copper gold report 20140331

31st March 2014 WWW.LCC.ASIA

IMPORTANT DISCLAIMER This report has been prepared by Lincoln Crowne & Company Pty. Limited ("LCC"). The research is based on information obtained from sources believed to be accurate and reliable. LCC does not guarantee the accuracy, reliabi lity, completeness or suitability of any such information and makes no warranty, guarantee or representation, expressly or impliedly about this research. LCC accepts no ob ligation to correct or update the information. No opinion or recommendation is made within this research. This report is not intended to be, nor should it be relied on, as a substitute for professional advice. This report should not be relied upon as the sole basis for any investment decision or planning, and LCC does not accept any responsibility on this basis for actions made

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黄金武士 - IN GOLD WE TRUST Global Economic Fundamentals

Source: Capital IQ, COMEX, LCC, LME, SHFE, Thomson Reuters, WGC

Precious Metals Last Week r 4-Wk r YTD r Base Metals Last Week r 4-Wk r YTD r

Gold (A$/oz) 1,400 ▼ (4.8%) ▼ (5%) ▲ 4% Copper (A$/lb) 3.27 ▲ 0.2% ▼ (9%) ▼ (13%)

Gold (US$/oz) 1,294 ▼ (3.1%) ▼ (2%) ▲ 8% Copper (US$/lb) 3.02 ▲ 1.9% ▼ (6%) ▼ (10%)

Silver (US$/oz) 19.8 ▼ (2.6%) ▼ (7%) ▲ 2% Copper (RMB/t) 46,650 ▲ 2.8% ▼ (5%) ▼ (11%)

Platinum (US$/oz) 1,406 ▼ (2.1%) ▼ (3%) ▲ 3% Cobalt (US$/lb) 13.83 ▼ (1.6%) ▼ (2%) ▲ 3%

Palladium (US$/oz) 770 ▼ (2.3%) ▲ 4% ▲ 7% Molybdenum (US$/lb) 10.66 ▲ 4.4% ▲ 4% ▲ 9%

Iron Ore (US$/t) 112 ▲ 0.1% ▼ (4%) ▼ (16%) Nickel (US$/lb) 7.15 ▼ (1.4%) ▲ 8% ▲ 13%

Crude Oil (US$/barrel) 101 ▲ 2.3% ▼ (0%) ▲ 3% Lead (US$/lb) 0.93 ▼ (0.1%) ▼ (5%) ▼ (7%)

Gas H.Hub (US$/m btu) 4.49 ▲ 4.4% ▼ (3%) ▲ 7% Zinc (US$/lb) 0.90 ▲ 1.5% ▼ (5%) ▼ (5%)

Uranium (US$/lb) 34 ▼ (1.3%) ▼ (3%) ▼ (0%) Tin (US$/lb) 10.46 ▲ 0.2% ▼ (2%) ▲ 2%

Currencies & Indices Last Week r 4-Wk r YTD r Global Markets Last Week r 4-Wk r YTD r

AUD/USD 0.924 ▲ 1.7% ▲ 3% ▲ 2% ASX 200 5,367 ▲ 0.5% ▼ (1%) ▲ 0%

RMB/USD 0.161 ▲ 0.2% ▼ (1%) ▲ 0% Dow Jones 16,323 ▲ 0.1% ▲ 0% ▼ (2%)

CAD/USD 0.903 ▲ 1.2% ▲ 0% ▲ 1% S&P 500 Index 1,858 ▲ 0.4% ▼ (0%) ▲ 0%

EUR/USD 1.375 ▼ (0.2%) ▼ (0%) ▼ (0%) Shang Hai Index 2,042 ▲ 0.9% ▼ (1%) ▼ (2%)

ASX Ordinary Gold 2,184 ▼ (1.5%) ▼ (12%) ▼ (8%) Hang Seng Index 22,066 ▼ (0.3%) ▼ (3%) ▼ (4%)

TSX Global Gold 186 — 0.0% ▼ (6%) ▼ (6%) Nikkei 225 14,696 ▲ 3.3% ▼ (1%) ▼ (10%)

ASX 300 Metals & Mining 3,212 ▼ (8.3%) ▼ (6%) ▲ 1% FTSE 100 Index 6,616 ▲ 1.8% ▼ (3%) ▲ 3%

TSX Global Mining 74 ▼ (6.2%) ▼ (4%) ▲ 1% Euro STOXX 50 Index 3,172 ▲ 2.6% ▲ 1% ▲ 0%

1,200

1,300

1,400

1,500

1,600

0

100

200

300

Jan Feb Mar

Tho

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Gold PriceVolume A$/oz US$/oz200 day average

2.90

3.10

3.30

3.50

3.70

0

100

200

300

Jan Feb Mar

Tho

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LME Copper Price and Volume

Volume ('000 lot)Price (A$/lb)Price (US$/lb)

2.90

3.10

3.30

3.50

0

10

20

30

40

50

Jan Feb Mar

COMEX Copper Price and Stocks

Stocks ('000 t)

Price (US$/lb)

44000

46000

48000

50000

52000

54000

0

50

100

150

200

250

300

Jan Feb Mar

Tho

usa

nd

s SHFE Copper Price and Stocks

Stocks ('000 t)

Price (RMB/t)44000

46000

48000

50000

52000

54000

0

25

50

Jan Feb Mar

Tho

usa

nd

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SHFE Copper Price and Volume

Volume ('000 lot)Price (RMB/t)

2.90

3.10

3.30

3.50

0

25

50

75

100

Jan Feb Mar

COMEX Copper Price and Volume

Volume ('000 lot)

Price (US$/lb)

1500

2000

2500

3000

Jan Feb Mar

S&P/ASX All Ordinaries Gold Index(XGD)

3.00

3.20

3.40

3.60

3.80

4.00

0

100

200

300

400

500

600

Jan Mar May Jul Sep Nov Jan

China Copper Imports

Tonnes (kt)

Copper Price

2.90

3.10

3.30

3.50

3.70

0

100

200

300

400

Jan Feb Mar

LME Copper Price and Stocks

Stocks (kt)

Price (A$/lb)

Price (US$/lb)

0

500

1000

1500

2000

600

800

1000

1200

1400

Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13

World Gold Demand and Supply

Total Demand (tonnes)

Total Supply (tonnes)

Gold Price (US$/oz, RHS)

Copper Warehouse Stocks

0

20

40

60

80

100

120

140

160

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Hong Kong Gold Net Imports (tonnes)

2013

2014



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Markets & Majors

World #1 copper producer Codelco's output fell to a five-year low and its profit dropped by half in 2013 due to dwindling ore grades and lower metal prices. Output was 1.62 million tonnes or 1.5% lower year on year. Codelco indicated that production falls at Chuquicamata, Radomiro Tomic, Salvador, Andina and Gabriela Mistral mines were partially compensated by an increase at the El Teniente mine. Direct cash costs fell 0.3% to US$1.63/lb Cu, helped by lower power prices. Chile expects mining investment to reach US$112 billion by 2021, figure that include US$27 billion planned by Codelco with the expectation to maintain existing production and increase it to 2.1mt by 2021.

Metal Bulletin has launched an index for copper concentrate treatment and refining charges (TC/RCs) on a CIF Asia-Pacific ports basis. The TC/RC index was published for the first time on 14th March 2014, at a value of US$92 per dry metric tonne/9.2¢/lb, down from a high of US$122/12¢ at the end of November. This compares with US$66/6.6¢ on 15th June 2013. Rises and falls in TC/RCs provide an insight into the balance of supply and demand in the copper concentrates market. As such, they can be a leading indicator for supply and demand in the refined copper market. Traders are bidding aggressively to secure premium concentrates ahead of an expected squeeze in the market later in the year, as mine delays and disruptions continue. Smelters, by contrast, are still holding comfortable inventories that they built up around the turn of the year, and have so far avoided paying the higher prices that traders have agreed with miners. Recent sales to traders and smelters show an inverted spread between the cost of buying from mines and terms that can be extracted from consumers. High-grade copper concentrates have recently been sold to trade buyers at levels below US$80/8¢.

Reuters - Forthcoming metals warehouse rule changes and global political uncertainty have dampened the appetite for new industrial metals funds that are backed by physical material. In response to bitter complaints from metals users about delays in getting hold of metal, the LME last year announced changes to its rules on warehouses, stipulating a 50-day maximum wait time for delivery of physical metals. The rules come into effect on 1st April.

Reuters - Workers at Glencore Xstrata's Tintaya-Antapaccay copper mine in the Peruvian Andes have launched a 48-hour strike to demand a bigger share of profit. The deposit that produced 151,200 tonnes of copper last year is operating normally, a Peru-based Glencore spokesman said. Around 900 of 1,200 miners have dropped their tools at the mine located in the Cusco region, according to the secretary general of the union. Glencore has been operating in Tintaya-Antapaccay for 16 months and has been implementing drastic changes to labour relations.

Rio Tinto faces more delays to reach an agreement with the Mongolian government to expand the Oyu Tolgoi project into an underground mine. The standoff between Rio and the government - a funded 34% partner in the project - means the March 31 expiry date on project finance commitments from lenders is set to come

in to force, requiring the project partners to seek extensions of the commitments. Production guidance for 2014 has been revised at 135,000–160,000t of copper in concentrates and 600,000–700,000oz of gold, down from the previous forecast of 150,000–175,000t of copper and 700,000–750,000oz.

Jiangxi Copper, China's top producer of the metal, expects that the Chinese copper consumption will increase by about 700,000t in 2014 from the previous year, while production is expected to rise by between 600,000-650,000t.

The gold price broke through the 200-day moving average, a key support level. Last week saw the first reduction in four weeks of holdings in ETF backed by physical gold. The reduction was small, only 0.2 t, but marked a loss of positive momentum.

Mineweb - For the first two months of the year net gold imports through Hong Kong totaled 192.8t as compared with 80.6t in the first two months of 2013 suggesting a rise of just under 140%. The very fact that China imported more than 100t in February – normally a weak month for gold imports because of the Chinese New Year holiday – has to be highly significant as a guide to likely ongoing Chinese demand.

Copper Explorers & Emerging Producers

Copper Producers

Source: ASX, Capital IQ, LCC. Assumption: A$/US$ of 0.90

Code Company NameClose

PriceWeek r YTD r

Market

Cap (A$m)

52 Week

Range

Cash

(A$m)EV (A$m)

AVI Avalon Minerals 0.010 ▲ 25% 0% 12 2.7 9

AVB Avanco Resources 0.068 ▲ 1% (4% ) 92 16.6 75

AZS Azure Minerals 0.030 — 0% 0% 21 2.3 19

BMB Balamara Resources 0.11 ▼ (4% ) 16% 38 1.2 36

BTR Blackthorn Resources 0.15 ▼ (12% ) (42% ) 25 16.3 8

BOC Bougainville Copper 0.54 ▼ (2% ) 13% 215 6.2 208

CDU Cudeco 1.76 ▲ 9% (2% ) 412 47.4 364

ERM Emmerson Resources 0.032 ▼ (18% ) (24% ) 8.4 1.2 7

ENR Encounter Resources 0.20 ▼ (13% ) 5% 27 3.9 23

ESR Estrella Resources 0.15 ▲ 21% (17% ) 14 2.0 12

FND Finders Resources 0.18 ▲ 3% (17% ) 97 12.9 84

GCR Golden Cross Resources 0.005 — 0% 0% 9 1.1 8

HAV Havilah Resources 0.24 ▼ (4% ) (4% ) 29 3.5 25

HCH Hot Chili 0.38 ▼ (3% ) (11% ) 132 8.2 124

HIG Highlands Pacific 0.063 ▼ (15% ) 3% 54 9.6 44

IRN Indophil Resources 0.17 ▼ (3% ) 3% 205 215.1 (11)

KGL KGL Resources 0.110 ▲ 10% 5% 15 7.8 8

KDR Kidman Resources 0.110 ▼ (4% ) (41% ) 14 3.7 11

MMC Marengo Mining 0.014 — 0% (7% ) 16 4.5 39

MNC Metminco 0.023 ▼ (12% ) (26% ) 40 7.8 32

PEX Peel Mining 0.22 — 0% (15% ) 29 3.8 25

RDM Red Metal 0.17 — 0% 10% 24 1.1 23

RXM Rex Minerals 0.37 ▼ (10% ) (23% ) 80 20.9 59

SBR Sabre Resources 0.035 ▼ (8% ) (19% ) 8 4.1 4

SUH Southern Hemisphere 0.055 ▲ 2% 10% 14 0.5 13

TLM Talisman Mining 0.11 — 0% 5% 14 17.3 (3)

VXR Venturex Resources 0.007 — 0% (30% ) 11 3.4 7

XAM Xanadu Mines 0.050 — 0% 0% 10 2.8 7

YTC YTC Resources 0.23 ▼ (4% ) 0% 75 25.8 115

Code Company Name Close Price Week r YTD rMarket

Cap (A$m)

52 Week

Range

Cash

(A$m)EV (A$m)

EV/

EBITDA

ABY Aditya Birla Minerals 0.30 — 0% (13% ) 92 118 (25) NM

AOH Altona Mining 0.16 ▼ (3% ) (3% ) 85 20 76 3.3x

DML Discovery Metals 0.028 — 0% (47% ) 16 13 174 NM

HGO Hillgrove Resources 0.075 ▼ (12% ) (17% ) 89 17 117 3.4x

OZL OZ Minerals 3.42 ▲ 8% 9% 1,038 364 674 3.9x

PNA PanAust 1.54 ▼ (3% ) (15% ) 937 145 972 4.0x

SFR Sandfire Resources 5.70 ▲ 4% (12% ) 887 75 1,042 8.2x

SRQ Straits Resources 0.005 — 0% (38% ) 6 12 116 NM

TGS Tiger Resources 0.35 ▼ (3% ) 1% 281 42 295 4.5x

MWE Mawson West C$0.55 ▼ (2% ) (5% ) 92 56 59 1.9x985 CST Mining Group HK$0.058 ▼ (2% ) (13% ) 219 119 100 NM



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Mergers & Acquisitions

Bloomberg expects about US$30 billion in private equity investment to come into the mining sector as funds look for somewhere to park the significant capital raised in the past three years. Global mining sector head Ken Hoffman told delegates at Mines and Money Hong Kong on 27th March that 96 mining-specific funds emerged in 2013, raising almost US$8 billion in the same year.

Centamin (LSE: CEN) has moved to compulsory acquisition of Ampella Mining (ASX: AMX) after closing a takeover offer.

Indophil Resources (ASX: IRN) indicated interest in acquiring Glencore Xstrata’s stake in the US$5.9 billion Tampakan copper-gold project in the Philippines. The project operator Sagittarius Mines is owned 37.5% by IRN and 62.5% by GX. Indophil Vice President for Corporate Affairs Gavan Collery said that the company will resume negotiations in acquiring the remaining stake in Sagittarius after Glencore Xstrata sells its Las Bambas copper-gold mine in Peru.

ASX-Listed Company News

Altona Mining (ASX: AOH) announced an increase of the mineral

resource at its Kylylahti underground mine at the Outokumpu

copper project in Finland, with contained copper rising 17%. The

resource estimate now stands at 8.8mt at 1.3% copper, 0.8g/t

gold and 0.5% zinc. Contained metal is 117,480t of copper,

222,595oz of gold and 47,401t zinc. Resources are reported

above a 0.4% copper lower cut-off grade.

Resolute Mining (ASX: RSG) announced the results of the PFS at

Syama, Mali. Ore reserves increased to 3.15 million ounces, up

1.1moz with the addition of 14.3mt of underground ore. Reserves

were estimated using a gold price of US$1,300/oz.

St Barbara (ASX: SBM) has advised that performance at Simberi

in the March 2014 quarter has been hampered by poor mining

performance and delays in ramping up the new processing circuit.

The recently completed processing plant expansion, designed to

lift ore throughput from 2mtpa to 3.5mtpa, requires significant

debottlenecking and optimisation work to achieve nameplate

performance. Gold production for the March 2014 quarter will be

modest at around 11,000oz, with production for FY14 estimated to

be between 45,000 and 50,000oz. Simberi is now expected to be

cash positive by the month of December 2014. An annualised

production rate of 90,000 to 100,000oz is expected by March

2015. Unit cash operating costs for FY14 are expected to be

between A$1,850 and A$1,950/oz. Standard & Poor’s has revised

down St Barbara’s credit rating to B- from B.

Gold Explorers & Emerging Producers


Gold Producers



PriceWeek r YTD r

Market Cap

(A$m)

52 Week

Range

Cash

(A$m)

EV

(A$m)

ABU ABM Resources 0.024 ▼ (8% ) 9% 91 5.1 86

ALK Alkane Resources 0.32 ▲ 12% (6% ) 119 43.3 76

AUK Augur Resources 0.051 ▲ 2% (32% ) 14 2.2 11

AZM Azumah Resources 0.051 ▼ (23% ) 82% 18 3.3 15

BSR Bassari Resources 0.007 ▼ (22% ) (13% ) 7 0.2 7

BAB Bullabulling Gold 0.053 ▼ (12% ) 18% 18 4.3 14

CHN Chalice Gold 0.15 ▼ (3% ) 7% 43 55.1 (12)

CHZ Chesser Resources 0.13 ▼ (7% ) 24% 29 4.6 24

CDG Cleveland Mining 0.09 ▼ (14% ) (10% ) 22 0.6 21

CVG Convergent Minerals 0.013 ▼ (7% ) (19% ) 5 0.7 4

CAS Crusader Resources 0.28 ▼ (5% ) (7% ) 35 2.2 38

DCN Dacian Gold 0.36 ▼ (4% ) 48% 34 13.2 21

EXG Excelsior Gold 0.082 ▼ (2% ) 19% 34 4.3 28

FMl Focus Minerals 0.02 ▼ (12% ) 25% 137 81.2 63

GCY Gascoyne Resources 0.16 ▲ 14% 14% 25 1.2 24

GOR Gold Road Resources 0.15 ▼ (19% ) 52% 77 7.1 70

GRY Gryphon Minerals 0.15 ▼ (9% ) (12% ) 60 41.7 18

IDC Indochine Mining 0.076 ▲ 3% 77% 73 0.5 73

IAU Intrepid Mines 0.26 ▼ (5% ) (17% ) 145 98.2 46

KGD Kula Gold 0.09 ▼ (9% ) (18% ) 11 3.2 8

MSR Manas Resources 0.037 ▼ (8% ) 16% 15 5.6 10

MYG Mutiny Gold 0.029 ▼ (3% ) (9% ) 18 1.7 22

OBS Orbis Gold 0.32 — 0% 28% 80 5.5 75

ORD Ord Resources 0.00 — 0% (20% ) 5 1.5 3

PAN Panoramic Resources 0.41 ▼ (24% ) 64% 132 34.0 98

PIR Papillon Resources 1.25 ▼ (9% ) 28% 426 43.6 382

PXG Phoenix Gold 0.13 ▼ (10% ) (19% ) 39 4.6 34

RED Red 5 0.08 ▼ (17% ) (15% ) 57 36.7 20

RNI Resource & Investment 0.084 ▲ 5% 58% 28 3.0 40

ROL Robust Resources 0.30 ▲ 7% (14% ) 47 2.5 50

SIH Sihayo Gold 0.025 ▼ (4% ) (17% ) 23 0.5 23

SXG Southern Cross Goldfields 0.014 ▼ (7% ) 8% 12 5.1 14

SUM Sumatra Copper & Gold 0.08 ▼ (11% ) 14% 33 4.0 32

TAM Tanami Gold 0.02 ▼ (29% ) (9% ) 24 8.8 30

WAF West African Resources 0.16 ▲ 3% 11% 42 1.3 41

YTC YTC Resources 0.23 ▼ (4% ) 0% 75 25.8 115


PriceWeek r YTD r

Market

Cap (A$m)

52 Week

Range

Cash

(A$m)EV (A$m)

EV/

EBITDA

AQG Alacer Gold 2.71 ▼ (11% ) 19% 813 322 491 2.7x

AGD Austral Gold 0.09 — 0% (25% ) 15 9 67 3.5x

BDR Beadell Resources 0.59 ▼ (9% ) (25% ) 467 24 512 4.6x

BEZ Besra Gold 0.027 — 0% (40% ) 11 1 36 NM

DRM Doray Minerals 0.80 ▼ (9% ) 43% 131 24 156 5.2x

DRA Dragon Mining 0.18 ▼ (5% ) 38% 16 6 10 2.3x

EVN Evolution Mining 0.84 ▼ (7% ) 36% 593 37 698 4.1x

EVR Endeavour Mining Corp 0.79 ▼ (10% ) 62% 343 119 523 NM

IGO Independence Group 3.87 ▼ (4% ) 24% 903 46 921 11.0x

KCN Kingsgate Consolidated 0.99 ▼ (12% ) 6% 219 37 358 4.4x

KRM Kingsrose Mining 0.37 — 0% 10% 133 1 131 NM

LSA Lachlan Star 0.25 ▼ (11% ) 23% 36 3 37 NM

MML Medusa Mining 1.99 ▼ (12% ) (2% ) 414 23 390 7.6x

MLX Metals X 0.20 ▼ (11% ) 18% 331 50 281 13.4x

MOY Millennium Minerals 0.10 ▼ (9% ) (47% ) 22 5 55 2.0x

MLI Mintails 0.054 — 0% (4% ) 15 4 10 NM

NCM Newcrest Mining 9.80 ▼ (7% ) 26% 7,507 121 12,024 11.4x

NGF Norton Gold Fields 0.13 ▼ (4% ) (7% ) 116 41 190 2.6x

NST Northern Star Resources 1.10 ▼ (10% ) 40% 636 49 587 10.3x

OGC OceanaGold Corporation 2.41 ▼ (15% ) 52% 739 28 905 3.7x

PNA PanAust 1.54 ▼ (3% ) (15% ) 937 145 972 4.0x

PGI PanTerra Gold 0.040 ▼ (13% ) (2% ) 31 5 75 NM

PRU Perseus Mining 0.43 ▼ (9% ) 76% 226 28 198 18.6x

RMS Ramelius Resources 0.11 ▼ (12% ) 13% 40 33 11 1.0x

RRL Regis Resources 2.19 ▼ (9% ) (25% ) 1,094 13 1,091 5.0x

RSG Resolute Mining 0.57 ▼ (11% ) 3% 365 50 409 3.2x

SAR Saracen Mineral Holdings 0.32 ▼ (9% ) 73% 254 23 253 3.1x

SBM St Barbara 0.27 ▼ (27% ) 4% 132 70 392 NM

SLR Silver Lake Resources 0.43 ▼ (9% ) (20% ) 216 17 207 NM

TBR Tribune Resources 3.10 ▼ (1% ) 33% 156 9 166 3.2x

TGZ Teranga Gold Corp 0.84 ▼ (17% ) 52% 285 39 313 NM

TRY Troy Resources 1.02 ▼ (19% ) 30% 195 18 207 7.2x

UML Unity Mining 0.022 ▼ (12% ) (46% ) 21 10 11 1.4x

VGO Vantage Goldfields 0.023 ▼ (18% ) (12% ) 6 1 5 1.5x

ANG AngloGold Ashanti ZAR186 ▼ (5% ) 52% 7,658 725 11,122 6.4x

ABX Barrick Gold Corp C$20.24 ▼ (7% ) 8% 23,029 2,688 36,671 6.1x

CRK Crocodile Gold Corp C$0.22 ▼ (10% ) 83% 105 3 109 1.5x

GFI Goldfields ZAR42 ▼ (9% ) 27% 3,280 358 5,316 5.6x

NEM Newmont Mining Corp US$24 ▼ (3% ) 4% 12,884 1,739 21,571 6.2x



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Australian Gold Producers Cost Curve as at 31 December 2013

copper gold report 20140331

Economy & Finance