WEEKLY

25th November 2013

WWW.LCC.ASIA

Australian Copper Gold Report

Gold Bulls Are Surrendering

Global Economy Fundamentals
Precious Metals & Energy Last Close Price YTD Change 4-Week Change Week Change Base Metals Last Close Price YTD Change 4-Week Change Week Change

Gold Gold Silver Platinum Palladium Crude Oil Gas H.Hub Uranium

(A$/oz) (US$/oz) (US$/oz) (US$/oz) (US$/oz) (US$/barrel)

(US$/m btu)

(US$/lb)

1,358 1,243 19.9 1,381 711 95 3.68 37

Last Close Price

-16% -26% -34% -10% 1% 3% 9% -16%

YTD Change

-4% -8% -12% -5% -5% -3% -5% 5%

4-Week Change

-1.3% -3.4% -4.2% -4.0% -3.0% 0.4% -0.8% 0.6%

Week Change

Copper Copper Cobalt Molybdenum Nickel Lead Zinc Tin

Global Markets

(A$/lb) (US$/lb) (US$/lb) (US$/lb) (US$/lb) (US$/lb) (US$/lb) (US$/lb)

3.46 3.17 11.79 9.66 6.09 0.93 0.84 10.42

Last Close Price

0% -12% 2% -18% -21% -12% -9% -2%

YTD Change

3% -2% -4% 2% -7% -7% -7% 1%

4-Week Change

2.5% 0.4% -5.5% 0.0% -1.9% -0.6% -0.1% 0.0%

Week Change

Currencies & Indices

AUD/USD RMB/USD CAD/USD ZAR/USD ASX Ordinary Gold TSX Global Gold ASX 300 Metals & Mining TSX Global Mining
1700 1600

0.916 0.164 0.950 0.099 1,974 161 3,309 71

Gold Price

-12% 2% -6% -16% -60% -47% -9% -26%

-4% 0% -1% -3% -21% -14% -1% -7%

-2.1% 0.0% -0.6% 0.7% -10.6% -7.0% -1.3% -3.7%

ASX 200 Dow Jones S&P 500 Index Shang Hai Index Hang Seng Index Nikkei 225 FTSE 100 Index Euro STOXX 50 Index
Volume ('000 t) Price (A$/lb) Price (US$/lb)

5,336 16,065 1,805 2,196 23,696 15,382 6,674 3,056

15% 23% 27% -3% 5% 48% 13% 16%

-1% 3% 3% 3% 4% 9% -1% 1%

-1.2% 0.6% 0.4% 2.8% 2.9% 1.4% -0.3% 0.0%

LME Copper Price and Volume

400
A$/oz

3.80 3.60 3.40 3.20 3.00

1500 1400 1300

1200 Aug Sep Oct

US$/oz

300 200 100 0 Aug 120 80 Sep Oct

600
400 200 0 Aug 80

LME Copper Price and Stocks Stocks ('000 t) Price (A$/lb) Price (US$/lb)

3.80

3.60 3.40 3.20

3.00

Nov

Nov 3.80 3.60

Sep

Oct

Nov 3.80

3000 2500 2000 1500

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

COMEX Copper Price and Volume

COMEX Copper Price and Stocks Stocks ('000 t) Price (US$/lb)

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

60 40
20 0 Aug Sep

3.60 3.40
3.20 3.00

3.40 40 Aug Sep Oct Nov

0 Aug 100 80 60 40
Total Demand (tonnes) Total Supply (tonnes) Q1 11 Q3 11 Q1 12 Q3 12 Q1 13 Q3 13

3.20 3.00 Sep Oct Nov 4.50

Oct

Nov

1500
1250

World Gold Demand and Supply

SHFE Copper Price and Volume Volume ('000 lot) Price (US$/lb) 80
60 4.30 4.10 3.90

SHFE Copper Price and Stocks 4.50 Stocks ('000 t) Price (US$/lb)
4.30 4.10 3.90 3.70

1000
750

40
20

20 0
Aug
$3.25

3.70 3.50
Sep Oct Nov

500

0 Aug
500

3.50 Sep Oct

China Copper Imports
Tonnes ('000t) Copper Price

Nov
4.00

2012 Gold Production Costs

$1,250 $1,000

LME copper forward curve

$3.24 $3.23 $3.22 $3.21

Total production costs

Cash costs

400
Seller Buyer

3.80
3.60 3.40 3.20

$750
$500 $250 $0 Latin North America America Other Australia South Africa World

300 200 100

$3.20 Cash 3 Months Dec 1 Dec 2 Dec 3

Apr 12

Oct 12

Apr 13

Oct 13

3.00

Source: Capital IQ, COMEX, LME, SHFE, Thomson Reuters, LCC research. Note: the SHFE copper price is based on the LME 3-month price and includes CIF premium, tax and duty 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, reliability, completeness or suitability o f any such information and makes no warranty, guarantee or representation, expressly or impliedly about this research. LCC accepts no obligation 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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WEEKLY
25th November 2013

WWW.LCC.ASIA

Australian Copper Gold Report

Markets & Majors

Standard and Poors has updated its method for determining and implementing metals price assumptions by removing the conservative discounts it used to apply to forward curves. Notwithstanding generally weaker metals prices this year, S&P predicts favorable prices for copper and iron ore for 2014-2016, while aluminum, nickel and zinc will continue to suffer from oversupply over the forecast horizon. COPPER: US$3.10/lb for 2014 and 2015. Demand is stable, and should continue to benefit from growth in Asia and the consequent copper-intensive investments in infrastructure and housing, they advised. We observe continued pressure on operating costs for all major producers, as lower grades require higher energy and labor costs, and environmental requirements become increasingly stringent. GOLD: the sharp decline in gold prices during 2013 may portend further weakness if U.S. monetary stimulus wans, S&P noted. Therefore, S&P assumes a US$1,350/oz average gold price in 2014, US$1,300/oz in 2015 and US$1,200/oz in 2014. Chile's Codelco, the world's top copper producer, has raised the premium for 2014 term shipments to China by 41% according to trading sources, reflecting strong Chinese demand. The proposal to clients in private meetings in Shanghai last week is to increase the premium by US$40 to US$138/t - the highest since 2005. Ivanhoe Mines (TSX: IVN) has announced the results of an independent PEA of its Kamoa copper project in the DRC. Preproduction capital requirement is estimated at US$1.4 billion for the development of a mine and smelter through a two-phased approach. Steady-state production targets 300,000 tpa of blister copper at cash costs of US$1.18/lb. After-tax NPV8% is estimated at US$2.5 billion with an IRR of 15.2%. After-tax NPV12% is US$0.71 billion.

Mergers & Acquisitions

LionGold Corp subsidiary Owere Mines in Ghana has entered into an agreement with B&C Gold to process gold bearing waste tailings as part of environmental clean-up arrangements. A minimum of 1 mt of tailings will be purchased from B&C over a three year period assuming an average gold grade of 3 g/t and recovery of 90%, production of 90,000 oz gold is expected at the 320,000 tpa Konongo plant. LionGold owns a 77% interest in Signature Metals (ASX: SBL), which in turn has a 70% stake in Owere Mines. Stonewall Resources (ASX: SWJ) and the minority shareholders of Stonewall Mining Pty Ltd have entered into an agreement with Shandong Qixing Iron Tower Co. (SQIT) for the sale of 100% of Stonewall Mining. SWJ and the minority shareholders are to receive US$142 million. SWJ share represents A$0.27 per share. SQIT is a listed entity on Shenzhen Stock Exchange and is part of the Qixing Group, a privately owned large-scale diversified industrial company with group revenue exceeding RMB 15 billion (US$2.3 billion) in 2012. Viking Ashanti (ASX: VKA) has agreed to merge with emerging coal developer Auminco Mines Ltd (private). Viking will offer to acquire 100% of Auminco by the issue of VKA shares and options. Auminco shareholders will own 59% and Viking shareholders will own 41% of the combined entity. Auminco owns a number of coal and base metals assets in Mongolia.

Copper Producers
Code Company Name Open Price Close Price Weekly Market 52 Week Change Cap (A$m) Range Cash EV EV/ (A$m) (A$m) EBITDA

Emerging Copper Producers

Code Company Name Open Price Close Price Weekly Market 52 Week Change Cap (A$m) Range Cash (A$m) EV (A$m)

AVI AVB AZS BTR CDU HAV HCH HIG IRN KGL MMC MNC RXM VRX VXR FND TGS YTC

Avalon Minerals Avanco Resources Azure Minerals Blackthorn Resources Cudeco Havilah Resources Hot Chili Highlands Pacific Indophil Resources KGL Resources Marengo Mining Metminco Rex Minerals Ventnor Resources Venturex Resources Finders Resources Tiger Resources YTC Resources

0.013 0.065 0.031 0.22 1.90 0.26 0.45 0.071 0.14 0.074 0.019 0.042 0.48 0.007 0.20 0.33 0.24

0.022 0.064 0.029 0.20 1.89 0.26 0.44 0.068 0.13 0.088 0.018 0.041 0.45 0.16 0.006 0.21 0.32 0.23

69% 26 -2% 87 -6% 21 -9% 33 -1% 386 0% 31 -2% 153 -4% 58 -7% 156 19% 12 -5% 20 -2% 72 -6% 85 suspended -14% 9 8% 107 -3% 244 -4% 60

2.6 2.2 1.1 20.6 34.0 5.8 12.8 6.5 217.8 10.6 7.7 9.4 19.9 0.1 3.7 10.6 10.0 14.7

24 85 19 12 353 25 140 52 (61) 2 34 62 65 N/A 6 97 257 91

ABY AOH DML HGO IVA OZL PEM PNA SFR SRQ TGS

Aditya Birla Minerals Altona Mining Discovery Metals Hillgrove Resources Inova Resources OZ Minerals Perilya PanAust Sandfire Resources Straits Resources Tiger Resources

0.34 0.14 0.068 0.088 0.22 3.36 0.35 1.77 5.85 0.009 0.33

0.34 0.15 0.068 0.086 0.22 3.28 0.34 1.56 6.05 0.008 0.32

-1% 7% 0% -2% -2% -2% -1% -12% 3% -11% -5%

105 80 38 101 158 994 261 930 942 9 244

102 26 21 17 24 433 92 91 101 29 10

4 76 179 133 134 561 367 1,012 1,111 102 257

0.1x 5.2x NM 3.8x NM 4.3x 6.0x 3.3x 5.7x NM 4.2x

Source: Capital IQ, ASX announcements, LCC research. Assumption: A$/US$ of 0.95.

Source: Capital IQ, ASX announcements, LCC research. A$/US$ exchange rate of 0.95

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, reliability, completeness or suitability o f any such information and makes no warranty, guarantee or representation, expressly or impliedly about this research. LCC accepts no obligation 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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WEEKLY
25th November 2013

WWW.LCC.ASIA

Australian Copper Gold Report

Emerging Gold Producers

Code Company Name Open Price Close Price Weekly Change Market Cap (A$m) 52 Week Range Cash EV (A$m) (A$m)

Gold Producers
Code Company Name Open Price Close Price Weekly Change Market Cap (A$m) 52 Week Range Cash (A$m) EV EV/ (A$m) EBITDA

ABU ALK AZM BAB CHZ CVG CAS GCY GRY IGO IDC IAU KGD MSR MLX MYG OBS PAN PIR PVM PXG RNI ROL SIH SXG SUM

ABM Resources Alkane Resources Azumah Resources Bullabulling Gold Chesser Resources Convergent Minerals Crusader Resources Gascoyne Resources Gryphon Minerals Independence Group Indochine Mining Intrepid Mines Kula Gold Manas Resources Metals X Mutiny Gold Orbis Gold Panoramic Resources Papillon Resources PMI Gold Phoenix Gold Resource and Investment Robust Resources Sihayo Gold Southern Cross Goldfields Sumatra Copper & Gold

0.024 0.38 0.026 0.043 0.10 0.010 0.32 0.18 0.14 3.42 0.065 0.27 0.10 0.031 0.16 0.036 0.33 0.27 1.12 0.29 0.17 0.060 0.44 0.028 0.015 0.11

0.024 0.37 0.024 0.044 0.13 0.015 0.33 0.16 0.13 3.24 0.059 0.28 0.10 0.031 0.17 0.034 0.32 0.24 1.10 0.27 0.16 0.054 0.37 0.025 0.014 0.10

0% -3% -8% 2% 30% 50% 3% -9% -7% -5% -9% 4% -5% 0% 6% -6% -3% -11% -2% -9% -6% -10% -16% -11% -7% -11%

79 138 8 15 29 5 42 25 52 756 62 156 12 9 273 18 70 69 372 110 38 16 38 22 12 41

2.8 73 3.1 5.3 2.2 0.5 3.0 2.1 46.8 43.8 0.4 92 1.7 3.0 59.7 2.0 8.2 45 46.1 100.5 10.7 3.9 7.1 0.1 5.1 9.4

76 65 5 10 26 5 44 23 5 777 61 64 10 6 213 22 68 24 326 9 28 12 36 23 14 31

Source: Capital IQ, LCC research. Assumption: A$/US$ of 0.95 and A$/C$ of 1.00

ASX-listed Company News

Finders Resources (ASX: FND) has revised the BFS for its 95% owned Wetar copper project. At a US$7,000/t copper price, project EBITDA for the first full year of production should exceed US$132m, resulting in a 1-year capital costs payback. LOM copper production amounts to 155,000 tonnes over a 10.5 year mine life. Capital costs are estimated at US$132.4 million and operating costs at US$0.88/lb once operating full capacity or US$1.05/lb LOM. Hillgrove Resources (ASX: HGO) has produced 4,306 tonnes of copper in concentrate for the quarter ending 31 October 2013. C1 costs were US$2.80/lb and C3 costs were US$3.40/lb. Troy Resources (ASX, TSX: TRY) has entered into an agreement to acquire a 3.2 MW grinding mill, electrics and ancillary equipment for the West Omai gold project in Guyana. The mill acquisition enables TRY to finalise the detailed engineering of the remainder of the processing facility. The design concept is based on a staged development of the project to minimise risk and capital requirements, whilst retaining flexibility to increase processing rates over time. This initial stage would (subject to favourable study results) see throughput in excess of 600,000tpa. TRY expects to complete the project Scoping Study in December and Pre-Feasibility Study in the first half of calendar 2014.

AQG AGD BDR BEZ CTO CRK DRM DRA EVN EVR FML GDO KCN KRM LSA MML MLX MOY MLI NCM NGF NST OGC PNA PGI PRU PPM RMS RRL RSG SAR SBM SLR TBR TGZ TRY UML VGO

Alacer Gold Austral Gold Beadell Resources Besra Gold Citigold Corporation Crocodile Gold Corp Doray Minerals Dragon Mining Evolution Mining Endeavour Mining Corp Focus Minerals Gold One International Kingsgate Consolidated Kingsrose Mining Lachlan Star Medusa Mining Metals X Millennium Minerals Mintails Newcrest Mining Norton Gold Fields Northern Star Resources OceanaGold Corporation PanAust PanTerra Gold Perseus Mining Primero Mining Corp Ramelius Resources Regis Resources Resolute Mining Saracen Mineral Holdings St Barbara Silver Lake Resources Tribune Resources Teranga Gold Corp Troy Resources Unity Mining Vantage Goldfields

2.36 0.17 0.90 0.030 0.046 0.14 0.67 0.19 0.76 0.62 0.013 0.21 1.39 0.40 0.27 1.88 0.16 0.24 0.07 9.61 0.13 0.78 1.94 1.77 0.052 0.39 5.90 0.11 3.32 0.59 0.23 0.37 0.68 3.10 0.59 1.28 0.059 0.045

2.13 0.12 0.83 0.027 0.042 0.12 0.64 0.18 0.64 0.60 0.012 0.17 1.20 0.37 0.20 1.69 0.17 0.20 0.075 8.50 0.13 0.69 1.65 1.56 0.046 0.29 5.60 0.11 3.07 0.51 0.21 0.29 0.56 2.80 0.56 1.13 0.050 0.045

-10% -29% -8% -10% -9% -14% -4% -5% -15% -4% -8% -21% -13% -6% -28% -10% 6% -17% 7% -12% 0% -11% -15% -12% -12% -26% -5% -5% -8% -13% -7% -22% -17% -10% -4% -12% -15% 0%

597 20 656 11 57 49 91 16 454 244 110 235 183 124 29 335 273 44 12 6,508 116 296 493 930 35 133 634 38 1,529 327 125 139 245 141 181 189 35 11

234 363 13 65 35 723 2 67 1 56 28 27 18 128 4 12 4 577 119 425 90 36 30 434 44 325 8 116 3 52 6 336 60 213 10 76 0 13 69 10,649 42 189 48 259 15 724 91 1,012 6 77 27 106 126 543 33 9 93 1,436 59 362 25 122 106 364 26 239 8 153 36 225 27 168 20 15 1 10

1.6x 8.1x 66.7x 19.8x NM 0.5x NM 54.5x 3.0x NM NM 6.5x 3.2x NM NM 4.7x 22.2x 2.7x NM 9.5x 7.2x 3.4x 3.1x 3.3x NM 2.4x NM 0.4x 5.9x 1.9x 2.2x NM NM 2.4x NM 2.6x 1.2x 3.5x

Source: Capital IQ, LCC research. Assumption: A$/US$ exchange rate of 0.95. June quarter data in italics, September quarter data in regular font

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, reliability, completeness or suitability o f any such information and makes no warranty, guarantee or representation, expressly or impliedly about this research. LCC accepts no obligation 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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WEEKLY
25th November 2013

WWW.LCC.ASIA

Australian Copper Gold Report

Australian Gold Producers Cost Curve as at 30 September 2013

600 2000

500

Production Price Average AISC / C3 costs C1 costs

Third Quartile C1 < US$1041/oz Second Quartile C1 < US$848/oz

1750

1500

400

Annualised Gold Production (koz)

First Quartile C1 < US$612/oz

1250

C1 Cost US$/oz

Mines closed
300 1000

750 200 500 100 250

617

696

779

MML

RRL

UML

NST

GFI - St Ives

ABX - Plutonic

PPM

DRM

SBM

OGC

GFI - Agnew

NCM - Lihir

ABX - Cowal

NCM - Telfer

ABX - Yilgarn S

GDO

NCM - Cadia

ABX - Kanowna

Kalgoorlie

NCM - Gosowong

NEM - Boddington

NCM - Hidden

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, reliability, completeness or suitability o f any such information and makes no warranty, guarantee or representation, expressly or impliedly about this research. LCC accepts no obligation 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

NCM - Bonikro

MOY

KRM

BDR

AGD

SAR

EVN

EVR

KCN

TBR

AQG

RSG

VGO

RMS

PRU

TGZ

NGF

CTO

CRK

DRA

PNA

MLX

TRY

FML

LSA

MLI

SLR

BEZ

PGI

712

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