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Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies
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Jeremy Beer, Ernst & Young:Alternative strategies to finance projects in the current economic climate Capital raising for Junior Resources Companies

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Jeremy Beer, Associate Director Capital & Debt Advisory, Ernst & Young delivered this presentation at the 2013 Mining South Australia conference. The conference has been produced specifically for the …

Jeremy Beer, Associate Director Capital & Debt Advisory, Ernst & Young delivered this presentation at the 2013 Mining South Australia conference. The conference has been produced specifically for the South Australian mining and regional development community and represents a unique opportunity to hear the latest developments from the major projects, mines and explorers in South Australia. For more information on the annual event, please visit the conference website: http://www.informa.com.au/miningsa2013

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  • 1. Alternative strategies to finance projects in the current economic climate Jeremy Beer Mining South Australia – November 2013
  • 2. Macro and micro factors united against the sector in 2012 ... Macro ► Economic uncertainty ► Volatile markets ► Resource nationalism ► ► ► Impact Squeezed margins Share price volatility Sub-optimal returns Micro ► Weaker metals prices ► Labor unrest ► Cost inflation/overruns A “risk-off” capital strike Companies: slower spending Investors: selective investing ► Slowdown/Cutbacks in capex ► Risk aversion ► Smaller, “safer” M&A ► Retreat of traditional capital providers ► Focus on capital optimization ► Emergence of private and strategic investors ► Capital recycling through divestitures ► Increased funding innovation Page 2
  • 3. ... perpetuating a two-tier capital environment ... ► Constrained capital for junior and mid-tier companies ► Unique opportunities for the investment grade producers Capital raising by asset class: proceeds (2007–1H 2013) 350 300 Proceeds $b 250 ▼ Bank debt reserved for quality names/refinancing 200 150 ▲ Record bond proceeds as % of capital raised 100 50 ▼ Tightened equity on highly dilutive terms 0 2007 2008 IPOs Source: EY, ThomsonONE Page 3 2009 Follow-ons 2010 2011 Convertible bonds 2012 1H 2012 1H 2013 Bonds Loans
  • 4. A new capital era Challenging funding conditions for all but the investment grade majors Capital raising: majors’ proportion of total Debt and equity raising ($b) 2012 300 2011 Debt 1H 2013 350 Proceeds $b 400 250 2010 2009 200 2008 150 - 100 Other 50 1H 2013 0 Asian debt 100 200 300 Bonds - Top 6 Loans - Top 6 2009 2010 2011 2012 1H 2013 IPOs Follow ons Convertibles Bonds Loans T6 (all classes) Equity 2012 2008 2011 2010 2009 2008 T6/majors = top six global diversified miners. Source: Ernst & Young, ThomsonONE Page 4 Other 100 200 Top 6 IPOs Top 6 Follow ons 300 Top 6 convertibles
  • 5. Unique opportunities Investment grade and larger miners Banks Bonds Institutional Maintaining strong relationships with highest grade borrowers and national champions Unprecedented investor demand for high grade issuers Rise of the term loan B market The largest miners borrowing large Largest ever single tranche A$ bond (non financial) Second largest covenant-lite loan Long dated tenors (30 years) Glencore $19bn of syndicated loans in 2012 Page 5
  • 6. Sentiment-driven high-yield market — all about timing Widening divergence between coupons on high-yield and highgrade bonds in 2012 On the cusp of an apparent turn in the interest rate cycle, fear of rising interest rates may drive a change in investor preferences US$ bond issues by month (proceeds, 2012–1H 2013) 15 100 80 60 40 20 0 10 5 - Source: EY, ThomsonONE, Thomson Datastream *MOVE: Merrill Option Volatility Estimate index Page 6 Proceeds MOVE* MOVE index ► Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 ► Coupon ranges on US dollar and Euro bonds, by tenor (2012) Volatile high-yield markets, heavily influenced by economic news flow and sentiment Bond proceeds $b ►
  • 7. Emergence of non-traditional investors ► Retreat of traditional capital providers from higher risk growth projects ► Funding gap that is increasingly being filled by strategic, long-term investors Page 7
  • 8. Project funding options typically utilized in current environment Development stage Credit quality Investor perspective Public equity Farm-ins Standby equity Strategic equity Convertible bonds US PPM Streaming Royalties Offtake Development finance Project finance Equipment finance Pre-export finance Fixed income Commercial loans Refinancing Page 8 Exploration Development Construction Mid-tier producer Major producer Unrated Unrated Unrated/High yield High yield Investment grade Highest risk, zero/negative yield High risk, uncertain yield High risk, high yield Medium risk, high yield Lowest risk, low yield
  • 9. Financing Considerations Equity IPO, Private placement etc Summary Transaction Min Transaction specific Size Convertible Royalty Finance Off-take Finance Structured Loan Advantages Considerations Page 9 Corporate Loan Non bank loan secured against company’s assets Bank loan secured against project assets Debt provided by Non bank debt export credit security, private agencies placement, USPP (144A) Bank debt Public US$25m Transaction specific Transaction specific US$10-15m US$20m None Private none Transaction specific US public bond US$250m USPP US$25m Public 4 weeks Private 8 weeks 4-10 weeks 8-12 weeks  Lower interest coupon than vanilla debt  Negotiated bilaterally  Off balance  Straight sheet financing forward process  Long term  No covenants  Limited refinance risk  Less dilutive than equity  Potential dilution Corporate Bonds A form of debtor financing secured by an off-take agreement IPO 3 months, placement 2 weeks  Short prep periods ECA Finance Hybrid debt Financing instrument with provided as equity component consideration for the right to a percentage of future project revenues  Flexible structure Timing Project Finance  Cashflow required to service coupon  Deep discounts given weak  Public bond market requires min conditions market cap of $250m  Flexibility demand secured 6-12 weeks  Structural flexibility  Leverage offtakers’ credit profile  Can prove to be costly  In effect increases project costs  Financiers  Complex require “hell or financial high water” offstructures take  Can include  Risk premium warrants payable to offtaker/discount pricing 3-6 months 6-12 months 3-6 months 4-10 weeks  No dilution  Relatively cheap  Depth of market can fund large transactions  Relatively cheap  Non recourse  Relatively cheap  Easy to restructure  Long tenor  Provides liquidity  Long term financing  Non amortising relationship  Strict covenants  Long time to execution  Lengthy DD and docs process  Commodity hedging  Majority of deals unsecured  Straight forward process  Credit rating preferable  More covenants than bonds  Not flexible once established  More expensive than  Amortisation bank debt required  Availability linked to exports  Lengthy DD and docs process
  • 10. Alternative Funding Examples US Term Loan B Financing Glencore Offtaker Finance Sandstorm Royalty Finance • Australia iron ore producer (mkt cap ~A$1.2bn) • Financing package (Dec-12) • US$275m term loan • A$50m RCF • First debt facility Atlas has raised, historically funding operations with equity and cash flow • Structural highlights • “Covenant lite” (no earnings based maintenance covenants) • Precious and base metals junior miner (mkt cap ~A$70m) • Financing package (Nov-12) • A$3m Equity Placement • A$70m Converting Notes • A$85 Debt Facilities • Life of mine base metals offtake with Glencore • Glencore as project partner (technical committee & board) • DFS completed on the Hera project • Structural highlights • No hedging requirements • Financial flexibility (YTC conversion option) • Junior gold miner (mkt cap ~CAD$18m) • Financing package (May-12) • US$7.5m upfront cash payment for granting of royalty • US$0.5m share subscription • Pre-feasibility study completed on the Coringa project • Structural highlights • 2.5% royalty on the Coringa gold project • 1% royalty on the Cuiu Cuiu gold project Page 10
  • 11. Moving up the curve Pricing feedback from investors compared to stage of development B Value A Stage of Development Exploration Equity dilution Pre-feasibility Feasibility 20-25% Cost of Funding Scoping 15-25% 15-20% Likely to include equity component May include equity component May include equity component Development Base rate + 300-800bps Operational Various Direct comparison of funding structures is often complex across equity, royalty and hybrid and fixed interest instruments Page 11
  • 12. Instrument Comparison Convertible note vs. equity raising example ► Retrospective analysis of the shareholding that is required to be sold to achieve net funding in each option ► Interestingly, the equity raising was likely to result in lower relative dilution in all share price scenarios Current Share Price (A$[]) Equity Upside Price Scenario ► New shares as % of prior shares outstanding: []% >A$[] p/s ► No. shares Issued @ A$[] placement price: []m Downside Price Scenario ► New shares as % of prior shares outstanding: []% ► No. shares Issued @ A$[] placement price: []m Flat price scenario ► New shares as % of prior shares outstanding: []% A$[] p/s ► No. shares Issued @ A$[] placement price: []m A$[] VWAP + []% Premium A$[] p/s Page 12 A$[] VWAP Inc. Premium Convertible Note (A$[]m) No. shares issued on conversion : []m ► New shares as % of prior shares outstanding: []% ► A$[] VWAP Inc. Premium New shares as % of prior shares outstanding: []% ► A$[] VWAP Inc. Premium ► No. shares issued @ A$[] equity raise given no conversion: []m ► New shares as % of prior shares outstanding: []% ► No. shares issued on A$[] equity raise given no conversion: []m Evaluation In an increasing share price scenario, the CN is more dilutive despite exercise price > equity raise price. This is driven by the fees and interest which results in an increased CN facility size to achieve net A$[]m funding In a decreasing share price scenario, the CN is more dilutive given the requirement to raise equity to repay the CN at the decreased price Where the share price at conversion is between the equity raise price and the CN exercise price, the relative attractiveness is determined by the scale of the CN fees and interest vs. the premium to VWAP at which the exercise price is set
  • 13. In focus: Alternative sources of finance Page 13
  • 14. Royalty agreements Early Advanced Mid producer The provision of an upfront payment to the mining company in return for future payment, typically based on either a) a percentage of the value of the product produced or b) the profits or revenues generated from the mine. Royalties are most frequently granted over precious metals, but there are no limitations. ► ► ► ► ► ► Typically registered to the underlying property title, giving priority over creditors in financial distress Long-term, passive investments – no commitment to fund capital or operating costs A large degree of flexibility can usually be built into contracts Normally limited to between 2% and 5% of a project’s net revenue after certain charges Costs are usually limited to legal fees in drawing up contract terms; no hedging requirement. Royalties can change hands among (be acquired by other) royalty providers. Page 14 Maj. producer KEY PROVIDERS ► ► Royalties typically take the following forms: ► Gross revenue – right to a fixed percentage of gross revenue on metals sales ► Net smelter return – right to a fixed percentage of net revenues (gross revenues less treatment, refining and freight charges – i.e., cash flow that is free from any operating and capital costs or environmental liabilities) ► Net profit interest – right to a fixed percentage of the profits from an underlying asset. Terms vary but royalties are commonly payable after the recovery of certain pre-production costs and typically deduct mine site operating and administrative costs plus tax. Construction Royal Gold (Nasdaq/TSX) – one of the oldest royalty companies, also becoming active in streams (e.g., Thomson Creek); 83% of 2013–15 revenues precious metals, 17% base metals; 76% from royalties, 24% from streams; 36 producing and 22 development stage assets Franco-Nevada (TSX) – 2012 revenues: royalties – revenue-based 45%, profit-based 10%, 45% streams; 75% gold, 14% PGMs, 10% O&G, 1% base ► Premier Royalty – newest royalty company to emerge; 60% owned by Sandstorm Gold; NSRs on operating and exploration assets (gold) ► Anglo Pacific (LSE) – established royalty provider with 21-strong portfolio of producing, development and early stage royalties; diversified exposure to coal (53%), iron ore (21%), gold (11%), chromite (4%), uranium, copper, nickel, PGMs and others ► Callinan Royalties (TSX-V) – 1 producing (Hudbay), 2 development and 14 exploration assets ► Americas Bullion Royalty (TSX) – precious metal royalties and streams; 32 agreements, including Barrick Gold; able to receive payments-in-kind (bullion instead of cash) ► Royalco Resources (ASX) – ASX’s only royalty company; nine royalties in Aus and NZ (petroleum, silver and gold); and royalties on exploration projects in the Philippines (gold/copper) and Uganda (gold) ► Gold Royalties Corp (TSX-V) – relatively new entrant; NSR structures on early stage and producing mines in Canada; royalties on nine mines (as at June 2013)
  • 15. Standby equity Early Advanced Construction Mid producer Maj. producer Standby equity (a.k.a. equity line, equity-linked) facilities provide companies with an option to issue shares to a facility provider over a multi-year time period, giving companies assurance of a future buyer of shares and the flexibility to choose the timing of the issuance. There is no upfront capital injection but there may be an arrangement/security fee. Example: Company X agrees a $5m SEDA facility with Provider Y. CX may draw down these funds over a period of up to three years, in exchange for the issue of shares to PY at a discounted price (5% to market price during a 10-day drawdown period), with the maximum advance by PY linked to share trading volumes. A fee of $150,000, payable to PY on first drawdown, secures the facility. The equity provider commits to purchase a pre-established dollar amount of a company’s shares in a series of drawdown at the option of the issuer. The purchaser is committed for a fixed period to buy the securities. The issuer has the ability, but not the obligation, to sell the shares. There are normally no penalties for inactivity or termination of the agreement. Key providers to mining industry: ► YA Global (Yorkville Advisors) ► Darwin Strategic (Henderson Global Investors) ► Dutchess Opportunity Cayman Fund (Dutchess Capital Management) Recent deals: There are also SEDA-backed loan facilities whereby the borrowing company has the option to convert outstanding loan amounts into ordinary shares for the SEDA loan provider. Some providers also offer equity-linked promissory notes – short-term upfront capital injection (usually 90-180 days), repaid with cash from operations or funds drawn from the associated equity agreement. Benefits for the company: ► Is in control of the timing – funding can be drawn when needed ► Provides level of comfort over availability of near-term funding ► Eliminates the need for roadshows to bankers and investors ► Allows companies to set a price floor to each tranche Drawbacks: ► Can be lengthy and expensive to set up, depending on regulatory environment (structures differ according to market) ► Setup costs ► Drawdown can negatively impact share price – dilution of existing shareholdings usually includes a purchaser discount Page 15 Provider Company Value Type Dutchess Baobab Resources Sunkar Resources £17m £10m Equity line facility Equity line facility YA Global Red Rock Resources ECR Minerals Kibo Mining Conroy Gold Strategic Minerals Shanta Gold £3m £2.75m £3m + $1.5m $5m Financing package Financing package Stock purchase agreement SEDA SEDA+ Loan Loan Horizonte Minerals Altona Energy Noventa Orogen Gold Sunrise Resources DiamondCorp Ortac Resources £8m £2m £5m £5m £3m £10m £20m Equity finance facility Equity finance facility Equity finance facility Equity finance facility Equity finance facility Equity finance facility Equity finance facility Darwin
  • 16. Offtake agreements/ pre-export finance Offtake agreements typically comprise payment for a determined volume or percentage of production over a determined time span, often with exclusivity attached. Typically provided by customers, traders and specialist finance providers. Terms vary significantly from deal to deal. Some offtake agreements are required components of funding facilities (debt or equity), securing advance payments or used toward repayment or arrangement of the financing. Offtake-linked loans typically require some form of security over the assets or company. Pre-export financing is secured against determined production volumes, though additional security may be required to account for production/supply risks. Early Advanced Mid producer Page 16 Maj. producer Recent deals: Type Offtaker Company Advance Type Statebacked buyers ►Tongling ►Nautilus Minerals Mining ►Sirius Minerals ►Kaboko - ►Take ►Sinosteel Private capital ►Red ►Allied Gold Copper ►EMED Mining ►Augusta Res. ►$80m ►Loan ►Nevada ►$200m ►Loan ►$80m ►Equity ►$83m ►Loan ►Archipelago - ►Exclusive ►Yunnan TCT Kite + loan Customers ►Tiffany’s ►DiamondCorp ►$6m ►Term ►Wolfram Bergbau ►Tata Steel ►DuPont ►Sinosteel ►Yara Int’l ►Toshiba ►Wolf Minerals ►Northern Iron ►Base Resources ►Kaboko Mining ►IC Potash ►GoviEx Uranium ►$75m ►Loan - ►Long-term ►$40m ►Equity ►$40m ►Convertible ►Noble ►Kaboko ►$10m ►Loan ►Glencore ►Bellzone ►$15m ►Early ►Trafigura ►OceanaGold - ►Purchase ►JP ►Straits ►$98m ►Upfront ►$20m ►Loan Morgan ►Samsung ►Amara Res. repayment ►Stand. Commodity traders Chart. or pay take ►Fixed tonnage ►Exclusive Banks Offtake prices are usually market-linked, and sometimes discounted. Offtakes provide a guaranteed source of revenue for the project, which can help secure other sources of finance. Typically comprise any of the following: ► Pre-production advances in return for future offtake in form of: ► Equity stakes ► Loans (interest- and non-interest-bearing) ► Convertible bonds ► Exclusive right to purchase production at a determined price (which is usually index/market linked) ► Built-in options to extend – based on mutual consent ► Take or pay agreements (purchase product or pay a penalty) ► Additional marketing/distribution terms ► Some minimum stipulations are common: ► Minimum volume of offtake over agreed period of time ► Minimum price in volume-based offtake contracts ► Hedging to protect against volatility Construction Mining Resources Mining take loan offtake ►Purchase ►Take or pay payment payment
  • 17. Development finance Early Typical funding structures ► DFI Company Project Value Type IFC ►Oyu ►Copper, ►Loan ►$12m ►Equity Diamond Mine ►Hummingbird Resources ►Sama Resources ►Guyana Goldfields Mongolia Dom. Rep. ►Diamonds, S. Africa ►Gold, Liberia ►Nickel, Cote d’Ivoire ►Gold, Guyana ►$400m ►Gold, ►$25m ►Loan ►$9m ►Equity ►$1m ►Equity ►$10m ►Equity China Dev’t Bank ►MMG/China Minmetals Metals ►Generaly Moly ►Zijin Mining ►SLZ, Australia ore, Australia ►Molybdenum, US ►Investm’t/acq’n ►<$1b ►Loan ►Gindalbie ►Iron ►$250m ►Loan ►$665m ►Loan ►$4.9b ►Loan EBRD ►Dundee ►Gold, ►$67m ►Loan ►Coal ►Coal, ►$70m ►Loan ►$400m ►Loan ►$45m ►Equity ►$30m ►Loan Provide a variety of investment instruments – e.g., senior debt, subordinated debt, equity and convertibles ► Usually invest at BFS (post-DFS) stage ► Usually invest in base, precious or industrial minerals, but recent investments also seen in diamonds ► Follow stringent environmental and social standards – and under public scrutiny over their mining investments ► Frequently come with ancillary value-add services, such as environment and social (E&S) risk management advice, community engagement strategies ► Can be a more costly source of funding than other alternatives ► Represents vote of confidence/recommendation, which lends support to future financing opportunities Page 17 Maj. producer Key recent investments by DFIs in the mining sector: Tolgoi ►Unigold ►Finsch In principle, DFIs can accept higher project and country risk than commercial banks, but borrowers must demonstrate their commitment to benefitting the host nation, and compliance with high environmental, social and transparency standards. Construction Mid producer Development Finance Institutions (DFIs) (or multi-lateral development banks) provide credit in the form of higher risk loans, equity stakes and risk guarantee instruments to companies investing in developing countries. Advanced Precious Metals Energy ►Oyu Tolgoi ►Lydian International ►Hambledon Mining Bulgaria Ukraine ►Copper, Mongolia ►Gold, Armenia ►Gold, Kazakhstan + equity IDCSA ►Scaw ►Metals, ►$340m ►Equity ►Sedibelo Metals Platinum ►DiamondCorp ►Village Main Reef ►PGMs, South Africa South Africa ►Diamonds, S Africa ►PGMs, South Africa ►$328m ►Equity ►$28m ►Loan ►$15m ►Loan
  • 18. EY Capital & Debt Advisory The Capital and Debt Advisory Group advises clients across the capital spectrum in a broad range of debt transactions ► We provide objective and independent advice to our clients who are typically pursuing ► Transaction financing / acquisition financing ► Growth capital ► Refinancing ► Debt restructuring ► Debt capital markets issues ► Credit ratings advisory ► Structured financings ► Cross border financing ► We are a core part of Ernst & Young’s broader corporate finance business. Our product excellence is supported by exceptionally strong sector coverage capability and where it adds value, we are able to bring the wider service offerings of Ernst & Young to the situation, including transaction tax, specialist modelling and due diligence teams ► Our approach is flexible, from leading a debt raising to advising from the sidelines. Typically we undertake a two phase approach to ensure the debt structure and funding sources match your needs, as follows: Assessment of Objectives Options Appraisal Process Preparation and Market Sounding Formal Process & Execution “Objective and independent funding advice, excellence in executing transactions and access to a local and global network of banks, financiers and investors” Page 18
  • 19. Contacts Jason Lowe Executive Director, Joint National Head of Capital & Debt Advisory Tel: Mobile: E-mail: +61 3 8650 7600 +61 412 699 778 Jason.Lowe@au.ey.com Jeremy Beer Associate Director, Capital & Debt Advisory Tel: Mobile: E-mail: Page 19 +61 3 9288 8717 +61 413 976 634 Jeremy.Beer@au.ey.com
  • 20. Thank you
  • 21. EY | Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. About EY’s Global Mining & Metals Center With a strong but volatile outlook for the sector, the global mining and metals sector is focused on future growth through expanded production, without losing sight of operational efficiency and cost optimization. The sector is also faced with the increased challenges of changing expectations in the maintenance of its social license to operate, skills shortages, effectively executing capital projects and meeting government revenue expectations. EY’s Global Mining & Metals Center brings together a worldwide team of professionals to help you succeed — a team with deep technical experience in providing assurance, tax, transactions and advisory services to the mining and metals sector. The Center is where people and ideas come together to help mining and metals companies meet the issues of today and anticipate those of tomorrow. Ultimately it enables us to help you meet your goals and compete more effectively. © 2013 EYGM Limited. All Rights Reserved. EYG no. ER0107 ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.

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