Global Metals and Mining

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

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17 December 2015

Global

Equity Research

Global Metals and Mining Connections Series

Key themes and top equity picks

■ We present our key investment themes and top metals & mining picks

across the Global Credit Suisse Mining team. Our top picks are AEM.N,

BLT.L, BOL.ST, COAL.BO, GLEN.L, HBM.TO, LUN.TO, THO.TO and

2899.HK. We include performance trends and valuations for the sector,

sub-sectors and individual stocks.

■ 2015 is set to be the fifth straight year of deep underperformance for global

mining and longer term valuation metrics are reaching increasingly extreme

levels. However, the nearer term outlook remains challenging due to weak

demand, limited supply curtailments and continuing cost curve deflation. A

ceiling on the US$ and floor on oil prices will be critical in putting a floor on

industry costs (and prices) but our strategists expect ongoing albeit slower

appreciation of the US$ in 2016. Our China team expect 2016 to be another

year of weak demand especially for steel and coal (China Basic Materials

Sector. 2016 outlook: Supply solution). For iron ore the risk has shifted

increasingly to the demand side; we forecast -5% negative steel growth in

China in 2016 and prices to average $35/t in H2 2016. We retain our

preference for base metals where fundamentals appear stronger on both

demand and supply. Our forecasts are detailed in Commodities Forecasts:

Seeking closure.

■ Diversified/bulks: Among the large caps our top picks are BHP and GLEN.

H215 has forced a number of majors to reduce or suspend dividends and we

expect more of the same in 2016. We now model a 50% dividend reduction

for BHP to a more sustainable level, but believe this is now priced in and

places the stock on an attractive 5.5%+ yield. We like GLEN for its FCF

generation and deleveraging potential. Our single top pick from the iron ore

and coal pure plays is COAL.BO which benefits from a strong balance sheet,

high volume growth and dividend yield of over 6%.

■ Base metals: Our top picks (BOL.ST, HBM.TO, LUN.TO) offer a

combination of zinc exposure and conservative balance sheets. We forecast

a near balanced market in copper through 2016 however further supply

curtailments may be needed if demand growth remains muted.

■ Precious metals: We are cautiously optimistic on gold prices in 2016. We

believe the first hike is now priced into the gold market and a key question is

whether the Fed can continue on a tightening path. We target good

operators and FCF generation with conservative balance sheets (AEM.N,

THO.TO) and like Zijin Mining (2899.HK) for its growth reacceleration.

The Credit Suisse Connections Series

leverages our exceptional breadth of

macro and micro research to deliver

incisive cross-sector and cross-border

thematic insights for our clients.

Liam Fitzpatrick

44 20 7883 8350

[email protected]

Paul McTaggart

61 2 8205 4698

[email protected]

Matthew Hope

61 2 8205 4669

[email protected]

Trina Chen

852 2101 7031

[email protected]

James Gurry

44 20 7883 7083

[email protected]

Ralph M. Profiti, CFA

416 352 4563

[email protected]

Anita Soni, P. Eng., CFA

416 352 4587

[email protected]

Ivano Westin

55 11 3701 6318

[email protected]

Neelkanth Mishra

91 22 6777 3716

[email protected]

https://plus.credit-suisse.com/r/kzuCVc

https://plus.credit-suisse.com/r/kzuCVc

17 December 2015

Global Metals and Mining 2

Credit Suisse Global Metals & Mining Team

Equity Research – Metals and Mining

Australia

Paul McTaggart +61 2 8205 4698 [email protected]

Sydney

Matt Hope +61 2 8205 4669 [email protected]

Sydney

Christian Prendiville +61 2 8205 4012 [email protected] Sydney

Michael Slifirski +61 3 9280 1845 [email protected]

Melbourne

Nick Herbert +61 3 9280 1754 [email protected] Melbourne

Asia

Trina Chen +852 2101 7031 [email protected]

Hong Kong

Joy Zhang +852 2101 7083 [email protected] Hong Kong

Gary Xu +86 21 3856 0335 [email protected]

Shanghai

Shinya Yamada +81 3 4550 9910 [email protected]

Tokyo

Jun Yamaguchi +81 3 4550 9789 [email protected]

Tokyo

Paworamon (Poom) Suvarnatemee +66 2 614 6210 [email protected]

Bangkok

Minseok Sinn +82 2 3707 8898 [email protected]

Seoul

Hayoung Chung +82 2 3707 3795 [email protected]

Seoul

Neelkanth Mishra +91 22 6777 3716 [email protected]

Mumbai

Ravi Shankar +91 22 6777 3869 [email protected] Mumbai

Prateek Singh +91 22 6777 3894 [email protected] Mumbai

Ari Jahja +62 21 255 37976 [email protected] Jakarta

Europe

Michael Shillaker +44 20 7888 1344 [email protected]

London

Liam Fitzpatrick +44 20 7883 8350 [email protected]

London

James Gurry +44 20 7883 7083 [email protected]

London

Conor Rowley +44 20 7883 9156 [email protected] London

EEMEA

Semyon Mironov +7 495 662 8510 [email protected]

Moscow

Mikhail Priklonsky +7 495 662 8511 [email protected] Moscow

North America

Ralph Profiti +1 416 352 4563 [email protected]

Toronto

Anita Soni +1 416 352 4587 [email protected]

Toronto

Robert Reynolds +1 416 352 4516 [email protected] Toronto

Yan Truong +1 416 352 4584 [email protected] Toronto

Curt Woodworth +1 212 325 5117 [email protected]

New York

Gayle Podurgiel +1 212 325 6568 [email protected] New York

Serena Rocha Calejon +1 212 325 3482 [email protected] New York

Latin America

Ivano Westin +55 11 3701 6318 [email protected]

Sao Paulo

Renan Criscio +55 11 3701 6210 [email protected] Sao Paulo

Ana Zinser +52 55 5283 3821 [email protected] Mexico City

mailto:[email protected]



















17 December 2015


Global top picks Figure 1: Global top picks Name Ticker Investment case

Agnico Eagle Mines Limited AEM.N

Agnico Eagle is a top pick for its strong exploration and project pipeline, positive FCF at $1,000/oz, solid balance

sheet, favorable FX exposure (CAD, MXN and EUR) and stable jurisdictions. On the exploration front w e forecast

AEM to deliver one of the strongest reserve/resource updates in early 2016. AEM’s project pipeline includes

brow nfield opportunities at Meadow bank (Amaruq), Kittila, Goldex, Lapa (Pandora) and La India that w e estimate

provide solid returns in the current metals price environment at relatively low capital cost. We estimate AEM could

generate positive FCF at $1,000/oz in 2016 due to its low cost assets w hile continuing to invest in brow nfield

opportunities and maintaining a strong balance sheet w ith the low est net debt/EBITDA in 2016 amongst 1Moz+ gold

producers. AEM generates 68% of production in Canada, 20% in Mexico and 12% in Finland, resulting in a cost

benefit from currency devaluation and relatively stable geopolitical exposure.

BHP Billiton BLT.L

BHP protects the quality and value of its assets through a consistent and suff icient level of maintenance capex each

year. It is now time to apply this theory to the balance sheet and the investment case by rebasing the dividend. We

think management w ill use the upcoming interim results to put a line in the sand and reset the investment case by

revisiting the dividend policy. The chairman's AGM comments in November point to an understanding of not

destroying the balance sheet for the sake of the dividend. Review ing the dividend each six months and not just

annually, also means BHP can address the issue now rather than at the full year results in August. The w orld has

clearly changed - w itness our commodity price revisions - and a dividend cut is already priced in by the market -

suggesting any shareholder backlash is likely to be limited (but nevertheless disappointing). Assuming the dividend is

halved, BHP can hold debt levels at ~$25bn during the next tw o years of w eak commodity prices. Dividend yield

w ould still be +5%.

Boliden BOL.ST

We remain positive on Boliden given the company's solid operational momentum, low risk brow nfield volume grow th

out to 2017 and its zinc and smelting exposure. The company is also nearing its 'low end' gearing threshold of 20%

w hich offers the possibility of a higher payout ratio in 2016. We are positive on the fundamentals of the zinc market

follow ing the announced Glencore cuts (c500kt in 2016) and the equivalent cut by Chinese smelters according to

various media reports. We therefore see upside through the company's zinc leverage how ever w e note it w ill take

some time for the cuts to materialise in visible tightness on exchange inventories. The smelting division has been a

consistent earnings driver in 2015, although TCRCs have softened w hich w ill likely impact 2016 earnings (w e

assume a c12% fall in TCRCs). Management have also expressed their active approach tow ards M&A and that they

w ould consider a deal of up to c$US1bn including project capex. We w ould see a regional bolt-on (<$500m) as most

likely.

Coal India COAL.BO

Coal India is the w orld’s largest coal miner (Govt. of India ow ned (80% stake)), net cash and has a healthy dividend

yield of 6%+. The company is ramping up its coal output, having increased production/sales by 9% YTD, after

several years of f lattish grow th. We expect volume grow th to keep negating the impact of w eakness in ASPs (a

result of hitherto w eak domestic pow er demand and falling thermal coal prices globally) resulting in robust EBITDA

generation. At Rs619 bn, cash & equiv. are up 13% in the last 6 months (c29% of market cap). This should keep

dividend yield sustainable. CIL remains attractive on valuations too (post the 24% correction since Aug): EV/EBITDA

(ex. over-burden removal) is now at 6.7x (versus last 12M avg. of 8.7x).

Glencore GLEN.L

Glencore underperformed peers in the latter half of the year driven by falling copper prices and concerns over the

company's leverage. Management announced a debt reduction plan, w hich at the investor day last w eek w as then

expanded (now a c$13bn debt reduction) and is reportedly ahead of schedule. The company is also underpinned by

strong marketing cash flow w ith spot EBITDA guidance substantially ahead of w here consensus w as. We now

forecast net debt levels to fall from c$30bn at June to c$25bn at year-end and just over $20bn by end 2016 w hich

should insulate the company’s balance sheet and credit rating from a period of w eaker prices. Our estimates exclude

any potential divestments planned for 2016. In the current environment the company w ill need to show continual

delivery against this plan; how ever, in our view management's strategy is suff iciently detailed and provides a clear

pathw ay and timeline.

HudBay Minerals Inc. HBM.TO

We like HBM based on our relatively favorable outlook for zinc, grow ing cash flow (2016 FCF yield: 7%) and

deleveraging potential as Constancia ramps up to full production follow ing commercial declaration in April 2015 (nD/E

to 47% in 2016 vs. currently 55%).

Lundin Mining Corp. LUN.TO

We like LUN for its strong balance sheet (2016 nD/E: 9%), relative free cash flow position in the w eak price

environment (2016 FCF yield: +6%), and upside risk to guidance (tracking at 80/73% of copper/zinc guidance through

9M15). The zinc production expansion at Zinkgruvan in 2016, coupled w ith our relatively favorable outlook for zinc

should provide for a positive near-term catalyst.

Tahoe Resources Inc. THO.TO

We like Tahoe as one of the better positioned mid-tier precious metals producers on FCF yield (2016 FCF yield: +3%),

w ith a multi-mine platform to demonstrate its track record as a strong operator (2015 silver/gold cash costs: $7/580

per oz) and explorer, as w ell as a conservative balance sheet (2016 nD/E: -7%) for w hich to grow through

brow nfield expansion and acquisitions. First production at Shahuindo in 1Q16 should also provide for a positive near-

term catalyst.

Zijin Mining Group Co., Ltd 2899.HK

We expect reacceleration in gold production at 33% in 2016E, follow ed by grow th in mined copper by 5-15% in 2016-

2018E, driven partly by overseas acquisitions (Borgera, Kolw ezi), w ith low -to-mid-cost assets. We see continued

acquisition execution in the low commodity price environment. Potential placement to low er net gearings to 61% in

2016E from 109%. Source: Company data, Credit Suisse estimates

1

7 D

ec

em

ber 2

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ba

l Me

tals

an

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inin

g

4

Figure 2: Global commodities price & currencies forecast table

2015 2016 2017 2018 2019

Yr Avg Q1 Q2 Q3 Q4 (f) Yr Avg (f) Q1 (f) Q2 (f) Q3 (f) Q4 (f) Yr Avg (f) Yr Avg (f) Yr Avg (f) Yr Avg (f)

Iron Ore

Iron ore fines - 62% (China CFR) US$/t 96 63 58 55 45 55 45 48 35 35 41 43 50 50

previous 96 63 58 55 55 58 50 45 45 45 46 45 50 50

Coking Coal (contract)Hard coking coal (US$/t) 126 117 110 93 89 102 85 85 90 90 88 93 98 100

previous 126 117 110 93 89 102 90 90 95 95 93 95 100 105

Semi soft coal (US$/t) 92 86 81 74 71 78 68 68 72 72 70 73 73 72

previous 92 86 81 74 71 78 71 71 73 73 72 73 75 76

PCI coal (US$/t) 104 99 93 73 71 84 70 70 74 74 72 76 80 80

previous 104 99 93 73 71 84 73 73 77 77 75 78 82 84

Thermal CoalThermal Coal (Newcastle FOB) US$/t 71 63 58 59 52 58 53 53 53 53 53 50 50 50

previous 71 63 58 59 60 60 60 60 55 55 58 55 55 55

UraniumUranium spot (US$/lb) 33.84 37.95 36.75 36.50 37.00 37.05 38.00 40.00 40.00 42.00 40.00 45.00 50.00 60.00

previous 33.84 37.95 36.75 36.50 38.50 37.43 40.00 42.00 43.50 45.00 42.63 50.00 55.00 60.00

Base MetalsCopper (US$/t) 6,857 5,850 6,053 5,263 4,875 5,510 4,600 4,900 4,900 4,600 4,750 4,225 5,675 6,550

previous 6,857 5,850 6,053 5,290 5,500 5,673 5,000 4,850 4,650 4,600 4,775 4,750 5,900 6,550

Aluminium (US$/t) 1,889 1,803 1,767 1,592 1,495 1,664 1,450 1,500 1,600 1,650 1,550 1,760 1,850 1,850

previous 1,889 1803 1767 1595 1600 1,691 1,650 1,650 1,750 1,750 1,700 1,800 1,850 1,900

Aluminium - Mid West Premium 465 505 281 176 180 285 200 200 200 200 200 200 180 180

Aluminium - Japan Premium 375 382 212 101 90 196 100 100 120 120 110 120 120 120

Aluminium - Rotterdam Premium 354 346 142 97 100 171 120 120 120 120 120 120 120 120

Alumina spot (US$/t) 330 341 337 293 230 300 190 200 220 230 210 255 270 280

previous 330 341 337 293 275 312 260 270 275 275 270 285 300 310

Nickel (US$/t) 16,926 14,400 13,046 10,561 9,460 11,867 8,800 9,000 12,000 12,750 10,637 13,500 15,000 17,000

previous 16,926 14,400 13,046 10,582 10,000 12,007 10,000 12,000 14,000 14,000 12,500 15,000 16,500 18,500

Lead (US$/t) 2,101 1,812 1,941 1,715 1,670 1,784 1,600 1,700 1,800 1,800 1,725 1,800 1,800 1,850

previous 2,101 1,812 1,941 1,719 1,750 1,805 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,850

Zinc (US$/t) 2,161 2,082 2,189 1,849 1,620 1,935 1,550 1,700 1,800 1,900 1,738 2,100 2,150 2,100

previous 2,161 2,082 2,189 1,856 1,800 1,982 2,000 2,050 2,100 2,150 2,075 2,200 2,150 2,100

Precious MetalsGold (US$/oz) 1,266 1,219 1,194 1,125 1,118 1,164 1,150 1,125 1,150 1,175 1,150 1,175 1,200 1,200

previous 1,266 1,219 1,194 1,125 1,150 1,172 1,175 1,150 1,175 1,200 1,175 1,200 1,200 1,200

Silver (US$/oz) 19.04 16.71 16.38 14.93 14.75 15.69 14.90 14.90 15.50 15.90 15.30 16.00 17.00 17.50

previous 19.04 16.70 16.39 14.97 15.50 15.89 16.00 15.80 16.40 17.00 16.30 17.30 18.20 18.80

2015 2016 2017 2018 2019

Yr Avg (f) Q1 (f) Q2 (f) Q3 (f) Q4 (f) Yr Avg (f) Q1 (f) Q2 (f) Q3 (f) Q4 (f) Yr Avg (f) Yr Avg (f) Yr Avg (f) Yr Avg (f)

Commodity Currencies

AUD/USD 0.91 0.79 0.78 0.73 0.72 0.75 0.71 0.70 0.70 0.70 0.70 0.71 0.72 0.73

previous 0.91 0.79 0.78 0.73 0.71 0.75 0.71 0.70 0.70 0.68 0.70 0.71 0.72 0.73

CAD/USD 0.91 0.81 0.81 0.76 0.76 0.79 0.73 0.72 0.72 0.72 0.72 0.72 0.75 0.75

previous 0.91 0.80 0.81 0.77 0.75 0.79 0.73 0.72 0.72 0.73 0.73 0.75 0.75 0.75

2014

2014

Source: Credit Suisse estimates

17 December 2015


Sector outlook Figure 3: Global mining vs. MSCI World (U$) Figure 4: European mining P/B rel. to Europe market

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

Jul-95 Jul-98 Jul-01 Jul-04 Jul-07 Jul-10 Jul-13

30%

50%

70%

90%

110%

130%

150%

170%

190%

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

European mining stocks P/B Rel. mkt

Average

Source: Thomson Reuters Source: Thomson Reuters

2015 is set to be the fifth straight year of deep underperformance for global mining and

longer term valuation metrics are reaching increasingly extreme levels. However, the

nearer term outlook remains challenging due to slowing demand, limited supply

curtailments and continuing cost curve deflation.

Iron ore/steel outlook

Figure 5: Credit Suisse global steel production estimates

Mt 2011 2012 2013 2014 2015 2016 2017 2018

EU 28 178 169 166 169 172 174 179 183

NAFTA 119 122 118 120 113 115 120 123

China 702 731 822 823 803 758 730 715

India 74 78 81 83 89 93 98 103

Japan 108 107 111 111 106 109 114 120

S Korea 69 69 66 71 70 72 75 77

Taiwan 23 21 22 23 23 23 24 24

Russia 69 70 69 71 72 73 76 78

Ukraine 35 33 33 27 23 23 25 26

Turkey 34 36 35 34 32 32 35 36

Brazil 35 35 34 34 34 34 35 36

RoW 66 64 69 69 74 73 74 74

Global Total 1512 1533 1625 1637 1611 1579 1585 1595

YoY 7.5% 1.4% 6.0% 0.7% -1.6% -2.0% 0.3% 0.7%

World ex-China 810 802 803 814 808 821 855 880

Ex-China + China exports 843 845 852 894 903 916 930 945

YoY 6.3% 0.2% 0.8% 4.9% 1.0% 1.5% 1.5% 1.7%

China YoY 0.1% -2.4% -5.6% -3.7% -2.1%

China net (imports)/exports 33.3 42.2 48.3 79.4 95.0 95.0 75.0 65.0

China domestic 668.7 688.8 773.7 743.3 708.0 663.0 655.0 650.0

YoY 9.1% 3.0% 12.3% -3.9% -4.7% -6.4% -1.2% -0.8%

Source: WSA, Credit Suisse estimates

Iron ore supply is increasingly slower than we had expected earlier this year, with the

Samarco outage, Roy Hill delays and Vale and Rio Tinto appearing less aggressive in

17 December 2015


expanding tonnages than previously indicated. However our demand outlook (China's

steel sector) remains negative. We forecast c5% negative steel growth in China in 2016.

Figure 6: China monthly steel production and YoY growth

%

Figure 7: China iron ore port inventory (Mt)

-20%

-10%

0%

10%

20%

30%

40%

50%

5,000

15,000

25,000

35,000

45,000

55,000

65,000

75,000

Jan

-00

Oct-

00

Jul-0

1

Ap

r-02

Jan

-03

Oct-

03

Jul-0

4

Ap

r-05

Jan

-06

Oct-

06

Jul-0

7

Ap

r-08

Jan

-09

Oct-

09

Jul-1

0

Ap

r-11

Jan

-12

Oct-

12

Jul-1

3

Ap

r-14

Jan

-15

Oct-

15

Chinese steel outputChinese production growthPoly. (Chinese production growth)

30

40

50

60

70

80

90

100

110

120

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: WSA Source: Customs data, Credit Suisse estimates

China's iron ore imports were surprisingly weak for most of the year. However outages will

not be enough to stop large surpluses and on our estimates seaborne supply will rise by

about 40Mt in 2016.

Figure 8: Australia and Brazil exports (SA) Figure 9: Exports from minor producers

10

20

30

40

50

60

70

80

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Mt

(wet)

Australia Brazil

0

1

2

3

4

5

6

7

8

9

10

Jan

07

Jul 07

Jan

08

Jul 08

Jan

09

Jul 09

Jan

10

Jul 10

Jan

11

Jul 11

Jan

12

Jul 12

Jan

13

Jul 13

Jan

14

Jul 14

Jan

15

Jul 15

Mtp

a (

Wet)

Source: GTIS, Credit Suisse estimates Source: GTIS, Credit Suisse estimates

The Big 4 majors have already displaced marginal production but with our muted outlook

for China steel production, an extended period (12 months +) of low prices will be required

in our view to force out sufficient high cost tonnes from the market to potentially see a

recovery longer term.

17 December 2015


Figure 10: Big 4 producers are displacing marginal producers (dmt basis)

Shipments (Mt) 2013 2014f 2015f 2016f 2017f 2018f

Vale 247 254 267 272 297 321

YoY -18% 3% 5% 2% 9% 8%

Increment -56 6 13 5 25 24

Rio Tinto (WA) 222 261 292 312 326 335

YoY 3% 17% 12% 7% 5% 3%

Increment 6 39 31 20 15 8

BHP (WA) 195 229 248 265 269 275

YoY 17% 17% 8% 7% 2% 2%

Increment 28 33 19 17 4 6

FMG 91 138 154 151 150 150

YoY 52% 51% 12% -2% -1% 0%

Increment 31 46 16 -3 -1 0

Other 414 423 352 353 396 438

YoY 29% 2% -17% 0% 12% 11%

Increment 93 9 -71 1 42 42

Total 1171 1305 1313 1352 1438 1518

YoY 10% 11% 1% 3% 6% 6%

Increment, Total 102 134 8 40 86 80

Big Four 757 882 960 999 1043 1080

YoY 1% 17% 9% 4% 4% 4%

Increment, Big Four 9 125 79 39 43 38

Share of total growth 9% 93% 1035% 97% 51% 47%

Share of Seaborne mkt 65% 68% 73% 74% 72% 71% Source: Company data, Credit Suisse estimates

Copper: Balanced market expected in 2016, further

supply action may be needed

2016 now looks to be in deficit by 85kt (refined + concentrate), mainly due to the

adjustments of Glencore, Freeport and China's Smelter Purchasing Team.

Figure 11: Global copper supply-demand

Simplified Supply-demand 2011 2012 2013 2014 2015f 2016f 2017f 2018f

World mine supply (kt) 16,145 16,787 18,033 18,605 19,240 19,387 20,270 20,576

Chg YoY 0.2% 4.0% 7.4% 3.2% 3.4% 0.8% 4.6% 1.5%

Concentrate supply (kt) 12,683 13,152 14,329 14,778 15,280 15,628 16,444 16,409

SX/EW copper (kt) 3,440 3,613 3,682 3,805 3,938 3,737 3,804 4,145

Smelter production (kt) 14,736 15,032 15,489 16,582 16,867 17,475 18,326 18,334

smelting scrap supply (kt) 2093 2252 2111 2264 2193 2272 2382 2475

Demand for concentrate (kt) 13,085 13,231 13,843 14,816 15,180 15,728 16,494 16,409

Concentrate surplus/(deficit) (kt) (402) (79) 486 (37) 100 (100) (50) 0

refining scrap supply (kt) 1,702 1,629 1,665 1,534 1,567 1,419 1,746 1,769

Electro-refined copper production (kt) 16,222 16,503 17,038 17,900 18,434 18,894 20,072 20,103

Total refined copper supply (kt) 19,662 20,116 20,720 21,705 22,371 22,631 23,877 24,248

World Copper consumption (kt) 19,596 19,588 20,595 21,501 22,013 22,650 23,463 24,341

Chg YoY 2.3% 0.0% 5.1% 4.4% 2.4% 2.9% 3.6% 3.7%

China consumption Chg YoY 9.1% 5.3% 10.8% 7.0% 2.9% 3.3% 4.5% 4.6%

Copper balance (kt) 67 528 125 204 359 (19) 413 (93)

Source: Wood Mackenzie, BGRIMM, Credit Suisse estimates

As the price falls so does the cost curve. The bulk of the cost curve has fallen about 25¢/lb

since 2014, some of which has been achieved with FX and oil.

17 December 2015


Figure 12: Copper cost curve Figure 13: Copper 50th

and 90th

C1 cost (real) vs. real

copper price (c/lb)

-400

-300

-200

-100

0

100

200

300

400

C1 C

ash C

ost +

capex (

US

¢/lb)

Curtailed operations 2016 spot C1+capex cost curve 2014 cost curve

LME spot price $2.09/lb

0

50

100

150

200

250

300

350

400

450

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013

50th 90th Average real price (c/lb) (Rhs)

Source: Wood Mackenzie, Credit Suisse estimates Source: Wood Mackenzie, Credit Suisse estimates Note: costs

exclude capex

Copper supply cuts gathered pace in August in response to lower prices. To date we

estimate c550 kt of closures have been announced but have been limited to Glencore and

Freeport from the major producers. This does not include 'conventional' disruptions which

Wood Mackenzie estimate have totalled over 1.1Mt YTD. A consortium of copper smelters

in China has also agreed reduce output by 350kt in 2016.

Figure 14: Copper price related production cuts

Mine Location Company

Annual

Production cutCS comments Announced

Boseto Botswana Khoemacau Copper Mining 20Mine put on care and maintenance following liquidation of previous

operator (Discovery metals)17/12/2014

Mineral Park USA Mercator Mineral Park Holdings 15 Closed following bankruptcy of owner 30/12/2014

Aranzazu Mexico Aura Minerals 5Closing the mine as the company was unable to generate or

externally raise financing required to maintain current operations.15/01/2015

Dikulushi DRC Mawson West 5

Placed on care and maintenance due to commodity price

deterioration, combined with lower than expected copper and silver

production

20/01/2015

Wolverine Canada Yukon Zinc Corporation 5 Temporary shutdown due to low commodity prices 27/01/2015

Troy USA Hecla Mining 5 Permanantly closing 13/04/2015

El Abra, Miami &Tyrone Chile/USA Freeport 65

Freeport has announced it is reducing copper production by

c150mlbs in each of 2016/17. Mining has been suspended at Miami

mine and mining rates have been reduced c50% at both El Abra and

Tyrone

27/08/2015

Ray USA Asarco 35Asarco will curtail production at its Ray Mine in Arizona and shut its

Hayden concentrator due to low prices. 28/08/2015

Glencore African mines DRC Glencore 270

Glencore intend to cut c455 kt of copper cathode from the market by

the end of 2017 (c270 ktpa) by suspending Katanga and Mopani.

This curtailment was recently increased from 400kt over 18 months

due to the decision to delay investment in the new concentrator until

2017.

07/09/2015

Baluba Zambia CNMC 15 Placed on care and maintenance 07/09/2015

Collauhasi SxEw ChileGlencore (44%)/Anglo

American (44%)/Other30

Cutting production in response to weak market conditions. Company

is focusing on higher margin sulphide production and curtail the

higher cost oxide production.

29/09/2015

Sierrita USA Freeport 45Company is reducing operating rates by c50% at the mine. This is

guided to reduce output by c100Mlbs per annum22/10/2015

China Small Mines 30 Wood Mackenzie estimate

Nchanga Underground Zambia Vedanta 15Nchanga will continue to produce 10kt from its open put and c50kt

cathode from the tailings leaching plant16/11/2015

Total 560

Smelter Location Company

Annual

Production cutCS comments Announced

9 chinese smelters China 350

The cuts would be mainly made to output using scrap as feedstock

according to an executive, so concentrate demand and supply

should be largely unaffected

28/11/2015

Source: Company data, Wood Mackenzie, Credit Suisse estimates Note: This does not include mine disruptions

17 December 2015


China's copper demand has been weaker than expected in 2015. We now forecast

consumption at only 2.9% YoY, down from 7% in 2014 and 11% in 2013. Our China

materials analysts expect the UHV orders for copper to emerge in 1H-16 as tendering for

the seven major lines was completed in the summer this year – part of the five year plan

for power transmission from west to east. Into 2017, our analysts also expect a recovery in

grid distribution as property starts stabilise and the Distribution Grid Network Upgrade Plan

for 2015-2020E is implemented.

Figure 15: China investment in electrical grid (% chg YTD) Figure 16: China investment in power plants (% chg YTD)

0

10

20

30

40

50

60

70

80

90

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Jan

11

Ap

r 11

Jul 11

Oct 11

Jan

12

Ap

r 12

Jul 12

Oct 12

Jan

13

Ap

r 13

Jul 13

Oct 13

Jan

14

Ap

r 14

Jul 14

Oct 14

Jan

15

Ap

r 15

Jul 15

Oct 15

Grid

Investm

ent (B

n R

MB

)

YT

D %

Chg

Investment in Grid (RHS) YTD % Chg (LHS)

-10

0

10

20

30

40

50

60

70

80

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Jan

11

Ap

r 11

Jul 11

Oct 11

Jan

12

Ap

r 12

Jul 12

Oct 12

Jan

13

Ap

r 13

Jul 13

Oct 13

Jan

14

Ap

r 14

Jul 14

Oct 14

Jan

15

Ap

r 15

Jul 15

Oct 15

Grid Investm

ent (B

n R

MB

)

YT

D %

Chg

Power plant investment (RHS) YTD % Chg (LHS)

Source: CEIC, Credit Suisse estimates Source: CEIC, Credit Suisse estimates

17 December 2015


Valuations – by sector snapshot Figure 17: 2016E PE by sub-sector Figure 18: 2016E EV/EBITDA by sub-sector

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

Gold Iron ore Diversified Base metal Coal

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Coal Gold Iron ore Base metal Diversified

Source: Credit Suisse estimates, market cap weighted PE, CY basis Source: Credit Suisse estimates, market cap weighted EV/EBITDA,

CY basis

Figure 19: MSCI World Metals and Mining 12mth Fwd. PE Figure 20: MSCI World Metals and Mining 12 mth Fwd. PE

Relative MSCI World

0

5

10

15

20

25

30

Feb-95 Feb-98 Feb-01 Feb-04 Feb-07 Feb-10 Feb-13

Avg: 14.1

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

Feb-95 Feb-98 Feb-01 Feb-04 Feb-07 Feb-10 Feb-13

Avg: 0.88

Source: Thomson Reuters DataStream, Credit Suisse research Source: Thomson Reuters DataStream, Credit Suisse research

Figure 21: Sector DY relative to market – 20 years Figure 22: 2015E Dividend yield by commodity

30%

50%

70%

90%

110%

130%

150%

170%

190%

210%

230%

1995 1997 2000 2002 2005 2007 2010 2012 2015

UK Mining ex gold Miners DY rel market

Average(+/-1SD)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

Diversified Iron ore Coal Base metal Gold

Source: Thomson Reuters Source: Credit Suisse estimates, MC weighted Div. Yield, CY basis

17 December 2015


Performance trends Global mining is nearing the end of a a fifth straight year of deep underperformance

relative to global markets.

Figure 23: MSCI World and MSCI Metals and Mining return

(%)

Figure 24:MSCI Metals and Mining return relative to MSCI

World (%)

-60

-40

-20

0

20

40

60

80

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015MSCI Metals and Mining Return (%) MSCI World Return (%)

-60

-40

-20

0

20

40

60

1991199219931994199519961997199819992000200120022003200420052006200720082009201020112012201320142015

Source: Thomson Reuters DataStream Source: Thomson Reuters DataStream Note: Pre 1995 we use a

company proxy for Metals and Mining which uses an equal weighting

of the returns from Rio Tinto, Alcoa, Anglo American and Barrick Gold

The picture over the last 3 months and 1 year has been the same with platinum and the

bulk commodities leading underperformance while gold and base metals esp Aluminium

have been strongest.

Figure 25: Equities performance relative to commodities -

3m

Figure 26: Equities performance relative to commodities -

1yr

-50%

-40%

-30%

-20%

-10%

0%

10%

Gold Aluminium Copper Coal Diversified Iron ore Platinum

equity Commodity

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

Aluminium Gold Copper Diversified Coal Iron ore Platinum

equity Commodity

Source: Bloomberg Source: Bloomberg

17 December 2015


Mining and subsector performance

Figure 27: Indexed performance of global mining and subsectors

-80%

-60%

-40%

-20%

0%

Zinc MSCI WorldIndex

Gold Aluminium World mining Diversified Copper Coal Iron ore Platinum

YTD absolute performance

-50%

-40%

-30%

-20%

-10%

0%

10%

Gold Aluminium MSCI WorldIndex

Zinc World mining Copper Coal Diversified Iron ore Platinum

3 month absolute performance

-80%

-60%

-40%

-20%

0%

20%

Zinc MSCI WorldIndex

Aluminium Gold World mining Copper Diversified Coal Iron ore Platinum

1 year absolute performance

-100%

-50%

0%

50%

MSCI WorldIndex

Zinc Aluminium World mining Gold Diversified Copper Coal Platinum Iron ore


-100%

-50%

0%

50%

MSCI WorldIndex

Zinc Aluminium World mining Diversified Gold Copper Coal Platinum Iron ore


Source: Bloomberg

17 December 2015


Financial leverage Figure 28: 2016E Net Debt: EBITDA Top picks and Mkt Cap >$3bn

-4.00

-3.00

-2.00

-1.00

-

1.00

2.00

3.00

4.00

5.00

6.00

1171.HK

1898.HK

2600.HK

VA

LE

0486.HK

AA

L.L

FM

G.A

X

SC

CO

GLE

N.L

PO

LYP

.L

RIO

.L

2899.HK

SLW

.TO

GM

EX

ICO

B.M

X

AB

X

BLT

.L

NC

M.A

X

KG

HM

.WA

VD

AN

.BO

GG

.N

ALR

S.M

M

NK

ELyq.L

CC

O.T

O

NE

M

AE

M.N

FR

ES

.L

BO

L.ST

1088.HK

FN

V.N

PG

IL.L

PE

NO

LES

.MX

AN

TO

.L

NH

Y.O

L

S32.A

X

RR

S.L

0358.HK

CO

AL.B

O

NM

DC

.BO

HZ

NC

.BO

Source: Credit Suisse estimates, CY basis

Figure 29: 2016E Net Debt / Equity Top picks and Mkt Cap >$3bn

-100%

-50%

0%

50%

100%

150%

2600.HK

1171.HK

0486.HK

PO

LYP

.L

1898.HK

SC

CO

NK

ELyq.L

FM

G.A

X

VA

LE

ALR

S.M

M

2899.HK

GM

EX

ICO

B.M

X

AB

X

PG

IL.L

AA

L.L

GLE

N.L

BLT

.L

RIO

.L

NC

M.A

X

VD

AN

.BO

FR

ES

.L

KG

HM

.WA

SLW

.TO

BO

L.ST

AE

M.N

PE

NO

LES

.MX

NE

M

CC

O.T

O

1088.HK

GG

.N

FN

V.N

AN

TO

.L

NH

Y.O

L

S32.A

X

0358.HK

RR

S.L

NM

DC

.BO

HZ

NC

.BO

CO

AL.B

O

Source: Credit Suisse estimates, CY basis

17 December 2015


Global Comps Figure 30: Global comps by subsector

VALUATION (FY BASIS)

Investment MktCap EV Share Target Target P/B DivYld

Name Ticker Rating USD USD price Price Price FYE 2014 2015 2016 2014 2015 2016 2015 2015

US$mn US$mn (local) (local) Upside Date x x x x x x x %

DIVERSIFIED MINERS

Anglo American Plc AAL.L NEUTRAL 5,869 24,500 278.2 320.0 15% Dec-14 -2.1 -1.8 43.6 3.1 5.1 6.2 0.2 7.6%

BHP Billiton BHP.AX OUTPERFORM 62,092 86,509 17 20.0 16% Jun-15 4.7 10.4 27.7 2.7 4.0 6.6 1.0 10.0%

BHP Billiton BLT.L OUTPERFORM 62,092 86,509 702.8 900.0 28% Jun-15 4.0 8.9 23.7 2.7 4.0 6.6 0.9 11.7%

Glencore GLEN.L OUTPERFORM 16,835 53,269 84 130.0 54% Dec-14 3.9 21.9 39.0 4.2 5.6 5.2 0.3 4.7%

MMC Norilsk Nickel NKELyq.L NEUTRAL 20,446 23,983 12.9 16.5 28% Dec-14 10.1 7.1 7.4 4.2 5.2 5.8 4.3 11.7%

Rio Tinto RIO.AX NEUTRAL 52,475 65,271 43 45.0 5% Dec-15 6.2 11.9 33.5 3.3 5.4 9.0 1.4 6.9%

Rio Tinto RIO.L NEUTRAL 52,475 65,271 1,899.5 2,100.0 11% Dec-15 5.7 10.9 30.9 3.3 5.4 9.0 1.3 7.5%

South 32 S32.AX OUTPERFORM 3,932 4,338 1 1.3 27% Jun-15 8.9 6.9 56.6 3.3 2.3 4.0 0.4 0.0%

Teck Resources Ltd TCKb.TO NEUTRAL 1,858 7,375 4.5 8.0 78% Dec-14 5.7 12.2 15.5 3.8 -11.6 6.4 0.2 6.9%

Vale VALE UNDERPERFORM 17,426 42,259 3 4.5 35% Dec-15 23.9 -5.3 -3.8 3.2 6.1 11.4 0.4 8.8%

Vedanta Limited VDAN.BO OUTPERFORM 3,724 9,165 84 115.0 37% Mar-15 4.0 -1.6 9.5 3.2 2.7 4.0 0.5 2.7%

Vedanta Resources PLC VED.L UNDERPERFORM 1,152 20,264 277 230.0 -17% Mar-15 -6.0 -0.6 -2.3 5.1 5.4 8.1 0.7 15.1%

Av erage - simple 8.4 11.6 28.8 3.6 4.7 6.7 0.9 8.3%

Av erage - market cap w eighted 7.1 9.0 24.9 3.3 4.7 7.4 1.3 8.5%

ALUMINIUM

Alumina Limited AWC.AX UNDERPERFORM 2,282 2,369 1.1 1.2 5% Dec-14 -17.4 21.2 -22.4 -20.8 20.8 -26.5 1.0 8.2%

Aluminum Corporation of China 2600.HK NEUTRAL 9,818 28,356 2 2.4 0% Dec-14 -1.7 -18.1 -12.3 51.1 27.1 24.4 0.9 0.0%

National Aluminium Company Ltd. NALU.BO OUTPERFORM 1,534 801 39.8 45.0 13% Mar-15 14.8 8.7 15.3 7.7 3.6 6.1 0.8 4.7%

Norsk Hydro NHY.OL UNDERPERFORM 7,212 7,468 30 29.0 -4% Dec-14 77.3 12.7 29.8 6.2 4.3 7.4 0.9 3.6%

United Company Rusal Ltd. 0486.HK OUTPERFORM 4,803 8,380 2.5 4.1 67% Dec-14 16.4 3.5 4.7 5.5 3.5 3.5 1.5 0.0%

Av erage - simple 36.2 11.5 16.6 17.7 11.9 10.3 1.0 3.3%


COAL

China Coal Energy Company Limited 1898.HK UNDERPERFORM 10,278 23,857 3.0 2.5 -16% Dec-14 234.1 -7.7 -4.6 19.0 29.4 59.3 0.4 0.0%

China Shenhua Energy Company Limited 1088.HK NEUTRAL 43,120 51,988 12 11.8 1% Dec-14 5.0 8.6 12.7 3.9 5.3 6.2 0.6 4.1%

Coal India COAL.BO OUTPERFORM 29,878 21,298 316.4 405.0 28% Mar-15 13.2 14.6 13.9 8.5 9.0 9.1 5.0 7.0%

Inner Mongolia Yitai Coal Co. Ltd 3948.HK UNDERPERFORM 2,015 5,186 5 4.2 -13% Dec-14 5.8 34.6 -50.0 5.7 12.3 29.7 0.6 0.9%

Mechel MTL.N UNDERPERFORM 350 7,164 0.8 1.0 19% Dec-14 -0.1 -0.9 -1.0 10.1 9.4 12.4 -0.1 0.0%

New Hope Corporation NHC.AX NEUTRAL 1,048 300 2 1.9 9% Jul-15 23.2 28.1 23.2 3.5 4.0 12.2 0.8 5.6%

PT Indo Tambangraya Megah ITMG.JK NEUTRAL 470 244 5,850.0 8,800.0 50% Dec-13 2.3 4.2 4.2 0.9 1.2 1.2 0.6 19.5%

Whitehaven Coal WHC.AX OUTPERFORM 477 1,198 1 1.0 55% Jun-15 -16.7 -63.6 22.2 17.9 12.3 7.4 0.2 0.0%

Yanzhou Coal Mining Company Limited 1171.HK UNDERPERFORM 5,212 11,814 3.5 3.0 -14% Dec-14 18.6 -15.6 -4.5 9.4 13.2 48.8 0.4 0.0%

Av erage - simple 43.2 18.0 15.3 8.8 10.7 20.7 1.1 4.1%


BASE METALS

Altona Mining Limited AOH.AX OUTPERFORM 36 22 0.1 0.3 177% Jun-15 5.1 -8.2 -15.9 1.0 -0.4 -1.5 0.8 0.0%

Antofagasta ANTO.L UNDERPERFORM 6,197 8,059 418 400.0 -4% Dec-14 13.5 46.7 37.0 4.3 9.5 8.9 0.9 0.8%

Boliden BOL.ST OUTPERFORM 4,469 5,534 138.8 170.0 22% Dec-14 20.0 12.7 17.8 7.9 5.8 6.8 1.5 2.6%

Capstone Mining Corp. CS.TO NEUTRAL 93 216 0 0.5 34% Dec-14 1.7 -3.1 -4.4 1.0 -2.4 2.6 0.1 0.0%

First Quantum Minerals Ltd. FM.TO NEUTRAL 1,877 7,502 3.8 8.0 112% Dec-14 3.5 22.7 24.2 5.2 14.9 7.0 0.2 0.4%

Grupo Mexico GMEXICOB.MX NEUTRAL 16,616 20,897 37 44.0 20% Dec-14 9.7 12.8 16.9 5.3 7.2 7.1 1.7 0.0%

Hindustan Zinc Limited HZNC.BO OUTPERFORM 9,322 4,379 147.6 190.0 29% Mar-15 9.1 7.6 7.7 5.5 4.4 3.6 1.4 3.2%

HudBay Minerals Inc. HBM.TO OUTPERFORM 774 1,695 5 8.0 77% Dec-14 15042.3 366.7 19.1 15.4 8.2 4.1 0.4 0.6%

Independence Group NL IGO.AX OUTPERFORM 811 718 2.2 3.0 36% Jun-15 11.1 6.8 17.1 7.7 4.8 7.9 1.7 5.3%

Jiangxi Copper Company Ltd 0358.HK OUTPERFORM 6,840 7,454 9 10.6 21% Dec-14 8.7 15.5 21.6 7.5 9.5 11.5 0.5 1.6%

KAZ Minerals Plc KAZ.L NEUTRAL 599 1,561 89.1 115.0 29% Dec-14 -0.3 48.2 84.5 5.8 28.7 20.0 0.3 0.0%

KGHM Polska Miedz S.A. KGHM.WA UNDERPERFORM 3,099 4,324 61 71.0 16% Dec-14 5.0 9.7 9.2 3.1 3.9 4.7 0.5 5.9%

Lundin Mining Corp. LUN.TO OUTPERFORM 1,777 2,585 3.4 5.0 47% Dec-14 10.0 56.3 -19.3 12.8 3.2 6.6 0.4 0.0%

MMC Norilsk Nickel NKELyq.L NEUTRAL 20,446 23,983 13 16.5 28% Dec-14 10.1 7.1 7.4 4.2 5.2 5.8 4.3 11.7%

MMG Ltd. 1208.HK OUTPERFORM 1,024 8,823 1.5 2.9 93% Dec-14 9.9 -9.6 3.4 11.3 20.9 5.8 0.7 0.0%

Nautilus Minerals Inc NUS.TO OUTPERFORM 92 -26 0 0.6 111% Dec-14 -5.2 -4.1 -6.7 1.5 -1.8 -1.4 0.4 0.0%

OZ Minerals OZL.AX OUTPERFORM 859 681 3.9 4.5 15% Dec-14 39.4 10.5 -31.5 2.9 1.6 2.3 0.5 2.6%

Southern Copper Corporation SCCO NEUTRAL 19,988 23,785 25.5 28.0 10% Dec-15 15.2 22.0 25.4 8.8 11.9 11.8 3.6 1.5%

Thompson Creek Metals Co. Inc. TCM.TO UNDERPERFORM 52 662 0.3 0.3 -6% Dec-14 0.9 1.7 -1.9 2.8 4.4 5.9 0.1 0.0%

Vale Indonesia INCO.JK NEUTRAL 1,092 956 1,545 2,750.0 78% Dec-14 6.3 8.2 4.7 2.6 3.0 1.8 0.6 0.0%

Western Areas WSA.AX OUTPERFORM 341 289 2.0 3.0 48% Jun-15 15.2 13.5 -66.4 3.0 3.1 6.5 1.2 3.7%

Av erage - simple Av erage - simple 801.9 39.3 21.1 5.7 8.4 6.9 1.0 1.9%

Av erage - market cap w eighted Av erage - market cap w eighted 133.1 19.3 17.5 6.2 7.9 7.7 2.3 3.7%

PE EV:EBITDA

Source: Company data, Credit Suisse estimates, Price and other market data from Thomson Reuters DataStream

17 December 2015


Figure 31: Global comps by subsector (continued) VALUATION (FY BASIS)

Investment MktCap EV Share Target Target P/B DivYld

Name Ticker Rating USD USD price Price Price FYE 2014 2015 2016 2014 2015 2016 2015 2015

US$mn US$mn (local) (local) Upside Date x x x x x x x %

DIAMONDS

Alrosa ALRS.MM NEUTRAL 5,855 8,878 56 56.0 0% Dec-14 -22.9 8.9 7.5 6.2 5.2 5.0 2.4 2.9%

INDUSTRIAL MINERALS

Iluka Resources ILU.AX NEUTRAL 1,614 1,662 5 5.5 3% Dec-14 114.9 23.6 10.0 10.0 8.4 4.7 1.6 1.7%

IRON ORE

Ferrexpo Plc FXPO.L UNDERPERFORM 135 821 15.3 15.0 -2% Dec-14 0.8 1.0 -4.6 1.7 3.0 9.7 0.3 14.4%

Fortescue Metals Group Ltd FMG.AX NEUTRAL 4,263 11,451 2 2.0 5% Jun-15 1.6 13.5 11.6 2.1 4.6 4.1 0.6 3.1%

Kumba Iron Ore KIOJ.J UNDERPERFORM 715 1,940 33.3 28.0 -16% Dec-14 1.0 2.7 6.0 1.1 1.9 3.2 0.5 0.0%

Labrador Iron Ore Royalty Corporation LIF.TO NEUTRAL 502 472 11 13.5 25% Dec-14 6.7 17.7 -132.1 7.3 9.1 11.4 1.2 10.5%

National Mineral Development Corporation Ltd. NMDC.BO UNDERPERFORM 5,264 2,303 88.8 80.0 -10% Mar-15 5.5 5.4 10.5 2.1 2.2 4.9 1.2 10.3%

Rio Tinto RIO.L NEUTRAL 52,475 65,271 1,900 2,100.0 11% Dec-15 5.7 10.9 30.9 3.3 5.4 9.0 1.3 7.5%

Vale VALE UNDERPERFORM 17,426 42,259 3.3 4.5 35% Dec-15 23.9 -5.3 -3.8 3.2 6.1 11.4 0.4 8.8%

Av erage - simple 6.5 8.5 14.8 3.0 4.6 7.7 0.8 7.8%


GOLD & SILVER

Acacia Mining ACAA.L OUTPERFORM 1,031 879 167 265.0 59% Dec-14 11.5 73.6 11.1 3.5 5.2 3.0 0.5 1.7%

Agnico Eagle Mines Limited AEM.N OUTPERFORM 5,843 7,041 26.5 39.0 47% Dec-14 32.4 241.7 121.3 9.8 9.0 8.8 1.4 1.2%

Alacer Gold Corp. AQG.AX OUTPERFORM 525 178 3 3.9 56% Dec-14 10.6 12.0 66.6 1.2 1.4 4.7 0.8 0.0%

Alamos Gold Inc. AGI.N NEUTRAL 802 449 3.1 4.0 27% Dec-14 59.8 -18.9 549.5 8.5 14.4 5.0 0.5 1.3%

AuRico Gold Inc. AUQ.N NEUTRAL 806 1,031 3 3.0 5% Dec-14 -18.7 -25.4 324.7 17.7 12.2 8.2 0.5 2.0%

Barrick Gold Corp ABX NEUTRAL 8,270 18,652 7.1 9.0 27% Dec-14 10.4 23.8 28.6 4.8 5.0 4.6 0.8 2.0%

Compania de Minas Buenaventura BVN.N NEUTRAL 1,051 1,379 4 4.8 16% Dec-15 -74.9 -19.6 -61.1 2.2 4.6 5.7 0.3 0.2%

Detour Gold Corporation DGC.TO OUTPERFORM 1,828 2,194 14.7 19.5 33% Dec-14 -21.0 -43.5 222.1 19.7 16.0 8.4 1.0 0.0%

Eldorado Gold EGO.N NEUTRAL 2,085 2,190 3 3.8 29% Dec-14 15.0 46.4 45.1 4.6 7.6 8.2 0.4 0.0%

Evolution Mining Limited EVN.AX NEUTRAL 1,500 1,360 1.4 1.2 -16% Jun-15 20.9 10.6 8.0 10.6 7.1 4.0 1.8 1.5%

Franco Nevada Corporation FNV.N OUTPERFORM 7,383 6,794 46 57.0 23% Dec-14 51.3 88.0 99.7 19.4 23.5 21.1 2.2 6.9%

Fresnillo plc FRES.L NEUTRAL 7,468 7,969 673.5 630.0 -6% Dec-15 69.0 89.3 38.6 14.0 14.6 12.3 3.2 0.3%

Goldcorp Inc. GG.N OUTPERFORM 9,384 12,494 11 15.5 40% Dec-14 18.3 476.6 -73.1 8.3 6.7 7.1 0.5 2.2%

Golden Star GSS.A UNDERPERFORM 47 111 0.2 0.2 10% Dec-14 -3.3 -1.1 -4.9 15.6 -7.6 24.5 -0.5 0.0%

IAMGold IAG.N UNDERPERFORM 544 930 1 1.5 8% Dec-14 16.7 -3.8 -9.5 2.9 3.3 2.6 0.2 0.0%

Industrias Penoles S.A.B. DE C.V. PENOLES.MX NEUTRAL 4,258 5,007 183.4 200.0 9% Dec-15 15.3 11.5 11.1 4.4 4.3 3.9 1.2 1.1%

Kinross Gold Corp. KGC.N NEUTRAL 2,176 3,209 2 2.3 19% Dec-14 16.8 -24.0 -15.0 2.9 3.7 3.9 0.5 0.0%

Kula Gold KGD.AX OUTPERFORM 3 1 0.0 0.1 300% Dec-14 0.0 -2.8 -2.5 0.0 -1.6 -20.1 0.1 0.0%

Minera Frisco S.A.B de C.V MFRISCOA1.MX UNDERPERFORM 1,254 2,894 8 7.0 -17% Dec-15 -7.5 -6.8 51.3 8.1 9.1 9.5 1.2 0.0%

New Gold NGD.A NEUTRAL 1,201 1,705 2.3 2.8 18% Dec-14 26.1 -91.7 69.2 6.3 6.2 6.9 0.6 0.0%

New crest Mining NCM.AX UNDERPERFORM 6,953 9,851 13 11.1 -12% Jun-15 22.3 18.7 24.9 9.0 8.0 8.0 1.1 0.0%

New mont Mining NEM OUTPERFORM 9,736 13,906 18.4 25.5 39% Dec-14 16.9 16.6 24.6 6.5 4.6 5.0 0.8 0.6%

OceanaGold Corporation OGC.AX NEUTRAL 1,134 1,201 3 2.7 2% Dec-14 5.2 15.4 18.9 5.0 6.4 6.0 1.5 1.1%

Pan American Silver Corp. PAA.TO NEUTRAL 975 890 8.8 11.5 30% Dec-14 1.6 -79.4 -31.0 7.1 11.1 13.1 0.7 4.2%

Perseus Mining PRU.AX OUTPERFORM 128 48 0 0.7 106% Jun-15 -5.2 2.0 22.5 20.3 0.4 1.7 0.3 0.0%

Polymetal International POLYP.L NEUTRAL 3,422 4,863 539.0 548.6 2% Dec-14 -16.3 10.8 10.9 7.1 7.4 7.9 3.6 4.9%

Polyus Gold International PGIL.L UNDERPERFORM 10,312 11,292 226 150.0 -34% Dec-14 -56.7 13.7 14.4 11.2 10.0 10.0 6.9 5.5%

Randgold Resources RRS.L NEUTRAL 5,780 5,700 4,120.0 3,900.0 -5% Dec-14 24.7 30.8 28.8 8.9 10.1 8.6 1.8 1.0%

Regis Resources Limited RRL.AX UNDERPERFORM 814 791 2 1.9 -18% Jun-15 20.5 13.0 13.3 8.2 6.1 6.4 2.8 2.8%

Sandfire Resources NL SFR.AX NEUTRAL 591 601 5.2 5.2 -1% Jun-15 10.0 11.9 13.8 4.1 4.0 4.5 2.4 2.7%

Silver Standard Resources Inc. SSO.TO NEUTRAL 411 430 7 9.0 29% Dec-14 -23.6 26.7 -21.7 12.1 3.6 11.2 0.8 0.0%

Silver Wheaton Corp. SLW.TO NEUTRAL 5,070 5,666 17.2 21.0 22% Dec-14 23.1 32.3 28.4 17.8 31.6 14.6 1.6 1.2%

Yamana Gold AUY.N NEUTRAL 1,751 3,586 2 2.3 22% Dec-14 56.8 -17.3 -27.8 7.8 6.2 5.7 0.3 3.2%

Zijin Mining Group Co., Ltd 2899.HK OUTPERFORM 14,314 18,175 2.0 2.6 31% Dec-14 15.2 15.0 14.1 18.7 15.8 12.9 1.2 2.0%

Av erage - simple 23.8 58.2 74.5 9.4 8.7 8.1 1.3 1.5%


URANIUM

Cameco Corporation CCO.TO NEUTRAL 4,629 5,425 16.1 21.0 31% Dec-14 15.8 18.8 15.0 1242.5 12.2 8.0 1.2 2.6%

Denison Mines Corp. DML.TO NEUTRAL 200 181 0.5 0.8 51% Dec-14 -6.1 -8.5 -19.4 -8.1 -10.3 -9.7 1.0 0.0%

Paladin Energy PDN.TO UNDERPERFORM 274 527 0.2 0.3 14% Jun-15 -2.0 1.6 -58.3 -2.1 -105.3 8.5 0.9 0.0%

Av erage - simple 15.8 10.2 15.0 1242.5 12.2 8.3 1.0 0.9%


PE EV:EBITDA

Source: Company data, Credit Suisse estimates, Price and other market data from Thomson Reuters DataStream

17 December 2015


Performance trends Figure 32: Equity performance

Name Ticker

Market Cap

(US$m)

Share price

(Local)

Share Price

Currency 1W 1M 3M 6M YTD 12M 2Y 3Y 5Y

DIVERSIFIED MINERS

Anglo American Plc AAL.L 5,719 271.1 GBp -15% -40% -64% -72% -77% -76% -79% -85% -91%

BHP Billiton BHP.AX 61,586 17.18 AUD 0% -15% -28% -38% -35% -31% -47% -47% -58%

BHP Billiton BLT.L 61,586 686.9 GBp -8% -22% -39% -48% -47% -44% -59% -65% -71%

Glencore GLEN.L 16,440 82.37 GBp -1% -8% -39% -70% -72% -71% -73% -76% NA

MMC Norilsk Nickel NKELyq.L 20,193 12.76 USD -1% -9% -24% -29% -10% -15% -19% -28% -45%

Rio Tinto RIO.AX 52,060 43.02 AUD 2% -9% -16% -23% -26% -18% -34% -32% -51%

Rio Tinto RIO.L 52,060 1879.5 GBp -4% -15% -22% -32% -37% -31% -42% -45% -57%

South 32 S32.AX 3,932 1.025 AUD -2% -18% -35% -51% NA NA NA NA NA

Teck Resources Ltd TCKb.TO 1,858 4.5 CAD -10% -27% -49% -67% -72% -65% -82% -87% -92%

Vale VALE 17,426 3.33 USD 1% -16% -34% -48% -59% -53% -77% -83% -90%

Vedanta Limited VDAN.BO 3,724 84 INR 2% -6% -15% -53% -62% -57% -58% -55% -71%

Vedanta Resources PLC VED.L 1,199 288.5 GBp -10% -27% -48% -50% -50% -47% -64% -74% -88%

ALUMINIUM

Alumina Limited AWC.AX 2,282 1.1 AUD 1% -3% -10% -30% -39% -33% 8% 17% -56%

Aluminum Corporation of China 2600.HK 9,818 2.4 HKD 4% -3% -10% -42% -33% -28% -10% -34% -65%

National Aluminium Company Ltd. NALU.BO 1,534 39.8 INR 5% 8% 9% -4% -29% -20% 6% -15% -57%

Norsk Hydro NHY.OL 7,195 30.17 NOK -2% -3% 2% -15% -29% -24% 18% 9% -25%

United Company Rusal Ltd. 0486.HK 4,803 2.45 HKD -8% -12% -30% -42% -53% -47% 7% -49% -76%

COAL

China Coal Energy Company Limited 1898.HK 10,278 2.99 HKD -2% -12% -9% -38% -38% -38% -35% -64% -75%

China Shenhua Energy Company Limited 1088.HK 43,120 11.64 HKD -3% -5% -8% -36% -49% -48% -51% -64% -62%

Coal India COAL.BO 29,878 316.35 INR 3% -4% -6% -20% -17% -14% 10% -11% -1%

Inner Mongolia Yitai Coal Co. Ltd 3948.HK 2,015 4.8 HKD 1% -9% -9% -42% -28% -38% -66% -78% NA

Mechel MTL.N 350 0.8411 USD 4% -2% -16% -33% 23% 94% -64% -88% -97%

New Hope Corporation NHC.AX 1,048 1.75 AUD -13% -8% 7% -11% -28% -21% -46% -54% -60%

PT Indo Tambangraya Megah ITMG.JK 470 5850 IDR -8% -16% -36% -55% -62% -62% -79% -86% -88%

Whitehaven Coal WHC.AX 477 0.645 AUD -21% -30% -36% -55% -54% -43% -64% -80% -90%

Yanzhou Coal Mining Company Limited 1171.HK 5,212 3.48 HKD 1% -5% -8% -48% -47% -46% -53% -72% -44%

BASE METALS

Altona Mining Limited AOH.AX 36 0.094 AUD 2% -10% 8% -28% -6% -4% 51% -10% -29%

Antofagasta ANTO.L 6,125 412.9 GBp -8% -13% -32% -42% -45% -41% -46% -70% -73%

Boliden BOL.ST 4,469 138.8 SEK -6% -7% -2% -15% 11% 15% 54% 17% 4%

Capstone Mining Corp. CS.TO 93 0.335 CAD 6% -26% -44% -72% -83% -81% -88% -86% -93%

First Quantum Minerals Ltd. FM.TO 1,877 3.78 CAD -21% -24% -50% -78% -77% -76% -78% -82% -83%

Grupo Mexico GMEXICOB.MX 16,616 36.54 MXN 4% -4% -13% -24% -15% -13% -10% -19% -23%

Hindustan Zinc Limited HZNC.BO 9,322 147.55 INR 4% 2% 12% -9% -11% -6% 14% 5% 22%

HudBay Minerals Inc. HBM.TO 774 4.52 CAD -17% -13% -33% -61% -55% -48% -41% -58% -74%

Independence Group NL IGO.AX 811 2.2 AUD 1% -16% -27% -53% -50% -44% -21% -51% -72%

Jiangxi Copper Company Ltd 0358.HK 6,840 8.74 HKD 2% -9% -15% -36% -34% -34% -37% -57% -63%

KAZ Minerals Plc KAZ.L 623 92.75 GBp -4% 22% -41% -60% -64% -61% -53% -88% -94%

KGHM Polska Miedz S.A. KGHM.WA 3,063 60.3 PLN 2% -18% -31% -47% -45% -44% -47% -68% -51%

Lundin Mining Corp. LUN.TO 1,777 3.39 CAD -6% -6% -20% -37% -41% -33% -17% -34% -49%

MMC Norilsk Nickel NKELyq.L 20,193 12.76 USD -1% -9% -24% -29% -10% -15% -19% -28% -45%

MMG Ltd. 1208.HK 1,024 1.5 HKD -3% -6% -13% -47% -38% -36% -14% -53% -71%

Nautilus Minerals Inc NUS.TO 92 0.285 CAD 6% -7% -16% -37% -25% -40% 36% -12% -88%

OZ Minerals OZL.AX 859 3.93 AUD -2% -9% 13% -11% 13% 25% 31% -47% -74%

Southern Copper Corporation SCCO 19,988 25.45 USD 1% -1% -10% -17% -10% -2% -3% -33% -44%

Thompson Creek Metals Co. Inc. TCM.TO 52 0.32 CAD 7% -22% -57% -73% -83% -81% -86% -91% -98%

Vale Indonesia INCO.JK 1,092 1545 IDR 1% -14% 1% -47% -57% -60% -38% -34% -66%

Western Areas WSA.AX 341 2.03 AUD -6% -8% -18% -44% -46% -41% -6% -52% -65% Source: Thomson Reuters DataStream, Credit Suisse research

17 December 2015


Figure 33: Equity performance Continued…

Name Ticker

Market Cap

(US$m)

Share price

(Local)

Share

Price

Currency 1W 1M 3M 6M YTD 12M 2Y 3Y 5Y

DIAMONDS

Alrosa ALRS.MM 5,855 55.84 RUB 12% 9% -8% -9% -11% 2% 71% 115% NA

INDUSTRIAL MINERALS

Iluka Resources ILU.AX 1,614 5.35 AUD 5% -10% -22% -36% -10% -6% -35% -33% -38%

IRON ORE

Ferrexpo Plc FXPO.L 135 15.25 GBp -34% -54% -74% -78% -69% -66% -90% -93% -96%

Fortescue Metals Group Ltd FMG.AX 4,263 1.9 AUD 4% -16% -7% -18% -31% -21% -64% -56% -72%

Kumba Iron Ore KIOJ.J 715 33.32 ZAR -13% -26% -66% -81% -86% -86% -92% -94% -92%

Labrador Iron Ore Royalty Corporation LIF.TO 502 10.78 CAD -10% -27% -35% -35% -42% -38% -67% -67% -66%

National Mineral Development Corporation Ltd. NMDC.BO 5,264 88.8 INR 2% -3% -12% -25% -40% -34% -35% -45% -65%

GOLD & SILVER

Acacia Mining ACAA.L 1,031 167.1 GBp -11% 6% -33% -43% -35% -32% 7% -60% -72%

Agnico Eagle Mines Limited AEM.N 5,843 26.45 USD -5% 1% 11% -13% 6% 21% 0% -51% -65%

Alacer Gold Corp. AQG.AX 525 2.5 AUD -9% -12% -18% -12% 2% -1% 3% -45% NA

Alamos Gold Inc. AGI.N 802 3.14 USD -1% 3% -29% NA NA NA NA NA NA

AuRico Gold Inc. AUQ.N 806 2.86 USD 0% 0% 0% -10% -13% -7% -21% -65% -63%

Barrick Gold Corp ABX 8,270 7.1 USD -8% -7% 6% -36% -34% -31% -58% -79% -86%

Compania de Minas Buenaventura BVN.N 1,051 4.13 USD -14% -16% -36% -61% -57% -54% -63% -88% -91%

Detour Gold Corporation DGC.TO 1,828 14.69 CAD 1% 11% 8% -4% 55% 81% 232% -39% -50%

Eldorado Gold EGO.N 2,085 2.91 USD -5% -9% 1% -29% -52% -50% -48% -78% -84%

Evolution Mining Limited EVN.AX 1,500 1.425 AUD 3% 13% 20% 13% 136% 175% 175% -16% -16%

Franco Nevada Corporation FNV.N 7,383 46.18 USD -3% -2% 8% -5% -6% 0% 14% -21% NA

Fresnillo plc FRES.L 7,468 673.5 GBp 2% 0% 11% -6% -12% -4% -7% -65% -55%

Goldcorp Inc. GG.N 9,384 11.09 USD -8% -8% -17% -32% -40% -35% -48% -70% -75%

Golden Star GSS.A 47 0.181 USD -3% -16% -18% -42% -14% -10% -60% -90% -96%

IAMGold IAG.N 544 1.39 USD -5% -7% -15% -39% -49% -37% -60% -88% -92%

Industrias Penoles S.A.B. DE C.V. PENOLES.MX 4,258 183.39 MXN -1% -10% -20% -31% -36% -29% -44% -71% -56%

Kinross Gold Corp. KGC.N 2,176 1.89 USD -4% 2% 17% -18% -33% -27% -59% -81% -90%

Kula Gold KGD.AX 3 0.015 AUD 0% -38% -38% -59% -66% -64% -86% -96% -99%

Minera Frisco S.A.B de C.V MFRISCOA1.MX 1,254 8.41 MXN 5% 4% -11% -31% -61% -59% -68% -84% NA

New Gold NGD.A 1,201 2.34 USD -3% 6% 2% -23% -46% -38% -52% -79% -74%

New crest Mining NCM.AX 6,953 12.59 AUD 4% 10% 10% -5% 16% 21% 69% -47% -69%

New mont Mining NEM 9,736 18.4 USD -6% 4% 9% -23% -3% 3% -21% -58% -69%

OceanaGold Corporation OGC.AX 1,134 2.61 AUD 0% -4% 7% -11% 25% 29% 57% -10% -25%

Pan American Silver Corp. PAA.TO 975 8.83 CAD -9% -6% -2% -23% -18% -15% -25% -53% -77%

Perseus Mining PRU.AX 128 0.335 AUD -3% -6% 2% -16% 29% 56% 40% -85% -90%

Polymetal International POLYP.L 3,422 539 GBp 6% 1% 0% 3% -3% -5% 12% -51% NA

Polyus Gold International PGIL.L 10,312 226 GBp 0% 16% 16% 25% 25% 33% 22% 15% NA

Randgold Resources RRS.L 5,780 4120 GBp -1% 2% 9% -8% -6% 2% 4% -34% -27%

Regis Resources Limited RRL.AX 814 2.26 AUD 7% 10% 40% 97% 17% 44% -22% -58% 0%

Sandfire Resources NL SFR.AX 591 5.23 AUD 1% -6% -6% 3% 15% 26% -13% -36% -34%

Silver Standard Resources Inc. SSO.TO 411 6.99 CAD -8% 1% -16% -12% 20% 41% -3% -54% -74%

Silver Wheaton Corp. SLW.TO 5,070 17.24 CAD -4% 3% 6% -24% -27% -21% -21% -53% -54%

Tahoe Resources Inc. THO.TO 1,882 11.55 CAD -4% 0% 8% -31% -28% -13% -34% -35% -22%

Yamana Gold AUY.N 1,751 1.85 USD -12% -4% 15% -42% -54% -48% -79% -89% -85%

Zijin Mining Group Co., Ltd 2899.HK 14,314 1.98 HKD -2% 4% 1% -26% -10% -6% 13% -37% -58%

URANIUM

Cameco Corporation CCO.TO 4,629 16.06 CAD 0% -1% -13% -14% -16% -8% -28% -17% -59%

Denison Mines Corp. DML.TO 200 0.53 CAD 8% 2% -9% -46% -53% -51% -56% -57% -80% Source: Company data, Credit Suisse estimates

17 December 2015


Equities vs. Commodities Figure 34: Diversified mining index vs. underlying

commodity prices (US$) -1yr (indexed)

Figure 35: Diversified mining index vs. underlying

commodity prices (US$) -5yr (indexed)

50

60

70

80

90

100

110

120

Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15

Diversified mining index Underlying commodities

20

30

40

50

60

70

80

90

100

110

120

Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15

Diversified mining index Underlying commodities


Figure 36: Coal mining index vs. Coal price (US$/t) -1Y

(indexed)

Figure 37: Coal mining index vs. Coal price (US$/t) -5Y

(indexed)

40

50

60

70

80

90

100

110

120


Top coal producer Coal

10

30

50

70

90

110

130


Top coal producer Coal


17 December 2015


Figure 38: Iron ore mining index vs. Iron ore price (US$/t)

-1yr (indexed)

Figure 39: Iron ore mining index vs. Iron ore price (US$/t)

-5yr (indexed)

30

40

50

60

70

80

90

100

110

120

130


Iron ore mining Iron ore

5

25

45

65

85

105

125


Iron ore mining Iron ore


Figure 40: Copper mining index vs. copper price (US$/t)

-1yr (indexed)

Figure 41: Copper mining index vs. copper price (US$/t)

-5yr (indexed)

50

60

70

80

90

100

110

120

130


Copper mining Copper

10

30

50

70

90

110

130


Copper mining Copper


17 December 2015


Figure 42: Aluminium mining index vs. Aluminium price

(US$/t) -1yr (indexed)

Figure 43: Aluminium mining index vs. Aluminium price

(US$/t) -5yr (indexed)

65

75

85

95

105

115

125


Ali mining Ali

40

50

60

70

80

90

100

110

120

130


Ali mining Ali


Figure 44: Zinc mining index vs. Zinc price (US$/oz) -1yr

(indexed)

Figure 45: Zinc mining index vs. Zinc price (US$/oz) -5yr

(indexed)

60

70

80

90

100

110

120

130

140


Zinc mining index Zinc

60

80

100

120

140

160

180


Zinc mining index Zinc


17 December 2015


Figure 46: Gold mining index vs. gold commodity

performance -1yr (US$/oz)(indexed)

Figure 47: Gold mining index vs. gold commodity

performance -5yr (US$/oz) (indexed)

65

75

85

95

105

115

125

135

145


Gold mining Gold

20

40

60

80

100

120

140

160


Gold mining Gold


Figure 48: Platinum mining index vs. platinum price

(US$/oz) 1yr (indexed)

Figure 49: Platinum mining index vs. platinum price

(US$/oz) 5yr (indexed)

30

40

50

60

70

80

90

100

110

120

130


platinum mining index Platinum

5

25

45

65

85

105

125


platinum mining index Platinum


17 December 2015


Companies Mentioned (Price as of 15-Dec-2015)

Acacia Mining (ACAA.L, 157.9p) Agnico Eagle Mines Limited (AEM.N, $26.45) Alacer Gold Corp. (AQG.AX, A$2.62) Alamos Gold Inc. (AGI.N, $3.14) Alrosa (ALRS.MM, Rbl56.0) Altona Mining Limited (AOH.AX, A$0.09) Alumina Limited (AWC.AX, A$1.1) Aluminum Corporation of China (2600.HK, HK$2.16) Anglo American Plc (AAL.L, 271.1p) Antofagasta (ANTO.L, 412.9p) AuRico Gold Inc. (AUQ.N, $2.86) BHP Billiton (BLT.L, 686.9p) BHP Billiton (BHP.AX, A$16.27) Barrick Gold Corp (ABX.N, $7.1) Boliden (BOL.ST, Skr138.8) Cameco Corporation (CCO.TO, C$16.06) Capstone Mining Corp. (CS.TO, C$0.34) China Coal Energy Company Limited (1898.HK, HK$2.92) China Shenhua Energy Company Limited (1088.HK, HK$11.5) Coal India (COAL.BO, Rs314.1) Compania de Minas Buenaventura (BVN.N, $4.13) Denison Mines Corp. (DML.TO, C$0.53) Detour Gold Corporation (DGC.TO, C$14.69) Eldorado Gold (EGO.N, $2.91) Evolution Mining Limited (EVN.AX, A$1.4) Ferrexpo Plc (FXPO.L, 17.25p) First Quantum Minerals Ltd. (FM.TO, C$3.78) Fortescue Metals Group Ltd (FMG.AX, A$1.8) Franco Nevada Corporation (FNV.N, $46.18) Fresnillo plc (FRES.L, 659.5p) Glencore (GLEN.L, 82.37p) Goldcorp Inc. (GG.N, $11.09) Golden Star (GSS.A, $0.18) Grupo Mexico (GMEXICOB.MX, MXN36.54) Hindustan Zinc Limited (HZNC.BO, Rs145.6) HudBay Minerals Inc. (HBM.TO, C$4.52) IAMGold (IAG.N, $1.39) Iluka Resources (ILU.AX, A$5.15) Independence Group NL (IGO.AX, A$2.15) Industrias Penoles S.A.B. DE C.V. (PENOLES.MX, MXN183.39) Inner Mongolia Yitai Coal Co. Ltd (3948.HK, HK$4.78) Jiangxi Copper Company Ltd (0358.HK, HK$8.31) KAZ Minerals Plc (KAZ.L, 92.75p) KGHM Polska Miedz S.A. (KGH.WA, zł60.3) Kinross Gold Corp. (KGC.N, $1.89) Kula Gold (KGD.AX, A$0.02) Kumba Iron Ore (KIOJ.J, R33.32) Labrador Iron Ore Royalty Corporation (LIF.TO, C$10.78) Lundin Mining Corp. (LUN.TO, C$3.39) MMC Norilsk Nickel (NKELyq.L, $12.76) MMG Ltd. (1208.HK, HK$1.53) Mechel (MTL.N, $0.84) Minera Frisco S.A.B de C.V (MFRISCOA1.MX, MXN8.41) National Aluminium Company Ltd. (NALU.BO, Rs39.25) National Mineral Development Corporation Ltd. (NMDC.BO, Rs88.5) Nautilus Minerals Inc (NUS.TO, C$0.28) New Gold (NGD.A, $2.34) New Hope Corporation (NHC.AX, A$1.72) Newcrest Mining (NCM.AX, A$12.42) Newmont Mining (NEM.N, $18.4) Norsk Hydro (NHY.OL, Nkr30.17) OZ Minerals (OZL.AX, A$3.8) OceanaGold Corporation (OGC.AX, A$2.58) PT Indo Tambangraya Megah (ITMG.JK, Rp5,775) Paladin Energy (PDN.TO, C$0.22) Pan American Silver Corp. (PAA.TO, C$8.83) Perseus Mining (PRU.AX, A$0.33) Polymetal International (POLYP.L, 545.5p) Polyus Gold International (PGIL.L, 226.0p) Randgold Resources (RRS.L, 4024.0p) Regis Resources Limited (RRL.AX, A$2.26) Rio Tinto (RIO.AX, A$41.76) Rio Tinto (RIO.L, 1879.5p) Sandfire Resources NL (SFR.AX, A$5.06) Silver Standard Resources Inc. (SSO.TO, C$6.99) Silver Wheaton Corp. (SLW.TO, C$17.24) South 32 (S32.AX, A$1.0) Southern Copper Corporation (SCCO.N, $25.45) Teck Resources Ltd (TCKb.TO, C$4.5) Thompson Creek Metals Co. Inc. (TCM.TO, C$0.32) United Company Rusal Ltd. (0486.HK, HK$2.48) Vale (VALE.N, $3.33)

17 December 2015


Vale Indonesia (INCO.JK, Rp1,490) Vedanta Limited (VDAN.BO, Rs83.8) Vedanta Resources PLC (VED.L, 288.5p) Western Areas (WSA.AX, A$2.06) Whitehaven Coal (WHC.AX, A$0.6) Yamana Gold (AUY.N, $1.85) Yanzhou Coal Mining Company Limited (1171.HK, HK$3.41) Zijin Mining Group Co., Ltd (2899.HK, HK$1.93)

Disclosure Appendix

Important Global Disclosures

Liam Fitzpatrick, Paul McTaggart, Matthew Hope, Trina Chen, James Gurry, Ralph M. Profiti, CFA, Anita Soni, P. Eng., CFA, Ivano Westin and Neelkanth Mishra each certify, with respect to the companies or securities that the individual analyzes, that (1) the views expressed in this report accurately reflect his or her personal views about all of the subject companies and securities 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 in this report.

The analyst(s) responsible for preparing this research report received Compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities

As of December 10, 2012 Analysts’ stock rating are defined as follows:

Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark*over the next 12 months.

Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months.

Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months.

*Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractiv e, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European rating s are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the an alyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin Ame rican and non-Japan Asia stocks, ratings are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark; prior to 2nd October 2012 U. S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relativ e attractiveness of a stock’s total return potential within an analyst’s coverage universe. For Australian and New Zealand stocks, the expected total return (ETR) calculation includes 1 2-month rolling dividend yield. An Outperform rating is assigned where an ETR is greater than or equal to 7.5%; Underperform where an ETR less than or equal to 5%. A Neutral may be assigned where the ETR is between -5% and 15%. The overlapping rating range allows analysts to assign a rating that puts ETR in the context of ass ociated risks. Prior to 18 May 2015, ETR ranges for Outperform and Underperform ratings did not overlap with Neutral thresholds between 15% and 7.5%, wh ich was in operation from 7 July 2011.

Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances.

Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward.

Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation:

Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months.

Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months.

Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months.

*An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cov er multiple sectors.

Credit Suisse's distribution of stock ratings (and banking clients) is:

Global Ratings Distribution

Rating Versus universe (%) Of which banking clients (%)

Outperform/Buy* 58% (33% banking clients)

Neutral/Hold* 29% (31% banking clients)

Underperform/Sell* 12% (25% banking clients)

Restricted 1%

*For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, and Underperform most c losely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determine d on a relative basis. (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdin gs, and other individual factors.

17 December 2015


Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein.

Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: http://www.csfb.com/research-and-analytics/disclaimer/managing_conflicts_disclaimer.html

Credit Suisse does not provide any tax advice. Any statement herein regarding any US federal tax is not intended or written to be used, and cannot be used, by any taxpayer for the purposes of avoiding any penalties.

See the Companies Mentioned section for full company names

The subject company (BLT.L, 2899.HK, SFR.AX, PENOLES.MX, ACAA.L, BHP.AX, 2600.HK, S32.AX, VDAN.BO, 3948.HK, PAA.TO, ANTO.L, FXPO.L, AUY.N, ITMG.JK, LUN.TO, HBM.TO, SSO.TO, GG.N, WHC.AX, TCM.TO, 1208.HK, MFRISCOA1.MX, DGC.TO, EVN.AX, OZL.AX, OGC.AX, IAG.N, EGO.N, FM.TO, VED.L, COAL.BO, ILU.AX, NHY.OL, GMEXICOB.MX, KIOJ.J, 0486.HK, SLW.TO, SCCO.N, NCM.AX, ABX.N, NEM.N, FMG.AX, PRU.AX, FRES.L, GLEN.L, INCO.JK, 1171.HK, RIO.L, RRL.AX, 1898.HK, NMDC.BO, NGD.A, CS.TO, 1088.HK, IGO.AX, VALE.N, KGH.WA) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse.

Credit Suisse provided investment banking services to the subject company (2899.HK, ACAA.L, FXPO.L, AUY.N, DGC.TO, EVN.AX, FM.TO, COAL.BO, GMEXICOB.MX, SLW.TO, SCCO.N, ABX.N, NEM.N, FMG.AX, GLEN.L, INCO.JK, 1171.HK, RIO.L, 1898.HK, VALE.N) within the past 12 months.

Credit Suisse provided non-investment banking services to the subject company (NHY.OL, GMEXICOB.MX, SCCO.N, RIO.L) within the past 12 months

Credit Suisse has managed or co-managed a public offering of securities for the subject company (FXPO.L, AUY.N, DGC.TO, EVN.AX, COAL.BO, GMEXICOB.MX, SCCO.N) within the past 12 months.

Credit Suisse has received investment banking related compensation from the subject company (2899.HK, ACAA.L, FXPO.L, AUY.N, DGC.TO, EVN.AX, FM.TO, COAL.BO, GMEXICOB.MX, SLW.TO, SCCO.N, ABX.N, NEM.N, FMG.AX, GLEN.L, INCO.JK, 1171.HK, RIO.L, 1898.HK, VALE.N) within the past 12 months

Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (BLT.L, 2899.HK, SFR.AX, PENOLES.MX, ACAA.L, BHP.AX, 2600.HK, S32.AX, VDAN.BO, 3948.HK, PAA.TO, NALU.BO, ANTO.L, FXPO.L, AUY.N, ITMG.JK, 0358.HK, LUN.TO, HBM.TO, SSO.TO, ALRS.MM, WHC.AX, TCM.TO, 1208.HK, MFRISCOA1.MX, DGC.TO, EVN.AX, OZL.AX, OGC.AX, IAG.N, EGO.N, FM.TO, VED.L, COAL.BO, ILU.AX, HZNC.BO, BVN.N, GMEXICOB.MX, 0486.HK, SLW.TO, SCCO.N, NCM.AX, ABX.N, NEM.N, FMG.AX, PRU.AX, NHC.AX, FRES.L, GLEN.L, INCO.JK, 1171.HK, RIO.L, RRL.AX, 1898.HK, NMDC.BO, NGD.A, CS.TO, 1088.HK, IGO.AX, VALE.N, KGH.WA) within the next 3 months.

Credit Suisse has received compensation for products and services other than investment banking services from the subject company (NHY.OL, GMEXICOB.MX, SCCO.N, RIO.L) within the past 12 months

As of the date of this report, Credit Suisse makes a market in the following subject companies (AUY.N, GG.N, KGC.N, SCCO.N, ABX.N, NEM.N).

Please visit https://credit-suisse.com/in/researchdisclosure for additional disclosures mandated vide Securities And Exchange Board of India (Research Analysts) Regulations, 2014

Credit Suisse may have interest in (VDAN.BO, NALU.BO, COAL.BO, HZNC.BO, NMDC.BO)

As of the end of the preceding month, Credit Suisse beneficially own 1% or more of a class of common equity securities of (SFR.AX, 0358.HK, KGD.AX, KAZ.L, AAL.L, PRU.AX, RRL.AX, 1088.HK, IGO.AX).

Credit Suisse has a material conflict of interest with the subject company (RIO.AX) . Credit Suisse is acting as advisor to Imerys on the proposed acquisition of the Luzenac Talc Group from Rio Tinto.

Credit Suisse has a material conflict of interest with the subject company (1208.HK) . Credit Suisse Securities (Europe) Limited is acting as financial advisor in connection with the GlencoreXstrata sale of its interest in the Las Bambas copper mine project in Peru to a consortium owned 62.5% by MMG Limited, 22.5% by GUOXIN International Investment Corporation Limited and 15.0% by CITIC Metal Co. Limited.

Credit Suisse has a material conflict of interest with the subject company (SCCO.N) . The analyst Ivano Westin has a relationship with a natural person who may provide remunerated services to one or more of the companies covered in this report

Credit Suisse has a material conflict of interest with the subject company (AAL.L) . Credit Suisse is acting as financial adviser to Anglo American Platinum Limited in relation to the proposed disposal of its Rustenburg operations.

Credit Suisse has a material conflict of interest with the subject company (GLEN.L) . “Credit Suisse is acting as an advisor to Glencore PLC in relation to the proposed disposal of minority stake in its agriculture business.”

As of the date of this report, an analyst involved in the preparation of this report has the following material conflict of interest with the subject company (FXPO.L). Credit Suisse Securities (Europe) Limited is acting as Dealer Manager to Ferrexpo on the announced exchange offer for its outstanding US$500,000,000 7.875% notes due 2016

17 December 2015


For other important disclosures concerning companies featured in this report, including price charts, please visit the website at https://rave.credit-suisse.com/disclosures or call +1 (877) 291-2683.

Important Regional Disclosures

Singapore recipients should contact Credit Suisse AG, Singapore Branch for any matters arising from this research report.

The analyst(s) involved in the preparation of this report may participate in events hosted by the subject company, including site visits. Credit Suisse does not accept or permit analysts to accept payment or reimbursement for travel expenses associated with these events.

Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS--Non-Voting shares; RVS--Restricted Voting Shares; SVS--Subordinate Voting Shares.

Individuals receiving this report from a Canadian investment dealer that is not affiliated with Credit Suisse should be advised that this report may not contain regulatory disclosures the non-affiliated Canadian investment dealer would be required to make if this were its own report.

For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit https://www.credit-suisse.com/sites/disclaimers-ib/en/canada-research-policy.html.

Credit Suisse Securities (Europe) Limited (Credit Suisse) acts as broker to (RIO.L).

The following disclosed European company/ies have estimates that comply with IFRS: (BLT.L, ANTO.L, RIO.AX, MTL.N, KAZ.L, CCO.TO, VED.L, NKELyq.L, AAL.L, RIO.L).

Credit Suisse has acted as lead manager or syndicate member in a public offering of securities for the subject company (ACAA.L, FXPO.L, AUY.N, GG.N, RIO.AX, DGC.TO, EVN.AX, AUQ.N, FM.TO, COAL.BO, KGC.N, GMEXICOB.MX, FNV.N, SCCO.N, AGI.N, AAL.L, ABX.N, GLEN.L, 1171.HK, RIO.L) within the past 3 years.

As of the date of this report, Credit Suisse acts as a market maker or liquidity provider in the equities securities that are the subject of this report.

Principal is not guaranteed in the case of equities because equity prices are variable.

Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that.

I, Ivano Westin, certify that (1) The views expressed in this report solely and exclusively reflect my personal opinions and have been prepared independently, including with respect to Banco de Investimentos Credit Suisse (Brasil) S.A. or its affiliates ("Credit Suisse"). (2) Part of my compensation is based on various factors, including the total revenues of Credit Suisse, but no part of my compensation has been, is, or will be related to the specific recommendations or views expressed in this report. In addition, Credit Suisse declares that: Credit Suisse has provided, and/or may in the future provide investment banking, brokerage, asset management, commercial banking and other financial services to the subject company/companies or its affiliates, for which they have received or may receive customary fees and commissions, and which constituted or may constitute relevant financial or commercial interests in relation to the subject company/companies or the subject securities.

To the extent this is a report authored in whole or in part by a non-U.S. analyst and is made available in the U.S., the following are important disclosures regarding any non-U.S. analyst contributors: The non-U.S. research analysts listed below (if any) are not registered/qualified as research analysts with FINRA. The non-U.S. research analysts listed below may not be associated persons of CSSU and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Credit Suisse (Hong Kong) Limited ......................................................................................................................................................... Trina Chen

Banco de Investments Credit Suisse (Brasil) SA or its affiliates. ..................................................................................................... Ivano Westin

Credit Suisse Securities (India) Private Limited ........................................................................................................................... Neelkanth Mishra

Credit Suisse International ........................................................................................................................................ Liam Fitzpatrick ; James Gurry

Credit Suisse Equities (Australia) Limited ............................................................................................................ Paul McTaggart ; Matthew Hope

Credit Suisse Securities (Canada), Inc. ......................................................................................... Ralph M. Profiti, CFA ; Anita Soni, P. Eng., CFA

CSEAL Analysts involved in the preparation of this report may be co-located with Credit Suisse Emerging Companies (CSEC) analysts.

For Credit Suisse disclosure information on other companies mentioned in this report, please visit the website at https://rave.credit-suisse.com/disclosures or call +1 (877) 291-2683.

17 December 2015


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The investments and services contained or referred to in this report may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about such investments or investment services. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your individual circumstances, or otherwise constitutes a personal recommendation to you. CS does not advise on the tax consequences of investments and you are advised to contact an independent tax adviser. Please note in particular that the bases and levels of taxation may change. Information and opinions presented in this report have been obtained or derived from sources believed by CS to be reliable, but CS makes no representation as to their accuracy or completeness. 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