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

www.paradigmsecurities.com.au

Barry DawesB Sc F AusIMM(CP) MSEG MSAA

Head of ResourcesParadigm Securities

Resource Sector OutlookInvestment Opportunities in

The New Gold Mountain

Australia China Trade & Investment

Hotel Sofitel Wanda

Beijing 10-11 September 2013


DisclaimerNothing 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.


Global Demand For Resources

• Non-OECD > OECD demand • Demand now accelerating

• Current commodity prices at lows

• Investment in resources never better


Non-OECD surpassing OECD


Long term commodity prices


Market Prices - Oil


Market Price - Copper


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


China surpassing USA Steel

Source: World Steel Association


China surpassing USA

Source: Stockcharts


China surpassing the World!

Source: Stockcharts


Market Prices - Commodities

WE ARE HERE


Resources Market Wave Psychology


Market ActionASX XMM Mining Index XMM -57% from April 2011


Market ActionASX XGD Gold Index XGD -77% from April 2011


Market ActionASX XSR Small Resources Index XSR -70% from April 2011


Global Economy Robust

• Global equity markets near all time highs • Commodity prices rising

• Global interest rate cycle at lows

Transition from disinflation to inflationMajor low-risk investment opportunity


US T Bonds Yields Bottoming

Source: World Steel Association

INFLATION

DISINFLATION

CHANGE


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


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


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


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


ASX Metals and Mining


ASX Small Resources


ASX Gold Index


A$ vs US$ 1913 - 2013

Source: Thechartstore.com


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


The Paradigm Shift

• Barry Dawes

• [email protected]

• +61 2 9222 9111

mailto:[email protected]

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

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