Resources Investor Series

Keynote Jean-Franois (J-F) Bertincourt Director, Natural Resources & Resource Services

COMMODITY OUTLOOK

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Contents

OUTLOOK Copper Gold Oil & Gas Tungsten

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Copper Supply & Demand Fundamentals

Copper intensity of use 1.4 mt production loss between 2013-16 due to closures

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Source: World Bank, Brook Hunt, CRU, IISI, Global Insight, BHP Billiton analysis

Forecast production of mines operating in 2012 excluding brownfield expansions (mt)

1.8 mt annual production* lost due to declining grades between 2013-16

Source:: Turquoise Hill. * estimate of potential loss from concentrate supply only

Source: Wood Mackenzie, Rio Tinto

The copper market remains supply constrained

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Are we discovering enough copper?

Mining and discovery rates for copper Discovery Year 1979 Top 10 Mines Escondida

1988
1910 1996
As a rule of thumb to be sustainable we need to find at least 2x as much as we mine

Grasberg
Chuquicamata Antamina El Teniente Collahuasi Los Pelambres Los Bronces Norilsk Morenci

1910 1979 1996 1876 1935 1870s

Source: MinEx Consulting Feb 2012. Production data from USGS.

Moderate shortfall, lacking large discoveries

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Quality of the potential new supply?

Riskier Regions Greater Depth

High Disruptions

Declining grades

Source: Wood Mackenzie, Rio Tinto

Lower quality, greater depth, declining grades translate in higher costs

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How supply is fitting demand?

Global Copper Mine Production Potential
(000t contained copper in concentrates and SXEW cathode)
5.00 4.50 Scrap + Secondary Refined Production Consumption 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 2002
Source: CRU Group, LCC Research

LME Copper Price and Inventories

1200 1000

Inventories in 000 tonnes (RHS) Cash Settlement Price US$/lb (LHS)

800
600 400 200 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Possible and Probable projects likely to be postponed

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Operating costs trend

Copper Cash Operating Costs 2012

Selected C1 Costs
2.20 Codelco 1.80 1.40 1.00 0.60 0.20 Jun-09 Sep-09 Freeport OZ Minerals PanAust

US$/lb

Source: Company announcements, LCC Research

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Dec-09

Mar-10

Jun-10

Sep-10

Dec-10

Mar-11

Jun-11

Operating costs trending up

7

Sep-11

Dec-11

Mar-12

Jun-12

Sep-12

Dec-12

Mar-13

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Capital Intensity
Period 1985 - 2011 2012 - 2015 2016 - 2020 Year 2013 2016 - 2017 2017 2018 2021 Projects Greenfield and brownfield copper projects Greenfield copper projects in construction Greenfield unapproved copper projects Project / Mine Ministro Hales Radomiro Tomic sulphides Phase II El Teniente new mine level Chuquicamata underground Andina Phase II Total
Source: Wood Mackenzie, Codelco, LCC Research

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Capital Intensity 2011 US$/tpa $7,700/t $14,970/t $18,600/t Capacity 183,000 tpa Cu 343,000 tpa Cu 434,000 tpa Cu 366,000 tpa Cu 343,000 tpa Cu 1,700,000 tpa Cu Capex US$3.1 billion US$5.0 billion US$3.5 billion US$4.2 billion US$6.8 billion US$22.6 billion Capital Intensity $16,940/t $14,577/t $8,065/t $11,475/t $19,825/t $13,294/t

If the projects are not developed, Codelco output could drop to 800,000 tpa. US$23 billion to increase production from a stagnant production of 1.8 mtpa copper over the period 2009-2012 to 2.1 mtpa in 2021, i.e. an increase of only 300,000 tpa.

An unprecedented investment challenge for a minor capacity gain

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How much gold does the world need/want?

World Gold Demand vs Supply Purchasing behaviour
Percent of Indian and Chinese consumers who have purchased gold in the last six months

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World Gold Demand vs. Supply

Physical Demand By Region in Q1 2013

Sources of Demand
9% 12% Consumer Demand EFT Demand Central Bank Demand

6%
73%

Technology Demand

Source: World Gold Council

Physical and investment demand difficult to predict

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Are we finding enough?

Mining and Discovery Rates for Gold

Source: MinEx Consulting Feb 2012. Production data from USGS, World Gold Council

Possibly lacking gold discoveries

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Gold Price vs. Costs

Gold and Major Gold Equities Performance

Source: Company reports, Bloomberg, Barclays research

Source: Bloomberg, Mining Associates. Note data indexed to 14 th January 2000; index made up of eight major gold producers total return indexes by market capitalisation; major gold producers are AngloGold Ashanti, Barrick, Harmony, Kinross, Goldcorp, Goldfields, Newmont and Newcrest.

Source: GFMS

Costs followed prices, grades and labour are the key drivers
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Performance of Australian Gold Producers

ASX Listed Gold Producers Cost Curve
(as at 31 March 2013)
Write down of operations in Papua New Guinea 1,000 900 Current Production (Koz/year) 800 700 600 500 400 300 Current Production koz/year Cash Cost A$/oz Current Gold Price in A$ Producers with gold projects soley based in Australia

2000 1800 1600 1400 1200 1000 800 600 (A$/oz)

1st Quartile: cost under A$ 704/oz

2nd Quartile: cost under A$ 967/oz

WA mines for sale

3rd Quartile: cost under A$ 1202/oz

Comet Vale project for sale (terminated Laverton mine by CTT) closed Coyote mine closed Bronzewin g mine closed

200
100 -

400 Wiluna mine

200 for sale 0

Source: Goldnerds, LCC Research

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Apex Minerals BCD Resources Reed Resources Minera Gold Navigator Focus Minerals Norseman Gold Dragon Mining Gold One Vantage Goldfields Tanami Gold Norton Gold Fields Unity Mining Mintails Ramelius Red 5 Endeavour Mining Lachlan Star Saracen Mineral Austral Gold St Barbara AngloGold Ashanti Besra Gold Kingsgate OceanaGold Alacer Gold Resolute Mining Evolution Mining Millennium Perseus Mining Troy Resources Silver Lake Newcrest Mining Polymetals Mining Northern Star Citigold Regis Resources Tribune Resources Rand Mining Teranga Gold Kingsrose Mining Primero Mining Medusa Mining

Casualties appearing at the high end of the cost curve

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A$/US$ Exchange Rate The Saviour?

Historical Gold Price

Source: Capital IQ, LCC Research

Price correction seen before, A$/US$ FX to assist Australian mines

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Future Global Demand and Supply for Energy

Residential/commercial fuel demand by sector
Quadrillion BTUs

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Residential/commercial demand by fuel

Quadrillion BTUs

Liquid supply by type

Millions of oil equivalent barrels per day

Global natural gas supply

Billions of of cubic feet per day

Energy Mix continues to evolve

Quadrillion BTUs

Source: Exxon Mobil

Oil and gas remain key component of the energy mix

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Outlook for Crude Oil and Natural Gas

Crude Oil and Natural Gas Spot Price 2006-2013
Source: Capital IQ, LCC Research

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Crude Oil

Natural Gas Structural shift to natural gas-fired power generation Switch from gas to cheaper coal when price above US$4.00/mbtu Prices above US$3.70 are seen as incentive for new natural gas well drilling Natural gas prices more volatile than oil prices

Overall supply and demand figures show general weakness Global demand has been growing, albeit slowly Producers from Canada and US provide substantial supplies Geopolitical factors impacting oil prices Consensus indicates an oil price between US$85 and US$95 for the balance of the year

Crude Oil: US$85-95/bbl; Natural Gas: US$3.70-4.00/mmbtu

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Tungsten Fundamentals
Global Supply vs Demand Forecast Tungsten Demand 1989 to 2016*

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Tungsten APT (EU)

Source: ITIA, Roskill

Prices appear to be moving according to market fundamentals

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Outlook
Copper prices supported by strong long-term fundamentals: decreasing grades and increasing depth, significant country and infrastructure risks, higher operating costs and capital costs For gold: supply adjusting quickly, high production costs, strong demand from India and China, positive investment demand. Production costs are supporting of prices above the current level

Oil prices stable and natural gas prices more volatile

Tungsten represents an opportunity among the minor metals

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