PSQ_Analytics_Commodities_SectorReport_06101

Clean Technology
Initiation Report
03-11-2009
November 2009
©Argus Research Company, Independent International Investment Research Plc and Pipal Research Group 2010. All rights reserved.
Commodities: Mar 10-May 10 Review

About PSQ Analytics
PSQ Analytics is a ground-breaking research service for smaller and mid-cap companies on AIM and the Main Market,
launched with support of the London Stock Exchange in March 2009.
The PSQ Analytics service makes available the deep and broad research expertise of three leading independent
research firms, whose traditional client bases would generally comprise global blue-chip companies and institutions.
Working within a commercial framework that assigns companies randomly to an expert research provider, and developed
with support from the London Stock Exchange, PSQ Analytics is able to reassure the investor audience that the work
conducted is rigorously objective, and independent. The companies which have participated in this sector report (and,
even more notably, companies who commission PSQ Analytics to provide company-focused research), should enjoy the
benefits that new, in-depth coverage can bring to their profile in the investor community - which manifests in improved
liquidity, tighter dealing spreads and a reduction in the cost of access to capital.
The Providers
Three independent research providers – Argus Research, Independent International Investment Research and Pipal
Research are working together as PSQ Analytics to produce standardised, high quality, cost-effective research. The
three providers are all long-established research firms with international businesses and reputations.
Argus Research:
Founded in 1934, Argus is a leader in independent equity research, offering in-depth
economic analysis as well as forecasts and ratings on more than 700 US and
international firms. Argus employs a rigorous six-step process to analyze companies,
and provides clients with regular updates through consultation and conference calls,
online publications, and more than 4000 individual research reports a year.
Independent International Investment Research Plc:
IIR is one of the UK’s leading sources of impartial research and strategy for global
equities and foreign exchange. The Group has become a leading specialist in the US for
the provision of research on non-US companies. Core product offerings are: GEO
Monitor™ (www.geomonitor.co.uk) , providing research on Initial Public Offerings from
around the world; Research Oracle™ (www.researchoracle.com), which provides
access to the Group’s international research free of charge; and Global Research, which
provides access to financial models, sector analysts, short-term trading strategies, and
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promoting and assisting Team GB athletes in London 2012.
Pipal Research:
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model enables it to deliver timely, high quality, objective and cost effective research.
Pipal is registered in Chicago, USA and has operations in UK, Ireland and India.

Commodities
Mar 10-May 10 Review
21-06-10
Page 3
Sector research published by PSQ Analytics
From 4 November 2009 to 15 January 2010, PSQ Analytics published three wide-ranging reviews of the clean
technology, commodities and technology & telecom sectors. The full reports, including profiles on companies listed
on the London Stock Exchange’s Main Market and AIM in these three sectors are available for free at
www.psqanalytics.com.
'Clean Technology: The Upcoming Engine of Global Growth', published on 4 November 2009, aimed to provide a
broad overview of the clean technology sector, opening with a look at how to define cleantech and what products and
services it encompasses, the development of the sector and growth in cleantech investment, as well as the key drivers
and challenges. Following on from these broader themes we focused on some of the principal areas which make up the
sector, in terms of their framework, as well as sector and investment trends. For the purposes of our research we have
classified the clean technology sector into six major sub-sectors; clean energy (including renewable energy generation,
energy efficiency and energy storage), clean transportation, water and wastewater, waste management, air pollution
control and sustainable agriculture. The last sections of the report include an examination of the financial and market
performance of cleantech companies and our outlook for the sector. To provide further insight into the smaller end of the
cleantech sector we had profiled 17 small- and mid-cap companies operating in this space which are listed on the
London Stock Exchange and AIM. To download the full clean technology report free of charge, please go to:
www.psqanalytics.com/CompanyReports/1159.aspx
'Commodities: Resurgence Explored', published on 26 November 2009, aimed to provide a broad overview of the
commodities sector, opening with a look at the key characteristics and trends of the sector as well as the key drivers and
challenges. Following on from these broader themes we focused on the individual industries which make up the
commodities sector. The scope of our research encompasses energy commodities and the metals group, while excluding
agricultural commodities and commodity chemicals. We have classified the commodities sector into five major industries;
upstream oil & gas, mid- & downstream oil & gas, coal & consumable fuels, ferrous & base metals, gold & other precious
metals & minerals. We explore each in terms of their framework, demand-supply dynamics, sector trends, demand
drivers and recent transaction activities. The discussion on each sub-sector ends with our outlook. The last section of the
report is a case study on Junior Mining & Exploration, examining investment trends and factors determining investment,
as well as global transaction activities in the sector. To provide further insight into the smaller end of the commodities
sector we had profiled 19 small- and mid-cap companies operating in this space which are listed on the London Stock
Exchange and AIM. To download the full commodities report free of charge, please go to:
www.psqanalytics.com/CompanyReports/1201.aspx
The 'Technology & Telecom' report, published on 15 January 2010, aimed to provide a broad overview of the
technology and telecom sectors, identifying that the technology sector can still be understood as the source of new
processes and efficiencies but also the extent to which the distinction between technology and other sectors, as well as
segments within the sector, have become blurred. The report looked at the disruptive impact of the internet and the new
enterprise data centre battleground for computing and communications companies. Central to the report's focus was an
analysis of how the various segments in the sectors are impacting each other and driving towards convergence. In
illustrating these broader themes, we discussed the major global trends, key growth drivers, transformative technologies
and long term prospects of the major technology categories. The report focused on information processing, examining
computing and servers & storage, communications equipment, focusing on wireline and wireless infrastructure as well as
mobility, semiconductors, software and telecom services, before taking a look at some of the smaller players making a
mark in the technology sector. To provide further insight into the smaller end of the sectors we had profiled 20 small- and
mid-cap companies operating in this space which are listed on the London Stock Exchange and AIM. To download the
full Technology & Telecom report free of charge, please go to: www.psqanalytics.com/CompanyReports/1252.aspx
Following on from publication of these in depth reports, we are issuing quarterly updates on sector developments.
We published our first commodities update on 08 March 2010, with 30 companies profiled: To download the update
free of charge, please go to: www.psqanalytics.com/CompanyReports/1281.aspx
We published our first clean technology update on 23 March 2010, with 24 companies profiled: To download the
update free of charge, please go to: www.psqanalytics.com/CompanyReports/1401.aspx
We published our first technology & telecom update on 23 April 2010, with 20 companies profiled: To download the
update free of charge, please go to: www.psqanalytics.com/CompanyReports/1354.aspx

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21-06-10
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Contents
1. Executive summary ...................................................................................................................................5
2. Commodities sub-sectors.........................................................................................................................6
2.1. Upstream oil and gas ...................................................................................................................................6
2.2. Mid- and down-stream oil & gas...................................................................................................................7
2.3. Coal & consumable fuels .............................................................................................................................8
2.4. Ferrous & base metals.................................................................................................................................9
2.5. Gold & other precious metals & minerals...................................................................................................11
Appendix – Profiles of commodities companies listed on the London Stock Exchange / AIM .............13
Disclaimer………………………………………………………………………………………………………………77

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1. Executive Summary
During the early part of the period under review, a continuation of the apparent recovery in the global economy lent
support to demand and the upward movement in commodity prices. This trend was visible until the end of April 2010, in
which the crude oil spot price touched its 18-month high. Iron ore led metals prices, with spot prices reaching a historic
high in April 2010. However, unfolding of the European sovereign debt crisis and the ensuing tremors sent through the
global economy led to a significant correction in commodity prices in May 2010.
In a major development on 20 April 2010, an explosion at the Deepwater Horizon oil rig off the Gulf of Mexico caused a
massive oil spill, raising fears over the political future of offshore drilling. On top of the immediate fallout from the spill,
and the 6 month moratorium on new drilling, policy response is likely to be in the form of stricter environmental
regulations for offshore drilling, potentially significantly driving up project costs. Despite the steep correction in crude oil
price in the latter half of the period under review, refining margins for downstream oil companies improved during the
period, reflecting stronger demand. Midstream companies also benefited as a rise in oil and refined products imports by
East Asian economies supported the demand for tankers, driving up freight rates. Coal prices rose steadily, also mainly
due to increasing demand from Asian economies. During the quarter, speculation was rife that Australian coal mining
companies might shift their coking coal sales to short term, market-based pricing. The anticipated new quarterly pricing
scheme could aggravate volatility in coal prices. In the base and ferrous metals space, an initial run up in prices of metals
in the first half of the quarter, led by iron ore, came to a halt, reflecting the fears of a double dip recession aggravated by
the European sovereign debt crisis and concerns over instability in China and its impact on industrial metals demand. On
the supply side, companies’ capacity utilization rates rose across all metal segments. However, metals inventories
remain at historically high levels. Gold recovered its sheen in the period, largely reflecting the ffect of investors' fears
regarding economic stability and the long term viability of the euro. The quarter saw a realignment of investment
portfolios in favour of safer assets, gold, silver and platinum.
Despite medium term concerns over liquidity tightening measures and credit default risk in European economies, our
long term outlook for the commodities sector remains broadly unchanged. A recovery in demand for crude oil is evident,
with worldwide consumption rising steadily. Although we expect hydrocarbon prices to remain under pressure over the
near-to-medium term, our long term outlook for oil prices is positive, based on an anticipated rise in demand from
emerging markets. Demand for natural gas is also set to increase over the long term driven by adoption of tougher
environmental regulations, particularly in the US. For mid and downstream oil companies, we expect higher prices for oil
products and freight rates during the latter half of 2010. However, large refinery capacity additions expected to come on-
stream over the next couple of years and the sluggish pace of refinery divestment are likely to keep global refining
margins at low levels. Our outlook on coal prices remains positive based on robust demand from Asian economies. In the
metals space, we maintain a neutral outlook for aluminium and copper prices, with a negative bias, as a worsening of the
financial crisis in Europe could trigger moderate downside pressure from current levels. Over the long term, we remain
bullish on prospects for aluminium, as we anticipate the auto and construction industries' preference for aluminium to
increase over other metals, particularly steel. Our short to medium steel price outlook is moderated from neutral to
bearish as demand may moderate due to fiscal tightening, while our long term view on steel remains negative. Copper
prices are expected to stagnate at current levels over the long term. Prospects for gold and other precious metals appear
favourable against the backdrop of the fears associated with the re-emergence of the financial crisis, particularly in
Europe. Gold prices are set to gain most from this capital reallocation in the short-to-medium term. However, in our
opinion, the upside potential for silver prices is largely exhausted. We therefore moderate our silver outlook from positive
to neutral with a positive bias. Beyond the medium term, we anticipate a slide in prices once demand from portfolio
reallocation dries out. Our long term outlook on precious metals therefore, remains negative.

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2. Commodities Sub-sector Categories
2.1. Upstream oil and gas
Review of the past quarter
Crude oil touched an 18-month high of USD86.84 per barrel in April 2010 as a strong dollar failed to rein in the
commodity, calling into question the often-observed inverse relationship between crude oil and the US dollar index.
However, the onset of the European sovereign debt crisis raised concerns about crude’s rapid appreciation, and prices
fell more than 20% to bottom out at approximately USD66 per barrel by May end. Since then, crude oil prices have
staged a dramatic recovery, gaining back half their losses, and are currently trading above USD75 per barrel. Natural
gas prices registered an improvement in 1Q 10, trading at an average of USD5.09 per mmbtu (USD4.34 per mmbtu in
4Q 09), before falling to USD3.72 per mmbtu in April 2010, a 5-month low, amid concerns of a global supply glut, and
then retracing the journey to a current price of USD5.0 per mmbtu.
Exhibit 1: Oil and gas prices since our last report
2.00
2.80
3.60
4.40
5.20
6.00
65
70
75
80
85
90
1/3/10 1/4/10 1/5/10 1/6/10
Crude oil (USD perbbl) Natural gas (USD per mmbtu)
Crudeoil
Naturalgas
Source: Bloomberg
In late March 2010, the US government opened certain offshore areas for drilling - previously off-limits due to
environmental concerns about the risks of spills - along the Atlantic coastline, the eastern Gulf of Mexico and the north
coast of Alaska. Collectively, his area is believed to hold 39 bn-65 bn barrels of oil equivalent and has the potential to
almost double US oil reserves (source: Minerals Management Service). This plan was supported by arguments that it
would reduce US dependence on crude oil imports and lower greenhouse gas emissions by boosting natural gas
supplies. However, the explosion at BP plc’s Deepwater Horizon oil rig on 20 April 2010, causing a catastrophic oil spill,
throws the political future of offshore drilling into doubt. The upward revision of estimates for the flow rate of the leak in
early June has dwarfed original figures, putting the scale of the leak at potentially more than 100 mn gallons by 14 June
2010. By the same date, BP had spent approximately USD1.6 bn on oil containment, grants to affected states to mitigate
the impact of the spill, claims paid and federal costs, with the total cost expected to escalate to many billion dollars. On
16 June 2010, the company agreed to finance a USD20 bn compensation fund and halt its dividend payments for the
rest of the year. Meanwhile, the firm’s market value has collapsed since the date of the spill, placing the company in a
precarious position and leading to speculation that it is vulnerable to acquisition. Despite BP’s claims that it is making
every effort to contain the leak, it continues to threaten the marine and coastal environment. In response to the spill, the
US government put in place a six month moratorium on new offshore drilling permits until a thorough investigation of the
Deepwater Horizon oil spill is complete. The fallout from this spill is likely to lead to far stricter regulations for offshore
drilling, driving up project costs. Demand and day rates for offshore rigs operating in the Gulf of Mexico could also come
under pressure if offshore rigs are idled in light of regulatory actions. However, our view is that, in the long term, the US
government is unlikely to reverse its moves to open new areas for drilling, considering the energy security implications of
growing the country’s reserve base.

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Transactions and developments
Recovery in the US and Chinese economies has been counterpoised by the unfolding sovereign debt crisis in Europe.
Two notable oil and gas exploration IPOs – Athabasca Oil Sands Corp. (billed as Canada’s most significant IPO in more
than a decade) and Kulczyk Oil Ventures Inc. – faltered on their first trading days. While Athabasca’s investors have lost
more than one third of their IPO investment, Kulczyk’s IPO has squared off its initial losses, with its shares trading close
to the offer price. MIE Holdings Corp. abandoned its listing due to the sell-off in markets around the world. Although
Essar Energy Ltd., an Indian industrial conglomerate, with operations in oil and gas exploration as well as power
generation, made a weak debut on the London Stock Exchange, falling 7.3% from the retail launch price of GBp420, the
stock is now trading over 10% above its offer price. Moving into June, however, Oasis Petroleum Inc. raised USD588 mn
from its listing, making it the country's second largest IPO in 2010 to date, and made more than 10% gains within two
days of listing. In 2H 10, oil exploration companies expected to approach the market include Gujarat State Petroleum
Corporation, with a USD860 bn IPO (India) and Arrow International Ltd., with a USD500 mn IPO (Australia).
M&A activity over the period included the acquisition of Dominion Exploration & Production, Inc. for USD3.47 bn by
CONSOL Energy Inc. and the purchase of a 40% stake in Bridas Corporation for USD3.1 bn by CNOOC International
Limited in March 2010. Small caps on the London Stock Exchange continued to demonstrate hunger for investment with
private placement deals. Europa Oil and Gas plc raised GBP1 mn on 19 April 2010 to support production and appraisal
work in the UK and Romania and Offshore Hydrocarbon Mapping plc raised GBP3.4 mn on 08 April 2010 to support
working capital requirements. The total number of transactions (including M&A deals, private placements and public
offerings) closed in 1Q 10 was 429, compared to 558 in 4Q 09. From the beginning of the year to the end of May 2010,
transactions worth USD128.5 bn have been closed globally; more than double the amount raised by total deals executed
during the same period in 2009.
Outlook
A recovery in demand is evident: worldwide consumption of oil in 1Q 10 rose by 1.9 mn barrels per day y-o-y to 86.3 mn
barrels per day. This rise was driven mainly by growth in demand from China. However large crude oil stockpiles at the
Cushing oil hub in the US rule out any significant price increase over the near-to-medium term. Gas faces a similar
outlook, with high inventories, growth in LNG capacity and an increase in unconventional gas production. We expect
hydrocarbon prices to remain under pressure over the near-to-medium term due to investor concerns about the
possibility of a double-dip recession and a decline in European oil consumption. Our long term outlook for oil prices is
positive, considering growth in demand from emerging markets. Tougher environmental regulations, particularly in the
US, are expected to increase demand over the long term for natural gas, which is a cleaner and cheaper source of
energy than other fossil fuels such as coal.
2.2. Mid- and down-stream oil & gas
While global refining margins improved from USD1.49 per barrel in 4Q 09 to USD3.08 per barrel in 1Q 10, reflecting
stronger demand, they are still some way off the average of USD6.20 per barrel reported in 1Q 09 (source: BP plc).
Meanwhile, global refinery throughput has risen by 800 thousand barrels per day (kb/d) y-o-y to 72.5 mn barrels per day;
mainly reflecting higher activity levels in Asia. Higher imports of oil and refined products by East Asian economies have
strengthened demand for tankers, driving up freight rates. The Baltic Dirty Tanker Index has risen from an average of
650 in 4Q 09 to an average of 1,010 in 1Q 10; since moderating to a current level of approximately 925.
Transaction activity (including M&A deals, private placements and public offerings) in the refining & marketing and the
storage & transportation industries eased q-o-q in 1Q 10. Natural gas storage operators saw mixed responses to their
IPOs during April and May 2010; while PAA Natural Gas Storage LP closed 8% above its launch price on 30 April 2010,
Niska Gas Storage Partners fell 6.8% below its offer price on 12 May 2010. Interesting IPOs in the pipeline include
Chesapeake Midstream Partners L.P’s USD489 mn IPO in the US and Taqa Arabia’s USD150 mn IPO in Egypt. M&A
activity in the midstream and downstream sectors has been few and far in between in 2010 with no single transaction
exceeding USD500 mn. A total of 95 transactions were closed in 1Q 10 compared to 115 in 4Q 09. 120 transactions had
taken place this year by the end of May 2010.

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Outlook
Our outlook for the refining & marketing and the storage & transportation industries remains broadly unchanged since our
last update report. In its latest Oil Market Report, dated 12 May 2010, the International Energy Agency forecast global oil
demand to increase by 1.6 mn barrels per day to 86.4 mn barrels per day in 2010, with China, Saudi Arabia, Russia,
Brazil, Iran and India projected to account for almost three-quarters of global oil demand growth in the year. We expect to
see higher prices for oil products and higher freight rates during the latter half of 2010.
Large refinery capacity additions are expected to come on-stream in the next couple of years. China is expected to
increase its annual oil refining capacity to 750 mn tonnes (Mt) by 2015 (currently 477 Mt per annum), while India is
expected to increase its annual refining capacity to 255.83 Mt in 2011-12 (currently 182.09 Mt). New refining capacity is
pressuring refining margins across the globe. This, along with reduced demand for petroleum products in developed
nations, has led many US and European oil majors such as ExxonMobil Corp., Total S.A, BP plc, Royal Dutch Shell plc,
Chevron Corp. and ConocoPhillips to either divest or shut down their oil refineries. However, the pace of divestment is
slow, due to lack of buyers. While we believe that refining margins bottomed out in 4Q 09, new capacity additions and
the sluggish pace of refinery divestment are likely to keep global refining margins at low levels in the long term.
2.3. Coal and consumable fuels
Coal prices have risen steadily since 4Q 09, driven mainly by rising demand in Asian economies, primarily China and
India. Upward pressure was compounded by reports in March 2010 that major Australian miners BHP Billiton and Rio
Tinto were shifting much of their coking coal sales to short term, market-based pricing. The new quarterly pricing scheme
could aggravate price volatility for coal, going forward. Despite concerns over the softening of the Chinese steel market,
fuelled by the Chinese government’s efforts to prevent a domestic real estate bubble, local hot-rolled steel sheet prices
remain above RMB4,200 per tonne. Coupled with stockpiling by coal-fired power plants in China, which are preparing for
peak summer demand, this has driven up benchmark coal prices in China during recent weeks.
Meanwhile, unlike other commodities which experienced a bull run before the Greek insolvency crisis, uranium prices
have remained low. The US Department of Energy (DOE) sold 226 tonnes of uranium in May 2010, following an earlier
sale of excess inventory in December 2009, raising concerns of oversupply of uranium in the market.
Transaction activities
Despite securing significant hikes in contract rates for coking coal deliveries in 2Q 10, the quarter was unkind to coal
mining companies when it came to capital raising. Apart from South Africa’s Optimum Coal Holdings Ltd.’s USD102 mn
public offering, no major IPOs debuted this past quarter, and Australian billionaire Clive Palmer’s high profile plan to list
Resourcehouse Mining plc is now set to remain in hibernation. However, the next 6 months are expected to witness
greater activity, with US-based thermal coal mining company, Oxford Resources Partners, in the final stages of launching
its USD175 mn public offering, the Indian government planning a USD2.9 bn share issue of state-owned mining
company Coal India Ltd. in September 2010, and a USD1 bn IPO for Russia’s largest steam coal producer, Siberian
Coal Energy Company (SEUK) now deferred from July to September 2010. While primary fundraising activity remained
muted due to investor apprehension, emerging market steel and power companies continued to acquire coal mines
around the world as part of an effort to backward-integrate operations. The total value of deals closed during the March-
May 2010 period stands at USD8.9 bn, compared to USD4.7 bn during the preceding three months.
Outlook
Our short term outlook for coal remains unchanged since our last update report. Demand is expected to increase, driven
by robust demand from Asian economies. During 2009, China (already the world’s largest coal consumer) nearly doubled
its coal imports y-o-y to 130 Mt, following a crackdown on smaller, illegal mines as well as mines that did not meet local
environmental standards, leading to widespread closures. Chinese steel production is expected to surpass 600 Mt this
year (567.8 Mt in 2009), supported by large-scale infrastructure development. India is also emerging as a major buyer of
coal, with imports nearly doubling over the last 4 years. India may import close to 100 Mt of coal this year to meet
growing demand from power plants (source: Coal India Ltd.). Our positive outlook for coal is also reinforced by the
planned introduction of 72 GW in fresh coal-fired power capacity around the world in 2010, as well as the expected ramp-
up of thermal plants totaling 220 GW in capacity over the next 5 years, (which could create incremental demand for over
750 Mt of thermal coal) (source: ACI and Platts International in Arch Coal, Inc. Investor Presentation February 2010) In
view of these factors, our long term outlook for coal prices remains positive.

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While demand and spot prices for uranium are expected to remain muted – most Western utilities’ 2010 uranium
requirements having already being contracted – our long term outlook remains strong. Growth in energy demand and
mounting urgency in the worldwide search for cleaner, more sustainable energy, imply a positive long term trend for
uranium. Globally, close to 56 nuclear reactors are under construction, with a further 136 at the planning stage (source:
Resource Opportunities). Demand for uranium is especially strong in China, India and Japan, where there are near term
plans to build 34, 20 and 12 nuclear reactors, respectively (source: World Nuclear Association).
2.4. Ferrous and base metals
An apparently recovering global economy drove improvement in industrial metal demand and prices over the earlier part
of the period. Iron ore led the way, with spot prices reaching a historic high in April 2010. However, fear of a double dip
recession, intensified by the sovereign debt crisis in Europe and concerns of instability in China and its impact on
industrial metal demand, led to a significant price correction in May 2010. While economic data indicates some
strengthening of the global economic recovery, with the Chinese and US economies achieving annual GDP growth of
11.9% and 2.5% in 1Q 10 respectively, fears over the resurgence of financial crisis have the potential to suppress
medium term demand prospects for metals. On the supply side, metal companies' capacity utilization rates have been on
the rise across all metal segments; global crude steel capacity utilization improved by 1.9 percentage points m-o-m and
18.9 percentage points y-o-y to 83.5% in April 2010. There has been a clear improvement in metal demand from the
previous quarter, with monthly consumption of refined copper (regarded as a barometer of economic conditions) growing
12.5% y-o-y and 23.9% q-o-q to 1.71 Mt. Despite rising demand and production cuts, metal inventories remain at
historically high levels, with LME aluminium inventory hovering at around 0.46 Mt for the past 6 months. Moreover,
China’s medium term demand for industrial metals seems to be satisfied as the country's metal imports have started to
decline. Meanwhile, market jitters have continued to hamper capital raising activity and M&A deals in the metals space
over the last three months, with major public offerings characterised by offer price cuts, reduction in offer sizes and
disappointing debuts on secondary markets.
That metal prices have shown signs of fatigue after the more than 100% surge from the early 2009 low is perhaps not
surprising. Compounding a fear that the steep run-up in prices had left ferrous and base metals over-priced, rising
concerns over the implications of a sovereign debt crisis in Europe for metal demand over the medium term loomed large
over the industry. With the revival of the debt crisis on the one hand and the need to start rewinding stimulus packages
and quantitative easing to ease anticipated inflationary pressures on the other, the fortunes of the metal industry seem to
be caught in a Catch 22 situation. While the Chinese central bank has already taken steps to prevent overheating this
year by raising its reserve requirements and interest rates on three-month bills, pressure is fast building on other
governments to make clear plans to limit fiscal deficits. Although austerity drives in various European countries currently
appear symbolic at best, the diversion of approximately USD1 tn from developmental activities to protect the eurozone's
currency and bond markets is bound to impact industrial demand and metal consumption in the region over the coming
months. With default risks on sovereign bonds spreading from Dubai to Greece, the Iberian Peninsula and Italy, investor
risk aversion is building, which could continue to drive funds away from metals into more defensive asset classes.
Meanwhile, the metals and mining sectors face the prospect of growing regulatory aggression, as ‘resource nationalism’
experiences a resurgence. With restrictions and customs duties on the global trading of natural resources already on the
rise in China and India for example, the Australian government’s proposal to levy an additional 40% tax on the profits of
mining companies from 2012, taking the potential effective tax rate to approximately 58%, is likely have a significant
adverse impact on profits and impact future investment in the sector. Already mining deals in Australia have almost
halved from 87 deals worth USD9.11 bn in 2Q 09 to 47 deals worth just USD914 mn during April and May 2010. The
implementation of a policy such as this in a country long perceived as ‘friendly’ to the mining sector could also act as a
potential trigger to a global trend. However, despite these potential medium term inhibitors, we believe the sector’s long
term prospects remain intact, with ongoing development in emerging economies set to lessen the large gap between per-
capita consumption of natural resources between developed and developing economies.
Reflecting the apparently improving economic conditions across the globe, metal prices continued to rise until the end of
April 2010. However, global economic tremors from default risks in the PIIGS economies (Portugal, Italy, Ireland, Greece
and Spain have collectively been termed ‘PIIGS’ by the financial media), led to a correction of more than 15% in metal
prices in May 2010 and prices have stagnated at low levels, with negligible recovery since then. Iron ore prices, which
have outperformed other industrial metals over the last 3 months, were the most impacted, with spot rates falling by more
than 25% from the historically high level in April 2010 to a current level of approximately USD150 per ton. Packages
announced to shore up the Eurozone have failed to lift metal prices. Overall, metals prices have suffered a net loss over
the last 3 months.

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Exhibit 2: Base metal prices since our last report (USD/tonne)
5,600
6,160
6,720
7,280
7,840
8,400
1,600
1,800
2,000
2,200
2,400
2,600
1/3/10 1/4/10 1/5/10 1/6/10
Copper
Aluminium
Aluminium Copper
Source: Bloomberg
Despite the rising metal prices of the earlier period, capital raising activity by metal players remained subdued, as
investors shied away from pure natural resource plays. Russian aluminium giant Rusal’s poor performance on the
secondary markets dealt a blow to potential public offerings by other metals companies. Those firms which did test the
market – like metal processing and servicing companies Metals USA and Ryerson Holding - did not have much success;
Ryerson was forced to cancel its IPO due to poor market response, and investors in Metals USA’s IPO are sitting on a
notional loss of more than 25%. With a sovereign default crisis looming in the European economy, mining giants
including Severstal and Companhia Siderurgica Nacional (CSN) could be forced to delay the planned flotation of non-
core assets. Meanwhile, Brazilian iron ore exploration company Ferrous Resources’ planned USD600 mn IPO on the
London Stock Exchange, previously scheduled to be launched in June 2010, has been deferred indefinitely. Although
government owned Indian mining giant NMDC Ltd was able to raise approximately INR99 bn (USD2.15 bn) from the
market, this was only achieved with the help of government owned financial institutions. A 10% equity divestment in
Hindustan Copper Limited by the Indian government, which is expected to raise up to USD1 bn, is also expected to be
the prime investment activity in the metals universe in 3Q 10. Nevertheless some smaller exploration companies have
successfully raised capital. Notably, exploration company Bellzone Mining plc not only raised GBP33.6 mn in its AIM
listing, but has also signed a binding agreement with China International Fund Limited (CIF) to fund the entire
infrastructure for its iron ore mine in Guinea – offering some hope to others looking to tap markets for new funding.
While investors are avoiding making capital commitments to metals companies, internal churning within the industry
continues as players continue to realign their asset bases. 21 M&A deals of above USD50 mn, totalling USD5.9 bn, were
completed in 1Q 10. 2Q 10’s M&A calendar has so far been dominated by the USD1.34 bn acquisition of Anglo American
plc's zinc assets by Hindustan Zinc Limited (a Vedanta Group company), which has become the world’s largest zinc
producer, controlling over 11% of global zinc supply.
Outlook
Despite medium term concerns over liquidity tightening measures and credit default risk in eurozone economies, our long
term outlook for base metals remains unchanged. Over the medium term, we maintain a neutral outlook for aluminium
and copper prices with a negative bias, as a worsening of the financial crisis in Europe could trigger moderate downside
pressure from current levels. Demand supply dynamics also provide further downside scope, as high inventory levels
and a potential increase in supply from mothballed production facilities could restrict the positive impact of economic
recovery on demand growth. Over the long term, we remain bullish on prospects for aluminium, as we anticipate the auto
and construction industries' preference for aluminium to increase over other metals, particularly steel. Excess demand
due to the substitution of steel along with the expected gradual phasing out of high-cost production plants will tighten
demand-supply dynamics and boost aluminium prices in the long term. While we continue to expect a high-value, low-
volume demand scenario for copper to restrict upside potential, its limited availability and a high industry concentration
ratio guard against the possibility of any abrupt fall in prices. On balance, we expect copper prices to stagnate at current
levels over the long term.

Commodities
21-06-10
Page 11
With the European sovereign debt crisis pressuring regional governments to quickly adopt austerity measures and
unwind stimulus measures, medium term demand fundamentals for steel are at risk. While demand may moderate due to
fiscal tightening, fragmentation in the steel industry will hinder steel companies’ efforts to effectively limit supply.
Therefore, our short to medium steel price outlook is moderated from neutral to bearish. Our long term view on steel
remains negative due to the expected gradual shift in a number of industrial processes away from steel towards
substitutes such as aluminium and synthetic materials. With the accuracy of our earlier medium term bullish stance on
iron ore prices confirmed by the 70% increase in annually-negotiated contract rates in April 2010 between iron ore
miners and steel producers, we now believe that iron ore prices have raced ahead of their fundamentals, and that
moderation in steel demand will lead to a significant correction in iron ore prices over coming months. After the
correction, iron ore prices are expected to remain at lower than current levels over the longer term in line with our outlook
on steel prices.
2.5. Gold and other precious metals & minerals
After stagnating for most of 1Q 10, the sheen on gold prices returned in April 2010 and the metal resumed its upward
streak. This was largely a result of the return of investors' fears on economic stability, specifically in the Eurozone, and
the impact of developments in Greece on the long term viability of the euro. With ratings downgrades by credit agencies
including Standard & Poor’s and Moody’s, yields on ten-year Greek notes increased from 6.5% in March 2010 to above
12% by mid May, before moderating to current levels of 9.0-9.5% after a rescue package was agreed by the European
Union and the IMF. A pattern, similar in direction but milder in scale, was also visible in securities issues by other PIIGS
economies. Sovereign default risk in these economies has halted the euro’s progress towards establishment as the
global currency reserve. The euro has fallen approximately 10% against the US dollar since March. With the US dollar
itself under pressure as a result of an unprecedented surge in the US monetary base, a realignment of investment
portfolios from financial to haven status assets like precious metals has taken place. Gold, along with silver and platinum,
has been the prime beneficiary of such a shift.
Exhibit 3: Change in precious metal prices since our last report (USD/oz)
1,000
1,060
1,120
1,180
1,240
1,300
14.0
15.2
16.4
17.6
18.8
20.0
1/3/10 1/4/10 1/5/10 1/6/10
Gold
Silver
Silver Gold
Source: Bloomberg
With the exception of the flotation of African Barrick Gold Ltd. (ABG), the African unit of the world’s largest gold mining
company Barrick Gold, transaction activity at the larger end of the precious metals sector has remained muted since our
last report. Although ABG’s USD882 mn public offering met with an initial lukewarm response from investors in the
context of weak market conditions, its performance has been decent since listing, with initial investors earning more than
10% returns from their investment in the IPO. This compares with negative returns generated by benchmark indices over
the same period. The company’s inclusion in the FTSE 100 further sweetens the deal for investors. We expect turmoil in
Europe to severely impact the capital raising plans of gold mining companies in 2H 10. Nevertheless, various mining
majors, primarily Russian, including oligarch Viktor Vekselberg’s mining assets, OAO Severstal, and diamond giant

Commodities
21-06-10
Page 12
Alrosa Company Ltd. are aiming to raise capital by carving out their gold mining operations into separate entities. A
number of smaller exploration companies in China and Australia also intend to tap the IPO route to fund exploration
activities, with Mungana Goldmines Ltd. already raising USD71 mn from its listing on the Australian Stock Exchange in
June 2010.
Outlook
Medium term prospects for gold and other precious metals appear favourable as financial crisis amongst developed
economies, particularly in Europe, re-emerges. With fears over the sustainability of the euro and US dollar as reserve
currencies, we expect countries with trade surpluses to look to precious metals as a haven. Gold prices are set to gain
most from this capital reallocation in the short-to-medium term, which is also likely to lift other precious metals. However,
silver prices have already appreciated by approximately 10% over the period under review, in line with our expectations.
At this stage, our view is that the upside potential for silver prices is largely exhausted. We therefore moderate our silver
outlook from positive to neutral with a positive bias.
Although we maintain our bullish stance on gold and other precious metals & minerals over the medium term, we believe
the long term conclusions offered in our initiation report hold good. Despite the resurgence of financial crisis, we continue
to believe that prices for gold and other precious metals have moved well ahead of their fundamentals. Therefore, we
forecast a slide in prices once demand from portfolio reallocation peters out; a trend which may be brought forward if
major central banks begin to hike interest rates in an attempt to stem inflation, attracting capital away from precious
metals.

Straight plc (STT: AIM)
Sector: General Industrials
25-11-2009
Appendix – Profiles of Commodities companies listed on London Stock Exchange/AIM

Commodities
21-06-10
Page 14
Methodology of company selection
We have defined the Commodities sector to include the primary energy commodities and the metals group, and have
excluded agricultural commodities and commodity chemicals for the purposes of the main report. We have adopted the
following criteria to arrive at the list of companies profiled in this report:
− Our universe includes commodities companies traded on the London Stock Exchange/AIM in the Oil & Gas
Producers, Oil Equipment, Services & Distribution, Mining, and Industrial Metals & Mining sectors.
− As exploration & development companies are a key focus area, we did not apply a revenue minimum in selecting the
companies to be profiled, as many of these companies are at early stages of the exploration process and are yet to
generate revenues.
− We then considered the following factors to arrive at the final shortlist:
(a) Near-equal representation by the constituent industries within the selected groups.
(b) Market cap range of GBP1 mn – GBP160 mn.
(c) Ideally, a free float of at least 25% of total outstanding shares.
(d) Limited current analyst coverage.
Consequently, we have covered the following 31 companies in our report. following comprehensive interaction with the
majority of the companies' management.
Companies profiled in the report
Arian Silver Corporation Green Dragon Gas Ltd. Orosur Mining Inc.
Aurelian Oil & Gas plc* Gulfsands Petroleum plc Petro Matad Limited
Chaarat Gold Holdings Ltd. Herencia Resources plc Providence Resources plc
EMED Mining plc Maple Energy plc* Sirius Exploration plc*
Emerging Metals Ltd*. Max Petroleum plc* Stratex International plc
Empyrean Energy plc Metals Exploration plc* Strategic Natural Resources plc*
European Nickel plc Minco plc Toledo Mining Corporation plc*
Finders Resources Limited Minera IRL Uranium Resources plc*
Forte Energy NL* Nighthawk Energy Velosi Ltd.*
Fortune Oil Plc Norseman Gold plc Xtract Energy plc*
Getech Group plc
* We did not receive input from company management on the updated company profiles.

Arian Silver Corporation (AGQ: AIM)
Sector: Mining
Sub-sector: Platinum & Precious Metals
21-06-10
Page 15
Company description
Arian Silver Corporation (Arian Silver) is a silver exploration and
development company with a focus on ‘brownfield’ projects in
Mexico, enabling access to considerable ready infrastructure
and additional resource areas. It owns/has rights/options on 33
mining concessions and currently has 2 major projects:
– San Jose project (100% ownership and 2% NSR):
Located in Zacatecas, the project is spread over nearly
6,500 hectares (Ha) and comprises 11 concessions. After an
independent preliminary scoping study, Arian Silver
identified 7 mining blocks, but will only use 3, which are
expected to sustain an approximate 4yr lifespan using
contract mining & milling, and to yield 125,000 tonnes per
year. The company expects 500,000 tonnes of production
from the 3 blocks at San Jose to yield about 2.15 mn oz
(Moz) of silver, 1,800 tonnes of lead and 3,100 tonnes of
zinc over the 4yr lifespan. As of September 2009, the
company had identified JORC and/or NI 43-101 compliant
inferred resources of 11.2 Mt grading 93.8 grams per tonne
(g/t) silver, 0.39% lead and 0.83% zinc and indicated
resources of 2.2 Mt grading 127.7 g/t silver, 0.51% lead and
0.88% zinc at the property. It identifies that these resources
are contained within only 10% of the known strike length of
the San Jose Vein within the property, and anticipates a
probable significant upside within the remaining 90+% of the
Vein. The company stated that a recent batch of assays from
the project revealed encouraging high-grade drill hole
results. These include 2.35 m containing 834 g/t silver, 2 m
containing 822 g/t silver and 3.05 m containing 602 g/t silver.
The company has entered a contract for initial mining and
expects the project to go into production before the end of
June. Subject to the results of a feasibility study expected to
be undertaken concurrent with the contract mining, the
company anticipates full-scale commercial mining by the end
of the 4th year of contract mining. The revenue generated
from the initial relatively small-scale contract mining
operation, forecast to occur within 6 months of the start of
production, will be used for further exploration, including
drilling on current resource blocks and to partly finance a
feasibility study to evaluate larger-scale commercial mining
on the San Jose property.
– Calicanto project (100% ownership and 3% NSR): This
project, located in Zacatecas, covers 75.5 Ha and consists of
7 contiguous concessions. Management has not yet
identified any JORC / NI 43-101 compliant resources at the
project but expects it to yield more than 25-50 Moz of silver,
plus gold and base metals.
Exhibit 1: Key financials
All figures in USD '000, unless
specified FY 2008A FY 2009A
FY 2008-09
(%change)
Revenues 0 0 N/A
Operating income (3,720) (2,068) 44.4%
Net income (3,689) (2,068) 43.9%
Fully diluted EPS (USD) (0.03) (0.01) 66.7%
Net cash 753 101 (86.6%)
P/E N/A N/A N/A
Source: Company data
342,346
1M 3M 12M
(18.2) 44.0 117.9
FTSE AIM ALL Share Index (3.0) (1.1) 27.9
Name Capital
12.7%
4.4%
82.9%
100.0%
AGQ
Grant Thornton UK LLP
Haywood Securities (UK) Ltd
National Westminster Bank Plc
PKF (UK) LLP
DOR:
Source: Company data, Bloomberg
Principal area of operations:
Country of incorporation: British Virgin Islands
Mexico
Somatish Banerji
Analyst:
Managing analyst:
Company website: www.ariansilver.com
Debaraj Roy
Lawyers: Charles Russell LLP
Management
Others
Total shares
ISIN number:
Bankers:
Auditors:
Nominated advisor:
Broker:
Last-12-month average daily trading
volume (AIM)
GBP21.27 mn
Sprott Asset Management LLP
Capitalization
Market capitalization
Major shareholders
AGQ
12-month price volume performance
N/ANet debt / equity
Dividend yield
52-week range
Shares outstanding 236.3 million (mn)
GBp2.63-GBp13.00
Company data
Stock data as of 16-06-10
Price GBp9.00
Satish Betadpur, CFA
N/A
Enterprise value
Price performance (%)
GBP22.78 mn
Head Office location:
TIDM code:
VGG0472G1063
United Kingdom
0
600
1,200
1,800
2,400
3,000
3,600
4,200
4,800
0
2
4
6
8
10
12
14
J J A S O N D J F M A M J
Volume(thousands)
Stockprice(GBp)
Stock Price Volume

Arian Silver Corporation (AGQ: AIM)
Sector: Mining
Sub-sector: Platinum & Precious Metals
21-06-10
Page 16
SWOT
Strengths Weaknesses
JORC / NI 43-101 compliant resources
– Estimated indicated and inferred resources of 80 Moz silver-
equivalent at San Jose, based on 43 Moz silver, 120 Mlbs of
lead and 250 Mlbs of zinc. The project is expected to start
production by the end of June following recent encouraging
high-grade drill hole assay results.
Strong concession portfolio
– The company owns/has rights/options on 33 mining
concessions spread over 7,847.8 hectares.
Experienced Management team
– The company has a strong Management team, with the CEO
having more than 25 years of international mining and
exploration experience and the Chairman having more than
35 years’ international mining industry experience.
Advantages offered by brownfield projects
– The strategy of using previously mined sites offers the
advantage of ready infrastructure and knowledge of probable
resource locations.
No measured resources or proven reserves yet
– The company has not yet identified any reserves or
measured resources, recognition of which is highly valued by
the market.
Cash generation delayed
– Lack of funds resulted in no meaningful work being carried
out between April 2009 and Jan 2010, in all projects including
San Jose, where production in the 3 identified blocks was
due to begin in 4Q 09, delaying prospective cash generation.
Limited operational history
– The company has not produced any revenue to date.
Success of the company depends on discovery of new silver
deposits and development of new and existing deposits.
Significant capital investment would be required for
exploration at the concessions and to achieve commercial
production. However, it is uncertain whether the company will
be able to raise the required funds in the future to continue
these activities.
Opportunities Threats
Production commencement by the end of 2Q 10
– Commencement of commercial production by the end of 2Q
10 will move the company into a cash generation phase.
Improvement in liquidity conditions
– The company has taken various measures including
optioning its Tepal property, unravelling the bulk of the
Grafton transaction and raising CAD3.5 mn in January 2010
though a private placement. All these measures have eased
liquidity conditions and provide leeway for the company to
carry on with its core activities, accelerating efforts towards
commercial mining.
Resources, the potential cash generators
– Resources and reserves act as potential cash generators as
they attract investors. The company can also generate cash
by selling the final product or its concessions.
Delays in production plans would constrain liquidity
– Any delay in plans to commercialize production would
negatively impact the liquidity position and operations of the
company.
Decline in metal (silver) prices may hamper operations
– The company's production plans are dependent on metal
prices as Management expects to support production with
internal accruals. As a result, the company's operations are
dependent on metals prices and any decline in prices may
hamper production plans and, in turn, operations.
Change in government taxation and environment policies
– Any tightening of government taxation policy or
environmental regulation could have a significant negative
impact on operations.
Key recent news
27 May 2010: The company announced its 1Q 10 results. Net loss narrowed from USD0.48 mn a year ago to USD0.37
mn. As of 31 March 2010, working capital was USD4.1 mn, with cash of USD2.1 mn.
21 April 2010: The company announced encouraging high-grade drill hole assay results. These results show 2.35 m
containing 834 g/t silver, 2 m containing 822 g/t silver and 3.05 m containing 602 g/t silver. The company stated that it
has agreed a contract for initial mining and expects the project to go into production before the end of June 2010.
Management
Jim Williams, Chief Executive Officer: A professional geologist with more than 25 years’ international mining and
exploration experience and a fellow of UK IMMM (FIMMM). Holds a CEng and a CGeol, and is a Eur. Ing. and Eur. Geol.
Tony Williams, Chairman: He has more than 35 years’ experience in the international mining and investment banking
industries.
The company has reviewed a draft of this profile and factual amendments have been made

Aurelian Oil & Gas plc (AUL: AIM)
Sector: Oil & Gas Producers
Sub-sector: Exploration & Production
21-06-10
Page 17
Company description
Founded in 2002, Aurelian Oil & Gas plc (AUL) is an exploration
and production company focused on central European
countries, including Bulgaria, Poland, Romania and Slovakia. In
total, it has 17 licenses with a bias towards exploration and
appraisal activities, targeting a range of proven plays in
established, yet underexplored, hydrocarbon provinces.
– Poland: Aurelian’s main asset is its 90% working interest in
the large undeveloped Siekierki tight gas field in the Permian
Basin in Central/Western Poland. Contingent resources are
estimated at 346 bcf (Aurelian’s share) and full-field
development is expected to commence in 2013. AUR has a
large position in the Carpathian Thrust fold belt in Southern
Poland, where it is targeting conventional oil and gas
prospects using 2D seismic, which has not been applied to
any great extent in this region previously.
– Slovakia: Aurelian holds three adjacent blocks in Slovakia
with a 50% working interest in each. These blocks are in the
Carpathians and contiguous with Aurelian’s blocks in
Southern Poland. The blocks exhibit a number of surface oil
seeps and an exploration well is scheduled to be started in
2011.
– Bulgaria: Aurelian holds interests in Golitza blocks in
Bulgaria, operated by JKX Oil & Gas. Work by the previous
block owner identified two deep plays, a deep Mesozoic play
occupying most of B-Golitza and a shallower tertiary gas
play extending along the Black Sea coast. The latter is the
same play as Melrose Resources’ offshore Galata field
(producing for many years).
– Romania: Aurelian holds five licenses in Romania and
operates all of its acreage. The Bilca Production Area is
currently the only producing asset.
– Competition: There are many competitors within the oil &
gas E&P industry. Aurelian believes it has a distinct
competitive advantage due to its internal technical team,
astute knowledge of its acreage, long-standing reputation
within its countries of operation and large volume of
development and exploration resources.
Exhibit1: Key financials
All figures in USD '000,
unless specified FY 2008A FY 2009A
FY 2008-09
(%change)
Revenues 2,720 4,150 52.6%
Operating income (9,620) (970) 89.9%
Net income (6,490) (60) 99.1%
Diluted income per
share (USD)
(0.05) 0.00 100.0%
Net cash 8,400 20,050 138.7%
P/E N/A N/A N/A
1M 3M 12M
11.4 12.2 191.2
(3.0) (1.1) 27.9
Name Capital
Lord Sainsbury 12.9%
Kulczyk Investment 10.1%
Palo Alto Investors 7.7%
Other 69.3%
Total Shares
AUL
Ambrian Partners Limited
Oriel Securities Limited
HSBC
BDO Stoy Hayw ard LLP
Auditors:
Ambrian Partners Limited
ISIN number:
100.0%
GB00B15S8C31
Country of incorporation: GB
Law yers:
London
Bankers:
Broker:
Nominated advisor:
TIDM code:
Capitalization
Company data
Price GBp41.5
52-w eek range
Shares outstanding
Dividend yield N/A
Last-12-month average daily
trading volume (AIM)
1,179,747
GBp13.3 - GBp49.3
339.5 million (mn)
Market capitalization GBP140.9 mn
Enterprise value GBP140.9 mn
Net debt / equity 2.8%
AUL
Major shareholders
FTSE AIM ALL Share
Principal area of operations: Central Europe
Company w ebsite: w w w .aurelianoil.com
Analyst(s):
DOR: Jim Kelleher, CFA
William Selesky
0
5,000
10,000
15,000
20,000
25,000
0
10
20
30
40
50
J J A S O N D J F M A J
Volume(thousands)
Stockprice(GBp)
Stock Price Volume

Aurelian Oil & Gas plc (AUL: AIM)
Sector: Oil & Gas Producers
Sub-sector: Exploration & Production
21-06-10
Page 18
SWOT
Attractive portfolio of acreage
– The company’s 17 licenses are located in the proven
hydrocarbon regions of Poland, Romania, Bulgaria and
Slovakia, all EU countries with strong rules of law. AUL
believes its existing substantial land/license position enables
it to benefit as a “first-mover” in those regions.
Low royalty and tax payments
– Within the company’s core areas of operation, gross profit
potential remains substantial as royalty and corporate tax
payments to respective local governments are significantly
lower versus fiscal regimes in other regions.
Technical expertise
– A seasoned and well-developed technical staff provides
internal core competencies.
Company size
– AUL is a relatively small oil and gas exploration & production
company – and has approximately two years of
developmental growth before meaningful production growth is
realized.
Additional requirements for capital
– Additional financing may be required in the future for Aurelian
to fully exploit its large portfolio of opportunities and fund
expansion. Aurelian currently believes it has sufficient funding
to complete its program through the end of 2011.
Permian basin
– AUL plans to benefit from the advantages of being a “first-
mover” in Poland and Central Europe by using horizontal
drilling and fraccing, two techniques uncommon in the region
in which they are operating. This might allow AUL to build a
reputation as an “industry expert.”
Conventional exploration & production
– “First-mover” advantage also exists for the application of 2D
seismic technology, a technique which allows companies to
find oil and gas opportunities at deeper depths.
Technical risk of Siekierki
– The Rotliegendes tight gas project makes up a significant
portion of the portfolio value -- and while AUL plans to utilize
tight gas technologies, drilling and fraccing a well is
technically challenging.
Resource estimates
– Oil and gas reserves, contingent resources, prospective
resources and prospects and forward-looking estimates are
inherently uncertain.
Retention of key personnel
– AUL relies on a team of highly skilled people and will have to
manage carefully to retain them.
Key recent news
7 June 2010: Announced an update on Romania operations. The Chimauti-1 well encountered a gas-bearing reservoir
in the Suceava Block, providing approximately 2 bcf of gas reserves and increasing production by about 18%.
18 May 2010: Announced that company Chairman, John Conlin had purchased 50,000 shares of company stock.
Management
Michael D.Seymour, Exploration Director/President. Seymour is the founder of Aurelian Oil & Gas plc and is a trained
geologist with more than 40 years’ experience in the oil industry.
Rowen Bainbridge, Chief Executive Officer. Rowen joined Aurelian in July 2009 as the new CEO and has more than 22
years of international experience leading, delivering and executing projects in the Energy sector.
Mark Reid, Chief Financial Officer. Reid joined Aurelian in September 2009 as the new CFO and has more than 20 years
of experience in investment banking and financial services.

Chaarat Gold Holdings Ltd (CGH: AIM)
Sector: Mining
Sub-sector: Gold Mining
21-06-10
Page 19
Company description
Chaarat Gold Holdings (CGH) is engaged in the exploration and
development of gold in the western part of the Kryrgyz Republic.
The company explores and develops the Chaarat license area,
604 square miles located in the mountainous area of the
Sandalash River valley, on the western border of Kyrgyzstan.
The company has a 100% interest in the exploration license
area. The company was listed on London’s Alternative
Investment Market (AIM) on 8 November 2007.
– Three Project Areas: There are three known areas of gold
occurrences or “clusters.” They are Chaarat, Minteke and
Kashkasu. The Chaarat Gold Project is the only area in
which extensive prospecting has been conducted. The
Chaarat Project is located at the central part of the
Sandalash License Area and sericiticaly altered sulphide-rich
lodes occur in three mineralized zones: the Main Zone, the
Contact Zone and the Tukkubash Zone.
– Exploration: The company is in its sixth exploration season
for the Chaarat project. By the end of the 2009 season, a
total of 218 diamond drill holes were completed for a total of
46,401 m drilled; 8,505 m of prospecting trenches were
excavated. During 2009, considerable progress was made
on the prefeasibility study, which is expected to be
completed during the third quarter of 2010. CGH has not yet
started exploration with the Minteke and Kashkasu projects.
– The License: Chaarat Gold has a two-year license with the
State Agency of Geology and Mineral Resources (SGMR).
The license gives The Chaarat Group exclusive rights to
conduct geological prospecting and exploration for
commodities including gold and other metals in the 605 sq
km license area. This license was issued in December 2002
and most recently was renewed until December 2010. The
company is then entitled to apply for a further license period
of two years, or until 2012.
FY 2008-09
(%change)
Revenues 0 0 N/A
Net income (11,363) (7,429) 34.6%
Diluted income per
share (USD)
(0.2) (0.1) 48.0%
Net cash 1,375 6,812 395.4%
P/E N/A N/A N/A
1M 3M 12M
8.8 (22.0) 117.5
(3.0) (1.1) 27.9
Name Capital
China Nonferrous 19.9%
Mada Limited 10.2%
Vetan Investments Limited 7.9%
Other 62.0%
Total Shares
CGH
Mirabaud Securities LLP
Banker Royal Bank of Scotland International
PKF UK LLP
Geneva, Sw itzerland
Auditors:
ISIN number:
100.0%
VGG203461055
Country of incorporation: VG
Broker:
Nominated advisor:
Law yers: Watson, Farley & Williams LLP
Westhouse Securities LLP
TIDM code:
Capitalization
Company data
Price GBp43.5
52-w eek range GBp18.8 - GBp60.8
Shares outstanding
Dividend yield N/A
237,695
112.9 million (mn)
Net debt / equity N/A
CGH
Major shareholders
FTSE AIM ALL Share
Principal area of operations: Kyrgyz Republic
Company w ebsite: w w w .chaarat.com
Analyst(s):
DOR: James Kelleher, CFA
Erin Smith, CFA
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
0
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20
30
40
50
60
70
Volume(thousands)
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Stock Price Volume

Chaarat Gold Holdings Ltd (CGH: AIM)
Sector: Mining
21-06-10
Page 20
SWOT
License and geographic area
– CGH’s exploration area is situated within the Tien Shan gold
belt, one of the most-prolific gold producing areas in the
world. The company’s license grants exclusive rights for
CGH to explore this underdeveloped area for gold and
metals.
Independent study
– A recent independent study by SRK of Johannesburg
confirmed there is considerable potential mining opportunity
in certain regions of the Chaarat Project. In 2010 the
company announced that its Chaarat Gold Project area has a
JORC compliant mineral resource of 4 Moz at a grade of
4.14 g/t gold.
Continued net loss
– The company reported a net loss per share in both 2008 and
2009. Although the loss narrowed, CGH’s income will likely
remain weak as anticipated revenue from antimony is not
likely to materialize to cover exploration and administrative
expenses.
License expiration
– The company has had a license from the State Agency of
Geology and Mineral Resources since 2002. The company
recently renewed its license, which was to expire in
December 2010, for another two years, until 31 December
2012. However, after December 2012, Chaarat cannot
extend its exploration license and must apply for a mining
license.
The Chaarat Gold Project
– This is the only project with extensive exploration activity.
CGH is currently conducting a pre-feasibility study, but
expects initial gold production of over 200,000 ounces per
annum by 2013.
The Minteke & Kashkasu Projects
– There are future exploration and mining opportunities from
these projects. Previous prospecting found pyrite,
chalcopyrite and stibnite in the Minteke region and gold
mineralization in the Kashkasu region.
Economic & political challenges
– Recent political upheaval in the Kyrgyz Republic has given
rise to uncertainty, but has not yet impacted CGH’s
operations. Economic weakness in 2008 resulted in
depressed share levels in late 2008 and into 2009.
Weather
– Exploration activity can be stalled by poor weather. Typically,
there is less exploration activity during the first months of the
year due to weather.
Key recent news
01 June 2010: Chaarat announced that the company renewed its exploration license agreement for its 100% owned
Chaarat project until 31 December 2012. The previous contract was set to expire on 11 December 2010. The license
has been renewed on four separate occasions since 2002.
21 May 2010: Announced preliminary results for the fiscal year ended 31 December 2009. During 2009, 5,357 m in 25
drill holes and 206 m of adits were completed. The loss per share narrowed to USD0.0822 in 2009 compared to a loss
of USD0.1581 in 2008. CGH ended the year with USD6.8 mn cash compared to USD1.4 mn in 2008.
17 May 2010: CGH gave an update on the Pre Feasibility Study at the Chaarat Project. The findings show that there is
potential of implementing an initial, high-grade, low-cost open pit mine within the project area in the Tulkubash zone.
CGH noted that the area currently has a JORC compliant resource of 336,000 oz at a grade of 4.18 g/t Au. CGH also
announced that the study is on track for completion in 3Q 10.
Management
Christopher David Palmer-Tomkinson, Non-Executive Chairman: From 1963, he worked at Cazenove, serving as Partner
from 1972 until 2001 and as Managing Director of Corporate Finance until May 2002. He was a Director of Highland
Gold Mining Limited from 2002-2008.
Dekel Golan, Chief Executive Officer: Previously, he served as President of Apex Asia LDC, a subsidiary of Apex Silver
Mines Limited. He has extensive experience in promoting and developing businesses in both emerging economies as
well as the developed world.
The company has reviewed this profile and factual amendments have been made.

EMED Mining Public Ltd (EMED: AIM)
Sector: Mining
21-06-10
Page 21
Company description
EMED Mining Public Ltd (“EMED”) is a Cyprus-based company
engaged in exploration and development of natural resources,
with a focus on copper and gold. With its operational base in
Spain, EMED’s operations span across Europe and the Middle
East region. After being listed on AIM in May 2005, EMED
changed its name from Eastern Mediterranean Resources
Public Ltd to EMED Mining Public Ltd in September 2006.
While EMED’s ongoing exploration projects are in Cyprus,
Georgia, Spain and Slovakia, its core focus projects are - Rio
Tinto Mine in Spain and Biely Vrch Prospect in Slovakia.
Additionally, EMED holds a 25% stake in AIM-listed KEFI
Minerals which explores for gold and copper in Turkey and
Saudi Arabia.
Rio Tinto Mine Project: Owned (100%) by EMED, Rio Tinto
Mine in Spain is an established open-pit mine, with a copper-
concentrator plant and other infrastructure. The mine offers an
opportunity to bring a large copper mine into production at a
relatively low acquisition and start-up costs. EMED is well
advanced on the process with the regulatory authorities for
securing permission to initiate production activities at the mine
and expects the commissioning to start by the end of 2011.
The mine comprises ore reserves with 585,000 tonnes of
contained copper and mineral resources with 940,000 tonnes of
contained copper. In relation to marketing and financing of the
mine development, EMED has engaged MRI Trading and
Goldman Sachs in 2009.
Biely Vrch Project: EMED’s 100%-owned licence area
(695ksq km) in central Slovakia for Biely Vrch porphyry,
contains JORC Code-compliant mineral resource estimated to
be 41.7 million tonnes at 0.79g/t gold, containing 1.1 mn oz of
gold. EMED is currently looking to advance the project design
and permitting process for Biely Vrch, leading to development
and production.
Copper exploration in Cyprus: EMED’s 95%-owned project
owns the largest portfolio of exploration licences (for copper and
zinc) in Cyprus. The JORC compliant estimates put the project’s
Inferred resources at 4.5 Mt at 0.41% copper and 0.74% zinc in
Klirou, and at 2.1 Mt at 0.95% zinc in South Mathiatis. EMED
plans to restart its exploration activities in Cyprus once the Rio
Tinto Mine becomes operational.
Gold exploration in Georgia: EMED’s 100%-owned project in
Georgia has large Russian gold resources. However, the
company suspended exploration activities at the project due to
its other priorities and the then un-viable political situation in
Georgia.
All figures in EUR'000,
FY 2008-09
(%change)
Revenues 0 0 N/A
Net income (16,605) (9,561) 42.4%
Fully diluted EPS (c) (8.00) (3.00) 62.5%
Net cash (1,298) (3,315) (155.4%)
P/E N/A N/A N/A
1M 3M 12M
(17.9) (28.9) 12.2
Name Capital
11.0%
4.0%
7.0%
78.0%
EMED
RFC Corporate Finance
Broker: Fox-Davies Capital Limited
Bankers:
Auditors: Moore Stephens International Ltd
Lawyers:
DOR:
Source: Company data, Bloomberg, Pipal Research
425.9 million (mn)
985,248
GBp6.38-GBp15.75
Nominated advisor:
0.29
volume (AIM)
52-week range
EMED
TIDM code:
ISIN number:
RMB Australia Holdings Limited
Others
Resource Capital Funds
MRI Group
CY0000100319
Company data
Price GBp8.00
Managing analyst:
Head Office location: Cyprus
www.emed-mining.com
CyprusCountry of incorporation:
Shares outstanding
N/A
Manish Kapoor
Sonia Bakshi
Analyst:
Company website:
Prakash Kamathia
Field Fisher Waterhouse LLP,
Dr. K Chrysostomides & Co
Cyprus, Slovakia, Spain
Net debt / equity
Dividend yield
Total shares
Major shareholders
Capitalization
GBP34.1 mn
100.0%
Laiki Popular Bank Ltd
0
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10,000
15,000
20,000
25,000
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EMED Mining Public Ltd (EMED: AIM)
Sector: Mining
21-06-10
Page 22
SWOT
Large copper resources at the Rio Tinto Mine
– At an average copper price of USD3 per pound, the total
value of Rio Tinto’s 584,900 tonnes of copper reserves is
USD3.9 billion and the value of its 940,200 tonnes of copper
resources is around USD6.2 bn. EMED believes that it has
an opportunity to increase resources and reserves from Rio
Tinto open pit to +300 mn tonnes and +200 mn tonnes,
respectively, in the future.
Well diversified asset base
– Besides the potential to restart copper production quickly at
Rio Tinto Mine in Spain, EMED has over 1 mn oz gold
resources in Slovakia , together with exploration activities in
Cyprus (copper) and Georgia (gold). EMED also holds a 25%
stake in KEFI Minerals, which explores gold and copper in
Turkey and Saudi Arabia. Company is well-positioned to
derive long term value from a diversified portfolio of
commodities across various countries within its regional
focus.
Challenges in arranging financing for its exploration
projects
– Being in the exploration stage with no cash flows, EMED
primarily relies on equity financing for its exploration and
development projects. With the equity and credit markets not
in the best of state, the Group faces the risk of failing to raise
adequate capital, which may hamper the progress of its
exploration activities.
Risk of delay in obtaining permission for restart of Rio Tinto
Mine
– EMED is still expecting regulatory approval for restarting
preparations at Rio Tinto in 4Q 10. There is a risk that the
Spanish authorities may take longer to grant approval than is
anticipated.
– Although, a long list of improvements were announced for the
mine in May 2010, the licensing authorities may not be
satisfied.
Favorable macroeconomics
- Since the depths of the global financial crisis,
macroeconomics have moved in EMED Mining's favor. The
market prices of the gold, have risen strongly by 37% over
the past 12months. Further, the near-term outlook for gold
prices has been further strengthened on the back off the
recent European sovereign crisis. This is likely to improve the
economic viability of EMED’s key projects, including the Biely
Vrch Project. A weaker euro is also good for EMED as the
company has a euro cost base.
Accelerated production at Rio Tinto
– An opportunity exists for plant expansion at Rio Tinto Mine by
increasing the capacity from 9 mn tonnes per annum (Mtpa)
to 15 Mtpa. This would bring revenue forward and result in a
higher net present value of the project.
Expected near-term volatility in copper prices
- After showing indications of an attractive recovery in January
2010, copper prices pulled back somewhat in February.
Though many industry experts hold a positive outlook for
copper in the near-to-medium -term on expectations of a
major global economic upturn, the copper prices may remain
volatile for some time to come. This may impact the
economics of EMED’s copper projects, particularly those in
Cyprus.
Key recent news
15 April 2010: Raised GBP8.3 mn through issuance of 83,571,429 new ordinary shares at an issue price of 10.5p per
share to its existing and new institutional investors, principally in the UK and Canada. The amount raised will be used to
fund the maintenance, planning and permitting process in relation its Rio Tinto project in Spain and finance the mine-
development feasibility, planning and permitting, which EMED is carrying out in Slovakia.
Management
Ronnie Beevor, Non-Executive Chairman: A qualified chartered accountant, Beevor is a former investment banker and
previous head of investment banking at NM Rothschild & Sons (Australia) Ltd. Beevor is also non-executive director of
Bendigo Mining Ltd, Bannerman Resources Ltd and QMAG Ltd, and has extensive involvement in the natural resources
sector.
Aristidis (Harry) Anagnostaras-Adams, Managing director: Adams has over 25 years of senior management experience.
He has earlier served as deputy chairman of the Australian Gold Council and as managing director of Gympie Gold Ltd.
He is a chartered accountant and has a Master of Business Administration from the Australian Graduate School of
Management. He is a fellow of the Australian Institute of Management and the Australian Institute of Company Directors.

Emerging Metals Ltd (EML: AIM)
Sector: Mining
Sub-sector: General Mining
21-06-10
Page 23
Company description
Emerging Metals Limited (EML) is focused on investing in
metals and bulk commodities where there is an anticipated
imbalance in supply and demand.
- Target Metals: The investment metals for which the
company plans to target exposure include all metals other
than base metals (such as copper and lead) and bulk
commodities metals (such as iron, potassium and
aluminium).
- Initial Investment: The company’s initial investment – and
current core holding – has been the Tsumeb Slag Stockpiles
Project in Namibia, where Emerging Metals is working to
potentially extract germanium, zinc and gallium.
- Acquisition plans: In addition to pursuing its strategy of
investing in minor metals and minor metal projects, the
company plans to acquire strategic stakes in publicly traded
companies that have a focus on investment metals.
- Experienced Management: The Directors believe that their
experience in mining, acquisitions, accounting and corporate
and financial management -- together with the opinion of
expert consultants in the evaluation and exploitation of
investment metals opportunities -- will enable the company
to achieve its objectives.
- Successful Diversification: In 2009, Emerging Metals
diversified its exposure by acquiring an interest in a
company, Kalahari Minerals plc, that is focused on the
development of the recently discovered Rossing South
Uranium Project in Namibia. The value of this investment
increased 246% to GBP34.7 mn in the 12 months ending 30
September 2009.
- Divestment: In a two-stage sale, approved by shareholders,
Emerging Metals sold its stake in Kalahari in March and April
2010. The price was GBP185 per Kalahari share, more than
230% higher than the price paid of GBP54.5 per share.
- Special Dividend: Subsequent to the completed sale,
accordingly, the EML Board approved a Special Dividend of
GBP7.13 per share, which was paid on 18 May 2010, to
shareholders of record as of 30 April 2010.
-
All figures in GBP '000,
FY 2008-09
(%change)
Revenues 78 11,057 14,075.6%
Operating income (1,673) 9,739 N/A
Net income (1,499) 10,006 N/A
Diluted income per
share (GBP)
(0.03) 0.03 N/A
Net cash 9,056 3,758 (58.5%)
P/E N/A 245.61 N/A
1M 3M 12M
(6.1) 28.2 58.7
(3.0) (1.1) 27.9
Name Capital
Vidacos Nominees Ltd. 31.2%
Roy Nominees Ltd. 16.4%
HSBC Global Custody 11.0%
Other 41.4%
Total Shares
EML
Religare Capital Markets (UK) Ltd.
Fox-Davies Capital Ltd
KPMG AUDIT
Country of incorporation: VG
Law yers:
Isle of Man
Principal area of operations: Africa
Analyst(s):
DOR: James Kelleher, CFA
John Eade
Company w ebsite: w w w .emergingmetals.com
EML
Major shareholders
TIDM code:
Bankers:
Auditors:
Kerman & Co. LLP, Harney
Westw ood & Riegels LLP
Net debt / equity N/A
Capitalization
Company data
Price GBp2.0
52-w eek range GBp1.1 - GBp5.9
Shares outstanding
Dividend yield N/A
1,483,944
330.8 million (mn)
FTSE AIM ALL Share
Conister Trust
ISIN number:
100.0%
VGG3032P1036
Broker:
Nominated advisor:
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
0
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1
2
2
3
3
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Stockprice(GBp)
Stock Price Volume

Emerging Metals Ltd (EML: AIM)
Sector: Mining
21-06-10
Page 24
SWOT
Management
– Management is developing a track record of delivering value
to shareholders. The company’s recent investment in and
divestment of Kalahari Minerals plc resulted in a 230%-plus
ROI. The Board then declared a special dividend to
shareholders.
Flexibility
– The company has shown the ability to alter its strategy as
industry conditions change. In April 2009, the Board
amended its strategy to allow for a broader range of
investments. The company then purchased a stake in
Kalahari Minerals plc, with a focus on uranium. With the
2010 divestment of the Kalahari stake, the company is now
considered an investment company.
Cash position
– After payment of the special dividend, the company has cash
of approximately USD15 mn. While management contends
that cash can cover current costs, the company does not
have a sizable war chest to make future investments.
Market volatility
– Currency problems in Europe, a projected economic
slowdown in China and a rising dollar have caused metals
prices to fluctuate in 2010.
Change in the executive suite
– CEO Mitch Alland stepped down in the summer of 2009, and
the position is currently filled by two directors. This structure
is not likely to be sustainable over the long term, and the
company will eventually need to recruit and hire a new CEO.
Growth in emerging markets
– The BRIC nations – Brazil, Russia, India and China – are
expected to post GDP growth of 5.3% on average in 2010,
well ahead of expected growth in the 2% range for
industrialized nations. These emerging markets are expected
to have substantial demand for metals.
Attractive asset prices
– Since the onset of the global recession in 2008, prices for
metals have come down sharply, offering management an
opportunity to purchase assets at attractive prices.
Trouble in Tsumeb
– The company’s remaining significant asset is its interest in
the Tsumeb Slag Stockpiles project. EML has been
conducting its own tests to determine the viability of
extracting the metals. But current market conditions have
weakened, and Management now believes that better returns
in metals will be achievable elsewhere. EML is planning to
slow down testing on Tsumeb and may exit the project
altogether.
Emerging market balance sheets
– Historically, emerging market nations have maintained deep
current account and budget deficits, which have threatened
currency levels and long-term economic stability.
Key recent news
16 April 2010: The company held its annual Meeting of Shareholders. Two related resolutions were passed. The first
resolution authorized the company to sell its remaining 8.9 mn Kalahari Minerals plc shares to Nippon Uranium
Resources (Australia) plc at GBP 185. The Board declared a special dividend of GBP7.13 payable on 18 May.
Previously, on 26 March 2010, the company had announced that it disposed of the other 50% of its holding of Kalahari to
Nippon. The other resolution was to approve Emerging Metals’ new investing strategy, which was required under AIM
Rule 15 subsequent to the divestment of the Kalahari investment.
24 December 2009: The company announced its interim results for the six-months ended 30 November 2009. Highlights
included a net profit versus a prior-period loss.
Management
Stephen Roland Dattels, Executive Co-Chairman. Mr. Dattels has founded and/or financed a number of mining ventures
over the past 20-plus years. He recently sold UraMin Inc. to Areva, the French government-owned uranium company.
He also was an executive at Barrick Gold Corp.
James Mellon, Executive Co-Chairman. Mr. Mellon has been a fund manager for 20 years. He is the principal
shareholder of Burnbrae Ltd. and participates in a number of markets, including stock markets of emerging nations. He
is currently co-chairman of Regent Pacific Group Ltd.
Denham Eke, Chief Financial Officer. Mr. Eke has held directorships of numerous companies, principally involved in
equity investments and property ownership, where he has worked to restructure operations.

Empyrean Energy Plc (EME: AIM)
Sector: Oil and Gas Producers
Sub-sector: Exploration and Production
21-06-10
Page 25
Company description
Empyrean Energy Plc (Empyrean) was established with the aim
to identify, analyse and finance rewarding projects in the fields
of exploration, development and production of energy resources
around the world. It is currently focusing on traditional Oil & Gas
sector exploration and production activities in the geopolitically
stable environment of the US. Empyrean currently generates
revenues from oil and gas sales from two of its three prospects
in Texas, US. The company was incorporated in the UK in
March 2005 and was listed on the AIM in July 2005. The
company’s main assets are as follows:
– Sugarloaf Hosston Project (Texas, US): Wells are located
in Blocks A and B. Its original interests in projects in the area
lie between 3% - 9%. Farm-out of half the company's
holdings in Block B has freed Empyrean to focus on other
projects. A total of 5 wells have been drilled on Block A of
the Sugarloaf Hosston prospect, while 3 existing wells have
been successfully re-stimulated. 3 new wells (Easley-1H,
Morgan-1H and Rancho Grande 168-1) have been drilled on
Block B since the farm-out agreement with HilCorp Energy
Company of September 2009.
– Riverbend Project (Texas, US): Empyrean will earn a 10%
working interest in this project from Krescent Energy by
participating in the re-entry, drilling and testing activities in
the Quinn 3-H well. The Riverbend project located in the
Tyler and Jasper counties has an estimated recoverable
reserve potential of 800 bcf of gas equivalent.
– Eagle Oil Pool Development Project (California, US):
Empyrean has a 48.5% working interest in this project.
Following suspension of the Eagle North-1 well, which had
reported a successful drilling attempt, no new wells have
been drilled. However, the company intends to have a new
well drilled as soon as possible on the Eagle prospect.
– Hercules Project (Texas, US): In December 2009,
Empyrean acquired a 10% working interest under a
participation agreement with Krescent Energy, in each of the
Hercules and Aquarius prospects in Tyler County, Texas. It
no longer holds an interest in Aquarius. The Hercules project
has a mean target of 21.4 bn cubic feet of gas equivalent.
All figures in GBP '000,
FY 2009-10
(%change)
Revenues 724 310 (57.2%)
Operating income (1,548) (4,267) (175.6%)
Net income (1,494) (4,266) (185.5%)
Fully diluted EPS (GBp) (2.53) (3.65) (44.3%)
Net cash 291 254 (12.7%)
P/E N/A N/A N/A
1M 3M 12M
12.0 (33.3) 5.6
Name Capital
13.8%
11.1%
9.7%
7.1%
5.3%
Others 53.0%
EME
Astaire Securities Plc
Astaire Securities Plc
N/A
Chapman Davis LLP
DOR:
Bankers:
Halifax Share Dealing (Nominees)
N/A
Nominated advisor:
Broker:
Thomas Kelly (Commercial Director)
Enterprise value
Shares outstanding
Dividend yield
52-week range
TD Waterhouse Nominees (Europe) Ltd.
Capitalization
volume (AIM)
GBP12.76 mn
Kerman & Co LLP
182.2 million (mn)
1,344,942
GBP11.85 mn
Lawyers:
Barclays Stockbrokers Ltd.
www.empyreanenergy.com
Total shares
Major shareholders
Company data
Price GBp7.00
Net debt / equity
Squaregain (Nominees)
100.0%
N/A
GBp24.75-GBp5.38
Ritwik Bhattacharjee
England and WalesCountry of incorporation:
Meera Patil
Company website:
Managing analyst:
Analyst:
US
Australia
EME
TIDM code:
Auditors:
ISIN number: GB00B09G2351
0
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Empyrean Energy Plc (EME: AIM)
Sector: Oil and Gas Producers
Sub-sector: Exploration and Production
21-06-10
Page 26
SWOT
Near term volume visibility
– Two of the four projects located in the US are successfully
producing oil and gas to market and the company expects
volumes to increase with the remaining drilled wells
beginning to generate revenues or being reworked.
Credible reputation with above average success rate
– Empyrean has achieved commercial production from 11 of
the 18 exploratory wells drilled in the last four years. This
translates into a success rate of 61%, which the company
expects to increase to 72%. Empyrean has identified that it
has achieved a 'wildcat' well success rate of 22% while the
industry average is 8.3%.
Unsuccessful development activities have hurt bottom-line
– Unsuccessful E&P attempts at the TCEI JV A-2 and Aquarius
wells and their subsequent abandonment and suspension of
Glantal resulted in bottom-line taking a significant hit in FY
2010. More such failed attempts, with the Riverbend Project
currently held up by the failure of clean up operations for
example, could result in erosion of shareholder value.
A significant portion of assets yet to be monetized
– Of its current 4 projects Empyrean has only been able to
successfully monetize 2 as yet. The timescale of
monetization of other assets is uncertain and is dependent on
proof of commercial viability from production test results.
Industry holds significant growth potential
– The EIA predicts global energy demand to rise by 33% over
2010 - 2030 with oil and gas accounting for nearly one-third
and one-fourth of the world energy supply respectively.
Presence in heavy energy consumer- the US
– Empyrean’s operations are centered in the US, one of the
largest consumers of energy. As of 2007, the US stood 1st in
terms of world oil consumption source: CIA World Factbooks.
Riverbend Project remains encouraging
– Multiple and significant gas flares were encountered during
the drilling of Quinn 3H well in Nov 2009. As the well is
already connected to a pipeline, if the horizontal drill and flow
tests are completed successfully, top-line contribution will
follow shortly. Testing at Quinn-3H commenced in Jan 2010
and while cleanout operations in Feb/Mar 2010 proved
unsuccessful, with a renewed attempt under evaluation, gas
pressures and flow rates encountered remain encouraging.
Volatile commodity demand and price environment could
pose a challenge to capital raising
– Empyrean’s future investments are dependent on sufficient
funding to undertake exploration & development. Raising
funds, either through debt financing or equity, is highly
sensitive to oil prices. Although the company successfully
raised GBP3.6 mn from its April 2010 share placement, which
is a significant boost to its cash resources and ultimately
operational activities, a return to volatility could greatly affect
the company's ability to raise capital in future.
Sector threat from growing demand for renewables
– The EIA estimates that by 2030, global renewable energy
consumption will increase by 63% and form 11% of global
energy supplies, with wind & solar power growing the fastest.
With depleting traditional energy resources and rising fuel
prices, rapid growth in demand for renewable energy could
adversely impact demand & prices of traditional oil resources.
Key recent news
04 June 2010: Empyrean provided the first 30 day total gas production figures for Morgan-1H and Easley-1H, at 109.4
mmscf and 125.9 mmscf respectively, with total condensate production at 38,500 bbls and 12,212 bbls respectively.
01 June 2010: Empyrean announced the spudding of Cartwright No.1 well, targeting as its primary objective the
regionally productive fractured Upper Cretaceous Austin Chalk, with a second objective the Saratoga Formation.
04 May 2010: Empyrean announced that it does not plan to apply for an extension or new permit application for the
Neues Bergland Permit covering the Glantal and Lautertal prospects in Germany, as it intends to focus its efforts on the
American assets, particularly the Sugarloaf project.
14 April 2010: Empyrean announced the raising of an additional GBP2.1 mn through placement of 35 mn new ordinary
shares, taking the total amount raised including the 09 April 2010 placement to GBP3.6 mn.
Management
Tom Kelly, Commercial Director: A corporate finance & investment banking professional with +15 years of experience,
he has been responsible for the financing of listed companies on the ASX and M&As in the Australian corporate sector.
He has been Executive Officer of a West Australian stock broking firm and is a director of Lefroy Resources Ltd.
Frank Brophy, Technical Director: A petroleum geologist with over 44 years experience in exploration, development and
production for companies including Maurel & Prom, Ampolex Ltd, Elf Aquitaine Australia and Peko Oil Ltd. His work has
crossed regions including Australia, Asia, Europe, the US and the Middle East.

European Nickel Plc (ENK: AIM)
Sector: Mining
21-06-10
Page 27
Company description
European Nickel Plc identifies, acquires, develops and exploits
nickel-cobalt deposits internationally. The company has
developed a low cost, heap leach process for the extraction of
nickel from nickel laterites which it plans to commercialise at its
flagship project in Turkey. It also has operations in the
Philippines and Albania. It has just acquired Rusina Mining NL's
entire issued share capital in an equity-based transaction, and is
raising USD19.4 mn. Rusina Is Philippine focused mineral
exploration company with an interest in the Acoje project. The
combined group now has a total attributable resource base of
1.35 Mt of contained nickel, with a medium term nickel
production target of 50,000tpa. 2 key projects are:
Çaldağ project: European Nickel's flagship project in Turkey,
Çaldağ has a JORC proven reserve of 33.2Mt @ 1.13%Ni,
containing 375,160t of contained nickel. The company aims at
256,500t Ni production, over a life span of 14 years, with a
production target of 20,000tpa nickel and 1,000tpa cobalt.
Production is expected to commence 13 months after
construction is completed, around May 2012. Total project costs
are estimated to be USD428 mn. The company has already
invested USD78 mn, and the rest will be financed by a USD350
mn debt facility. The company appointed Société Générale and
UniCredit Bank AG as Initial Mandated Lead Arrangers (IMLAs),
after the prior off-take agreement with Jiangxi Rare Earth and
Rare Metals Tungsten Group Co. Ltd. (JXTC) expired on 17
May 2010. The IMLAs have signed a joint mandate letter and
provided an indicative term sheet to arrange a USD300 mn term
loan facility and USD25 mn overrun facility for the development
of Çaldağ on a best effort basis. The company has recently
announced significant progress in its discussions with western
banks and expects funding to be completed by the end of 2010.
On 14 May 2010, the company announced that one of its
forestry permits for this project had been revoked, and that the
others would be revoked also. However, the Turkish parliament
passed a new mining law on 10 June 2010, resolving the legal
conflict that led to the withdrawal, and it is expected that re-
issuance of its permits will be straightforward.
Acoje Project: This is the next planned heap leach project for
commercialisation, with a JORC indicated reserve of 34.1Mt @
1.09% nickel, amounting to 371,700t of contained nickel. The
company expects to produce 24,500 tpa of nickel with a capital
cost per annual pound of nickel of USD7.84. European Nickel
held a 20% interest, with a right to earn up to 40%, while Rusina
held a 72% interest in the project. Rusina secured an
Environment Compliance Certificate for the project in April 2010.
FY 2008-09
(%change)
Revenues 5,606 0 N/A
Operating income (22,672) (11,677) N/A
Net income (23,336) (14,369) 62.4%
Fully diluted EPS (USD) (0.06) (0.03) 100.0%
Net cash 8,791 1,530 (82.6%)
P/E N/A N/A N/A
1M 3M 12M
(5.4) (13.5) 19.1
Name Capital
15.0%
9.5%
6.0%
6.0%
6.0%
57.5%
100.0%
ENK
Canaccord Adams Ltd.
Broker Canaccord Adams Ltd.
Barclays Bank Plc
PKF International Ltd.
DOR:
Major shareholders
ENK
Citigroup Global Markets
1,682,082
volume
GBP33.64 mn
Net debt / equity
Morton Holdings Inc
Head Office location: United Kingdom
Country of incorporation:
M&G Investment Management Ltd.
Nominated advisor:
Bankers:
United Kingdom
GB0034265404
JP Morgan Asset Management (UK) Ltd.
Fasken Martineau LLP
Others
ISIN number:
TIDM code:
Prashant Gattani
Turkey, Philippines
Ritwik Bhattacharjee
Company data
Price GBp6.15
N/A
Fidelity International Ltd.
Capitalization
Enterprise value
Analyst:
Managing analyst:
Company website: www.enickel.co.uk
Lawyers:
Total shares
Auditors:
GBp12.50-GBp5.25
546.99 million (mn)
Dividend yield
52-week range
Shares outstanding
1.68%
GBP52.19 mn
0
5,000
10,000
15,000
20,000
0
2
4
6
8
10
12
14
Volume(thousands)
Stockprice(GBp)
Stock Price Volume

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