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Presentation on theme: " Barry Dawes B Sc F AusIMM(CP) MSEG MSAA Head of Resources Paradigm Securities Resource Sector Outlook Investment Opportunities."— Presentation transcript:

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

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 Source: World Steel Association INFLATION DISINFLATION CHANGE

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:

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 +61 2 9222 9111

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