According to Dundee Securities:

https://app.box.com/s/mc98ejtpxge8p0vycgw1

Colossus Minerals

October 17, 2013

SELL, Speculative Risk

Dundee target: C$0.50

Investor Patience & Balance Sheet Wearing Thin: Downgrading to SELL

Technical Challenges, Balance Sheet Stress, Tough Financing Environment, & Soft Metal Prices Underpin our New Sell Rating

- In the past, we'd highlighted the potential opportunities buried within Colossus Mineral's (CSI) 75%-owned Serra Pelada project in Brazil. But given the technical challenges encountered (brought on by water and challenging ground conditions), realizing that prize now appears a less likely scenario for the shareholders of CSI. While some would argue that technical problems have technical solutions, this statement inherently assumes that financing remains available to bring about these solutions. In the case of CSI, we believe the options for raising new capital are few and expect that any future cash injections would likely be arranged under highly punitive terms. The prospect of adding further financial burden to what is already a leveraged capital structure in the context of a soft metal price environment has us concerned. Given our lack of balance sheet comfort, management's failure to budget and operational challenges that remain, we are downgrading CSI to SELL (from Neutral) and reducing our target to $0.50 (from $0.80).

- Should CSI deliver on its previous promise of commencing production by year-end (without raising further capital), we may reconsider our position. But given the poor track record of operational execution to date, we believe that the risks of investing in CSI outweigh the potential rewards at this time.

Too Many Unknowns To Justify the Leap of Faith

- While recognizing that construction of the crushing circuit and the processing plant are nearing completion, commissioning remains the major hurdle to overcome. In theory, operating the gravity recovery circuit should be a relatively simple exercise. But commissioning and optimizing the circuit to achieve intended recoveries, however, could take time. With little room for error and much left to be done, metal recovery remains a key variable which could potentially overextend CSI's already stretched balance sheet.

- Apart from processing, mining remains the bigger challenge in our opinion and given that mining of the CMZ is only expected to resume in December, we believe CSI still has to climb the learning curve. While we remain convinced that the water issues can be overcome and the 3,000 tonnes of mineralized material on surface could feed the plant temporarily, our comfort with respect to proposed mining rate of 1,000 tpd remains low.

- Assuming we completely underestimate the achievable mining rate, grade remains another question. While previous drilling suggests that high-grade material is present, it also suggests that grade can be erratic and unpredictable. This is before considering the platinum and palladium credits which are only expected to be realized in 2015. While lab work suggests potential for robust PGM recoveries, replicating these results on a commercial scale could prove to be more challenging than once thought.