Entering a New Era for Resources in Asia 27 May 2010 Owen Hegarty - - PowerPoint PPT Presentation

Asia Mining Club – Hong Kong Entering a New Era for Resources in Asia

27 May 2010 Owen Hegarty

Executive Vice Chairman G-Resources, Executive Vice Chairman CST Mining Group, Chairman Tigers Realm Minerals, Director Fortescue Metals, Director Range River Gold, Director of the AUSIMM, Member SAMPEG

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Introduction

Minerals supply remains under pressure but Asia has great endowment Hong Kong capital market and the HKEx Minerals demand remains on an upward trajectory Asia’s circle of growth and prosperity Growing world-class businesses: G-Resources, CST Minerals Group & Tigers Realm Minerals

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China remains the major driver of commodities demand with India and others to follow

►World to continue in a long period

• f economic expansion

►China still the main game ►Traditional markets of US, Japan, Europe still important ►But emerging markets including India and Indonesia are the future

Source: IMF;Goldman Sachs; CIA World Fact Book; Macquarie research; ICSG; The Balloch Group; Beijing Traffic Management Bureau

Airports Railways Highways Ports Water Subways 2006 2018 2030 2042

Car Ownership (millions) India China

Car Ownership Projections

300 600 900

GDP real growth rate 2009 by country GDP 2009 and 2050 Forecasts China’s GQ – Growth Quadrella 1. Accelerating consumption from growing middle class 2. A metal intensive stage of economic development 3. Largest urban migration in world history 4. Massive infrastructure development

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Supply- still under pressure

Supply will be running to catch up

• FMG - a great example
• More of them required
• Exploration needs to be encouraged

Asia is uniquely positioned

• Geopolitically
• Technically
• Financially

Some structural challenges

• Physical infrastructure
• Regulatory infrastructure
• Sovereign risk issues

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Copper - Red gold, powering the world

Source: ICSG; Brook Hunt; Citi

4% 15% 41% 51%

Exploration Mining Smelting Consumption Asia World

13,000 15,000 17,000 19,000 21,000 23,000 25,000 27,000

Copper (Kt) Copper Supply / Demand Forecast

Refined Production (Kt) Consumption demand (Kt)

► Whilst copper demand grows rapidly, supply growth remains modest at best and can’t match Asia and the worlds’ needs ► The world needs one new Escondida each year to keep up with demand growth

Asia consumes 51% of world copper production but attracts just 4% of global exploration spend

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Asia – inherent prospectivity

► Although exploration expenditures have grown, the amount of metal found continues to decline ► Inherent endowment for Au & Cu-Au resources in the SE Asia-SW Pacific modern plate margins is among the greatest in the world ► Asia remains substantially underexplored compared to many other regions ► Opportunities are provided by the combination of endowment and relative immaturity of exploration

Expenditures (2009 US$B)

Moz

Source: MinEx Consulting

(E)

Global discovery rates - in this example gold - are falling even as and exploration expenditures rise Asia’s mineral belts are among the world’s most prospective

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Hong Kong Capital Markets and the HKEx

► HKEx now recognised as world IPO capital with US$22.7bn raised via 71 IPOs in the past 12 months ► HKEx is growing at a faster pace than its developed peers ► Hang Seng 5 year growth 97.8% ► Tokyo Stock Exchange (1st section) declined 42.7% in 5 years ► ASX 5 year growth 17.3% ► Major companies like Rusal attracted by unparalleled access to capital ► However only 51 mining companies on the HKEx versus 682 on the ASX ► In November 2009 the HKEx sought responses to a questionnaire on listing rules on eligibility for mining and exploration companies ► Consequent changes to listing rules to take effect on 3 June 2010 ► Significant number of changes to encourage mining and oil and gas companies with regulations similar to ASX and TSX such as requirements for Competent Person's Reports ► However early stage exploration companies are still excluded ► The door has been left ajar with the HKEx saying they may be listed "once the market is more mature”

Hong Kong Stock Exchange - Carefully working towards a world competitive Stock Exchange for mining and exploration companies

Source: Morgan Stanley

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Asia’s circle of growth and prosperity

Demand Capital Prospectivity, people and technology Supply

Hong Kong

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►G-Resources:  Is an Asia/Pacific gold company based and listed in Hong Kong  Owns the Martabe gold and silver project in North Sumatra  Is looking to grow an Asia Pacific focused world class gold company by:

• Building Martabe to time, budget and quality
• Organic growth from increases in Martabe

Reserves and Resources and through discovery on the large Martabe licence area

• Acquisition and development of other quality

projects or producing assets in Asia, Australasia and the Pacific Region

• Leveraging off management’s regional gold

and base metals experience and knowledge  Martabe production commencing 2011 will be 250koz/a gold and 2.5Moz/a silver  Is targeting 1 million ounces per annum gold production within 5 years

G-Resources Overview

Hong Kong Headquarters Martabe Jakarta office Melbourne office

Asia hosts some of the world’s great gold deposits in the Tianshan and SE Asian mineral belts Tianshan Mineral Belt SE Asian Mineral Belt

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►Hong Kong based and listed ►Market capitalisation1 of US$810m / HK$6,300m ►14.1 billion shares on issue ►13 billion shares issued in July 2009 at HK35c raising US$587m to:  Purchase Martabe for US$220m  Complete the project development  Provide funds for exploration and business development ►Cash at end 2009 of US$350 million ►Top 20 shareholders include major international resource funds and Hong Kong and Mainland China institutions and tycoons ►Management have shares and options up to 10% of capital

G-Resources Corporate Overview

Notes: 1. Share price as of 23 May 2010 of HK$ 0.45 and TSO of 14.1Bn

G-Resources (HK1051) Share Price

HK$

Martabe Project Other Potential Gold Projects G-Resources Group Limited

0.2 0.3 0.4 0.5 0.6 0.7 0.8

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►The Martabe Project is a world class gold and silver project located in North Sumatra Province, Indonesia  Discovered some 10 years ago  7.4 million ounces of gold equivalent1 resources  6 known deposits within a 5 x 6km area with Purnama the largest so far  Part of a large-scale mineralised district which has the potential to host further gold and gold-copper deposits ►Fully permitted under a sixth generation Contract of Work ►Excellent location ►Significant value accretion in train

Martabe Overview

Notes: 1. Gold equivalent calculated as 70g/t Ag being equal to 1g/t Au

Barani 660koz Au Purnama- Pit 1 4.5Moz Au, 58.5Moz Ag Ramba Joring / East 1.2Moz Au, 5.2Moz Ag Uluala Hulu 80koz Au Martabe Camp

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► Gold is: a commodity, a currency, a store of value, a hedge against inflation and geopolitical and financial uncertainty ► Supply fundamentals:  Mine production provides majority of gold supply  Declining mine production expected to continue as easy-to- mine and easy-to-process ore is depleted  10-15+ years from discovery to project completion ► Demand fundamentals:  Investment demand the primary driver in 2010 due to inflationary fears and risk aversion  Growing national reserve demand  Jewelry demand increasingly bolstered by consumers in China where demand increased 6% in H1 2009

Strong Gold Price Outlook

Source: Bloomberg as of 4 May 2010

Gold Historical & Forward Price Why Gold? Supply: Declining mine production and discovery rates Demand: China and India underweight gold

Source: GFMS

Tonnes Gold Price US$/oz

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009e

100 200 300 400 500 600 700 800 900 1,000 Total Mine Production Official Sector Sales Scrap Gold Avg Gold Price US$

Source: GFMS; World Gold Council 2Q 2009 Update Source: World Gold Council 3Q 2009

20 40 60 80 China Japan India Australia United Kingdom Switzerland France Germany United States %

Gold - Percentage of Total Foreign Reserves Gold - Tonnes

8,134 3,408 2,435 1,040 310 80 358 765 1,054

1,164 1,196 1,226 1,271 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300

Jan-04 Jun-04 Nov-04 Apr-05 Sep-05 Feb-06 Jul-06 Dec-06 May-07 Oct-07 Mar-08 Aug-08 Jan-09 Jun-09 Nov-09 Apr-10 Sep-10 Feb-11 Jul-11 Dec-11 May-12

Spot Forward

US$ / oz

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CST - Mining Group

► Listed on Hong Kong Stock Exchange (HK0985) ► Current Market capitalisation of ~ US$200M ► Targeting copper production of 250,000t/a in the medium term ► Active acquisition of quality strategic resource projects  Chariot Resources including Macobre Copper Project, Peru  Lady Annie Copper Project, Australia ► Presently raising US$1bn in equity ► Experienced Board and management in resources and corporate finance

Copper Growth Strategy Macobre Copper Project, Peru (70%) Lady Annie Project, Australia (100%) Investments and Cash (including 9% in G-Resources)

Mining Group

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The Year of the Tiger

Thai-TGV Gold Jakarta office Woyla Gold Melbourne HQ Magallanes Coal Indonesian Coal Mongolia Generative Colombia Generative Gold & base metal projects Coal projects

Tigers Realm Minerals Corporate overview

• Melbourne based global resources group
• Tony Manini, CEO
• Unlisted private company
• IPO of coking coal business in late 2010
• Focused on exploration and acquisition of early stage

projects in gold, copper, coking coal and iron ore

Exploration Development Mining

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China’s Investment in Australia is win-win: FMG and Hunan Valin

►Hunan Valin completed acquisition of 17% of FMG for A$644m at $2.48/share ►Gives China a major stake in one of the world’s leading iron ore companies ►Ensures FMG has the funding to continue its aggressive growth strategy

Source: FMG

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The AusIMM

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Contacts

Thank you

Websites: www.g-resources.com www.tigersrm.com.au