1. Precious Metals & Jewellery Who needs Who? Dr Paul Walker 3 rd Dubai City of Gold Conference Dubai, 21-22 February 2005

2. INDEPENDENT, INFORMED & INTERNATIONAL GFMS Limited – Precious Metals - Paul Walker CEO GFMS Metals Consulting Ltd – Base Metals – Neil Buxton Director GFMS Mining and Exploration Limited – Richard Napier Director GFMS Analytics Limited – regular analysis of all the metals markets but focus on precious - Rhona O’ Connell Director Coming soon, GFMS Consumer Research Limited – focus on consumer research covering the jewellery and investment markets. THE GFMS GROUP

3. 17 Analysts + Consultants; full-time representation in UK, India, China, Australia & Russia. Not just desk-based: Over 40 countries visited in the last 12 months. More than 7,000 meetings since 1996. Annual Gold, Silver and now also Platinum & Palladium Surveys GFMS’ Unique Research Capabilities & Programme

4. Presentation Outline Historical relationship between jewellery demand and metal supply Who are making the money? – a look at the value chain Important macro trends for jewellery Conclusions

5. Jewellery demand as a proportion of total supply in 2004* GoldSilverPlatinum Jewellery68%30%31% Industrial uses14%65%69% Other18%5%0% TOTAL100% *Based on GFMS preliminary 2004 data

6. The value of metal used in jewellery in 2004* GoldSilverPlatinum Average metal price - $/oz409.196.65845.41 Nominal Metal Value$16,221m$1,687m$1,860m *Based on GFMS preliminary 2004 data

7. Jewellery – global market size?

8. Gold: jewellery & mine output - An historical perspective Mine Output 13,000 tonnes Jewellery Demand 24,500 tonnes

9. Gold jewellery & mine supply *Based on GFMS preliminary 2004 data

10. And for silver? – demand covers supply… Mine Output 93,000 tonnes Jewellery Demand 98,700 tonnes

11. What about Platinum? Well, nearly the same story… Mine Output 430 tonnes Jewellery Demand 330 tonnes

12. Average prices over the same 20 year period US Dollar*Gold $/oz Silver $/oz Platinum $/oz 1985 average1343176.13293 2004 average854096.66845 20 year average963555.23473 * US Dollar Major Currency Index – base year 1973 = 100

13. US$/gramme24K Gold18K Gold950 Platinum Wholesale price14.1214.4528.90 Metal cost13.6810.2627.59 Labour cost0.200.600.72 Profit0.243.590.59 Margin1.7%24.8%2.0% China- Jewellery Margins (Fabricator) (Basis US$860/oz and US$411/oz metals prices)

14. China- Jewellery Margins (Retailing) (Basis US$860/oz and US$411/oz metals prices) US$/oz 24K Au 18K Au Pt 950 Retail price 495.80 675.33 1,044.34 Metal Cost 411.00 450.22 855.42 Profit 84.80 225.11 188.92 Margin 17.1% 33.33% 18.1%

15. But does the jewellery industry need support? Mega trends women’s earning power men’s jewellery age at marriage leisure hours investment background Demographic changes Competition for Jewellery technology goods travel luxury consumer goods other new products

16. Precious metals & Jewellery Who needs Who? All metals have relied upon jewellery demand to soak up increased mine supply. Jewellery as a ‘spend’ category is under threat. Marketing expenditure does not appear to be coordinated nor monitored. More strategic, independent research on the jewellery sector is needed. Some Conclusions