NewCastle Gold Inc. (NCA-T) C$0.78 Equinox Gold: Fully Funded to Mid-tier Gold Production Daniel Earle Arun Lamba, CFA, (Associate) Recommendation: TENDER Prior: SPEC BUY Risk: SPECULATIVE 12-Month Target Price: C$2.00 12-Month Dividend (Est.): C$0.00 12-Month Total Return: 156.4% Market Data (C$) Current Price C$0.78 52-Week Range $0.52 - $1.13 Mkt Cap (f.d.) ($mm) $165.3 Float Cap ($mm) $122.5 Current Dividend $0.00 Dividend Yield 0.0% Avg. Daily Trading Vol. 701,180 Financial Data (C$) Fiscal Y-E December Shares O/S (f.d)(mm) 211.9 Shares O/S (basic) (mm) 203.8 Float Shares (mm) 157.0 Net Debt/Total Cap 0.0% Cash ($mm) $10.0 NAVPS $2.47 Supplemental Data Year 2016A 2017E 2018E 2019E Gold US$/oz 1,248 1,258 1,300 1,300 NAVPS in the metadata is our current corporate NAV5% for NewCastle. All figures in C$, unless otherwise specified Page 1 of 6 November 1, 2017 Details Aurizona (100%), Maranhao State, Brazil Background Past producer from 20102015 under Luna Gold, which failed under the heavy burden of a 17% gold stream and debt facility owed to Sandstorm Gold, while unsuccessfully attempting to transition from saprolite to hardrock feed due to a lack of capacity at the front-end of the plant. The stream was restructured in March 2015 to a sliding-scale royalty of 3-5% (3% at