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5th May 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, reliability, completeness or suitability of 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
. Page 1 / 3
WEEKLYAustralianCopperGoldReport
CODELCO DESPERATE FOR CAPEX FUNDING
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$/oz) 1,404 ▲ 0.1% ▲ 0% ▲ 4% Copper (A$/lb) 3.28 ▼ (1.1%) ▲ 1% ▼ (12%)
Gold (US$/oz) 1,300 ▼ (0.1%) ▼ (0%) ▲ 8% Copper (US$/lb) 3.04 ▼ (1.3%) ▲ 0% ▼ (9%)
Silver (US$/oz) 19.5 ▼ (1.2%) ▼ (2%) ▲ 0% Copper (RMB/t) 48,680 ▼ (0.7%) ▲ 3% ▼ (7%)
Platinum (US$/oz) 1,435 ▲ 0.8% ▼ (1%) ▲ 5% Cobalt (US$/lb) 13.47 ▼ (2.6%) ▼ (3%) ▲ 1%
Palladium (US$/oz) 807 ▼ (0.5%) ▲ 2% ▲ 12% Molybdenum (US$/lb) 13.38 ▲ 2.6% ▲ 13% ▲ 37%
Iron Ore (US$/t) 107 ▼ (7.9%) ▼ (8%) ▼ (20%) Nickel (US$/lb) 8.26 ▼ (1.4%) ▲ 10% ▲ 30%
Crude Oil (US$/barrel) 100 ▼ (0.8%) ▼ (1%) ▲ 1% Lead (US$/lb) 0.93 ▼ (3.8%) ▼ (2%) ▼ (7%)
Gas H.Hub (US$/m btu) 4.67 ▲ 0.3% ▲ 5% ▲ 11% Zinc (US$/lb) 0.91 ▼ (2.4%) ▼ (2%) ▼ (4%)
Uranium (US$/lb) 30 ▼ (2.0%) ▼ (11%) ▼ (13%) Tin (US$/lb) 10.43 ▼ (3.4%) ▼ (1%) ▲ 2%
Currencies & Indices Last Week r 4-Wk r YTD r Global Markets Last Week r 4-Wk r YTD r
AUD/USD 0.925 ▼ (0.2%) ▼ (0%) ▼ (0%) ASX 200 5,458 ▼ (1.3%) ▲ 1% ▲ 2%
RMB/USD 0.160 ▼ (0.1%) ▼ (1%) ▼ (0%) Dow Jones 16,513 ▲ 0.9% ▲ 1% ▼ (0%)
CAD/USD 0.911 ▲ 0.5% ▼ (0%) ▲ 1% S&P 500 Index 1,881 ▲ 1.2% ▲ 1% ▲ 2%
EUR/USD 1.387 ▲ 0.2% ▲ 1% ▲ 0% Shang Hai Index 2,026 ▲ 2.0% ▼ (2%) ▲ 1%
ASX Ordinary Gold 2,200 ▲ 0.1% ▼ (0%) ▼ (4%) Hang Seng Index 22,261 ▼ (0.5%) ▼ (1%) ▼ (4%)
TSX Global Gold 186 — 0.0% ▲ 0% ▼ (1%) Nikkei 225 14,458 ▲ 0.2% ▼ (4%) ▼ (11%)
ASX 300 Metals & Mining 3,238 ▼ (3.6%) ▼ (2%) ▼ (3%) FTSE 100 Index 6,822 ▲ 0.3% ▲ 2% ▲ 4%
TSX Global Mining 76 ▼ (0.7%) ▲ 1% ▲ 0% Euro STOXX 50 Index 3,178 ▲ 1.6% ▼ (2%) ▲ 0%
1,200
1,300
1,400
1,500
1,600
0
100
200
300
Feb Mar Apr May
Thousands
Gold Price
Volume
A$/oz
US$/oz
200 day average
2.90
3.10
3.30
3.50
3.70
0
100
200
300
Feb Mar Apr May
Thousands
LME Copper Price and Volume
Volume ('000 lot)
Price (A$/lb)
Price (US$/lb)
2.90
3.10
3.30
3.50
0
10
20
30
Feb Mar Apr May
COMEX Copper Price and Stocks
Stocks ('000 t)
Price (US$/lb)
44000
46000
48000
50000
52000
54000
0
100
200
300
Feb Mar Apr May
Thousands
SHFE Copper Price and Stocks
Stocks ('000 t)
Price (RMB/t)
44000
46000
48000
50000
52000
54000
0
1
1
2
2
3
Feb Mar Apr May
Millions
SHFE Copper Price and Volume
Volume (mt)
Price (RMB/t)
2.90
3.10
3.30
3.50
0
25
50
75
100
Feb Mar Apr May
COMEX Copper Price and Volume
Volume ('000 lot)
Price (US$/lb)
1500
2000
2500
3000
Feb Mar Apr May
S&P/ASX All Ordinaries Gold Index
(XGD)
3.00
3.20
3.40
3.60
3.80
4.00
0
100
200
300
400
500
600
Jan Mar May Jul Sep Nov Jan Mar
China Copper Imports
Tonnes (kt)
Copper Price
2.90
3.10
3.30
3.50
3.70
0
100
200
300
Feb Mar Apr May
LME Copper Price and Stocks
Stocks (kt)
Price (A$/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)
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
$2.96
$2.98
$3.00
$3.02
$3.04
Cash 3 Months Dec 1 Dec 2 Dec 3
LME copper forward curve
Seller
Buyer
5th May 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, reliability, completeness or suitability of 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
. Page 2 / 3
WEEKLYAustralianCopperGoldReport
Markets & Majors
Codelco CEO Thomas Keller warmed to the idea of tapping
Chile's sovereign wealth funds (US$23 billion) to pay for its
US$30.0 billion investment plan. Is there an alternative?
Captain Copper, a superhero teaching Chilean kids about the metal, courtesy of Codelco
Thomson Reuters - The London Metal Exchange (LME) plans to
seek permission to appeal against a court ruling it lost last month,
which halted a major reform aimed at cutting backlogs at
warehouses. In late March, Russian aluminium producer Rusal
won a ruling that halted a warehouse reform because
consultations had been "unfair and unlawful". The LME, which is
owned by Hong Kong Exchanges and Clearing Ltd, earlier this
month lost the first stage of an effort to appeal, in which it turned
to the court that made the original ruling. Now it is going up to the
next level by filing with the Court of Appeal. A legal source said
parties that lose rulings are often advised to seek leave to appeal
to give them the widest possible set of options.
Thomson Reuters - U.S. futures exchange CME Group is
considering the introduction of daily limits on price moves in gold
and silver futures in a bid to rein in wild volatility that has spooked
investors in recent years. CME at present has price fluctuation
limits for futures contracts in some energy, agricultural
commodities and financial products, but none for its precious and
base metals products. The possible move reflects growing
concern at the largest U.S. exchange of futures and options about
big bouts of buying or selling that have caused huge fluctuations
in prices without any apparent fundamental reason.
Thomson Reuters - U.S. Securities and Exchange Commission
will implement large portions of a rule requiring companies to
determine if their products contain "conflict minerals" from a war-
torn part of Africa, SEC Chair Mary Jo White said last week. The
conflict minerals rule stems from a provision in the 2010 Dodd-
Frank Wall Street reform law that requires publicly traded
manufacturers to disclose to investors whether any tantalum, tin,
gold or tungsten used in their products may have originated from
the conflict-ridden Democratic Republic of Congo (DRC).
Fighting a crippling current account deficit and a weakening
currency, India’s finance ministry has pushed up gold import
duties tenfold from 1% at the start of 2012 to 10% today. Other
measures include excise duties at 9%, cash only for imports, re-
export of 20% of all imports, transaction taxes and bans on gold-
backed exchange traded fund investments. The measures are
having the intended effect with latest official data showing gold
imports falling 47% to $5.4 billion in the 2013-14 fiscal year.
Despite the curbs, overall Indian consumption still rose by more
than 100 tonnes to 975 tonnes last year, with an estimated
doubling of unofficial imports to more than 100 tonnes.
Newmont Mining Corp is running out of space to store copper
concentrate in Indonesia, where a dispute with the government
has halted exports, and may be forced to cut production.
Newmont indicated that the concentrate barn was set to reach full
capacity in the second half of May. If this happens, the company
will be forced to implement contingency plans to scale back
production. Newmont is cautiously optimistic that it will get
permission to export in the coming weeks and that the country's
proposed export tax "will be clarified."
Copper Explorers & Emerging Producers
Source: ASX, Capital IQ, LCC. Assumption: A$/US$ of 0.90
Code Company Name
Close
Price
Week r YTD r
Market
Cap (A$m)
52 Week
Range
Cash
(A$m)
EV (A$m)
ARE Argonaut Resources 0.022 ▲ 5% (8% ) 8 1.3 6
AVI Avalon Minerals 0.009 ▼ (10% ) (10% ) 11 1.7 9
AVB Avanco Resources 0.067 ▼ (1% ) (6% ) 91 13.7 77
AZS Azure Minerals 0.030 ▼ (9% ) 0% 21 1.6 20
BMB Balamara Resources 0.11 ▼ (8% ) 16% 38 1.5 36
BTR Blackthorn Resources 0.16 ▼ (11% ) (40% ) 25 14.2 11
BOC Bougainville Copper 0.51 ▲ 1% 7% 205 6.2 198
CYU Chinalco Yunnan Copper 0.03 ▼ (29% ) (22% ) 7 0.8 7
CDU Cudeco 1.83 ▼ (3% ) 2% 429 26.3 403
ERM Emmerson Resources 0.045 ▲ 13% 7% 14.7 0.7 14
ENR Encounter Resources 0.19 — 0% 0% 25 3.1 22
ESR Estrella Resources 0.15 ▲ 12% (17% ) 16 1.1 15
FND Finders Resources 0.18 — 0% (17% ) 99 5.2 94
GCR Golden Cross Resources 0.004 — 0% (20% ) 8 3.0 5
HAV Havilah Resources 0.23 ▼ (10% ) (10% ) 27 3.5 24
HCH Hot Chili 0.25 ▼ (15% ) (41% ) 87 5.4 81
HIG Highlands Pacific 0.060 ▼ (6% ) (2% ) 51 8.1 43
IRN Indophil Resources 0.14 ▼ (3% ) (15% ) 168 211.7 (43)
KGL KGL Resources 0.088 ▼ (5% ) (16% ) 12 19.1 (7)
KDR Kidman Resources 0.090 ▼ (14% ) (51% ) 12 3.6 8
MMC Marengo Mining 0.014 ▲ 17% (7% ) 16 0.9 43
MNC Metminco 0.022 ▲ 5% (29% ) 38 5.5 33
PEX Peel Mining 0.18 ▼ (16% ) (31% ) 24 3.9 20
RDM Red Metal 0.18 ▼ (5% ) 20% 26 1.9 24
RXM Rex Minerals 0.33 ▼ (3% ) (31% ) 73 27.6 45
SBR Sabre Resources 0.031 — 0% (28% ) 7 3.5 4
SUH Southern Hemisphere 0.065 ▲ 12% 30% 16 2.8 13
SMD Syndicated Metals 0.032 ▼ (6% ) (6% ) 9 2.3 6
TLM Talisman Mining 0.11 ▲ 8% 0% 14 16.6 (3)
VXR Venturex Resources 0.006 ▼ (14% ) (40% ) 9 2.1 7
XAM Xanadu Mines 0.050 ▲ 9% 0% 12 1.5 10
5th May 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, reliability, completeness or suitability of 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
. Page 3 / 3
WEEKLYAustralianCopperGoldReport
Copper Producers
Source: ASX, Capital IQ, LCC. Assumption: A$/US$ of 0.90
Mergers & Acquisitions
First quarter M&A activity in the global metals market plunged to
its lowest level since 2008, with 13 deals totalling US$3.3 billion, a
78% drop year on year, according to a report from PwC.
Barrick Gold Corp and Newmont Mining have terminated talks for
a gold mega-merger.
Ord River Resources (ASX: ORD) has made a combined scrip
and cash takeover office to acquire Dampier Gold (ASX: DAU).
Ord River Resources is offering 6 ORD shares and 1.5 cents cash
per DAU share. The implied offer price of A$0.0486 per DAU
share (calculated the 90 day VWAP of ORD shares) represent a
79% premium to the 90 day VWAP of DAU shares.
ASX-Listed Company News
Aditya Birla Minerals (ASX: ABY) stood down the majority of its
workforce as the Nifty copper operations continue to be
suspended.
Sandfire Resources (ASX: SFR) has completed an accelerated
prepayment of A$20 million against the DeGrussa project finance
facility. The prepayment reduces the outstanding balance of the
facility to A$170 million as at 30 April 2014.
Northern Star Resources (ASX: NST) produced 50,219 oz of gold
in the March quarter at cash operating costs of A$929/oz and
AISC of A$1,167/oz. Production guidance is expected to be
between 180,000 to 190,000 ounces of gold at between A$1,100
to A$1,150/oz AISC. The June quarter is expected to recover
80,000 to 90,000 oz of gold at an AISC of A$1,100/oz.
St Barbara (ASX: SBM) produced 92,522oz of gold for the March
quarter (December quarter: 93,577 oz), with production from the
Australian operations consistent with expectations, and lower than
expected production from the Pacific operations. Consolidated
cash operating costs for the quarter were A$1,139/oz (Dec Q:
A$1,189/oz), with good cost performance at Gwalia, but continued
above plan costs in the Pacific operations. AISC were A$1455/oz.
Gold Explorers & Emerging Producers
Source: ASX, Capital IQ, LCC. Assumption: A$/US$ of 0.90
Gold Producers
Source: ASX, Capital IQ, LCC. Assumption: A$/US$ of 0.90
Code Company Name Close Price Week r YTD r
Market
Cap (A$m)
52 Week
Range
Cash
(A$m)
EV (A$m)
EV/
EBITDA
ABY Aditya Birla Minerals 0.21 ▼ (29% ) (38% ) 66 137 (70) NM
AOH Altona Mining 0.15 ▼ (3% ) (9% ) 80 16 64 3.1x
DML Discovery Metals 0.025 ▼ (7% ) (53% ) 14 3 169 NM
HGO Hillgrove Resources 0.065 ▼ (8% ) (28% ) 77 17 105 2.5x
OZL OZ Minerals 3.530 ▼ (6% ) 12% 1,071 364 707 4.1x
PNA PanAust 1.535 ▼ (5% ) (15% ) 939 130 992 4.0x
SFR Sandfire Resources 5.500 ▼ (6% ) (15% ) 856 90 956 8.0x
SRQ Straits Resources 0.006 ▲ 20% (25% ) 7 12 118 NM
TGS Tiger Resources 0.335 ▼ (1% ) (3% ) 281 11 351 4.4x
MWE Mawson West C$0.47 ▼ (11% ) (20% ) 78 54 42 0.4x
985 CST Mining Group HK$0.052 ▼ (5% ) (22% ) 196 119 77 NM
1208 MMG Limited HK$1.88 ▲ 6% 15% 1,386 154 3,045 3.9x
Code Company Name
Close
Price
Week r YTD r
Market
Cap (A$m)
52 Week
Range
Cash
(A$m)
EV
(A$m)
ABU ABM Resources 0.023 — 0% 5% 87 14.4 73
ALK Alkane Resources 0.290 ▼ (11%) (15%) 108 18.6 89
AUK Augur Resources 0.049 — 0% (35%) 13 1.7 11
AZM Azumah Resources 0.039 ▼ (15%) 39% 14 4.9 9
BSR Bassari Resources 0.006 ▼ (25%) (25%) 6 0.1 6
BAB Bullabulling Gold 0.076 ▲ 9% 69% 26 3.0 23
CHN Chalice Gold 0.15 ▼ (3%) 11% 37 50.4 (13)
CHZ Chesser Resources 0.11 ▼ (8%) 5% 24 2.9 21
CDG Cleveland Mining 0.09 ▲ 23% (8%) 22 6.6 16
CAS Crusader Resources 0.26 ▼ (2%) (15%) 32 2.9 34
DCN Dacian Gold 0.35 — 0% 46% 34 12.2 21
EXG Excelsior Gold 0.082 ▲ 2% 19% 34 8.7 23
FML Focus Minerals 0.01 ▼ (8%) 0% 110 78.6 49
GCY Gascoyne Resources 0.14 ▲ 17% 0% 22 1.8 20
GOR Gold Road Resources 0.15 ▼ (9%) 52% 77 14.1 63
GRY Gryphon Minerals 0.13 ▼ (7%) (24%) 52 38.7 13
IDC Indochine Mining 0.060 ▼ (12%) 40% 60 2.0 60
IAU Intrepid Mines 0.27 ▼ (2%) (14%) 150 97.6 53
KGD Kula Gold 0.09 ▼ (5%) (14%) 11 1.8 11
MSR Manas Resources 0.027 ▼ (10%) (16%) 11 3.5 8
MYG Mutiny Gold 0.027 ▼ (7%) (16%) 18 3.8 21
OBS Orbis Gold 0.26 — 0% 4% 65 10.1 55
ORD Ord Resources 0.00 — 0% (20%) 5 2.3 4
PAN Panoramic Resources 0.60 ▼ (12%) 138% 192 41.0 151
PIR Papillon Resources 1.22 ▼ (8%) 24% 415 41.3 374
PXG Phoenix Gold 0.12 ▼ (14%) (25%) 40 8.7 31
RED Red 5 0.07 ▼ (3%) (22%) 52 41.4 11
RNI Resource & Investment 0.078 — 0% 47% 27 1.3 46
ROL Robust Resources 0.23 ▼ (15%) (34%) 49 5.4 49
SIH Sihayo Gold 0.026 ▼ (13%) (13%) 26 0.2 26
SXG Southern Cross Goldfields 0.014 ▲ 17% 8% 12 2.9 15
SUM Sumatra Copper & Gold 0.06 ▼ (21%) (14%) 25 1.7 26
TAM Tanami Gold 0.02 ▼ (5%) (9%) 24 1.6 29
WAF West African Resources 0.12 ▼ (8%) (18%) 31 1.2 30
WPG WPG Resources 0.036 ▲ 6% 24% 9 8.2 1
YTC YTC Resources 0.21 — 0% (9%) 69 21.6 132
Code Company Name
Close
Price
Week r YTD r
Market Cap
(A$m)
52 Week Range
Cash
(A$m)
EV (A$m)
EV/
EBITDA
AQG Alacer Gold 2.56 ▼ (3% ) 13% 764 292 472 2.5x
ALK Alkane Resources 0.29 ▼ (11% ) (15% ) 108 19 89 6.4x
AGD Austral Gold 0.09 — 0% (25% ) 15 9 56 3.5x
BDR Beadell Resources 0.64 ▼ (4% ) (19% ) 506 13 543 4.9x
BEZ Besra Gold 0.024 — 0% (47% ) 8 1 32 NM
DRM Doray Minerals 0.85 ▼ (4% ) 52% 139 37 130 5.5x
DRA Dragon Mining 0.12 ▼ (20% ) (8% ) 11 13 (3) 1.3x
EVN Evolution Mining 0.81 ▼ (10% ) 32% 575 37 680 4.0x
EVR Endeavour Mining Corp 0.79 ▼ (4% ) 63% 335 119 516 NM
IGO Independence Group 4.11 ▼ (3% ) 32% 959 47 962 11.7x
KCN Kingsgate Consolidated 0.85 ▼ (12% ) (9% ) 190 52 297 4.1x
KRM Kingsrose Mining 0.42 ▲ 5% 25% 151 6 145 NM
LSA Lachlan Star 0.14 ▼ (20% ) (30% ) 21 3 22 NM
MML Medusa Mining 1.74 ▼ (9% ) (15% ) 362 23 339 6.6x
MLX Metals X 0.21 — 0% 21% 339 73 266 13.8x
MOY Millennium Minerals 0.10 ▼ (17% ) (49% ) 21 9 41 1.0x
MLI Mintails 0.054 — 0% (4% ) 15 2 13 NM
NCM Newcrest Mining 10.13 ▼ (1% ) 30% 7,759 121 12,276 11.6x
NGF Norton Gold Fields 0.10 ▼ (20% ) (26% ) 93 32 176 2.3x
NST Northern Star Resources 1.10 ▼ (6% ) 40% 636 76 560 10.3x
OGC OceanaGold Corporation 2.65 ▲ 7% 67% 842 47 983 2.8x
PNA PanAust 1.54 ▼ (5% ) (15% ) 939 130 992 4.0x
PGI PanTerra Gold 0.039 — 0% (5% ) 30 5 74 17.0x
PRU Perseus Mining 0.31 ▼ (15% ) 24% 161 48 113 13.0x
RMS Ramelius Resources 0.11 — 0% 8% 38 28 14 0.9x
RRL Regis Resources 2.35 ▼ (5% ) (20% ) 1,174 31 1,159 5.4x
RSG Resolute Mining 0.58 ▼ (10% ) 5% 372 68 408 3.2x
SAR Saracen Mineral Holdings 0.31 ▼ (6% ) 65% 242 67 187 2.9x
SBM St Barbara 0.19 ▼ (16% ) (27% ) 93 58 372 NM
SLR Silver Lake Resources 0.41 ▼ (6% ) (23% ) 206 41 165 NM
TBR Tribune Resources 2.95 ▲ 2% 27% 148 11 137 3.0x
TGZ Teranga Gold Corp 0.67 ▼ (13% ) 22% 254 54 240 NM
TRY Troy Resources 0.96 ▼ (5% ) 22% 187 54 173 7.0x
UML Unity Mining 0.016 ▼ (6% ) (61% ) 16 8 8 0.3x
VGO Vantage Goldfields 0.045 ▲ 22% 73% 11 13 (2) 2.5x
ANG AngloGold Ashanti ZAR190 ▼ (2% ) 55% 7,894 725 11,390 6.2x
ABX Barrick Gold Corp C$19.14 ▼ (3% ) 2% 21,945 2,882 22,158 4.1x
CRK Crocodile Gold Corp C$0.27 ▲ 13% 121% 126 38 131 1.8x
GFI Goldfields ZAR44 ▼ (1% ) 34% 3,499 358 5,548 NM
NEM Newmont Mining Corp US$25 ▼ (7% ) 7% 13,316 1,591 22,031 7.0x

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Lcc copper gold weekly 20140505

  • 1. 5th May 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, reliability, completeness or suitability of 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 . Page 1 / 3 WEEKLYAustralianCopperGoldReport CODELCO DESPERATE FOR CAPEX FUNDING 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$/oz) 1,404 ▲ 0.1% ▲ 0% ▲ 4% Copper (A$/lb) 3.28 ▼ (1.1%) ▲ 1% ▼ (12%) Gold (US$/oz) 1,300 ▼ (0.1%) ▼ (0%) ▲ 8% Copper (US$/lb) 3.04 ▼ (1.3%) ▲ 0% ▼ (9%) Silver (US$/oz) 19.5 ▼ (1.2%) ▼ (2%) ▲ 0% Copper (RMB/t) 48,680 ▼ (0.7%) ▲ 3% ▼ (7%) Platinum (US$/oz) 1,435 ▲ 0.8% ▼ (1%) ▲ 5% Cobalt (US$/lb) 13.47 ▼ (2.6%) ▼ (3%) ▲ 1% Palladium (US$/oz) 807 ▼ (0.5%) ▲ 2% ▲ 12% Molybdenum (US$/lb) 13.38 ▲ 2.6% ▲ 13% ▲ 37% Iron Ore (US$/t) 107 ▼ (7.9%) ▼ (8%) ▼ (20%) Nickel (US$/lb) 8.26 ▼ (1.4%) ▲ 10% ▲ 30% Crude Oil (US$/barrel) 100 ▼ (0.8%) ▼ (1%) ▲ 1% Lead (US$/lb) 0.93 ▼ (3.8%) ▼ (2%) ▼ (7%) Gas H.Hub (US$/m btu) 4.67 ▲ 0.3% ▲ 5% ▲ 11% Zinc (US$/lb) 0.91 ▼ (2.4%) ▼ (2%) ▼ (4%) Uranium (US$/lb) 30 ▼ (2.0%) ▼ (11%) ▼ (13%) Tin (US$/lb) 10.43 ▼ (3.4%) ▼ (1%) ▲ 2% Currencies & Indices Last Week r 4-Wk r YTD r Global Markets Last Week r 4-Wk r YTD r AUD/USD 0.925 ▼ (0.2%) ▼ (0%) ▼ (0%) ASX 200 5,458 ▼ (1.3%) ▲ 1% ▲ 2% RMB/USD 0.160 ▼ (0.1%) ▼ (1%) ▼ (0%) Dow Jones 16,513 ▲ 0.9% ▲ 1% ▼ (0%) CAD/USD 0.911 ▲ 0.5% ▼ (0%) ▲ 1% S&P 500 Index 1,881 ▲ 1.2% ▲ 1% ▲ 2% EUR/USD 1.387 ▲ 0.2% ▲ 1% ▲ 0% Shang Hai Index 2,026 ▲ 2.0% ▼ (2%) ▲ 1% ASX Ordinary Gold 2,200 ▲ 0.1% ▼ (0%) ▼ (4%) Hang Seng Index 22,261 ▼ (0.5%) ▼ (1%) ▼ (4%) TSX Global Gold 186 — 0.0% ▲ 0% ▼ (1%) Nikkei 225 14,458 ▲ 0.2% ▼ (4%) ▼ (11%) ASX 300 Metals & Mining 3,238 ▼ (3.6%) ▼ (2%) ▼ (3%) FTSE 100 Index 6,822 ▲ 0.3% ▲ 2% ▲ 4% TSX Global Mining 76 ▼ (0.7%) ▲ 1% ▲ 0% Euro STOXX 50 Index 3,178 ▲ 1.6% ▼ (2%) ▲ 0% 1,200 1,300 1,400 1,500 1,600 0 100 200 300 Feb Mar Apr May Thousands Gold Price Volume A$/oz US$/oz 200 day average 2.90 3.10 3.30 3.50 3.70 0 100 200 300 Feb Mar Apr May Thousands LME Copper Price and Volume Volume ('000 lot) Price (A$/lb) Price (US$/lb) 2.90 3.10 3.30 3.50 0 10 20 30 Feb Mar Apr May COMEX Copper Price and Stocks Stocks ('000 t) Price (US$/lb) 44000 46000 48000 50000 52000 54000 0 100 200 300 Feb Mar Apr May Thousands SHFE Copper Price and Stocks Stocks ('000 t) Price (RMB/t) 44000 46000 48000 50000 52000 54000 0 1 1 2 2 3 Feb Mar Apr May Millions SHFE Copper Price and Volume Volume (mt) Price (RMB/t) 2.90 3.10 3.30 3.50 0 25 50 75 100 Feb Mar Apr May COMEX Copper Price and Volume Volume ('000 lot) Price (US$/lb) 1500 2000 2500 3000 Feb Mar Apr May S&P/ASX All Ordinaries Gold Index (XGD) 3.00 3.20 3.40 3.60 3.80 4.00 0 100 200 300 400 500 600 Jan Mar May Jul Sep Nov Jan Mar China Copper Imports Tonnes (kt) Copper Price 2.90 3.10 3.30 3.50 3.70 0 100 200 300 Feb Mar Apr May LME Copper Price and Stocks Stocks (kt) Price (A$/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) 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 $2.96 $2.98 $3.00 $3.02 $3.04 Cash 3 Months Dec 1 Dec 2 Dec 3 LME copper forward curve Seller Buyer
  • 2. 5th May 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, reliability, completeness or suitability of 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 . Page 2 / 3 WEEKLYAustralianCopperGoldReport Markets & Majors Codelco CEO Thomas Keller warmed to the idea of tapping Chile's sovereign wealth funds (US$23 billion) to pay for its US$30.0 billion investment plan. Is there an alternative? Captain Copper, a superhero teaching Chilean kids about the metal, courtesy of Codelco Thomson Reuters - The London Metal Exchange (LME) plans to seek permission to appeal against a court ruling it lost last month, which halted a major reform aimed at cutting backlogs at warehouses. In late March, Russian aluminium producer Rusal won a ruling that halted a warehouse reform because consultations had been "unfair and unlawful". The LME, which is owned by Hong Kong Exchanges and Clearing Ltd, earlier this month lost the first stage of an effort to appeal, in which it turned to the court that made the original ruling. Now it is going up to the next level by filing with the Court of Appeal. A legal source said parties that lose rulings are often advised to seek leave to appeal to give them the widest possible set of options. Thomson Reuters - U.S. futures exchange CME Group is considering the introduction of daily limits on price moves in gold and silver futures in a bid to rein in wild volatility that has spooked investors in recent years. CME at present has price fluctuation limits for futures contracts in some energy, agricultural commodities and financial products, but none for its precious and base metals products. The possible move reflects growing concern at the largest U.S. exchange of futures and options about big bouts of buying or selling that have caused huge fluctuations in prices without any apparent fundamental reason. Thomson Reuters - U.S. Securities and Exchange Commission will implement large portions of a rule requiring companies to determine if their products contain "conflict minerals" from a war- torn part of Africa, SEC Chair Mary Jo White said last week. The conflict minerals rule stems from a provision in the 2010 Dodd- Frank Wall Street reform law that requires publicly traded manufacturers to disclose to investors whether any tantalum, tin, gold or tungsten used in their products may have originated from the conflict-ridden Democratic Republic of Congo (DRC). Fighting a crippling current account deficit and a weakening currency, India’s finance ministry has pushed up gold import duties tenfold from 1% at the start of 2012 to 10% today. Other measures include excise duties at 9%, cash only for imports, re- export of 20% of all imports, transaction taxes and bans on gold- backed exchange traded fund investments. The measures are having the intended effect with latest official data showing gold imports falling 47% to $5.4 billion in the 2013-14 fiscal year. Despite the curbs, overall Indian consumption still rose by more than 100 tonnes to 975 tonnes last year, with an estimated doubling of unofficial imports to more than 100 tonnes. Newmont Mining Corp is running out of space to store copper concentrate in Indonesia, where a dispute with the government has halted exports, and may be forced to cut production. Newmont indicated that the concentrate barn was set to reach full capacity in the second half of May. If this happens, the company will be forced to implement contingency plans to scale back production. Newmont is cautiously optimistic that it will get permission to export in the coming weeks and that the country's proposed export tax "will be clarified." Copper Explorers & Emerging Producers Source: ASX, Capital IQ, LCC. Assumption: A$/US$ of 0.90 Code Company Name Close Price Week r YTD r Market Cap (A$m) 52 Week Range Cash (A$m) EV (A$m) ARE Argonaut Resources 0.022 ▲ 5% (8% ) 8 1.3 6 AVI Avalon Minerals 0.009 ▼ (10% ) (10% ) 11 1.7 9 AVB Avanco Resources 0.067 ▼ (1% ) (6% ) 91 13.7 77 AZS Azure Minerals 0.030 ▼ (9% ) 0% 21 1.6 20 BMB Balamara Resources 0.11 ▼ (8% ) 16% 38 1.5 36 BTR Blackthorn Resources 0.16 ▼ (11% ) (40% ) 25 14.2 11 BOC Bougainville Copper 0.51 ▲ 1% 7% 205 6.2 198 CYU Chinalco Yunnan Copper 0.03 ▼ (29% ) (22% ) 7 0.8 7 CDU Cudeco 1.83 ▼ (3% ) 2% 429 26.3 403 ERM Emmerson Resources 0.045 ▲ 13% 7% 14.7 0.7 14 ENR Encounter Resources 0.19 — 0% 0% 25 3.1 22 ESR Estrella Resources 0.15 ▲ 12% (17% ) 16 1.1 15 FND Finders Resources 0.18 — 0% (17% ) 99 5.2 94 GCR Golden Cross Resources 0.004 — 0% (20% ) 8 3.0 5 HAV Havilah Resources 0.23 ▼ (10% ) (10% ) 27 3.5 24 HCH Hot Chili 0.25 ▼ (15% ) (41% ) 87 5.4 81 HIG Highlands Pacific 0.060 ▼ (6% ) (2% ) 51 8.1 43 IRN Indophil Resources 0.14 ▼ (3% ) (15% ) 168 211.7 (43) KGL KGL Resources 0.088 ▼ (5% ) (16% ) 12 19.1 (7) KDR Kidman Resources 0.090 ▼ (14% ) (51% ) 12 3.6 8 MMC Marengo Mining 0.014 ▲ 17% (7% ) 16 0.9 43 MNC Metminco 0.022 ▲ 5% (29% ) 38 5.5 33 PEX Peel Mining 0.18 ▼ (16% ) (31% ) 24 3.9 20 RDM Red Metal 0.18 ▼ (5% ) 20% 26 1.9 24 RXM Rex Minerals 0.33 ▼ (3% ) (31% ) 73 27.6 45 SBR Sabre Resources 0.031 — 0% (28% ) 7 3.5 4 SUH Southern Hemisphere 0.065 ▲ 12% 30% 16 2.8 13 SMD Syndicated Metals 0.032 ▼ (6% ) (6% ) 9 2.3 6 TLM Talisman Mining 0.11 ▲ 8% 0% 14 16.6 (3) VXR Venturex Resources 0.006 ▼ (14% ) (40% ) 9 2.1 7 XAM Xanadu Mines 0.050 ▲ 9% 0% 12 1.5 10
  • 3. 5th May 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, reliability, completeness or suitability of 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 . Page 3 / 3 WEEKLYAustralianCopperGoldReport Copper Producers Source: ASX, Capital IQ, LCC. Assumption: A$/US$ of 0.90 Mergers & Acquisitions First quarter M&A activity in the global metals market plunged to its lowest level since 2008, with 13 deals totalling US$3.3 billion, a 78% drop year on year, according to a report from PwC. Barrick Gold Corp and Newmont Mining have terminated talks for a gold mega-merger. Ord River Resources (ASX: ORD) has made a combined scrip and cash takeover office to acquire Dampier Gold (ASX: DAU). Ord River Resources is offering 6 ORD shares and 1.5 cents cash per DAU share. The implied offer price of A$0.0486 per DAU share (calculated the 90 day VWAP of ORD shares) represent a 79% premium to the 90 day VWAP of DAU shares. ASX-Listed Company News Aditya Birla Minerals (ASX: ABY) stood down the majority of its workforce as the Nifty copper operations continue to be suspended. Sandfire Resources (ASX: SFR) has completed an accelerated prepayment of A$20 million against the DeGrussa project finance facility. The prepayment reduces the outstanding balance of the facility to A$170 million as at 30 April 2014. Northern Star Resources (ASX: NST) produced 50,219 oz of gold in the March quarter at cash operating costs of A$929/oz and AISC of A$1,167/oz. Production guidance is expected to be between 180,000 to 190,000 ounces of gold at between A$1,100 to A$1,150/oz AISC. The June quarter is expected to recover 80,000 to 90,000 oz of gold at an AISC of A$1,100/oz. St Barbara (ASX: SBM) produced 92,522oz of gold for the March quarter (December quarter: 93,577 oz), with production from the Australian operations consistent with expectations, and lower than expected production from the Pacific operations. Consolidated cash operating costs for the quarter were A$1,139/oz (Dec Q: A$1,189/oz), with good cost performance at Gwalia, but continued above plan costs in the Pacific operations. AISC were A$1455/oz. Gold Explorers & Emerging Producers Source: ASX, Capital IQ, LCC. Assumption: A$/US$ of 0.90 Gold Producers Source: ASX, Capital IQ, LCC. Assumption: A$/US$ of 0.90 Code Company Name Close Price Week r YTD r Market Cap (A$m) 52 Week Range Cash (A$m) EV (A$m) EV/ EBITDA ABY Aditya Birla Minerals 0.21 ▼ (29% ) (38% ) 66 137 (70) NM AOH Altona Mining 0.15 ▼ (3% ) (9% ) 80 16 64 3.1x DML Discovery Metals 0.025 ▼ (7% ) (53% ) 14 3 169 NM HGO Hillgrove Resources 0.065 ▼ (8% ) (28% ) 77 17 105 2.5x OZL OZ Minerals 3.530 ▼ (6% ) 12% 1,071 364 707 4.1x PNA PanAust 1.535 ▼ (5% ) (15% ) 939 130 992 4.0x SFR Sandfire Resources 5.500 ▼ (6% ) (15% ) 856 90 956 8.0x SRQ Straits Resources 0.006 ▲ 20% (25% ) 7 12 118 NM TGS Tiger Resources 0.335 ▼ (1% ) (3% ) 281 11 351 4.4x MWE Mawson West C$0.47 ▼ (11% ) (20% ) 78 54 42 0.4x 985 CST Mining Group HK$0.052 ▼ (5% ) (22% ) 196 119 77 NM 1208 MMG Limited HK$1.88 ▲ 6% 15% 1,386 154 3,045 3.9x Code Company Name Close Price Week r YTD r Market Cap (A$m) 52 Week Range Cash (A$m) EV (A$m) ABU ABM Resources 0.023 — 0% 5% 87 14.4 73 ALK Alkane Resources 0.290 ▼ (11%) (15%) 108 18.6 89 AUK Augur Resources 0.049 — 0% (35%) 13 1.7 11 AZM Azumah Resources 0.039 ▼ (15%) 39% 14 4.9 9 BSR Bassari Resources 0.006 ▼ (25%) (25%) 6 0.1 6 BAB Bullabulling Gold 0.076 ▲ 9% 69% 26 3.0 23 CHN Chalice Gold 0.15 ▼ (3%) 11% 37 50.4 (13) CHZ Chesser Resources 0.11 ▼ (8%) 5% 24 2.9 21 CDG Cleveland Mining 0.09 ▲ 23% (8%) 22 6.6 16 CAS Crusader Resources 0.26 ▼ (2%) (15%) 32 2.9 34 DCN Dacian Gold 0.35 — 0% 46% 34 12.2 21 EXG Excelsior Gold 0.082 ▲ 2% 19% 34 8.7 23 FML Focus Minerals 0.01 ▼ (8%) 0% 110 78.6 49 GCY Gascoyne Resources 0.14 ▲ 17% 0% 22 1.8 20 GOR Gold Road Resources 0.15 ▼ (9%) 52% 77 14.1 63 GRY Gryphon Minerals 0.13 ▼ (7%) (24%) 52 38.7 13 IDC Indochine Mining 0.060 ▼ (12%) 40% 60 2.0 60 IAU Intrepid Mines 0.27 ▼ (2%) (14%) 150 97.6 53 KGD Kula Gold 0.09 ▼ (5%) (14%) 11 1.8 11 MSR Manas Resources 0.027 ▼ (10%) (16%) 11 3.5 8 MYG Mutiny Gold 0.027 ▼ (7%) (16%) 18 3.8 21 OBS Orbis Gold 0.26 — 0% 4% 65 10.1 55 ORD Ord Resources 0.00 — 0% (20%) 5 2.3 4 PAN Panoramic Resources 0.60 ▼ (12%) 138% 192 41.0 151 PIR Papillon Resources 1.22 ▼ (8%) 24% 415 41.3 374 PXG Phoenix Gold 0.12 ▼ (14%) (25%) 40 8.7 31 RED Red 5 0.07 ▼ (3%) (22%) 52 41.4 11 RNI Resource & Investment 0.078 — 0% 47% 27 1.3 46 ROL Robust Resources 0.23 ▼ (15%) (34%) 49 5.4 49 SIH Sihayo Gold 0.026 ▼ (13%) (13%) 26 0.2 26 SXG Southern Cross Goldfields 0.014 ▲ 17% 8% 12 2.9 15 SUM Sumatra Copper & Gold 0.06 ▼ (21%) (14%) 25 1.7 26 TAM Tanami Gold 0.02 ▼ (5%) (9%) 24 1.6 29 WAF West African Resources 0.12 ▼ (8%) (18%) 31 1.2 30 WPG WPG Resources 0.036 ▲ 6% 24% 9 8.2 1 YTC YTC Resources 0.21 — 0% (9%) 69 21.6 132 Code Company Name Close Price Week r YTD r Market Cap (A$m) 52 Week Range Cash (A$m) EV (A$m) EV/ EBITDA AQG Alacer Gold 2.56 ▼ (3% ) 13% 764 292 472 2.5x ALK Alkane Resources 0.29 ▼ (11% ) (15% ) 108 19 89 6.4x AGD Austral Gold 0.09 — 0% (25% ) 15 9 56 3.5x BDR Beadell Resources 0.64 ▼ (4% ) (19% ) 506 13 543 4.9x BEZ Besra Gold 0.024 — 0% (47% ) 8 1 32 NM DRM Doray Minerals 0.85 ▼ (4% ) 52% 139 37 130 5.5x DRA Dragon Mining 0.12 ▼ (20% ) (8% ) 11 13 (3) 1.3x EVN Evolution Mining 0.81 ▼ (10% ) 32% 575 37 680 4.0x EVR Endeavour Mining Corp 0.79 ▼ (4% ) 63% 335 119 516 NM IGO Independence Group 4.11 ▼ (3% ) 32% 959 47 962 11.7x KCN Kingsgate Consolidated 0.85 ▼ (12% ) (9% ) 190 52 297 4.1x KRM Kingsrose Mining 0.42 ▲ 5% 25% 151 6 145 NM LSA Lachlan Star 0.14 ▼ (20% ) (30% ) 21 3 22 NM MML Medusa Mining 1.74 ▼ (9% ) (15% ) 362 23 339 6.6x MLX Metals X 0.21 — 0% 21% 339 73 266 13.8x MOY Millennium Minerals 0.10 ▼ (17% ) (49% ) 21 9 41 1.0x MLI Mintails 0.054 — 0% (4% ) 15 2 13 NM NCM Newcrest Mining 10.13 ▼ (1% ) 30% 7,759 121 12,276 11.6x NGF Norton Gold Fields 0.10 ▼ (20% ) (26% ) 93 32 176 2.3x NST Northern Star Resources 1.10 ▼ (6% ) 40% 636 76 560 10.3x OGC OceanaGold Corporation 2.65 ▲ 7% 67% 842 47 983 2.8x PNA PanAust 1.54 ▼ (5% ) (15% ) 939 130 992 4.0x PGI PanTerra Gold 0.039 — 0% (5% ) 30 5 74 17.0x PRU Perseus Mining 0.31 ▼ (15% ) 24% 161 48 113 13.0x RMS Ramelius Resources 0.11 — 0% 8% 38 28 14 0.9x RRL Regis Resources 2.35 ▼ (5% ) (20% ) 1,174 31 1,159 5.4x RSG Resolute Mining 0.58 ▼ (10% ) 5% 372 68 408 3.2x SAR Saracen Mineral Holdings 0.31 ▼ (6% ) 65% 242 67 187 2.9x SBM St Barbara 0.19 ▼ (16% ) (27% ) 93 58 372 NM SLR Silver Lake Resources 0.41 ▼ (6% ) (23% ) 206 41 165 NM TBR Tribune Resources 2.95 ▲ 2% 27% 148 11 137 3.0x TGZ Teranga Gold Corp 0.67 ▼ (13% ) 22% 254 54 240 NM TRY Troy Resources 0.96 ▼ (5% ) 22% 187 54 173 7.0x UML Unity Mining 0.016 ▼ (6% ) (61% ) 16 8 8 0.3x VGO Vantage Goldfields 0.045 ▲ 22% 73% 11 13 (2) 2.5x ANG AngloGold Ashanti ZAR190 ▼ (2% ) 55% 7,894 725 11,390 6.2x ABX Barrick Gold Corp C$19.14 ▼ (3% ) 2% 21,945 2,882 22,158 4.1x CRK Crocodile Gold Corp C$0.27 ▲ 13% 121% 126 38 131 1.8x GFI Goldfields ZAR44 ▼ (1% ) 34% 3,499 358 5,548 NM NEM Newmont Mining Corp US$25 ▼ (7% ) 7% 13,316 1,591 22,031 7.0x