Copper & Gold Juniors · Equities: Copper & Gold Juniors 5 Finders Resources Company flyover FND is...

Equities: Copper & Gold Juniors19 May 2013 ׀ ASX Code: DRM/FND/CAS/RXM/VXR ׀ Mining

Important Disclosures and analyst certifications regarding subject companies are in the Disclosure and Disclaimer Appendix of this document and atwww.research.commbank.com.au. This report is published, approved and distributed solely by Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945. CBA isnot registered as a broker-dealer under the U.S. Securities Exchange Act of 1934 and is not a member of the Financial Industry Regulatory Authority, Inc. or any U.S. self-regulatory organization.

Andrew Knuckey T. +613 9675 6791 E. [email protected]

Paul Hodsman, CFA T. +613 9675 8532 E. [email protected]

Mind the funding gap

Initiating coverage

We initiate coverage on five junior copper and gold companies – Doray Minerals (DRM), Crusader Resources (CAS), Finders Resources (FND), Rex Minerals (RXM) and Venturex Resources (VXR).

These companies are seeking to develop a range of projects across various geographies. The common challenge each faces is the funding gap to develop their projects – depressed market capitalisations, constrained balance sheets and significant capex requirements make the funding challenge substantial.

Relative winners should be those companies with lower capital intensity projects and low operating costs that can or have already secured project financing. Our order of preference is: 1) DRM, 2) FND, 3) CAS, 4) RXM and 5) VXR.

Key stock views – DRM and FND preferred

DRM: Australian gold junior about to hit first production from its flagship Andy Well project. High reserve grades (11.7g/t) and low-costs ($600/oz) deliver an expected project payback within two years on $55m capex that was 100% debt funded. The resource is highly under-explored and we see upside to current mine life.

FND: owns an advanced development stage 25ktpa SX-EW copper project in Indonesia, with forecast USD1.07/lb cash costs. An operational test plant is currently in place, while finalising financing and forestry permitting should further de-risk the project.

CAS: developing a small Brazilian iron ore project (1.0mtpa) with AUD12/t operating costs that is currently hitting first production. The company recently secured a $20m debt facility, while cash profits from the iron ore project are to be reinvested in Brazil for gold exploration and development/refinement of the 150kozpa Borborema gold project.

RXM: seeking to develop the Hillside copper and iron ore project in South Australia. We believe the company needs to go back to the drawing board to optimise the project. Feasibility study operating costs appear optimistic and $900m capex against a current market cap of $54m represents a potentially insurmountable funding challenge.

VXR: seeking to develop a copper-zinc project in the Pilbara that appears marginal while exploring for gold in Brazil. The weakest balance sheet and market capitalisation across our coverage means liquidity just to fund exploration and project refinement will likely be a challenge.

Figure 1: Recommendations and price targets

Company ASX Mkt capAUDm

Price Valuation(ps)

PriceTarget

TSR Recommendation

Doray Minerals DRM $63.1 $0.45 $0.61 $0.61 35% OverweightFinders Resources FND $51.2 $0.16 $0.26 $0.20 25% OverweightCrusader Resources CAS $34.2 $0.27 $0.32 $0.30 11% NeutralRex Minerals RXM $49.1 $0.26 $0.55 $0.31 19% NeutralVenturex Resources VXR $27.2 $0.02 $0.01 $0.01-50% Underweight

Source: IRESS, CBA estimates

Recommendation

ASX code Last price ($) Price target ($) Rec

DRM 0.45 0.61 Overweight

FND 0.16 0.20 Overweight

CAS 0.27 0.30 Neutral

RXM 0.26 0.31 Neutral

VXR 0.02 0.01 Underweight

Price relatives Starting index and share price rebased to 100

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Global Markets Research

Equities: Copper & Gold Juniors

2

Table of contents

Executive summary ........................................................................................................................... 3

Doray Minerals ................................................................................................................................... 9

Company overview ........................................................................................................................ 9

Andy Well project overview ......................................................................................................... 10

Operating assumptions ................................................................................................................ 12

Valuation ...................................................................................................................................... 13

Risks ............................................................................................................................................ 13

Finders Resources ........................................................................................................................... 14

Company overview ...................................................................................................................... 14

Wetar project overview ................................................................................................................ 15

Ojolali project ............................................................................................................................... 16


Valuation ...................................................................................................................................... 18

Risks ............................................................................................................................................ 18

Crusader Resources ........................................................................................................................ 19


Borborema project overview........................................................................................................ 20

Posse project overview ................................................................................................................ 21


Valuation ...................................................................................................................................... 22

Risks ............................................................................................................................................ 23

Rex Minerals .................................................................................................................................... 24


Hillside project overview .............................................................................................................. 24


Valuation ...................................................................................................................................... 27

Risks ............................................................................................................................................ 28

Venturex Resources ........................................................................................................................ 29


Sulphur Springs project overview ................................................................................................ 30


Valuation ...................................................................................................................................... 33

Risks ............................................................................................................................................ 33

Appendix 1 – Doray Minerals ........................................................................................................... 34

Appendix 2 – Finders Resources ..................................................................................................... 37

Appendix 3 – Crusader Resources .................................................................................................. 40

Appendix 4 – Rex Minerals .............................................................................................................. 42

Appendix 5 – Venturex Resources .................................................................................................. 45



3

Executive summary

Each of the five companies we initiate coverage on is different across a myriad of factors, such as the commodity exposure(s), geographic location, project development stage, capex requirements, balance sheet strength, forecast cashflows and exploration appeal.

Our overall preference has been determined through a combination of fundamental and qualitative analysis. We have assessed each company across three core categories covering risk, expected return and valuation support.

Our order or preference is: 1) DRM, 2) FND, 3) CAS, 4) RXM, and 5) VXR.

Figure 2: Company risk profile

Rank Company Geography Financing Project(s)

1 DRM Low Low Low2 FND High Low/Medium Low3 CAS High Medium/Low Medium4 RXM Low High Medium/High5 VXR Low High High

Source: World Bank, CBA estimates

Figure 3: Expected project returns

Rank Company Operating margin Capex ROIC

1 DRM High Low High2 FND High Low High3 CAS Medium Medium Medium4 RXM Medium High Low5 VXR Low High Low

Source: CBA estimates

Figure 4: Valuation support

Rank Company Discount to NPV Exploration appeal

1 DRM Medium High2 FND High Medium3 CAS Medium Medium4 RXM Low Medium5 VXR Low Low


Figure 5: Recommendations

Company ASX Mkt capAUDm

Price Valuation(ps)

PriceTarget

TSR Recommendation

Doray Minerals DRM $63.1 $0.45 $0.61 $0.61 35% OverweightFinders Resources FND $51.2 $0.16 $0.26 $0.20 25% OverweightCrusader Resources CAS $34.2 $0.27 $0.32 $0.30 11% NeutralRex Minerals RXM $49.1 $0.26 $0.55 $0.31 19% NeutralVenturex Resources VXR $27.2 $0.02 $0.01 $0.01 -50% Underweight

Source: IRESS, CBA estimates



4

Doray Minerals

Company flyover

DRM is developing its flagship Andy Well gold project, located in the Murchison district, Western Australia. The project is scheduled to pour its first gold in August 2013 and should produce an average 74kozpa of gold over an initial 3.7-year mine life.

Mining operations consist of a small two-stage open-pit, followed by underground mining at a rate of 200ktpa. A high reserve grade of 11.4g/t and excellent metallurgical recoveries of 97.5% provides a forecast low cash-cost of AUD592/oz (C1) and AUD868/oz (C2).

DRM has secured debt financing for 100% of the construction costs of Andy Well. Near-mine exploration results indicate a very high probability that the mine life will be extended, particularly with the integration of the adjacent 106koz Judy Lode into the mine plan.

Risk/reward balance – DRM stands out

Of the stocks we are initiating on, DRM is our preferred stock on the basis of our risk/reward framework. The company has the most advanced project, making it the most likely to successfully transition from explorer to producer. We see valuation support with near-mine resource growth likely to extend the mine life beyond the current mine plan.

Low risk. From an overall risk perspective, DRM has the lowest relative risk across these five stocks. Geographically, all its projects are located in Australia (#10) which comfortably ranks ahead of Indonesia (#128) and Brazil (#130) on the World Bank’s ‘ease of doing business’ index. DRM is the only company to have secured 100% of the required project funding requirements. Operationally, Andy Well has lower technical risk, with the mine plan using narrow-vein stopping and processing is via a standard CIL plant.

Robust project returns. For a small-scale operation (200ktpa), Andy Well cash costs of AUD592/oz are particularly strong considering it does not benefit from the economies of scale that much larger operations do. The benefit of the small-scale operation is its low development capex of AUD55m which, coupled with its strong margins, delivers an estimated project IRR of 60%. We value DRM at $0.61ps using a standard WACC of 10% and apply no Price/NPV multiple or gold premium, setting our 12-month price target in-line with our DCF valuation.

Exploration appeal. The geology of the Andy Well resource is a typical high-grade and narrow-vein gold deposit which often has a short initial and ongoing mine life. The resource has been under-explored to date given it is more costly to completely drill out the resource from surface, and thus the underground decline should enable more efficient drilling from underground. The Wilber Lode remains open at depth from 480m and the Judy Lode has only been tested to 250m depth and remains open down plunge.

Figure 6: Doray Minerals – key financial metrics

AUDm 2013f 2014f 2015f 2016f 2017f

Revenue - 101 88 77 72EBITDA -10 50 38 28 22NPAT underlying -7 26 17 11 9Free cashflow -48 22 28 21 20EPS (c) -0.05 0.18 0.12 0.08 0.06P/E 21.1x 9.3x 7.8x 3.5x 3.9xEV/EBITDA -6.4x 0.8x 0.4x -0.2x -1.3xDebt/EBITDA -0.1x -0.4x -1.3x -2.5x -4.1xDebt/Capitalisation 2% -33% -88% -157% -284%


Investment view

We initiate coverage on DRM with an overweight recommendation and 12-month price target of $0.61ps. We believe DRM offers low-risk exposure to gold via a low-cost and small-scale producer on the eve of first production. The Andy Well deposit and surrounding near-mine ground has been underexplored and we consider an extension to the current 3.7 year mine plan is eminently achievable.



5

Finders Resources

Company flyover

FND is developing its 95%-owned Wetar Island copper project, located in Indonesia. The project should produce an average of 25,000tpa copper via an SX-EW plant over an initial 9.2-year mine life. FND has operated a 1,800tpa demonstration plant on-site, which significantly de-risks technical aspects of the project.

The resource is high grade at 2.5% copper and a stand-out feature of the project is the expected life of mine average cash costs of USD1.07/lb. Mining operations are relatively small-scale (up to 1.65mtpa) and comprise only $0.23/0.24/lb of operating costs, less than industry average, and therefore adds greater certainty on operating cost guidance being maintained. The total development cost for the project is forecast at USD220m.

The next major milestones for the Wetar Island project include Indonesian forestry permitting approval - expected in June 2013 - followed by finalisation of project funding by October 2013. The company is targeting 7,000tpa copper production by September 2014 and 25,000tpa copper production by October 2015.

Risk/reward balance

FND is our second preference behind DRM from a risk/reward perspective. The company’s Wetar Island project is less advanced than Andy Well and has higher geographical and financing risk. These higher risks are offset by a greater discount to NPV, and investors with a preference for copper exposure may consider FND a more attractive investment.

Project risk. FND has a number of stages to progress through to reach first production. These include forestry permitting and finalisation of project funding, including a component of both mezzanine debt and an equity raising. Secondly, the company needs to successfully develop the project on-time and within budget on a remote island in Indonesia. That said, we believe the project’s strong economics should enable Wetar Island to be developed and the demonstration plant significantly de-risks technical aspects of the project. Overall, these risks are reflected in the valuation upside we see in FND market capitalisation.

Strong project returns. Cash costs of $1.07/lb underpin the strong forecast cash profit margins for Wetar Island. We calculate the project IRR at 35% under our newly revised lower copper price deck. An updated BFS, scheduled to be released in June 2013, is expected to include slight reductions to both capex and operating expense forecasts for the project, reflecting industry cost and local currency deflation.

Valuation support. Our raw, unadjusted valuation of FND is $0.26ps which represents significant upside against the current $0.16 share price. Continued de-risking of the Wetar Island project through permitting and financing approvals should deliver a progressive re-rate of the stock. We set our 12-month price target at $0.20ps by applying a 20% discount against our project NPV to reflect these risks.

Figure 7: Finders Resources – key financial metrics

AUDm 2013f 2014f 2015f 2016f 2017f

Revenue - 21 99 216 206EBITDA -12 4 68 131 132NPAT -9 -5 29 68 71Free cashflow -58 -120 -7 95 90EPS (c) -2.1 -0.9 4.9 11.4 11.9P/E -7.7x -17.7x 3.3x 1.4x 1.3xEV/EBITDA -8.8x 53.4x 3.5x 1.2x 0.6xDebt/EBITDA -1.0x 31.4x 2.1x 0.4x -0.2xDebt/Capitalisation 18% 73% 64% 26% -16%

Source: Company data, CBA estimates

Investment view

We initiate coverage on FND with an Overweight recommendation and $0.20ps price target. The Wetar Island project is a high quality and low-cost operation and FND’s market capitalisation is highly discounted compared to the project’s NPV. We believe that as the project is continually de-risked through permitting and financing approvals through to construction, increasing shareholder value can be realised.



6

Crusader Resources

Company flyover

CAS is a Brazil-focussed company, with in-country board members and executive management whose principal focus is the ongoing development of its 100%-owned Borborema gold project. CAS gold exploration and development program benefits from early cashflow generation from the small-scale Posse iron ore project, commissioned during March quarter 2013.

Posse is expected to produce run‐of‐mine production of up to 1.0mtpa of premium lump and fines product from an Indicated Mineral Resource of 36Mt @ 43.5% Fe with low contaminants.

CAS has successfully identified a resource of 2.43Moz at Borborema and Maiden Ore Reserve of 1.61Moz since its acquisition in August 2010. A Bankable Feasibility Study (BFS), focussing on potential +10 year mine life and gold production of 150koz pa with start-up capex of around $172m, has been undertaken and is currently being optimised and due for completion in mid-CY13. This is to be followed by potential first production in calendar year 2014.

Risk/reward balance – early cashflow eases exploration funding

Project risk. We note Brazil ranks #130 on the World Bank’s ‘ease of doing business’ index (Australia #10 and Indonesia # 128), and whilst it should be expected that CAS in-country management, board representation and established networks will mitigate regional operating risk, we remain cautious towards potential bureaucratic impediments and delays. The Borborema project proposes conventional open cut mining and CIL processing. However, pending conclusion of the BFS, we estimate cash costs based on reserve parameters of close to $900/oz, significantly higher than initial PFS estimates of $600/oz.

Financing risk. We see limited near-term balance sheet risk for CAS. The Posse iron ore mine delivers important early cashflow in the lead up to developing Borborema, with projected monthly NPAT of $1m/mth. CAS has sought to strengthen its balance sheet with a $20m debt facility.

Returns. Assuming successful financing, we calculate IRR for Borborema at 18% with NPV of $52m, whilst the low-cost Posse mine has a remarkable estimated 321% IRR and NPV of $53m. We value CAS at $0.32ps using a standard WACC of 10% and no assumed gold premium but set our 12-month price target of $0.30ps by applying a small discount to reflect the above risks.

Exploration appeal. Borborema drilling has been accelerated post the PFS, raising the contained gold in resource to 2.43Moz in July 2012, from 68.6Mt @ 1.10g/t. A Maiden ore reserve was declared in November 2012 with Proven and Probable Ore Reserves of 1.61Moz of mineable gold from 42.4Mt @ 1.18g/t. The Borborema mineralised system remains open in all directions with drilling continuing to target adjacent and nearby gold prospects.

Figure 8: Crusader Resources – key financial metrics

AUDm 2013f 2014f 2015f 2016f 2017f

Revenue 6 60 127 240 235EBITDA -1 41 41 84 75NPAT -2 28 20 44 37Free cashflow -5 -56 -55 52 35EPS (c) -1.6 16.1 9.3 20.1 17.3P/E -17.1x 1.7x 2.9x 1.3x 1.6xEV/EBITDA -19.8x 1.7x 3.1x 0.8x 0.2xDebt/EBITDA 5.1x 0.2x 1.6x 0.1x -0.6xDebt/Capitalisation -26% 14% 53% 10% -273%


Investment view

CAS Posse iron ore mine is small scale but creates significant value for CAS relative to its market cap. The flagship Borborema project yields slightly lower NPV than Posse, reflecting high cash cost and capex requirements. We are optimistic toward the BFS optimisation to identify opportunities for improving the value of Borborema through resource expansion and potential staged development. We initiate coverage on CAS with a Neutral recommendation and $0.30ps 12-month price target.



7

Rex Minerals

Company flyover

RXM is seeking to develop its 100%-owned copper, gold and iron ore project at Hillside on the Yorke Peninsula South Australia, around 165km from Adelaide.

A Prefeasibility Study (PFS), published in October 2012, confirmed a 15-year mine life at 70ktpa copper and gold concentrate, with iron ore by-product from separate tailings treatment. The project presents a near surface (~20m) large scale resource of 330Mt (0.8% CuEq). Startup capex is estimated at $900m. We forecast C1 cash costs at USD1.70/lb (after by-product credits), 42% higher than the PFS estimate of USD1.20/lb. RXM is now pursuing permitting and advancing a Bankable Feasibility Study (BFS) ahead of pursuing funding and construction proposed in 2014.

In addition to Hillside, RXM hold substantial (100%-owned) exploration licences along the Pine Point Copper belt on the Yorke Peninsula, with potential for further copper-gold discovery.

Risk/reward balance – walking a funding tightrope

Project risk. The Hillside project is favourably located, with excellent access to established infrastructure in a positive jurisdiction within 165km of Adelaide. Mining is by low strip ratio (4:1) open pit, supplemented by underground mining of deeper resource extensions with conventional flotation processes to produce the Cu/Au concentrate. However, project economics and cash costs are heavily dependent on iron ore by-products recovered by magnetic separation.

Financing risk. Against RXM’s current $49m market capitalisation, Hillside faces a substantial funding challenge in meeting the PFS-estimated $900m capex requirement. We believe the BFS needs to optimise the project and realise material capex and opex savings to improve project economics ahead of development commitment.

Returns. We forecast project IRR of 18% and project NPV of $445m, and value RXM at $0.55ps using a standard 10% WACC. We set our 12-month price target of $0.31ps by applying a discount against our project NPV to reflect these risks.

Exploration appeal. The resource at Hillside has grown over a relatively short period (2.5yrs) to its current 330Mt @ 0.6% Cu for 2.0Mt of contained copper. Around 50% of the resource is consumed in the current 15-year mine plan and Hillside is still not fully tested at depth, providing potential for further extension. However, we continue to emphasise total capex and funding are the project’s principal challenge, not resource size.

Figure 9: Rex Minerals – key financial metrics

AUDm 2013f 2014f 2015f 2016f 2017f

Revenue - - - 391 789EBITDA -9 -11 -23 123 295NPAT underlying -6 -8 -20 38 123Free cashflow -10 -468 -456 42 181EPS (c) -3.1 -1.3 -2.0 3.9 12.5P/E 21.1x 9.3x 7.8x 3.5x 3.9xEV/EBITDA -2.2x -37.7x -38.0x 6.9x 2.3xDebt/EBITDA 3.6x -14.3x -26.8x 4.8x 1.4xDebt/Capitalisation -21% 26% 59% 56% 42%


Investment view

The Hillside project has large scale potential and is geographically well located, with excellent access to existing infrastructure including highway, power and port. However, based on current capex and operating cost estimates, we view the funding requirement of AUD900m against RXM’s market capitalisation of AUD49m as a potentially insurmountable challenge. That said, the substantial size of the resource has considerable potential value and potential for third party buy in to help motivate development. We believe optimisation and refinements to reduce up-front capex requirements could see Hillside become a reality. We initiate coverage on RXM with a Neutral recommendation and $0.31 12-month price target.



8

Venturex Resources

Company flyover

VXR has completed a definitive feasibility study (DFS) of its Sulphur Springs copper-zinc project in Western Australia’s Pilbara. VXR also holds gold exploration tenements in central Brazil.

The Sulphur Springs DFS focusses on development of a 1.0mtpa copper-zinc processing ‘hub’, with ore feed from a proposed underground operation at Sulphur Springs and regionally from open pits at Whim Creek and VXR’s neighbouring tenements. Annual production is targeted at 16.5kt Cu and 30kt Zn in concentrate over an 8.5-year mine life from an ore Reserve of 8.37Mt @ 1.8% Cu, 4.0% Zn, 0.3% Pb and 21.5g/t Ag. Capex is estimated at $279m with cash costs of $1.57/lb.

Subsequent to publishing the DFS, Venturex has initiated an enhancement program to optimise the project economics through scale, review of development sequence and alternative capex options, whilst also advancing its regional exploration program with the aim to bring additional resource into the project (VXR has a cumulative regional Mineral Resource of 26.4Mt grading 1.2% Cu, 3.4% Zn, 0.3% Pb and 18.9g/t Ag).

Risk/reward balance – standing on the precipice

Project risk. VXR has the highest relative risk profile across these companies. The principal Sulphur Springs project is favourably located in a positive jurisdiction and within 150km of the major centre of Port Hedland. Whilst the project employs standard underground long-hole open and transverse stoping techniques, with processing by conventional flotation, we cite satellite deposit dependency as a risk to sustained operating levels and cash costs in the latter years of the project.

Financing risk. At the end of the calendar March 2013 quarter, VXR had approximately $2.2m of cash on balance sheet. In April 2013, VXR launched a $6.42m capital raising, partly to fund ongoing exploration for the Pilbara copper-zinc project.

— The raising includes a $1.2m placement to significant shareholder, Henghou Industries (Hong Kong), and a 2:11 $5.2m non-renounceable rights issue. Over 1.696b shares will be on issue post the raising, along with 36.5m options, highlighting the dilution challenges VXR faces in advancing exploration and project enhancement.

— We expect dilutionary funding issues are compounded by several orders of magnitude when contemplating funding the $279m DFS project capex estimate, with any potential equity raising likely to be prohibitively dilutionary.

Returns low. Based on the DFS and assuming successful financing, we calculate IRR for the project at 12%, with a project NPV of just $17m. We value VXR at $0.01ps using a standard WACC of 10%.

Figure 10: Venturex Resources - key financial ratios

AUDm 2013f 2014f 2015f 2016f 2017f

Revenue - 81 180 219 229EBITDA -2 -10 27 52 69NPAT -1 -20 -4 -2 8Free cash flow -7 -140 -70 45 54EPS (c) -0.08 -1.19 -0.24 -0.11 -0.11P/E -23.2x -1.6x -7.8x -17.8x -17.8xEV/EBITDA -12.6x -16.2x 8.9x 3.8x 3.8xDebt/EBITDA 3.5x -13.1x 7.7x 3.2x 1.7xDebt/Capitalisation -10% 71% 80% 77% 67%


Investment view

We recognise and endorse VXR management’s strategic shift to refine and optimise the Sulphur Springs/Pilbara CuZn project, and believe a quantum shift in project economics (capex, operating costs, LOM) is required to warrant development. VXR’s substantial and proven regional tenement and resource package could provide the solution with only three of six known mineral resources currently included in the project. However, we anticipate project optimisation to require at least a further 12 months to finalise, and cite ongoing dilutionary funding risk. We initiate coverage on VXR with an Underweight recommendation and 12-month price target of $0.01ps.

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With the recent addition of the Judy Lode, Andy Wells total Inferred and Indicated resource has grown to 1.2Mt @ 11.3g/t Au for 440koz, presenting realistic potential of mine life extension beyond the BFS’ 3.7yrs.

Andy Well project overview

BFS summary

Andy Well is located around 45km north of Meekatharra in Western Australia’s Murchison region. Following DRM’s February 2010 ASX listing, a maiden resource was released in early 2011. The resource was increased and converted to Reserve in early 2012, with a mining lease also granted.

DRM completed a BFS and committed to development in July 2012.

In September 2012, DRM reached a project finance deal totalling AUD55m to provide funding for 100% of the capital expenditure requirements for the development of Andy Well.

DRM also completed a capital raising for a AUD30.8m placement, and also announced a fully underwritten $12.2m non-renounceable entitlement offer.

Figure 12: Andy Well BFS physical parameters

Total ore tonnes mined 717ktMined head grade 11.4g/tAverage mill throughput 197ktpaMetallurgical recovery 97.5%Average annualised production 74kozTotal recovered ounces 256kozInitial mine life 3.7yrs


Capex for Andy Well is a low AUD55m (Figure 13).

Figure 13: BFS financials (AUD)

Capex (100% debt funded) $m $55Operating cash cost (C1) $/oz $592Total cash cost (C1 + C2) $/oz $868LOM revenue (@$1,600/oz Au price) $m $409LOM EBIT cash surplus (@$1,600/oz Au price) $m $118IRR 70%Project Payback (@$1,600/oz Au price) 12-14 months


Mining

Initial mining at Andy Well will be by a two stage open pit along with parallel development of a mechanised narrow vein underground operation. The BFS mining inventory totalled 717kt @ 11.4g/t (262koz), incorporating the declared reserve of 660kt @ 11.7g/t (248koz) plus an additional 57kt @ 7.7g/t (14koz) of inferred resource which are expected to be mined once the underground operation is established.

The majority (176koz) of the 262k mined ounces are scheduled to come from the underground.

Mining of the stage 1 open pit, utilising contractor MACA Civil, is advancing ahead of first processing with operations 38m below surface, with only a further 2.5m to final floor, from which the underground portal (access) will be established.

Underground mining contractor, GBF, has begun mobilizing personnel and equipment to site in anticipation of commencement of the underground development.

Processing

BFS metallurgical studies confirmed the Wilber Lode ore contains simple free-milling gold amenable to high gold recoveries from a gravity circuit prior to leaching through a standard CIP gold processing plant.

Construction of the processing plant and associated site infrastructure is on schedule with commissioning of the plant to commence mid-2013, with first gold production in September.

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12

Operating assumptions

Our Andy Well forecast operating assumptions are based on the updated BFS completed July 2012.

— Total construction costs, including pre-development stripping total, are AUD55m and have been 100%-debt funded.

Stage 1 of the open pit has been completed and underground mining commenced in June. Construction of the 250ktpa nameplate capacity process plant is well-advanced. First gold is expected to be poured during the September quarter, targeting early August.

The current mine plan reserves only include 256koz from the open-pit ore and upper parts of the Wilber Lodes. Total current resources stand at 444koz, representing an additional three years mine life assuming 100% conversion to reserve.

— The geology is a typical high-grade and narrow-vein gold deposit, which often has a short initial and ongoing mine life. The resource has been under-explored to date given it is more costly to completely drill out the resource from surface, and thus the underground decline should enable more efficient drilling from underground.

— The Wilber Lode remains open at depth from 480m and the Judy Lode has only been tested to 250m depth and remains open down plunge.

— We model an additional four years of mine life, using the Judy Lode resource grade of 9.7g/t to factor in its inclusion into the mine plan and continued resource growth.

Figure 15: Andy Well operating assumptions


Using CBA’s recently revised lower gold price deck (Figure 15), we model a project pay-back period of less than two years from construction.

Figure 16: DRM financials


2013F 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F

Ore processed (Kt) - 203.0 200.0 200.0 191.0 200.0 200.0 200.0 200.0

Gold grade (g/t) - 12.50 11.00 9.00 9.00 9.70 9.70 9.70 9.70

Recoveries - 97.5% 97.5% 97.5% 97.5% 97.5% 97.5% 97.5% 97.5%

Gold production (oz) - 79,543 68,964 56,425 53,886 60,813 60,813 60,813 60,813

C1 cost (A$/t) n/a 535 605 704 723 625 634 644 654

Total cash cost (A$/t) n/a 580 661 828 873 698 709 720 732

AUD:USD 1.04 1.04 1.01 0.93 0.90 0.88 0.88 0.88 0.88

Gold price (US$/oz) 1,604 1,372 1,352 1,327 1,254 1,283 1,312 1,342 1,372

CBAf extension Existing reserves

2013F 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F

Revenue (A$m) - 101 88 77 72 89 91 93 95

Expenses (A$m) -10 -51 -51 -50 -50 -45 -46 -47 -48

EBITDA (A$m) -10 50 38 28 22 43 45 46 47

D&A (A$m) -1 -13 -12 -12 -12 -6 -6 -6 -6

EBIT (A$m) -11 37 26 16 10 38 39 40 42

Operating cash flow -7 40 30 25 21 32 36 38 40

Investing cash flow -40 -18 -3 -3 -3 -3 -3 -4 -4

FCFF -44 24 31 22 21 34 35 36 37

Project IRR (%) 59%

Project NPV (A$m) $101.4



13

Valuation

Our valuation of Andy Well is based on the discounted cash flow (DCF) methodology using forecast FCFF based on the current mine life of existing reserves, plus our assumed 4-year extension.

— We assume a weighted average cost of capital of 10%.

— Our total raw-unadjusted NPV of DRM is $86m, or $0.61ps.

— We set our 12-month price target in-line with our DCF valuation and apply no Price/NPV multiple or gold premium.

Figure 17: Valuation and price target Figure 18: WACC

DRM AUDm AUDps Price target

Andy Well 32 0.22Andy Well Extension 69.8 0.49Corporate -14 -0.10Cash / (Net Debt) -1 -0.01Value 86 0.61 0.61

Risk Free Rate 5.5%

Equity Risk Premium 6.0%Beta 1.1Cost of Equity 12.1%Target Gearing 30.0%Cost of Debt 7.0%Tax Rate 30.0%WACC 9.9%

Source: Company data, CBA estimates Source: CBA estimates

Investment view

We initiate coverage of DRM with an Overweight recommendation and 12-month price target of $0.61. We believe DRM offers low-risk exposure to gold via a low-cost and small-scale producer on the eve of first production. The Andy Well deposit and surrounding near-mine ground has been under-explored, and we believe an extension to the current 3.7-year mine plan is eminently achievable.

Risks

Risks to our 12-month price target include:

Gold price – material variance from our base case forecast.

Currency – material variance from our AUDUSD base case forecast.

Capital cost over-runs and/or delays to Andy Well construction.

Failure to meet Andy Well company production and operating cost guidance.

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15

Wetar project overview

BFS summary

The Wetar Island Copper Project comprises the development of two sulphide copper deposits on Wetar Island, Indonesia, utilising conventional open pit methods and with first production planned 12 months from commencement of development, currently pending forestry rezoning approval. An initial BFS was published in June 2011, with an updated BFS published in May 2012 incorporating capital and opex cost estimates base dated to 2Q 2012.

Life of mine is 9.2 years. Peak production of up to 1.65mtpa of sulphide ore, producing a total of 25,000tpa copper cathode, is targeted.

A phased production approach is planned with mining initially at Kali Kuning and, from Year 3, also at Lerokis with ore hauled from the open pits to the Kali Kuning ROM pad.

Figure 20: Wetar project updated BFS summary (May 2012)

Ore reserve 8.2MtStrip Ratio 0.86Initial Mine Life 9.2yrsAve Cu grade 2.5%Cathode Production capacity 25,000 tpaLOM Cathode Production 150,000 tAverage Copper Recovery 75%Operating Cash Cost US$1.07/lbCapital Costs US$167.4m


In 2010, Finders began operating a 1,850tpa Cu demonstration plant on site that incorporates heap leaching, solvent extraction (SX) and electrowinning (EW). The demonstration phase was successful, significantly de-risking the technical aspects of the project.

The BFS Update capital cost estimates include a two-stage, brownfields expansion of the project:

The Expanded Demonstration Plant (EDP) project phase involves the expansion of the existing 1,850tpa heap leach SX-EW plant to a nominal capacity of 7,000tpa of cathode copper.

Phase two incorporates the Main 18,000tpa SX-EW Plant purchased and relocated from Whim Creek for a total production capacity of 25,000tpa cathode.

Figure 21: Updated BFS Capex

Capital USDm

EDP 40.0Main Plant 110.0Accuracy Provision 17.3Contingency and other 52.6

Total Capex 220


Indonesian regulatory environment

In 2012, the Indonesian Government issued two new regulations. The first regulation (No. 7/2012) is designed to encourage the processing of pure metal products within Indonesia, prohibiting export of unfinished products- such as copper concentrate - from 2014.

The copper cathode product at the Wetar Copper Project complies with the 99% purity threshold for in country processing.

The second regulation (No. 24/2012) is designed to align with the constitution and safeguard the principal that mineral deposits are developed for the benefit of Indonesia, stipulating companies with mining licenses must be 51% Indonesian-owned by the tenth year of production.

The Wetar Project is jointly operated by Finders’ wholly-owned Indonesian subsidiary, PT Batutua Tembaga Raya (“BTR”, responsible for processing and cathode sales) and PT Batutua Kharisma Permai (“BKP”, responsible for mining and lease holder). In 3Q 2012, BKPM (the Indonesian Investment Coordinating Board) granted approval for foreign ownership (70%) of the local company holding tenements (BKP). BTR has completed subscription for 70% of BKP’s share capital. Finders’ economic interest in the project is unchanged at 95%.



16

The new regulations should not have an adverse effect on the Wetar Copper Project since the corporate structure is compliant with, and aligned with the principles of, both regulations No. 7/2012 and No. 24/2012.

Land ownership and Forestry permitting

Securing project financing and commencing first construction have been hampered by delays over permitting of pre-existing forestry zoned areas to rezone to non-forestry status.

FND is pursuing two possible pathways to permitting:

Maluku Spatial Plan - is the preferred process, requiring a government-sponsored new spatial plan for the province of Maluku in which the forestry status of the majority of the project area is changed into open (non-forest) ground.

— The boundaries and documentation for the Spatial Plan have been agreed by the Provincial Government and Forestry Department since early 2012 but final gazetting is still pending.

Pinjam Pakai permit - this alternate process involves a local subsidiary applying for production stage forestry permits for areas within the project boundary that fall within Production Forest classification. This process is now at an advanced stage, with in-principle approval, subject to final survey, compensation and reclamation plans which are currently being concluded.

Next steps

FND has in place all other key subsidiary permits required for the development phase of the project, including:

— Mining business licences (“IUP”) for Transport and Sales, Sand & Gravel Mining and Limestone Mining.

— Building Permits for the EDP, Main Plant and Neutralisation Plants.

— Power generation permit for 20MW, location permits for water pipelines and electricity transmission lines, and Water use permits.

Project optimisation of the BFS and Master schedule is also ongoing, including:

— SX-EW copper production capacity can be increased by up to 10% without significant impact on capital estimates and based on the existing mining schedule.

— Refurbishment of the MFO generator units required for Stage 1 has been completed by Royce Power Engineering, including testing of the units and associated accessory equipment.

— Project Master Schedule review has been completed with an integrated schedule of works confirming delivery timelines for expansion to 7,000tpa cathode within 12 months of the project start date, and further expansion to 25,000tpa cathode production 12 months later.

— Key contractors have been selected for most aspects of the project, with contract documentation advanced to facilitate execution within a month of permitting.

Ojolali project

The Ojolali project (FND 71.7% interest) is an advanced gold-silver prospect in Lampung Province of southern Sumatra, covering a large epithermal system with numerous shoots. Ojolali lies within the Sumatran Gold Belt, which hosts numerous medium-large scale gold deposits.

The project has numerous geochemical targets, with a defined gold resource of 176koz including 131koz of oxide ore split between the Jambi and Tambang zones. Throughout the field only a few holes have been drilled to >100m depth, presenting potential for extension at depth.

In 2012, Finders announced that it would assess options to raise additional funding to accelerate the exploration and future development of the Ojolali project.



17


Our Wetar Island operating assumptions are based on the updated BFS released May 2012.

— A further updated BFS is scheduled to be released in late June 2013 and is expected to include small reductions to capital costs reflecting currency (USDIDR) and industry deflation, and reductions to forecast operating losses during construction.

— We forecast total project construction costs at USD207m, comparative to the existing BFS estimate of USD220m.

Following forestry permit approval expected June 2013, management is targeting finalisation of Wetar Island financing by October 2013. Our forecast financing assumptions are:

Figure 22: Wetar Island financing

Uses USDm Sources USDm

Capital 167 Senior debt 138 Operating losses and interest during construction 25 Mezzanine debt 24 Contingency 15 Equity 45 Total 207 Total 207


We model the BFS mine life of 9.2 years, with our production ramp-up reflecting the following staged project completion:

— The demonstration SW-EX plant to be switched back on in December 2013.

— Expanded demonstration plant to 7,000tpa copper production capacity by September 2014.

— Construction of main SX-EW plant to lift total combined production to 25,000tpa copper from October 2015.

Figure 23: Operating assumptions

2013f 2014f 2015f 2016f 2017f 2018f 2019f 2020f 2021f 2022f

Ore processed (Mt) - 0.2 0.7 1.4 1.3 1.4 1.4 1.4 1.4 1.4Copper grade (%) - 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%Copper recovery - 75.0% 75.0% 75.0% 75.0% 75.0% 75.0% 75.0% 75.0% 75.0%Copper production (t) - 3,094 13,313 25,313 24,750 25,313 25,313 25,313 25,313 25,313

C1 cost (U$/lb) - -1.23 -0.62 -1.07 -0.91 -0.92 -0.94 -0.96 -0.98 -1.01Total cost (US$/lb) - -1.38 -0.79 -1.26 -1.10 -1.11 -1.13 -1.16 -1.18 -1.21AUDUSD 1.04 1.03 0.98 0.90 0.89 0.88 0.88 0.88 0.88 0.88Copper price / US$/lb 3.25 3.10 3.29 3.49 3.34 3.36 3.44 3.46 3.54 3.62


Figure 24: Forecast financials

2013f 2014f 2015f 2016f 2017f 2018f 2019f 2020f 2021f 2022f

Total Revenue (A$m) - 21 99 216 206 213 218 219 224 229Expenses (A$m) -12 -16 -31 -84 -74 -76 -76 -78 -74 -75EBITDA (A$m) -12 4 68 131 132 137 142 141 151 154D&A (A$m) -2 -10 -17 -17 -17 -17 -17 -17 -17 -17EBIT (A$m) -14 -5 51 114 115 120 125 124 134 137

Operating cashflow -8 4 47 95 93 101 107 110 119 125Investing cashflow -51 -125 -57 -5 -5 -5 -6 -5 -5 -3FCFF -54 -114 1 97 97 101 103 103 106 113

Project IRR 35%Project NPV (A$m) $204




18

Valuation

Our valuation of Wetar Island is based on the DCF methodology, using forecast FCFF based on the current mine life of existing reserves. We value the Ojolali exploration project resource using an EV/oz multiple after discounting for conversion risk.

— We assume a weighted average cost of capital of 10.8%.

— Our total raw unadjusted NPV of FND is $174m, or $0.26ps.

— We set our 12-month price target at $0.20 by applying a 20% discount to our project valuations to reflect current market conditions and short-term risks around permitting, financing and the construction of Wetar Island.


FND AUDm AUDps Risk Adj Price target

Wetar Island Copper Project 204 $0.32 0.80 $0.25Exploration/Growth 6 $0.01 0.80 $0.01Corporate -27 -$0.05 1.00 -$0.05Cash / (Net Debt) -10 -$0.02 1.00 -$0.02Total 174 $0.26 $0.20

Risk Free Rate 5.5%Equity Risk Premium 6.0%Beta 1.3Cost of Equity 13.3%Target Gearing 30.0%Cost of Debt 7.0%Tax Rate 30.0%WACC 10.8%


Investment view

We initiate coverage of FND with an Overweight recommendation and $0.20 price target. The Wetar Island project is a high quality and low-cost operation, and FND’s market capitalisation is highly discounted compared to the project’s NPV. We believe that as the project is continually de-risked through permitting and financing approvals through to construction, increasing shareholder value can be realised.

Risks


Copper price – material variance from our base case forecast.

Failure to obtain Indonesian forestry permitting approval and other relevant mining permits.

Failure to obtain sufficient project financing.

Capital cost over-runs and/or delays.



19

Crusader Resources

Company overview

CAS is a Brazil-focussed exploration company, with strong local networks benefitting from CAS’ experienced in-country management.

CAS’ principal project and focus is the ongoing development of its 100%-owned Borborema gold project, where it has successfully identified a resource of 2.43Moz and Maiden Ore Reserve of 1.61Moz.

A BFS is currently in progress, due for completion in mid-CY13, with targeted first production in calendar year 2014.

CAS has a diverse portfolio of over 4,100km2 of exploration tenements in the Seridó Belt of north east Brazil, which hosts Borborema with an exploration program to expand Crusader’s gold-driven organic growth through discovery of repeats of Borborema-style mineralisation.

Following granting of a mining licence in December 2012, CAS successfully commissioned the small scale Posse Iron Ore Project during the March quarter of 2013.

Posse is expected to produce run‐of‐mine production of up to 1.0mtpa of premium lump and fines product from an Indicated Mineral Resource of 36Mt @ 43.5% Fe with low contaminants. The project delivers important early cashflow for CAS in the lead up to developing Borborema.

Figure 27: Crusader Resources Borborema and Posse project regional plan

Source: Crusader Resources

In addition to instituting positive cashflow generation from Posse, CAS has sought to strengthen its balance sheet with a $20m debt facility announced in March CY13.

To further complement Crusader’s established in-country management team, CAS has strengthened its ties to Brazil through the appointment of ex-Vale executive, Mr Mauricio Ferreira, as a non-executive director. His local knowledge, contacts and understanding of the mining, regulatory and investment industries within Brazil should be valuable for the company.

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21

Given the current state of international financial markets, CAS is critically reviewing all areas of the BFS study to ensure the maximum NPV and IRR are achieved, including a number of trade of studies to further enhance the project.

— CAS is also considering an option for a staged production project, which would have a positive impact on the amount of capital required to commence production.

Licensing activities, infrastructure studies, social interaction and communication, and environmental monitoring are all ongoing

Figure 29: Borborema reserve open pit assumptions (@USD1,350/oz)

Total ore tonnes mined 42.4MAnnualised throughput 4MtpaLife of Mine (LOM) >10yrsGold grade (g/t) 1.18Mining recovery 98%Mineable Gold 1.61MozMetallurgical recovery 95%LOM recovered gold 1.53MozLOM strip ratio 6.5:1


Posse project overview

The Posse Iron Ore Mine is expected to produce run‐of‐mine production of up to 1.0mtpa of low contaminant, premium lump and fines product. The project delivers important early cashflow for CAS in the lead up to developing Borborema. The mining licence was received in December 2012.

The project has a Mineral Resource of 36Mt @ 43.5% Fe. It boasts a low strip ratio (0.15:1 in the early years), is free digging, and simple crushing and dry screening of the ore results in very low operating costs of ~ AUD12 per tonne of ore mined.

The mine is located 30km from Belo Horizonte, the capital of Minas Gerais state, and is served with an experienced mining workforce amongst a population of over 2.3m and favourable infrastructure and excellent access to the domestic steel market.

Key infrastructure items, including the completion of highway entrances, modification of stockpile areas and expansion of office facilities, were completed during the March quarter 2013 with production and sales commencing in March.

— A total of 11,705 tonnes of ore were mined and 6,764 tonnes processed during the quarter.

Customer feedback reported has been very good, with focus now on delivering consistent and high quality product. Additional drilling that was undertaken during the March CY13 quarter will allow more accurate mine planning and grade control, enabling improved product quality control.


Our operating assumptions for the Posse iron ore project reflect an assumed mine life of seven years.

— Cash costs of production at AUD13.50/t life-of-mine average.

— Realised iron pricing estimated at AUD70/t for coarse and fine lump (>63% Fe) during initial 18-months, followed by AUD28/t for fines (55% Fe) and AUD14/t for low grade fines (40% Fe) from years 2-6.

— Capex estimated at AUD8m for construction of a magnetic concentration of low grade fines plant to extend mine life to 2020.

We estimate the project NPV at $53m and an exceptionally strong IRR at 321% due to negligible capex requirements. Further sighting on the realisable value of iron ore sales to local steel mills over time could provide significant upside potential.



22

Figure 30: Posse operating assumptions and financials

2013f 2014f 2015f 2016f 2017f 2018f 2019f 2020f

Iron ore production (Mt) 0.1 1.0 1.0 1.0 1.0 1.0 1.0 1.0Iron ore grade (% Fe) 43.5% 43.5% 43.5% 43.5% 43.5% 43.5% 43.5% 43.5%Total cash cost (U$/t) -13.1 -13.5 -13.8 -14.2 -14.5 -14.9 -15.2 -15.6Iron ore fines price (US$/t) 126 125 113 105 100 100 100 101Realised iron ore price (US$/t) 70 69 33 29 28 30 30 31AUDUSD 1.04 1.04 1.01 0.93 0.90 0.88 0.88 0.88

Total Revenue (A$m) 6.3 62.5 29.6 26.3 25.2 26.6 26.8 27.7Expenses (A$m) -1.3 -13.5 -13.8 -14.2 -14.5 -14.9 -15.2 -15.6EBITDA (A$m) 5.0 49.0 15.8 12.2 10.7 11.7 11.5 12.1D&A (A$m) -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5EBIT (A$m) 3.5 47.5 14.3 10.7 9.2 10.2 10.0 10.6

Project IRR 321%Project NPV (A$m) $52.8


Our operating assumptions for Borborema gold project are based on a 10.5-year mine life at 4.0mtpa processing rate and reserve gold grade. We assume construction cost of AUD172m.

We forecast life-of-mine average cash costs of AUD925/oz based on average AUD2.70/t mining cost, AUD15/t processing cost and 6.5:1 strip ratio.

— We expect further project enhancements to reduce capital expenditure requirements will be released with the BFS in 2H 2013.

Figure 31: Borborema operating assumptions and financials

2013f 2014f 2015f 2016f 2017f 2018f 2019f 2020f

Ore Processed (t) - - 2.0 4.0 4.0 4.0 4.0 4.0Gold Grade (g/t) - - 1.18 1.18 1.18 1.18 1.18 1.18Recovery - - 97.0% 97.5% 97.5% 97.5% 97.5% 97.5%Production (oz) - - 73,600 147,958 147,958 147,958 147,958 147,958

Gold price / oz 1,604 1,372 1,352 1,327 1,254 1,283 1,312 1,342Cash Costs / oz - - -890 -891 -912 -932 -953 -974Total Costs / oz - - -903 -905 -924 -945 -966 -988

Total Revenue (A$m) - - 99 196 186 190 194 199Expenses (A$m) - - -66 -134 -137 -140 -143 -146EBITDA (A$m) - - 33 62 49 50 51 52D&A (A$m) - - -1 -1 -1 -1 -1 -1EBIT (A$m) - - 24 46 31 33 34 35

Project IRR 18%Project NPV (A$m) $52.3


Valuation

Our valuation of CAS is based on the DCF methodology using forecast FCFF based on current mine life of existing reserves for both the Posse iron ore project and Borborema gold project.


— Our total raw-unadjusted NPV of RXM is $395m, or $0.55ps, with more than half our valuation reflected in the iron ore project given its projected high margins (AUD40/t cost) and low incremental capex requirement of AUD120m.

We set our 12-month price target at $0.30ps by applying a 10% discount to our project valuation to reflect funding risks and project delays while project optimisation studies continue.



23


AUDm AUDps Risk Adj Price target

Posse Iron Ore Project 53 0.26 1.00 0.26Borborema Gold Project 52.3 0.16 0.90 0.14Corporate -23 -0.14 1.00 -0.14Cash / (Net Debt) 5 0.04 1.00 0.04Value 87 0.32 0.30



Investment view

CAS’ Posse iron ore mine is small scale but creates significant value for CAS relative to its market cap. The flagship Borborema project yields slightly lower NPV than Posse, reflecting high cash cost and capex requirements. We are optimistic toward the BFS optimisation to identify opportunities for improving the value of Borborema, through resource expansion and potential staged development. We initiate coverage of CAS with a Neutral recommendation and $0.30 12-month price target.

Risks


Commodity prices – material variance from our base case iron ore and gold price forecasts.

Currency – unfavourable FX movements in AUDUSD and USDBRL.

Borborema – unfavourable adjustments to forecast capex and operating costs from the BFS outcome.

Posse – unfavourable study outcomes.

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25

Figure 35: RXM Hillside PFS results

Annual average Total for 15 years

Project Revenue ~A$710 million ~A$11 billionEstimated operating cashflow before tax (EBITDA) ~A$240 million ~A$3.6 billionCopper production (tonnes) 70,000 1,050,000 Gold production (ounces) 50,000 750,000 Iron ore production (tonnes @ 67% Fe) 1.2 million 18 millionAverage cash costs (after by-product credits) ~US$1.20/lbProcessing plant capacity 15Mt 225Mt


Estimated pre-production capital for the Hillside Project is approximately AUD900m. The bulk of capital is dedicated to the construction of a 15Mtpa processing plant and surface infrastructure. The processing plant will produce a copper-gold concentrate, followed by separate components that can further treat the tailings to recover a high quality iron ore concentrate. Pre-strip for the open pit is scheduled to commence six months prior to production start up (Figure 36).

Figure 36: RXM Hillside pre-production capital

Pre-production capital Cost estimates

Pre-strip & mining infrastructure A$100 millionProcess plant and surface infrastructure A$680 millionIron ore extensions A$120 millionTotal (includes A$90 million of contingency) A$900 million


Mining

Hillside PFS assumes an open pit mine, supplemented by underground mining of potential deeper extensions of resource. Current LOM plan is predominately based on current Indicated Mineral Resource and assumes just over 50% of available Mineral Resource is converted to mineable Reserve, with potential for further conversion dependent on commodity and cost drivers.

Optimised mining options identified an open pit mine with an average operating strip ratio of approximately 4:1 and an average mining cost per tonne of approximately AUD3.00. Mineralisation extends beyond the proposed open pit mine and is intended to be mined using underground mining (longitudinal and transverse sub-level caving). Underground material adds over 30Mt to Hillsides total mining inventory and remains open at depth and to the north, presenting potential for further growth.

Processing

Proposed process plant design utilises conventional flotation technology to produce a copper-gold concentrate. In addition, the tailings from the copper-gold circuit will be treated to recover an iron ore product, which would be produced and sold separately as an iron ore concentrate.

LOM head grades are estimated to average 0.54% copper or 0.8%CuEq2. Copper recoveries are estimated to be 85% and gold recoveries are estimated to be approximately 82%.

Treatment of the tailings using conventional magnetic separation methods is targeted to recover 1.1 to 1.3Mt of iron ore annually, with the iron ore concentrate containing an average grade of 67% iron with low impurities at a cost of less than AUD40/t, making it one of the lowest cost iron ore products in Australia, and well within the bottom quartile of global iron ore production.

Transport of the copper-gold and iron ore concentrates will be via a 12km slurry pipeline from the process plant to the port of Ardrossan. The construction of the slurry pipeline and washing/drying facilities close to the port are included in the estimates for capital required for the project.

Infrastructure

Capital costs at Hillside benefit from its close proximity to infrastructure and ability to access existing key services such as power, water and port facilities including:

Infrastructure – a major highway connects Hillside to Adelaide (two hour drive).

People and equipment – South Australia has a developed mining industry, providing a potential source of skilled labour, service and equipment suppliers.

Power – the area is connected to South Australia’s main power grid.

Port and town – Hillside lies within 15kms of the port town of Ardrossan.



26

In October 2012, RXM announced an agreement with SA Water which will ensure that the required fresh water for the Hillside Project will be available in time to commence in 2015. The PFS has also identified multiple options for access to power and port facilities without the need for building new remote facilities.

The existing power network, both adjacent to and throughout Yorke Peninsula, has adequate capacity to deal with the needs of the Hillside Project. Current network has 132kV line capacity within 10km of the site, with the ability to further enhance this capacity by linking the larger 275kV line capacity into the Hummocks substation, located at the top of Yorke Peninsula.

Growth of existing resources

The resource at Hillside has grown over a relatively short period (2.5yrs), to its current 330Mt @ 0.6% Cu for 2.0Mt of contained copper inclusive of 431 diamond holes and 234 RC drill holes, for a total of 212,000 metres (Figure 37). The depth of Hillside is still not fully tested, providing potential for further extension beyond its initial 15-year mine life.

Figure 37: RXM Hillside Inferred and Indicated Resource – July 2012

Contained Contained ContainedZone Category Tonnes (mt) Copper % Gold g/t Iron % Copper (t) Gold (oz) Iron ore (oz)

Oxide Copper Indicated 19.0 0.55% 0.21 14.49% 104,500 128,281 2,754,509Oxide Copper Inferred 1.0 0.50% 0.10 14.10% 5,000 3,215 139,481Secondary Sulphide Indicated 14.0 0.59% 0.20 14.81% 82,600 90,022 2,092,737Secondary Sulphide Inferred 1.0 0.70% 0.10 11.50% 7,000 3,215 102,861Primary sulphide Indicated 129.0 0.59% 0.15 13.83% 761,100 622,117 17,502,511Primary sulphide Inferred 167.0 0.60% 0.10 14.10% 1,002,000 536,917 23,293,359Total 330.0 0.60% 0.15 14.10% 1,980,000 1,591,462 46,028,794


Next steps

RXM anticipates the Bankable Feasibility Study (BFS), SA Government approvals and project financing will be completed before the end of 2013, in time for construction start up in early 2014.

State government approvals and associated mining licences are anticipated to be submitted in early 2013. As part of the approvals process, Rex has been working with a community consultative committee, which represents a comprehensive spectrum of the local community including the local council, local community groups and State government representatives.


Our Hillside Project forecast operating assumptions are based on PFS released October 2012.

While original PFS estimated Hillside construction costs at AUD900m, RXM announced in March 2013 that project enhancements, including significant capital reductions, were being considered as part of the BFS scheduled to be completed in late 2013.

— For the purposes of our analysis, we have assumed original PFS estimates with our financing assumptions outlined below:

Figure 38: Hillside sources and uses

Uses AUDm Sources AUDm

Pre-strip and mining infrastructure 100 Senior debt 620 Process plant and surface infrastructure 680 Equity 280 Iron ore project extension 120 Gearing 69% Total 900 Total $900


We model first production from FY16f, with ramp-up to the design nameplate capacity of 15mtpa using reserve grades for copper, gold and iron ore.

— Based on indicated open-pit mining costs of AUD3/t, processing costs of AUD11-12/t and CBAf commodity prices for gold and iron in Figure 39 (by product revenues), we forecast average life-of-mine C1 cash costs of AUD1.79/lb, approximately 50% higher than PFS estimates of AUD1.20/lb.



27

Figure 39: Hillside operating assumptions

2016f 2017f 2018f 2019f 2020f 2021f 2022f 2023f 2024f 2025f

Ore processed (Mt) 7.5 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0Copper grade (%) 0.53% 0.53% 0.53% 0.53% 0.53% 0.53% 0.53% 0.53% 0.53% 0.53%Gold grade (g/t) 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14Copper recovery 88.0% 88.0% 88.0% 88.0% 88.0% 88.0% 88.0% 88.0% 88.0% 88.0%Copper production (t) 34,980 69,960 69,960 69,960 69,960 69,960 69,960 69,960 69,960 69,960Gold production (oz) 28,357 56,714 56,714 56,714 56,714 56,714 56,714 56,714 56,714 56,714Iron ore concentrate (Mt) 1.0 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8

C1 cash cost (incl gold by-products) (A$/lb)

-2.21 -2.22 -2.26 -2.32 -2.38 -2.44 -2.50 -2.57 -2.63 -2.70

C1 cash cost (incl all by-products) (A$/lb)

-1.55 -1.62 -1.66 -1.72 -1.77 -1.82 -1.87 -1.92 -1.97 -2.02

Total cash cost (A$/lb) -1.76 -1.84 -1.87 -1.94 -1.99 -2.04 -2.10 -2.15 -2.21 -2.27

AUDUSD 0.93 0.90 0.88 0.88 0.88 0.88 0.88 0.88 0.88 0.88Copper price (US$/lb) 3.41 3.44 3.33 3.40 3.45 3.50 3.58 3.66 3.74 3.83Gold price (US$/oz) 1,327 1,254 1,283 1,312 1,342 1,372 1,403 1,434 1,467 1,500Iron ore fines (US$/t) 129 118 110 102 100 100 100 102 104 107


Figure 40: RXM forecast financials

2016f 2017f 2018f 2019f 2020f 2021f 2022f 2023f 2024f 2025f

Total Revenue (A$m) 391 789 787 802 815 828 866 885 906 926Expenses (A$m) -268 -494 -506 -518 -531 -544 -571 -585 -600 -614EBITDA (A$m) 123 295 281 284 284 284 295 300 306 312D&A (A$m) -45 -85 -85 -85 -85 -85 -85 -85 -85 -85EBIT (A$m) 78 210 196 199 199 199 210 215 221 227

Operating cash flow 79 203 205 210 242 223 236 247 257 268Investing cash flow -50 -40 -35 -20 -10 -10 -11 -11 -11 -10FCFF 63 192 188 205 215 215 219 222 226 230



Valuation

Our valuation of Hillside is based on the DCF methodology, using forecast FCFF based on the current mine life of existing reserves.


— Our total raw unadjusted NPV of RXM is $395m, or $0.55ps, with more than half our valuation reflected in the iron ore project given its projected high margins (AUD40/t cost) and low incremental capex requirement of AUD120m.

— We set our 12-month price target at $0.31 by applying a 50% discount to our project valuation to reflect risks including uncertain project parameters, funding challenges and current market conditions.


AUDm AUDps Risk Adj Price

Hillside copper gold project 162 0.18 0.50 0.09Hillside iron ore project 265.8 0.30 0.50 0.15Corporate -67 -0.10 1.00 -0.10Cash / (Net Debt) 34 0.18 1.00 0.18Value 395 0.55 0.31





28

Investment view

The Hillside project has large-scale potential and is geographically well located, with excellent access to existing infrastructure including highway, power and port. However, based on current capex and operating cost estimates, we view the funding requirement of AUD900m against RXM’s market capitalisation of AUD49m as a potentially insurmountable challenge.

That said, the substantial size of the resource has considerable potential value and potential for third party buy in to help motivate development. We believe optimisation and refinements to reduce up-front capex requirements could see Hillside become a reality. We initiate coverage of RXM with a Neutral recommendation and $0.31 12-month price target.

Risks


Commodity prices – material variance from our base case copper, gold and iron ore price forecasts.

Unfavourable or insufficient project enhancements provided from the outcome of the BFS scheduled to be released late 2013.

Failure to secure required project funding.

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31

Mining

Two mining methods are proposed for the Sulphur Springs project; long hole open stoping and transverse stoping for stoping widths in excess of 13m. Mining will be staged bottom-up, utilising a combination of rock fill and paste fill for ground support. The placement of cemented paste fill in the transverse stopes will facilitate a mining sequence of primary and secondary stopes mined adjacent to each other, without the need for permanent pillars.

All development will be undertaken by conventional drill and blast excavation techniques.

The open pit mining study for the Whim Creek and Mons Cupri deposits consists of simple cut backs of the existing oxide open pits.

Processing

The conventional flotation process flow sheet was developed following new and historical test work completed at the Sulphur Springs and Whim Creek sites. The major components of the processing plant design are:

Three-stage crushing circuit, with variable grind size dependent on ore supply (55-80 micron).

Two-stage flotation circuit to produce separate copper and zinc concentrates, with provision for the future addition of a lead recovery circuit.

Separate concentrate and tailings thickeners.

Large scale concentrate storage and loading facility.

Paste plant to produce a filtered tailings product for placement underground and into tailings.

Growth of existing resource

The final Project Mine Plan delivered a Probable Ore Reserve 8.37 Mt @ 1.8% Cu, 4.0% Zn, 0.3% Pb and 21.5 g/t Ag. Potential exists to extend the resource and reserve with Sulphur springs remaining open at depth and along various aspects of the resource.

The DFS incorporates only three of the six known mineral resources currently controlled by the company in the Pilbara region.

The proximity of Salt Creek, Evelyn and Kangaroo Caves resource provides potential future ore supply for the processing hub at Sulphur Springs.

— Preliminary company modelling indicates that the additional resources could produce a potential project life in excess of 11 years at the current planned throughput rate.

Next steps

Exploration work continues to seek brownfield discovery and extensions to the current resource base. Construction work has commenced on the Sulphur Springs access and haul road.

Recognising volatility in global markets, VXR has initiated an enhancement program to optimise and upscale the project, including:

Increased scale – with aim to incorporate potential of additional resource areas.

Project value – refinement of the multiple ore source development sequence to optimise value.

Capex – investigate alternative capex options (eg modular construction).

Permitting – secure development approvals for the project.

In April 2013, VXR launched a $6.42m capital raising, partly to fund ongoing exploration for the Pilbara copper-zinc project, including a $1.2m placement to significant shareholder Henghou Industries and a 2:11 $5.22m non-renounceable rights issue to eligible shareholders.



32


Our operating assumptions for the Sulphur Springs copper-zinc project are based on the DFS project parameters and CBA’s commodity price deck (Figure 48).

— We assume a construction cost of AUD250m and model a 9-year mine life, with production ramping up to the 1.0mtpa processing rate by FY15.

— We forecast an average life-of-mine C1 cash cost USD1.69/lb payable copper, after by-product revenue of 30kt zinc and 200koz silver.

Figure 48: Sulphur Springs operating assumptions

2013f 2014f 2015f 2016f 2017f 2018f 2019f 2020f 2021f

Ore processed (Mt) - 0.5 1.0 1.0 1.0 1.0 1.0 1.0 1.0Copper grade (%) 1.8% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8%Zinc grade (%) 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%Silver grade (g/t) 17.00 17.00 17.00 17.00 17.00 17.00 17.00 17.00 92.0%Copper recovery 72.0% 85.0% 85.0% 92.0% 92.0% 92.0% 92.0% 92.0% 16,560Copper production (t) - 7,650 15,300 16,560 16,560 16,560 16,560 16,560 16,560Zinc production (t) - 15,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000Silver production (oz) - 114,778 196,763 202,229 199,496 199,496 199,496 199,496 199,496

C1 Cash Costs / US$/lb - -3.19 -1.91 -1.63 -1.27 -1.27 -1.35 -1.43 -1.47AUDUSD 1.05 1.07 1.02 0.93 0.90 0.88 0.88 0.88 0.88Copper price / US$/lb 3.48 3.09 3.18 3.41 3.44 3.33 3.40 3.45 3.50Zinc price / US$/t 2,038 2,369 2,616 2,755 2,807 2,831 2,845 2,858 2,922


We calculate the Sulphur Springs project NPV at $17m and IRR at 12%, only marginally above the company’s cost of capital.

We anticipate project optimisation will require at least a further 12 months to finalise but cite that we expect this will create further dilutionary funding risk.

Figure 49: Forecast financials

2013f 2014f 2015f 2016f 2017f 2018f 2019f 2020f 2021f

Total Revenue (A$m) - 81 180 219 229 230 233 236 240Expenses (A$m) - -87 -149 -163 -156 -159 -163 -167 -171EBITDA (A$m) - -6 31 56 73 70 70 69 69D&A (A$m) - -14 -22 -35 -35 -35 -35 -35 -14EBIT (A$m) - -24 1 10 27 24 24 23 51

Operating cash flow (A$m) -2 12 33 44 52 55 55 56 52Investing cash flow (A$m) -6 -153 -105 -5 -5 -5 -6 -5 -FCFF (A$m) -5 -152 -74 48 60 58 57 57 53





33

Valuation

Our valuation of VXR is based on the DCF methodology, using forecast FCFF based on the current mine life of existing reserves for Sulphur Springs.

We assume a weighted average cost of capital of 10%.

— Our total raw unadjusted NPV of VXR is $15m, or $0.01ps, or almost half the current market capitalisation of AUD27m and $0.019 share price.

We set our 12-month price target in-line with our NPV.


VXR AUDm AUD ps

Sulphur Springs 17 0.01Corporate -8 0.00Cash / (Net Debt) 7 0.00Value 15 0.01



Investment view

We recognise and endorse VXR management’s strategic shift to refine and optimise the Sulphur Springs/Pilbara CuZn project and believe a quantum shift in project economics (capex, operating costs, LOM) is required to warrant development.

VXR’s substantial and proven regional tenement and resource package could provide the solution, with only three of six known mineral resources currently included in the project. However, we anticipate project optimisation to require at least a further 12 months to finalise and cite that we expect ongoing dilutionary funding risk. We initiate coverage of VXR with an Underweight recommendation and 12 month price target of $0.01.

Risks


Commodity prices – material variance from our base case copper and zinc price forecasts.

Currency – unfavourable movement in the AUDUSD exchange rate.

Project funding – inability to secure required bank debt and/or equity funding component at suitable price to prevent excessive shareholder dilution.

Liquidity/solvency – we stress that VXR has AUD6.5m cash on hand with no operating revenues and is likely reliant on equity capital raisings to fund exploration. We believe current market conditions, including a depressed share price, make this increasingly dilutive. In addition, the company needs to spend further money on project refinements and exploration, placing the company in an increasingly challenging position.

Glob

Equ

bal Markets Res

uities: Copsearch

pper & Go

App

Figu

Sourc

Figu

Sourc

ld Juniors

pendix 1 –

re 52: Andy W

ce: Doray Mine

re 53: Andy W

ce: Doray Mine

– Doray M

Well Resourc

erals

Well – Judy L

erals

Minerals

ce and Reser

Lode maiden

rve growth (o

n resource, lo

oz)

ong section

34

Glob

Equ

bal Markets Res

uities: Copsearch

pper & Go

Figu

Sourc

Figu

Sourc

ld Juniors

re 54: Andy W

ce: Doray Mine

re 55: Andy W

ce: Doray Mine

Well Site Lay

erals

Well Develop

erals

yout

pment timelin

ne

35



36

Figure 56: Murchison exploration areas

Source: Doray Minerals

Figure 57: DorayMinerals – South Australian exploration areas

Source: Doray Minerals

Glob

Equ

bal Markets Res

uities: Copsearch

pper & Go

App

Figu

Sourc

Figumine

Sourc

ld Juniors

pendix 2 –

re 58: Wetar

ce: Finders Re

re 59: Old Bieralisation

ce: Finders Re

– Finders

Project - site

esources

lliton gold op

esources

Resourc

e plan

pen pit and e

es

exposed Kali Kuning mass

sive sulphidee copper

37

Glob

Equ

bal Markets Res

uities: Copsearch

pper & Go

Figu

Sourc

Figu

Sourc

ld Juniors

re 60: Demon

ce: Finders Re

re 61: Coppe

ce: Finders Re

nstration pla

esources

er SX-EW pro

esources

ant: 2,500t LM

ocess

ME grade A CCathode

38

Glob

Equ

bal Markets Res

uities: Copsearch

pper & Go

Figu

Sourc

Figu

Sourc

ld Juniors

re 62: Pre-ex

ce: Finders Re

re 63: Existin

ce: Finders Re

xisting Forest

esources

ng Infrastruct

esources

try Status

ture

39

Glob

Equ

bal Markets Res

uities: Copsearch

pper & Go

App

Figu

Categ

Prove Proba Total

Sourc

Figu

Sourc

Figu

Sourc

ld Juniors

pendix 3 –

re 64: Borbo

gory

en

able

ce: Crusader R

re 65: Borbo

ce: Crusader R

re 66: Borbo

ce: Crusader R

– Crusade

rema Gold P

OxideFreshOxideFresh

Resources

rema Gold P

Resources

rema Gold P

Resources

er Resour

Project – Maid

Tonnes (M

0.7.1.

32.42.

Project – long

Project – cros

rces

den ore rese

Mt)

6526688241

g section (Jul

ss section (Q

rve (Nov 201

Grade (Au g/t)

0.801.250.701.201.18

y 2012)

– Q)

2)

Mineable Gold

40

d (koz)

17 292 381,2601,610

Glob

Equ

Figu

Sour

bal Markets Res

uities: Cop

ure 68: Posse

rce: Crusader

search

pper & Go

Figu

Sourc

e iron ore min

Resources

ld Juniors

re 67: Posse

ce: Crusader R

ne processin

mine – locat

Resources

ng

tion and infra

Figu

Sourc

astructure

ure 69: Posse

rce: Crusader R

e mine

Resources

41

Glob

Equ

bal Markets Res

uities: Copsearch

pper & Go

App

Figu

Sourc

Figu

Sourc

ld Juniors

pendix 4 –

re 70: Hillside

ce: Rex Minera

re 71: RXM –

ce: Rex Minera

– Rex Min

e exploration

als

– Hillside Res

als

nerals

n drill lines an

source growt

nd magnetics

th

s

42

Glob

Equ

bal Markets Res

uities: Copsearch

pper & Go

Figu

Sourc

Figu

Sourc

ld Juniors

re 72: RXM –

ce: Rex Minera

re 73: RXM –

ce: Rex Minera

– water soluti

als

– power solut

als

ion agreed w

tion, existing

with SA Wate

g SA infrastru

r

ucture

43

Glob

Equ

bal Markets Res

uities: Copsearch

pper & Go

Figu

Sourc

Figu

Sourc

ld Juniors

re 74: RXM –

ce: Rex Minera

re 75: RXM –

ce: Rex Minera

– port solutio

als

– Hillside time

als

on, slurry pipe

eline

eline to existing port

44

Glob

Equ

bal Markets Res

uities: Copsearch

pper & Go

App

Figu

Sourc

Figu

Sourc

ld Juniors

pendix 5 –

re 76: Sulphu

ce: Venturex R

re 77: Tapajó

ce: Venturex R

– Venture

ur Springs sit

Resources

ós Gold regio

Resources

ex Resour

te layout

on (Brazil)

rces

45

Glob

Equ

bal Markets Res

uities: Copsearch

pper & Go

Figu

Sourc

Figu

Sourc

ld Juniors

re 78: Projec

ce: Venturex R

re 79: Projec

ce: Venturex R

ct mineral res

Resources

ct Ore Reserv

Resources

sources (@ 22

ves

2 November 2012)

46



47

Financials - DRM


Profit & Loss FY12A FY13F FY14F FY15F FY16F

Revenue - - 101.1 88.3 77.5 Financial Year End Date

Expenses -4.6 -10.0 -51.2 -50.7 -49.7 Last Reported Year

EBITDA -4.6 -10.0 50.0 37.6 27.8 Reporting Currency

Depreciation & Amortization -0.2 -0.6 -12.5 -12.0 -12.0 Valuation Currency

EBIT -4.9 -10.6 37.5 25.6 15.8 Share Price 0.45

Net Interest 0.7 0.0 -0.5 -0.7 0.5 Price Target 0.61

PBT -4.2 -10.6 36.9 24.9 16.3 Valuation 0.61

Tax - 3.2 -11.1 -7.5 -4.9 Recommendation

Minorities - - - - -

Underlying NPAT -4.2 -7.4 25.9 17.4 11.4

One-off items post tax - - - - -

Reported NPAT -4.2 -7.4 25.9 17.4 11.4

Balance Sheet FY12A FY13F FY14F FY15F FY16F Per Share Data (c) FY12A FY13F FY14F FY15F FY16F

Cash 5.2 34.0 71.1 83.5 90.0 EPS -14.9 -8.5 2.4 3.6 5.5

Receivables 0.4 - 8.1 7.1 6.2 Dividend - - - - -

Inventory - 1.2 11.1 10.9 11.2 Dividend Yield 0.0% 0.0% 0.0% 0.0% 0.0%

PP&E 1.4 40.8 46.3 37.3 28.3 Book Value 0.33 0.42 0.61 0.73 0.81

Other 21.6 21.6 21.6 21.6 21.6 P/E -14.9x -8.5x 2.4x 3.6x 5.5x

Total Assets 28.6 97.6 158.2 160.3 157.3 EV/EBITDA -12.0x -6.4x 0.8x 0.4x -0.2x

Creditors 1.8 2.4 22.1 21.9 22.4

Senior Debt - 35.0 50.0 35.0 20.0 Valuation A$m A$m A$ps

Other 0.1 0.1 0.1 0.1 0.1 Andy Well 31.6 0.22

Total Liabilities 2.0 37.5 72.3 57.0 42.6 Andy Well Extension 69.8 0.49

Shareholder Capital 30.4 71.3 71.3 71.3 71.3 Corporate -14.0 -0.10

Reserves/Other 2.7 2.7 2.7 2.7 2.7 Cash / (Net Debt) -1.0 -0.01

Retained Earnings -6.5 -13.9 12.0 29.4 40.8 Total Valuation 86.4 0.61

Total Equity 26.6 60.1 85.9 103.3 114.8

Cash Flow FY12A FY13F FY14F FY15F FY16F Operational FY12A FY13F FY14F FY15F FY16F

Net Income -4.2 -7.4 25.9 17.4 11.4 Production

Non-Cash Items 2.6 0.6 12.5 12.0 12.0 Andy Well Gold (oz) - - 79,543 68,964 56,425

Working Cap & Other 0.6 -0.2 1.8 0.9 1.1

Operating Cash Flow -1.0 -7.0 40.1 30.3 24.5 Cash costs (US$/lb)

Capex -0.6 -40.0 -18.0 -3.0 -3.0 C1 cash cost n/a 535 605 704 723

Other Investing Cash Flow -5.2 - - - - Total cash cost n/a 580 661 828 873

Investing Cash Flow -15.1 -40.0 -18.0 -3.0 -3.0

Capital Raisings 1.3 40.9 - - - Price forecasts

Net Borrowings - 35.0 15.0 -15.0 -15.0 Gold (US$/oz) 1,673 1,604 1,372 1,352 1,327

Dividends - - - - - Silver (US$/oz) 33 30 26 24 22

Other - - - - - Copper (US$/lb) 3.71 3.48 3.09 3.18 3.41

Financing Cash flow 1.3 75.9 15.0 -15.0 -15.0 AUD:USD 1.03 1.04 1.04 1.01 0.93

Total Cash Change -14.8 28.8 37.1 12.3 6.5

Operating Metrics (%) FY12A FY13F FY14F FY15F FY16F

EBITDA margin n/a n/a 49.4% 42.6% 35.9%

EBIT margin n/a n/a 37.0% 29.0% 20.4%

ROIC (NOPLAT) -22.6% -12.2% 40.7% 33.1% 24.4%

Return on Assets -14.6% -11.8% 20.2% 11.0% 7.2%

Return on Equity -15.4% -17.1% 35.4% 18.4% 10.5%

Net Debt / (Cash) (m) -5.2 1.0 -21.1 -48.5 -70.0

ND / ND+E -1.7% 1.5% -50.3% -330.8% 1017%

Effective Tax Rate 0.0% 30.0% 30.0% 30.0% 30.0%

Company Information

Overweight

30-Jun

2012

AUD

AUD



48

Financials - FND







EBIT -13.4 -13.5 -5.2 51.3 114.2 Share Price 0.16

Net Interest -6.4 -0.2 -2.4 -5.1 -8.1 Price Target 0.20

PBT -19.8 -13.7 -7.6 46.2 106.1 Valuation 0.26

Tax - 4.1 2.3 -13.9 -31.8 Recommendation

Minorities - 0.3 -0.1 -2.9 -6.1

Underlying NPAT -19.8 -9.3 -5.4 29.4 68.2


Reported NPAT -19.8 -9.3 -5.4 29.4 68.2


Cash 1.8 65.7 24.3 13.8 83.4 EPS -4.3 -2.1 -0.9 4.9 11.4


Inventory 0.4 1.2 2.2 5.7 18.5 Dividend Yield 0.0% 0.0% 0.0% 0.0% 0.0%

PP&E 16.2 65.7 181.2 221.2 209.3 Book Value 0.07 0.09 0.08 0.14 0.26

Other 16.6 16.6 16.6 16.6 16.6 P/E -4.6x -7.7x -17.7x 3.3x 1.4x

Total Assets 35.7 149.2 225.9 265.2 345.0 EV/EBITDA -5.2x -8.8x 53.4x 3.5x 1.2x

Creditors 2.3 2.4 4.4 11.3 36.9

Senior Debt 11.5 78.0 158.0 158.0 138.0 Valuation A$m A$ps

Other 2.1 13.6 13.6 13.6 13.6 Wetar Island Copper Project 204.2 0.32

Total Liabilities 15.9 94.0 176.0 182.9 188.5 Exploration/Growth 5.8 0.01


Reserves/Other 2.4 2.1 2.2 5.1 11.2 Cash / (Net Debt) -9.7 -0.02

Retained Earnings -79.1 -88.4 -93.8 -64.4 3.8 Total Valuation 173.7 0.26

Total Equity 19.8 55.2 49.9 82.2 156.5


Net Income -19.8 -9.6 -5.3 32.3 74.3 Production

Non-Cash Items 8.8 1.5 9.5 17.0 17.0 Copper (t) - - 3,094 13,313 25,313

Working Cap & Other 3.0 0.1 -0.6 -2.8 3.5

Operating Cash Flow -8.0 -8.0 3.5 46.5 94.8 Cash costs (US$/lb)

Capex -2.1 -51.0 -125.0 -57.0 -5.1 C1 cash cost n/a -1.23 -0.62 -1.07 -0.91

Other Investing Cash Flow -3.2 - - - - Total cash cost n/a -1.42 -0.77 -1.14 -0.98

Investing Cash Flow -6.9 -51.0 -125.0 -57.0 -5.1

Capital Raisings 5.3 45.0 - - - Price forecasts

Net Borrowings 9.5 78.0 80.0 - -20.0 Gold (US$/oz) 1,669 1,447 1,366 1,338 1,284

Dividends - - - - - Silver (US$/oz) 31 29 25 23 22

Other -1.7 - - - - Copper (US$/lb) 3.61 3.25 3.10 3.29 3.49

Financing Cash flow 13.1 123.0 80.0 - -20.0 AUD:USD 1.04 1.04 1.03 0.98 0.90

Total Cash Change -1.8 64.0 -41.5 -10.5 69.6


EBITDA margin #DIV/0! #DIV/0! 20.7% 68.9% 60.9%

EBIT margin #DIV/0! #DIV/0! -25.5% 51.7% 53.0%

ROIC (NOPLAT) -45.4% -13.9% -1.6% 16.5% 39.0%

Return on Assets -55.5% -10.0% -2.9% 12.0% 22.3%

Return on Equity -87.9% -24.7% -10.3% 44.5% 57.1%

Net Debt / (Cash) (m) 9.7 12.3 133.7 144.2 54.6

ND / ND+E 0.8% 0.6% 5.8% 6.3% 2.5%


Company Information

Overweight

31-Dec

2012

AUD

AUD



49

Financials - CAS



Revenue - 6.1 60.3 127.4 240.1 Financial Year End Date




EBIT -12.8 -2.9 39.4 30.7 66.3 Share Price 0.27

Net Interest 1.1 0.0 0.0 -1.8 -4.1 Price Target 0.32

PBT -11.7 -2.9 39.4 28.9 62.1 Valuation 0.30

Tax - 0.9 -11.8 -8.7 -18.6 Recommendation


Underlying NPAT -11.7 -2.0 27.6 20.2 43.5


Reported NPAT -11.7 -2.0 27.6 20.2 43.5


Cash 5.3 7.1 110.4 113.2 148.7 EPS -10.9 -1.6 16.1 9.3 20.1

Receivables 0.1 0.5 4.8 10.2 19.2 Dividend - - - - -

Inventory - - - 16.0 32.1 Dividend Yield 0.0% 0.0% 0.0% 0.0% 0.0%

PP&E 4.9 6.4 86.9 174.9 165.1 Book Value 0.21 0.23 0.45 0.54 0.74

Other 15.3 15.3 15.3 15.3 15.3 P/E -5.7x -17.1x 1.7x 2.9x 1.3x

Total Assets 25.6 29.3 217.4 329.5 380.4 EV/EBITDA -5.0x -19.8x 1.7x 3.1x 0.8x

Creditors 2.2 - - 31.9 64.3

Senior Debt 0.1 0.0 120.0 180.0 155.0 Valuation A$m A$m A$ps

Other 0.3 0.4 0.4 0.4 0.4 Posse Iron Ore Project 52.8 0.26

Total Liabilities 2.7 0.4 120.4 212.3 219.7 Borborema Gold Project 52.3 0.16


Reserves/Other 6.7 6.7 6.7 6.7 6.7 Cash / (Net Debt) 5.2 0.04

Retained Earnings -31.5 -33.5 -5.9 14.4 57.9 Total Valuation 86.9 0.32

Total Equity 22.9 28.9 97.0 117.2 160.7


Net Income -11.7 -2.0 27.6 20.2 43.5 Production

Non-Cash Items 5.8 1.5 1.5 10.0 18.0 Posse iron ore (t) - 0.1 1.0 1.0 1.0

Working Cap & Other 1.5 -2.6 -4.3 10.6 7.2 Borborema Gold (oz) - - - 73,600 147,958

Operating Cash Flow -4.4 -3.1 24.8 40.8 68.7

Capex -0.8 -3.0 -82.0 -98.0 -8.2 Cash costs (US$/lb)

Other Investing Cash Flow -7.2 - - - - Posse iron ore(A$/t) -13.1 -13.5 -13.8 -14.2 -14.5

Investing Cash Flow -11.6 -3.0 -82.0 -98.0 -8.2 Borborema total cash cost - - -903 -905 -924

Capital Raisings 17.4 7.9 40.5 - -

Net Borrowings -0.0 - 120.0 60.0 -25.0 Price forecasts

Dividends - - - - - Gold (US$/oz) 1,673 1,604 1,372 1,352 1,327

Other - - - - - Iron ore fines (US$/t) 156 126 125 113 105

Financing Cash flow 17.3 7.9 160.5 60.0 -25.0 Silver (US$/oz) 33 30 26 24 22

Total Cash Change 1.3 1.8 103.3 2.8 35.5 Copper (US$/lb) 3.71 3.48 3.09 3.18 3.41

AUD:USD 1.03 1.04 1.04 1.01 0.93


EBITDA margin n/a -22.5% 67.9% 32.0% 35.1%

EBIT margin n/a -47.1% 65.4% 24.1% 27.6%

ROIC (NOPLAT) -72.2% -9.2% 25.9% 12.0% 28.5%

Return on Assets -55.5% -7.3% 22.4% 7.4% 12.3%

Return on Equity -62.1% -7.7% 43.9% 18.9% 31.3%

Net Debt / (Cash) (m) -5.2 -7.1 9.7 66.8 6.4

ND / ND+E -1.2% -26.0% 14.2% 53.3% 9.8%


Company Information

Neutral

30-Jun

2012

AUD

AUD



50

Financials - RXM



Revenue - - - - 390.8 Financial Year End Date


EBITDA -3.6 -8.5 -11.0 -23.0 122.8 Reporting Currency

Depreciation & Amortization -0.0 - - - -45.0 Valuation Currency

EBIT -3.6 -8.5 -11.0 -23.0 77.8 Share Price 0.26

Net Interest 3.1 0.2 0.1 -5.3 -22.9 Price Target 0.31

PBT -0.5 -8.3 -10.9 -28.3 54.9 Valuation 0.55

Tax - 2.5 3.3 8.5 -16.5 Recommendation


Underlying NPAT -0.5 -5.8 -7.6 -19.8 38.4


Reported NPAT -0.5 -5.8 -7.6 -19.8 38.4


Cash 69.7 30.2 167.7 32.7 62.0 EPS -0.3 -3.1 -1.3 -2.0 3.9

Receivables 0.7 0.8 0.7 0.9 31.3 Dividend - - - - -

Inventory - 0.7 0.7 0.7 58.8 Dividend Yield 0.0% 0.0% 0.0% 0.0% 0.0%

PP&E 15.6 45.6 505.6 945.6 950.6 Book Value 0.95 0.92 0.45 0.43 0.47

Other 98.1 98.1 98.1 246.6 246.6 P/E -230.4x -8.4x -20.0x -13.0x 6.7x

Total Assets 184.2 175.5 772.9 1,226.5 1,349.2 EV/EBITDA -21.9x -2.2x -37.7x -38.0x 6.9x

Creditors 4.3 1.4 1.4 1.4 85.7

Senior Debt - - 325.0 650.0 650.0 Valuation A$m A$ps

Other 0.5 0.5 0.5 148.9 148.9 Hillside copper gold project 161.6 0.18

Total Liabilities 4.8 1.9 326.9 800.3 884.6 Iron ore project 265.8 0.30


Reserves/Other 1.3 1.3 1.3 1.3 1.3 Cash / (Net Debt) 34.3 0.18

Retained Earnings 0.4 -5.4 -13.0 -32.8 5.6 Total Valuation 394.9 0.55

Total Equity 179.4 173.6 446.0 426.2 464.6


Net Income -0.5 -5.8 -7.6 -19.8 38.4 Production

Non-Cash Items 0.1 - - - 45.0 Copper - - - - 34,980

Working Cap & Other 0.7 -3.7 0.1 -0.2 -4.2 Gold - - - - 28,357

Operating Cash Flow 0.3 -9.5 -7.5 -20.0 79.3 Iron ore - - - - 670,000

Capex -8.5 -30.0 -460.0 -440.0 -50.0

Other Investing Cash Flow -61.4 - - - - Cash costs (US$/lb)

Investing Cash Flow -15.3 -30.0 -460.0 -440.0 -50.0 Total cash costs - - - - -2.74

Capital Raisings 39.7 - 280.0 - - Net cash costs (C1) - - - - -1.55

Net Borrowings - - 325.0 325.0 -

Dividends - - - - - Price forecasts

Other - - - - - Iron ore fines (US$/t) 149 129 118 110 102

Financing Cash flow 39.7 - 605.0 325.0 - Gold (US$/oz) 1,673 1,604 1,372 1,352 1,327

Total Cash Change 24.7 -39.5 137.5 -135.0 29.3 Silver (US$/oz) 33 30 26 24 22

Copper (US$/lb) 3.71 3.48 3.09 3.18 3.41

Operating Metrics (%) FY12A FY13F FY14F FY15F FY16F AUD:USD 1.03 1.04 1.04 1.01 0.93

EBITDA margin n/a n/a n/a n/a 31.4%

EBIT margin n/a n/a n/a n/a 19.9%

ROIC (NOPLAT) -3.3% -4.2% -1.3% -1.4% 5.8%

Return on Assets -0.3% -3.2% -1.6% -2.0% 3.0%

Return on Equity -0.3% -3.3% -2.5% -4.5% 8.6%

Net Debt / (Cash) (m) -69.7 -30.2 157.3 617.3 588.0

ND / ND+E -10.4% -160.2% 38.0% 70.6% 69.6%


Company Information

Neutral

30-Jun

2012

AUD

AUD



51

Financials - VXR





EBITDA -4.3 -2.0 -10.2 26.9 51.7 Reporting Currency

Depreciation & Amortization - - -18.0 -30.0 -46.0 Valuation Currency

EBIT -4.3 -2.0 -28.2 -3.1 5.7 Share Price 0.02

Net Interest 0.9 0.0 -0.7 -2.7 -8.3 Price Target 0.01

PBT -3.4 -2.0 -29.0 -5.9 -2.6 Valuation 0.01

Tax 11.3 0.6 8.7 1.8 0.8 Recommendation


Underlying NPAT 7.9 -1.4 -20.3 -4.1 -1.8


Reported NPAT 7.9 -1.4 -20.3 -4.1 -1.8


Cash 6.5 57.0 26.2 53.9 93.2 EPS 0.01 -0.00 -0.01 -0.00 -0.00


Inventory 0.0 - 20.9 35.6 39.0 Dividend Yield 0.0% 0.0% 0.0% 0.0% 0.0%

PP&E 2.9 8.9 143.9 218.9 178.0 Book Value 0.05 0.04 0.03 0.03 0.03

Other 67.1 67.1 67.1 67.1 67.1 P/E 5.1x -23.2x -1.6x -7.8x -17.8x

Total Assets 76.6 133.0 264.6 389.9 394.9 EV/EBITDA -9.3x -12.6x -16.2x 8.9x 3.8x

Creditors 1.1 - 41.9 71.3 78.0

Senior Debt - 50.0 160.0 260.0 260.0 Valuation A$m A$m A$ps

Other 7.4 7.4 7.4 7.4 7.4 Pilbara Copper-Zinc 17.2 0.01

Total Liabilities 8.5 57.4 209.3 338.7 345.4 Corporate -8.3 -0.00

Shareholder Capital 79.4 88.3 88.3 88.3 88.3 Cash / (Net Debt) 6.5 0.00

Reserves/Other 1.2 1.2 1.2 1.2 1.2 Total Valuation 15.4 0.01

Retained Earnings -12.5 -13.9 -34.1 -38.3 -40.1

Total Equity 68.1 75.6 55.4 51.2 49.4


Net Income 7.9 -1.4 -20.3 -4.1 -1.8 Production

Non-Cash Items 1.3 - 18.0 30.0 46.0 Copper - - 7,650 15,300 16,560

Working Cap & Other -12.1 -1.0 14.4 6.8 0.3 Zinc - - 15,000 30,000 30,000

Operating Cash Flow -2.9 -2.4 12.1 32.7 44.5

Capex -0.3 -6.0 -153.0 -105.0 -5.1

Other Investing Cash Flow -30.5 - - - - Cash costs (US$/lb)

Investing Cash Flow -7.5 -6.0 -153.0 -105.0 -5.1 C1 cash cost - -3.19 -1.91 -1.63 -1.27

Capital Raisings 6.3 8.9 - - - Total cash cost - -3.46 -2.20 -1.92 -1.57

Net Borrowings - 50.0 110.0 100.0 -

Dividends - - - - - Price forecasts

Other - - - - - Gold (US$/oz) 1,673 1,682 1,728 1,660 1,428

Financing Cash flow 6.3 58.9 110.0 100.0 - Silver (US$/oz) 33 31 26 24 22

Total Cash Change -4.0 50.5 -30.9 27.7 39.3 Copper (US$/lb) 3.71 3.48 3.09 3.18 3.41

AUD:USD 1.03 1.05 1.07 1.02 0.93


EBITDA margin n/a n/a -12.5% 14.9% 23.6%

EBIT margin n/a n/a -34.6% -1.7% 2.6%

ROIC (NOPLAT) 11.4% -2.0% -10.3% -0.5% 3.0%

Return on Assets 10.4% -1.3% -10.2% -1.3% -0.5%

Return on Equity 12.9% -1.9% -30.9% -7.7% -3.6%

Net Debt / (Cash) (m) -6.5 -7.0 133.8 206.1 166.8

ND / ND+E -0.1% -0.1% 2.1% 3.3% 2.7%


Company Information

Underweight

30-Jun

2012

AUD

AUD



52

Current recommendation definitions CBA Institutional Equities investment recommendations are determined by the covering analyst and reflect the analyst’s assessment of a stock’s expected total shareholder return (TSR). Stock expected TSR is calculated as the difference between the analyst’s 12-month price target and the current share price plus the forecast dividend yield.

Overweight: Stocks with an Overweight recommendation represent the most attractive stocks under the analyst’s coverage. They are generally forecast to generate higher TSR compared to the rest of the analyst’s coverage.

Neutral: Stocks with a Neutral recommendation are less attractive than stocks with an Overweight recommendation. They are generally forecast to generate lower TSR compared to stocks with an Overweight recommendation in the analyst’s coverage.

Underweight: Stocks with an Underweight recommendation are the least attractive stocks. They are generally forecast to generate lower TSR compared to stocks with a Neutral recommendation in the analyst’s coverage.

Note: CBA’s previous recommendations prior to 9 November 2012 were:

Buy: Stocks with a Buy recommendation represent the most attractive stocks under the analyst’s coverage. They are forecast to generate significantly positive expected total shareholder returns. Hold: Stocks with a Hold recommendation are less attractive than stocks with a Buy recommendation. They are forecast to generate flat to slightly positive expected total shareholder returns. Sell: Stocks with a Sell recommendation are the least attractive stocks. They are forecast to generate flat or negative expected total shareholder returns. CBA’s previous recommendations prior to 25 January 2010 were: Short term (over 6 months): Buy – appreciate by >10%, Accumulate – increase between 2% and 10%, Reduce – increase by less than 2% or fall by up to 5%,Sell – fall by >5%. Long term (24 months) Outperform (O / P) – exceed market return by >5%, Market Perform (M / P) – be in line with market return, +/-5%, Under Perform (U / P) – be less than market return by >5%.

One year history of price target and recommendation changes

Date Price Target ($) Recommendation

19/05/2013 0.61 OVERWEIGHT


19/05/2013 0.20 OVERWEIGHT


19/05/2013 0.30 NEUTRAL


19/05/2013 0.31 NEUTRAL

0.0

0.2

0.4

0.6

0.8

1.0

May

12

Jun

12

Jul 1

2

Aug

12

Sep

12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13

Ap

r 13

DRM Price Target

0.0

0.1

0.2

0.3

May

12

Jun

12

Jul 1

2

Aug

12

Sep

12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13

Ap

r 13

FND Price Target

0.0

0.2

0.4

0.6

0.8

1.0

May

12

Jun

12

Jul 1

2

Aug

12

Sep

12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13

Ap

r 13

CAS Price Target

0.0

0.5

1.0

May

12

Jun

12

Jul 1

2

Aug

12

Sep

12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13

Ap

r 13

RXM Price Target



53


19/05/2013 0.01 UNDERWEIGHT

Source: CBA Equities, IRESS

0.0

0.0

0.0

0.0

0.0

0.1

0.1

May

12

Jun

12

Jul 1

2

Aug

12

Sep

12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13

Ap

r 13

VXR Price Target



54

Disclosure and Disclaimer Appendix

Companies Mentioned

Company Name Crusader Resources Limited CAS, AUD0.27, Neutral, AUD0.30Doray Minerals Limited DRM, AUD0.44, Overweight, AUD0.61Finders Resources Limited FND, AUD0.16, Overweight, AUD0.20MACA Limited MLD, AUD2.18, Neutral, AUD2.85Rex Minerals Limited RXM, AUD0.26, Neutral, AUD0.31Venturex Resources Limited VXR, AUD0.02, Underweight, AUD0.01

1. The U.S. Broker-Dealer or its affiliates beneficially own 1% or more of a class of common equity securities of VXR as of the end of the month immediately preceding the date of this research report (or as of the end of the second most recent month preceding the date of this research report, if this report is dated less than 10 calendar days after the end of the most recent month). Any such computation of beneficial ownership is based upon the methodology used to compute ownership under Section 13(d) of the Exchange Act; and

2. The U.S. Broker-Dealer or its affiliates did not make a market in the securities of DRM, FND, CAS, RXM, VXR at the time this research report was published;

This research report is provided with the understanding that Commonwealth Bank of Australia CBA, ABN 48 123 123 124, AFSL 234945 (the “Bank,” and together with its subsidiaries and affiliates, the “Group”) (“CBA”) and its affiliates are not acting in a fiduciary capacity. This research report represents the views of CBA and is subject to change without notice. The securities discussed in this research report may not be eligible for sale in all States or countries, and such securities may not be suitable for all types of investors. Offers and sales of securities discussed in this research report, and the distribution of this report, may be made only in States and countries where such securities are exempt from registration or qualification or have been so registered or qualified for offer and sale, and in accordance with applicable broker-dealer and agent/salesman registration or licensing requirements. The preparer of this research report is employed by CBA and is not registered or qualified as a research analyst, representative, or associated person under the rules of FINRA, the New York Stock Exchange, Inc., any other U.S. self-regulatory organization, or the laws, rules or regulations of any State.

Analyst Certification

Each research analyst primarily responsible for the content of this research report, in whole or in part, certifies that with respect to each security or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about those securities or issuers; and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the research report.

The analyst(s) responsible for the preparation of this report may interact with trading desk personnel, sales personnel and other constituencies for the purpose of gathering, synthesizing, and interpreting market information. Employees of CBA or its affiliates may serve or may have served as officers or directors of the subject company of this report.

Detailed Disclaimer

CBA is incorporated in Australia with limited liability. CBA is not registered as a broker-dealer under the Exchange Act and is not a member of FINRA

This report is prepared, approved, and published solely by CBA.

For U.S. Investors:

The U.S. Broker-Dealer is a wholly owned, but non-guaranteed, subsidiary of the Bank, organized under the laws of the State of Delaware, USA, with limited liability. The U.S. Broker-Dealer is not authorized to engage in the underwriting of securities and does not make markets or otherwise engage in any trading in the securities of the subject companies described in our research reports. The U.S. Broker-Dealer is registered under the Exchange Act and is a member of FINRA. The U.S. broker-dealer is the distributor of this research report in the United States and accepts responsibility for its content.

General:

This report is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy any securities or related financial instruments. This report is for distribution only under such circumstances as may be permitted by applicable law. This report has been prepared without taking account of the objectives, financial situation or needs of any specific person who may receive this report. Any such person should, before acting on the information in this report, consider the appropriateness of the information, having regard to the specific person’s objectives, financial situation and needs and, if necessary, seek appropriate professional or financial advice regarding the appropriateness of investing in any securities or investment strategies discussed in this report. CBA believes that the information in this report is correct and any opinions,



55

conclusions or recommendations are reasonably held or made, based on the information available at the time of its compilation, but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made in this report. Any opinions, conclusions or recommendations of CBA set forth in this research report are subject to change without notice and may differ or be contrary to the opinions, conclusions or recommendations expressed by other business areas or groups of the Group as a result of using different assumptions and criteria. The analysis contained in this research report is based on numerous assumptions; different assumptions could result in materially different results. CBA is under no obligation to update or keep current the information contained in this report. None of the entities within the Group or their directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this report. Any valuations, projections and forecasts contained in this report are based on the number of assumptions and estimates and are subject to contingencies and uncertainties. The inclusion of any such valuations, projections and forecasts in this report should not be regarded as a representation or warranty by or on behalf of the Group or any person or entity within the Group that such valuations, projections and forecasts or their underlying assumptions and estimates will be met or realized. Past performance is not a reliable indicator of future performance. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities, such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk.

The Group may engage in transactions in a manner inconsistent with this research report. In the case of certain products, the Bank or one of its affiliates is or may be the only market maker. No inducement has been or will be received by the Group or any person or entity within the Group or the research analyst from the subject of this report or its associates to undertake the research or make the recommendation. The research staff responsible for this report receive a salary and a bonus that is dependent on a number of factors including their performance and the overall financial performance of the Group. Decisions about remuneration for research staff are not contingent on specific investment banking, corporate advisory or dealing transactions. Investment Banking does not set or determine the remuneration pool or levels for research staff. The Group provides, or seeks to provide, services to the subject of the report and its associates. This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject any entity within the Group to any registration or licensing requirement within such jurisdiction. All material presented in this report, unless specifically indicated otherwise, is under copyright to entities within the Group. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior written permission of the Group or the appropriate entity within the Group.



56

Please view our website at www.research.commbank.com.au. The Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 ("the Bank") and its subsidiaries, including Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 ("CommSec"), Commonwealth Australia Securities LLC, CBA Europe Ltd and Global Markets Research, are domestic or foreign entities or business areas of the Commonwealth Bank Group of Companies (CBGOC). CBGOC and their directors, employees and representatives are referred to in this Appendix as “the Group”. This report is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy any securities or financial instruments. This report has been prepared without taking account of the objectives, financial situation and capacity to bear loss, knowledge, experience or needs of any specific person who may receive this report. No member of the Group does, or is required to, assess the appropriateness or suitability of the report for recipients who therefore do not benefit from any regulatory protections in this regard. All recipients should, before acting on the information in this report, consider the appropriateness and suitability of the information, having regard to their own objectives, financial situation and needs, and, if necessary seek the appropriate professional, foreign exchange or financial advice regarding the content of this report. We believe that the information in this report is correct and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of its compilation, but no representation or warranty, either expressed or implied, is made or provided as to accuracy, reliability or completeness of any statement made in this report. Any opinions, conclusions or recommendations set forth in this report are subject to change without notice and may differ or be contrary to the opinions, conclusions or recommendations expressed elsewhere by the Group. We are under no obligation to, and do not, update or keep current the information contained in this report. The Group does not accept any liability for any loss or damage arising out of the use of all or any part of this report. Any valuations, projections and forecasts contained in this report are based on a number of assumptions and estimates and are subject to contingencies and uncertainties. Different assumptions and estimates could result in materially different results. The Group does not represent or warrant that any of these valuations, projections or forecasts, or any of the underlying assumptions or estimates, will be met. Past performance is not a reliable indicator of future performance. The Group has provided, provides, or seeks to provide, investment banking, capital markets and/or other services, including financial services, to the companies described in the report and their associates. This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject any entity within the Group to any registration or licensing requirement within such jurisdiction. All material presented in this report, unless specifically indicated otherwise, is under copyright to the Group. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior written permission of the appropriate entity within the Group. In the case of certain products, the Bank or one of its related bodies corporate is or may be the only market maker. The Group, its agents, associates and clients have or have had long or short positions in the securities or other financial instruments referred to herein, and may at any time make purchases and/or sales in such interests or securities as principal or agent, including selling to or buying from clients on a principal basis and may engage in transactions in a manner inconsistent with this report.

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All investors: Analyst Certification and Disclaimer: Each research analyst, primarily responsible for the content of this research report, in whole or in part, certifies that with respect to each security or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about those securities or issuers; and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the report. The analyst(s) responsible for the preparation of this report may interact with trading desk personnel, sales personnel and other constituencies for the purpose of gathering, synthesizing, and interpreting market information. Directors or employees of the Group may serve or may have served as officers or directors of the subject company of this report. The compensation of analysts who prepared this report is determined exclusively by research management and senior management (not including investment banking).

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Unless otherwise noted, all data is sourced from Australian Bureau of Statistics material (www.abs.gov.au).


Equities: CBA Institutional Equities Contacts

57

Equities Research

Head of Research Management Sarah McWilliams +612 9118 1449

Consumer Agribusiness Jordan Rogers +612 9118 1177

Food & Beverage Andrew McLennan +612 9118 1199 Sam Teeger +612 9118 1184

Gaming Ben Brownette +612 9118 1190 Vana Makaric +612 9118 1198

Media Alice Bennett +613 9675 7118 Nathan Burley +613 9675 7029

Retail – Discretionary & Staples Andrew McLennan +612 9118 1199 Sam Teeger +612 9118 1184

Energy Luke Smith +612 9118 2868 Lachlan Cuskelly +612 9118 1981

Financials Banks Ross Curran +612 9118 1181 Jeff Cai +612 9118 1186

Diversified Financials Ross Curran +612 9118 1181 Naveen Patney +612 9118 6391

Insurance Ross Curran +612 9118 1181 Naveen Patney +612 9118 6391

Property David Lloyd +612 9118 1192 James Druce +612 9118 1193

Healthcare Bruce Du +613 9675 6244

Industrials and Utilities Developers & Contractors Ben Brownette +612 9118 1190 Vana Makaric +612 9118 1198

Transport/Infrastructure Matt Crowe +612 9118 1189 Andre Fromyhr +612 9118 1188

Utilities Will Allott +612 9916 0946 Matt Crowe +612 9118 1189

For email: first [email protected]

* Except: Michael Ward – [email protected] Michael Robson - [email protected] Nick Tuffley – [email protected] Jane Turner – [email protected] Christina Leung – [email protected]

Equities Research (cont)

Materials Chemicals Michael Ward* +612 9118 1139 Rahul Badethalav +612 9117 1243

Construction Materials Michael Ward* +612 9118 1139 Rahul Badethalav +612 9117 1243

Paper & Packaging Michael Ward* +612 9118 1139 Rahul Badethalav +612 9117 1243

Commodities Lachlan Shaw +613 9675 8618 Vivek Dhar +613 9675 6183

Diversified Resources/Steel Andrew Hines +613 9675 7443 Tomas Vasquez +613 9675 6059

Metals & Mining/Gold Andrew Knuckey +613 9675 6791 Paul Hodsman +613 9675 8532

Telecommunications Alice Bennett +613 9675 7118 Nathan Burley +613 9675 7029

Emerging Companies Nick Maclean +613 9675 7972 Jordan Rogers +612 9118 1177 Naveen Patney +612 9118 6391

Economics Michael Blythe +612 9118 1101

Quantitative Research & Database Nizar Torlakovic +612 9118 1178 Sidney Chow +612 9118 1200

Supervisory Analyst Joe Pardea +612 9118 6388 Publishing +612 9118 1183

Fax (Sydney) +612 9118 1000 Fax (Melbourne) +613 9675 7622

CommSec Retail Craig James +612 9118 1806 Savanth Sebastian +612 9118 1805

Institutional Equities

Head of Institutional Equities Jay MacGregor +612 9118 1204

Equity Distribution Equity Research Sales Rodney Walker (Head of Sales) +612 9117 7888 Angus Esslemont +612 9118 1471 Christine Leonard +612 9118 1442 Chad Mikhael (Emerging Companies) +612 9118 1210 James Barratt (Specialist Sales) +612 9117 0109 Rod Hardwick +612 9118 1444 Boyd Carter (Melbourne) +613 9675 6815 Melissa George (Desk Manager) +612 9118 1446

Corporate Access Marisa Zammit +612 9303 1120 Amanda Chamberlin +612 9118 1443 Mags Ni Mhaonaigh +612 9118 1448

Client Execution Services Andrew Tyrrell +612 9117 0102 Paul Welsh +612 9117 0101 Rod Ellis +612 9117 0105 Alex Stanford +612 9117 0106 Matt Bromfield +612 9118 1455 Steven Sassine +612 9117 0108 Anthony Brownlow (Electronic Trading) +612 9118 1463 Nicolas Thompson (Melbourne) +613 9675 6618 Visakha Mayo +612 9117 7035 Michael Robson* +64 9301 5686

Asian Sales Toll Free (HK) +800 901 636 Toll Free (Sing) +800 616 1949

Fax (Melbourne) +613 9675 7622

Global Markets Research Commodities Luke Mathews +612 9118 1098 Lachlan Shaw +613 9675 8618

Foreign Exchange Richard Grace +612 9117 0080 Joseph Capurso +612 9118 1106 Peter Dragicevich +612 9118 1107 Andy Ji +65 6349 7056 Chris Tennent-Brown +612 9117 1378 Martin McMahon +44 20 7710 3918

Fixed Income Adam Donaldson +612 9118 1095 Philip Brown +612 9118 1090 Tariq Chotani +612 9280 8058 Tally Dewan +612 9118 1105 Kevin Ward +612 9118 1960 Alex Stanley +612 9118 1125

Economics Michael Blythe +612 9118 1101 Michael Workman +612 9118 1019 John Peters +612 9117 0112 Gareth Aird +612 9118 1100 Diana Mousina +612 9118 6394 Nick Tuffley* +64 9301 5659 Jane Turner* +64 9374 8185 Christina Leung* +64 9369 4421

Fax (Sydney) +612 9118 1010

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