GCU-TSXV $2.30

Rating: STRONG BUY (Speculative)

Target Price: ?$4.70 (from $4.25)

Market Capitalization (Basic): $211.1 million

METALS & MINING

Michael Starogiannis –Analyst

416.682.4222

mstarogiannis@frasermackenzie.com

Neal Belovay– Associate

416.682.4228

nbelovay@frasermackenzie.com

Increasing Target Price on Step-out Hole Improving Strike Potential

Event

Gold Canyon announced drill results from its winter drill program at the Springpole Gold Project located
northeast of the Red Lake Mining District, Ontario.

Highlights from the drill program include:

o Hole SP11-036: 1.13 g/tonne gold over 138.5 metres, including 2.09 g/tonne gold over 27 metres.
The hole was terminated in mineralization.

o Hole SP11-037: 0.92 g/tonne gold over 262.5 metres, including 3.22 g/tonne gold over 18 metres.

o Hole SP11-035: 1.22 g/tonne gold over 95.5 metres.

o Hole SP11-038: 1.21 g/tonne gold over 81 metres.

A fourth rig has been sent to the property, which will test the down-dip continuation of the Portage Zone.
One barge is in the process of being mobilized while another is currently under construction.

Discussion

Infill hole SP11-037 was positive in that it shows a broad interval of mineralization of 262.5 metres
at 0.92 g/tonne gold with a higher grade core of 3.22 g/tonne gold over 18 metres. This hole also shows
mineralization comes to surface.

Mobilization of the fourth rig supports Gold Canyon completing 9,000-10,000 metres over the course of the
winter and summer drill programs and we expect a new resource estimate out by September.

The drill results are encouraging as it confirms the continuity of the Portage Zone with 50 metre step-out
hole SP11-036. Based on this step-out hole and the coincident geophysical anomaly we are confident in
increasing our probability-weighted estimate of potential ounces from 5.0 million ounces to 5.5 million
ounces. This results in a new target price of $4.70 per fully diluted share.

Continued successful step-out drilling to the southeast of Portage will merit yet another re-rating based on
increasing the probability weights for additional ounces in that direction. If we were to bring these probability
weights to 100% (based on successful step-outs), this would add an additional 300,000 ounces and would
raise our estimate of the potential from 5.5 million ounces gold to 5.8 million ounces gold and imply a
potential target of $4.95 per fully diluted share using the same $100/potential ounce in the ground value.

We maintain our Strong Buy recommendation and have increased our 12 month price target to $4.70
(from $4.25) per fully diluted share.