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Barry Dawes B Sc F AusIMM (CP) MSEG MSAA Head of Resources Paradigm Securities

Barry Dawes B Sc F AusIMM (CP) MSEG MSAA Head of Resources Paradigm Securities. Australia China Trade & Investment Hotel Sofitel Wanda B eijing 10-11 September 2013. Resource Sector Outlook Investment Opportunities in The New Gold Mountain. Disclaimer.

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Barry Dawes B Sc F AusIMM (CP) MSEG MSAA Head of Resources Paradigm Securities

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  1. Barry Dawes B Sc F AusIMM(CP) MSEG MSAA Head of Resources Paradigm Securities Australia China Trade & Investment Hotel Sofitel Wanda Beijing 10-11 September 2013 Resource Sector Outlook Investment Opportunities in The New Gold Mountain

  2. Disclaimer Nothing in this presentation shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. In preparing this research, Paradigm did not take into account the investment objectives, financial situation and particular needs of the reader. Before making an investment decision on the basis of this presentation, the reader needs to consider, with or without the assistance of an adviser, whether the advice is appropriate in light of their particular investment needs, objectives and financial circumstances. This presentation is based on information obtained from sources believed to be reliable but Paradigm does not make any representation or warranty that it is accurate, complete or up to date. Paradigm accepts no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice and accurately reflect the views of Paradigm at the time of writing. This presentation has originated from Paradigm (ABN 159 611 060), an Authorised Representative of licensed securities dealer Aureus Capital Pty Ltd (AFS Licence 307 706). Paradigm can gain income through brokerage, capital raising commissions and corporate advisory fees.

  3. Global Demand For Resources • Non-OECD > OECD demand • Demand now accelerating • Current commodity prices at lows • Investment in resources never better

  4. Non-OECD surpassing OECD

  5. Long term commodity prices

  6. Market Prices - Oil

  7. Market Price - Copper

  8. China Demand For Resources • Steel industry leading growth • China takes >40% of metals and energy • Global supply of resources limited • Australia has many resources options

  9. China surpassing USA Steel Source: World Steel Association

  10. China surpassing USA Source: Stockcharts

  11. China surpassing the World! Source: Stockcharts

  12. Market Prices - Commodities WE ARE HERE

  13. Resources Market Wave Psychology

  14. Market Action ASX XMM Mining Index XMM -57% from April 2011

  15. Market Action ASX XGD Gold Index XGD -77% from April 2011

  16. Market Action ASX XSR Small Resources Index XSR -70% from April 2011

  17. Global Economy Robust • Global equity markets near all time highs • Commodity prices rising • Global interest rate cycle at lows Transition from disinflation to inflation Major low-risk investment opportunity

  18. US T Bonds Yields Bottoming DISINFLATION INFLATION CHANGE Source: World Steel Association

  19. Resources Boom Resuming • BHP says 75% more commodities needed • Australian Iron Ore Industry is very positive • Onshore Oil Boom underway • Metals demand strong, inventories tight • Precious metals in strong markets • Technology metals growing rapidly • Uranium production to experience major growth • Fertilizers are new sector

  20. Global Capital Flows • Global bond markets peaking • Capital to flow from cash and bonds to equities • Capital flows also into commodities • Commodity equities underweight in portfolios • A$ to attract capital and remain strong

  21. Investment Opportunities • Resources shares mispriced and too low • Mining industry earnings bottoming • Growth in production in most sectors • Australian cost structure being reduced • Onshore oil sector in major long term boom • Exploration resulting in important discoveries • A$ to remain strong • Outstanding returns expected

  22. Wide Investment Choice • Explorers, Developers and Producers • >60 iron ore companies • >20 Copper companies • >50 gold companies • >30 oil and gas companies • >100 other resources companies

  23. ASX Metals and Mining

  24. ASX Small Resources

  25. ASX Gold Index

  26. A$ vs US$ 1913 - 2013 Source: Thechartstore.com

  27. Conclusions • Resources Boom is far from over • Cyclical lows provide low risk entry points • Many new projects available to develop • Portfolio investment encouraged • Opportunities for 5-25% equity interests • Commodities from iron ore, coal, gold, oil & more • Resources Sector to provide long term growth • Expect growth in earnings and dividends • Merger and Acquisition activity to increase Paradigm provides opportunities and advice

  28. The Paradigm Shift • Barry Dawes • bdawes@paradigmsecurities.com.au • +61 2 9222 9111

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