Gresham "Group 150\' - May 2011

$: Gresham "Group 150\' - May 2011$
MAY 2011

1

ASX RESOURCES - GROUP 150We are pleased to present the May edition of ‘Group 150’, a ranking of the top 150 ASX listed resources companies (excluding oil and gas), by market capitalisation.

The final week of trading saw the resource companies give back advances made in the first three weeks of the month. The cumulative market value of Group 150 decreased 2.0% from $603.84 billion to 591.5 billion at the end of April, mainly driven by falls in the top 50, with two-thirds recording a fall in market value. The entry point into the Group 150 increased to $130.6 million, up from $123.9 million for the previous month. The ASX/S&P 200 Resources Index decreased 2.0% for the month, underperforming both the ASX All Ordinaries and ASX/S&P 200 Index which decreased 0.6% and 0.3% respectively.

April recorded a rebound in M&A with nine transactions announced, focussed predominantly on copper and gold. The major deal for month was the A$7.4b overbid by Barrick Gold for Equinox, which immediately forced the under bidder in Minmetals Resources Group to raise the white flag.

Gold Road lead the “Winners” for April (in terms of growth in market capitalisation), entering the Group 150 in position 117, after recording a 78.7% increase in value. Other included: Alcyone (+64.9%), Northern Minerals (+49.9%), Independence (+45.8%), and Resource & Investment (+41.3%).

Revisiting our “WA 2010 : Gresham Year in Review” report released last August, our crystal ball view on the gold sector provides for an interesting read:

Gold’s fresh all-time high of over US$1,260 an ounce in June of this year was conclusive evidence of what everybody already knows – gold is firmly back in vogue. The last decade has seen gold “return from the dead” as the world’s turmoils shine the spotlight on its credentials as an investment. Relative to other asset classes, returns to holders of physical gold since 2000 – when the industry was being told to adjust to US$250 an ounce – have been stellar.

Gold’s performance in Australian dollar terms has been somewhat diluted by an appreciating currency in recent months, but is nonetheless sufficiently impressive to bring Australian gold equities sharply back into focus.

Since that time, the gold price has advanced further and is currently trading around US$1,550 an ounce. Despite the increase, the continuing appreciation of the Australian dollar provides a comparable outcome in Australian dollar terms.

Interestingly this impact does not appear to be reflecting on the value of gold equities.

Gresham Advisory Partners Limited

Gresham Group 150

May 2011

Edition 14

Darren MartinGresham Advisory [email protected]+61 8 9486 7077+61 412 144 719

Gresham Advisory Partners is a leading Australian mergers and acquisitions/corporate advisory business and one of Australia’s largest and highest ranking independent corporate advisors.

Top 150 asX LisTed resource companies - apriLBy Market Capitalisation

Group 150

2

Mkt Cap (A$m) % Mkt Cap (A$m) %

Apr Mar Company 30-Apr-11 31-Mar-11 Change Apr Mar Company 30-Apr-11 31-Mar-11 Change

1 1 BHP Billiton Ltd. (ASX:BHP) $252,878.2 $257,343.5 (1.7%) 51 63 Alkane Resources Limited (ASX:ALK) $602.6 $512.5 17.6%

2 2 Rio Tinto Ltd. (ASX:RIO) $159,889.3 $165,221.6 (3.2%) 52 53 Bougainville Copper Ltd. (ASX:BOC) $601.6 $641.7 (6.2%)

3 3 Newcrest Mining Ltd. (ASX:NCM) $31,726.1 $30,462.3 4.1% 53 50 OM Holdings Limited (ASX:OMH) $595.0 $702.9 (15.4%)

4 4 Fortescue Metals Group Ltd. (ASX:FMG) $19,145.3 $19,954.7 (4.1%) 54 58 Northern Iron Limited (ASX:NFE) $591.5 $579.7 2.0%

5 5 Coal & Allied Industries Ltd. (ASX:CNA) $9,662.0 $10,350.3 (6.7%) 55 56 Gujarat NRE Coking Coal Limited (ASX:GNM) $579.7 $589.6 (1.7%)

6 9 Equinox Minerals Ltd. (ASX:EQN) $6,824.9 $4,941.3 38.1% 56 68 Metminco Limited. (ASX:MNC) $575.8 $455.5 26.4%

7 6 Alumina Ltd. (ASX:AWC) $5,514.8 $6,002.8 (8.1%) 57 66 Aditya Birla Minerals Limited (ASX:ABY) $564.1 $463.8 21.6%

8 7 Iluka Resources Ltd. (ASX:ILU) $5,197.7 $5,525.9 (5.9%) 58 59 Discovery Metals Ltd. (ASX:DML) $555.1 $550.8 0.8%

9 8 OZ Minerals Limited (ASX:OZL) $4,663.5 $5,165.5 (9.7%) 59 48 Summit Resources Ltd. (ASX:SMM) $549.3 $719.3 (23.6%)

10 10 New Hope Corp. Ltd. (ASX:NHC) $4,068.1 $4,134.5 (1.6%) 60 50 Resolute Mining Ltd. (ASX:RSG) $547.1 $581.7 (5.9%)

11 11 Riversdale Mining Ltd. (ASX:RIV) $4,033.1 $3,912.6 3.1% 61 69 CuDeco Ltd. (ASX:CDU) $520.5 $449.6 15.8%

12 12 Lynas Corporation Limited (ASX:LYC) $3,533.8 $3,803.3 (7.1%) 62 62 Sphere Minerals Limited (ASX:SPH) $514.0 $514.0 0.0%

13 14 MacArthur Coal Ltd. (ASX:MCC) $3,504.3 $3,473.9 0.9% 63 61 Beadell Resources Ltd (ASX:BDR) $513.3 $528.8 (2.9%)

14 13 Aquila Resources Ltd. (ASX:AQA) $3,399.3 $3,496.2 (2.8%) 64 64 Cockatoo Coal Limited (ASX:COK) $503.0 $497.9 1.0%

15 15 Whitehaven Coal Limited (ASX:WHC) $3,170.2 $3,303.5 (4.0%) 65 60 Aspire Mining Limited (ASX:AKM) $482.4 $536.0 (10.0%)

16 16 Atlas Iron Limited (ASX:AGO) $2,883.4 $3,042.5 (5.2%) 66 55 Gryphon Minerals Ltd. (ASX:GRY) $472.2 $602.1 (21.6%)

17 17 Paladin Energy, Ltd. (ASX:PDN) $2,568.3 $2,807.5 (8.5%) 67 80 Guildford Coal Limited (ASX:GUF) $467.3 $389.4 20.0%

18 18 Aquarius Platinum Ltd. (ASX:AQP) $2,317.5 $2,497.1 (7.2%) 68 75 Murchison Metals Limited (ASX:MMX) $457.7 $433.7 5.5%

19 19 PanAust Limited (ASX:PNA) $2,283.1 $2,327.0 (1.9%) 69 71 Jabiru Metals Limited (ASX:JML) $452.5 $442.6 2.2%

20 20 Mount Gibson Iron Ltd. (ASX:MGX) $2,035.2 $2,154.3 (5.5%) 70 54 Ampella Mining Limited (ASX:AMX) $437.1 $608.9 (28.2%)

21 21 Aston Resources Limited (ASX:AZT) $1,943.0 $1,930.7 0.6% 71 67 Arafura Resources Limited (ASX:ARU) $430.5 $459.9 (6.4%)

22 22 Extract Resources Ltd. (ASX:EXT) $1,676.9 $1,981.7 (15.4%) 72 65 Panoramic Resources Ltd. (ASX:PAN) $426.5 $470.0 (9.3%)

23 26 Medusa Mining Limited (ASX:MML) $1,511.5 $1,317.6 14.7% 73 73 Kagara Ltd (ASX:KZL) $418.1 $435.8 (4.1%)

24 23 Gloucester Coal Ltd. (ASX:GCL) $1,452.2 $1,544.9 (6.0%) 74 83 Tiger Resources Ltd. (ASX:TGS) $414.6 $364.4 13.8%

25 25 Ivanhoe Australia Limited (ASX:IVA) $1,344.1 $1,390.2 (3.3%) 75 70 Kingsrose Mining Limited (ASX:KRM) $414.2 $448.2 (7.6%)

26 40 Independence Group NL (ASX:IGO) $1,333.7 $914.5 45.8% 76 72 Mineral Deposits Ltd. (ASX:MDL) $407.1 $441.2 (7.7%)

27 28 Zimplats Holdings Ltd. (ASX:ZIM) $1,291.7 $1,291.7 0.0% 77 74 Rex Minerals Limited. (ASX:RXM) $404.3 $435.5 (7.2%)

28 27 Perseus Mining Ltd. (ASX:PRU) $1,242.1 $1,309.9 (5.2%) 78 79 Integra Mining Ltd. (ASX:IGR) $399.7 $391.3 2.1%

29 30 Western Areas NL (ASX:WSA) $1,206.0 $1,215.0 (0.7%) 79 78 Metals X Limited (ASX:MLX) $396.0 $409.7 (3.3%)

30 29 Sundance Resources Ltd. (ASX:SDL) $1,089.0 $1,262.5 (13.7%) 80 76 Ramelius Resources Ltd. (ASX:RMS) $389.6 $416.7 (6.5%)

31 35 Sandfire Resources (ASX:SFR) $1,061.0 $1,017.4 4.3% 81 84 Hunnu Coal Limited (ASX:HUN) $374.0 $361.9 3.3%

32 31 Kingsgate Consolidated Limited (ASX:KCN) $1,049.3 $1,175.1 (10.7%) 82 82 Silver Lake Resources Limited (ASX:SLR) $373.9 $372.1 0.5%

33 24 Energy Resources of Australia Ltd. (ASX:ERA) $1,039.5 $1,516.4 (31.4%) 83 81 Moly Mines Ltd. (ASX:MOL) $367.7 $384.2 (4.3%)

34 38 Regis Resources Limited (ASX:RRL) $1,034.9 $970.1 6.7% 84 85 Saracen Mineral Holdings Limited (ASX:SAR) $344.4 $361.6 (4.8%)

35 39 Mirabela Nickel Ltd. (ASX:MBN) $968.4 $963.5 0.5% 85 77 Elemental Minerals Limited (ASX:ELM) $343.3 $409.9 (16.2%)

36 32 Intrepid Mines Limited (ASX:IAU) $950.1 $1,066.7 (10.9%) 86 87 Gold One International Limited (ASX:GDO) $339.1 $343.1 (1.2%)

37 33 Gindalbie Metals Ltd. (ASX:GBG) $940.3 $1,061.5 (11.4%) 87 98 Indophil Resources NL (ASX:IRN) $330.0 $304.1 8.5%

38 47 Bandanna Energy Limited (ASX:BND) $938.3 $754.9 24.3% 88 88 Perilya Ltd. (ASX:PEM) $325.7 $338.8 (3.9%)

39 36 CGA Mining Limited (ASX:CGX) $936.5 $1,016.5 (7.9%) 89 92 Conquest Mining Limited (ASX:CQT) $323.7 $324.7 (0.3%)

40 41 Mantra Resources Limited (ASX:MRU) $912.1 $905.3 0.8% 90 97 Marengo Mining Limited (ASX:MGO) $318.4 $308.1 3.3%

41 42 Minara Resources Ltd. (ASX:MRE) $900.5 $894.6 0.7% 91 90 Troy Resources NL (ASX:TRY) $315.8 $331.9 (4.9%)

42 44 Jupiter Mines Ltd. (ASX:JMS) $873.8 $817.7 6.9% 92 91 Adamus Resources Ltd. (ASX:ADU) $306.5 $331.7 (7.6%)

43 34 Coalspur Mines Limited (ASX:CPL) $863.1 $1,051.2 (17.9%) 93 89 Flinders Mines Limited. (ASX:FMS) $291.3 $336.8 (13.5%)

44 37 White Energy Company Limited (ASX:WEC) $850.3 $971.7 (12.5%) 94 103 Straits Resources Limited (ASX:SRQ) $287.1 $264.3 8.6%

45 46 Grange Resources Limited (ASX:GRR) $755.1 $755.1 0.0% 95 95 Cape Lambert Resources Limited (ASX:CFE) $285.9 $311.7 (8.3%)

46 43 Brockman Resources Limited (ASX:BRM) $739.9 $857.2 (13.7%) 96 86 South Boulder Mines Ltd. (ASX:STB) $285.9 $361.3 (20.9%)

47 49 ST Barbara Ltd. (ASX:SBM) $722.9 $709.8 1.8% 97 108 Focus Minerals Limited (ASX:FML) $271.8 $251.9 7.9%

48 45 Bathurst Resources Ltd (ASX:BTU) $718.1 $760.7 (5.6%) 98 96 Carabella Resources Limited (ASX:CLR) $270.1 $308.3 (12.4%)

49 51 OceanaGold Corporation (ASX:OGC) $700.0 $700.0 0.0% 99 110 BC Iron Limited (ASX:BCI) $268.0 $232.1 15.5%

50 52 Allied Gold Ltd. (ASX:ALD) $647.2 $656.6 (1.4%) 100 101 Galaxy Resources (ASX:GXY) $264.9 $278.5 (4.9%)

Includes ASX Resource companies excluding oil and gas

MAY 2011

3

new enTranTs - apriL eXiTs - apriL117 Gold Road Resources Limited (ASX:GOR)132 Alcyone Resources Ltd (ASX:AYN)134 Tribune Resources Limited (ASX:TBR)146 Ausgold Limited (ASX:AUC)147 Northern Minerals Limited (ASX:NTU)

Based on market capitalisation as at 30 April vs 31 March

Mkt Cap (A$m) % Mkt Cap (A$m) %

Apr Mar Company 30-Apr-11 31-Mar-11 Change Apr Mar Company 30-Apr-11 31-Mar-11 Change

101 93 Greenland Minerals and Energy Ltd (ASX:GGG) $260.4 $314.4 (17.2%) 126 124 Blackgold International Hold. Ltd (ASX:BGG) $180.0 $184.5 (2.4%)

102 100 Nucoal Resources NL (ASX:NCR) $258.8 $289.9 (10.7%) 127 121 Continental Coal Limited (ASX:CCC) $176.6 $192.1 (8.1%)

103 94 Catalpa Resources Limited (ASX:CAH) $258.1 $314.1 (17.8%) 128 133 Azumah Resources Ltd (ASX:AZM) $173.4 $160.9 7.8%

104 104 Noble Mineral Resources Ltd. (ASX:NMG) $256.3 $262.8 (2.5%) 129 128 WPG Resources Ltd (ASX:WPG) $173.1 $170.6 1.5%

105 113 Hillgrove Resources Ltd. (ASX:HGO) $254.0 $226.2 12.3% 130 123 Peninsula Energy Limited (ASX:PEN) $171.2 $185.7 (7.8%)

106 105 Orocobre Limited (ASX:ORE) $249.8 $262.2 (4.7%) 131 129 Astron Ltd. (ASX:ATR) $165.2 $168.4 (1.9%)

107 99 Equatorial Resources Limited (ASX:EQX) $241.0 $302.3 (20.3%) 132 181 Alcyone Resources Ltd (ASX:AYN) $164.1 $99.5 64.9%

108 102 Mincor Resources NL (ASX:MCR) $240.7 $275.8 (12.7%) 133 140 Kangaroo Resources Limited (ASX:KRL) $158.1 $139.9 13.0%

109 115 Atlantic Ltd (ASX:ATI) $237.7 $219.4 8.3% 134 158 Tribune Resources Limited (ASX:TBR) $157.0 $118.2 32.8%

110 114 Resource Generation Limited (ASX:RES) $236.4 $226.1 4.6% 135 135 Stanmore Coal Limited (ASX:SMR) $155.8 $155.8 0.0%

111 118 African Energy Resources Limited (ASX:AFR) $231.1 $211.5 9.3% 136 142 YTC Resources Limited (ASX:YTC) $155.0 $138.9 11.6%

112 109 Highlands Pacific Limited (ASX:HIG) $229.8 $240.1 (4.3%) 137 134 Robust Resources Limited (ASX:ROL) $154.6 $159.7 (3.2%)

113 112 Tanami Gold NL (ASX:TAM) $227.1 $229.7 (1.1%) 138 131 Pluton Resources Limited (ASX:PLV) $154.4 $163.5 (5.6%)

114 116 Northern Energy Corporation Ltd (ASX:NEC) $224.7 $217.5 3.3% 139 126 Berkeley Resources Ltd. (ASX:BKY) $149.9 $176.0 (14.8%)

115 106 Iron Ore Holdings Limited (ASX:IOH) $223.5 $261.4 (14.5%) 140 148 Altona Mining Limited (ASX:AOH) $148.7 $127.5 16.6%

116 119 Exco Resources Ltd. (ASX:EXS) $220.0 $204.4 7.6% 141 138 Kentor Gold Limited (ASX:KGL) $148.7 $143.3 3.8%

117 153 Gold Road Resources Limited (ASX:GOR) $217.6 $121.8 78.7% 142 132 IMX Resources Ltd. (ASX:IXR) $147.1 $161.5 (8.9%)

118 127 NKWE Platinum Ltd. (ASX:NKP) $214.8 $171.2 25.5% 143 139 Sihayo Gold Limited (ASX:SIH) $145.7 $141.5 3.0%

119 107 Deep Yellow Ltd. (ASX:DYL) $214.2 $253.7 (15.6%) 144 146 Reed Resources Ltd. (ASX:RDR) $144.2 $133.3 8.2%

120 125 Cerro Resources NL (ASX:CJO) $211.9 $183.2 15.7% 145 144 Cobar Consolidated Resources Ltd (ASX:CCU) $142.5 $135.2 5.4%

121 122 Kula Gold Limited (ASX:KGD) $202.7 $185.8 9.1% 146 151 Ausgold Limited (ASX:AUC) $140.8 $122.6 14.8%

122 111 Platinum Australia Limited (ASX:PLA) $200.1 $231.5 (13.6%) 147 186 Northern Minerals Limited (ASX:NTU) $139.9 $93.3 49.9%

123 117 Red 5 Ltd. (ASX:RED) $199.0 $211.8 (6.0%) 148 130 Australasian Resources Ltd (ASX:ARH) $139.4 $168.1 (17.1%)

124 143 Resource and Investment NL (ASX:RNI) $192.5 $136.2 41.3% 149 137 African Iron Limited (ASX:AKI) $134.3 $144.0 (6.7%)

125 120 FerrAus Ltd. (ASX:FRS) $182.1 $198.3 (8.2%) 150 141 Golden West Resources Limited (ASX:GWR) $130.6 $139.3 (6.2%)

Group 150 Leaders and LaGGers - markeT capiTaLisaTion performance - apriLLeaders

Laggers

Source: Capital IQ

* Included material placement, acquisition and/or option conversion during month

Mungana Goldmines Ltd (ASX:MUX)Iron Road Limited (ASX:IRD)Nyota Minerals Limited (ASX:NYO)Dragon Mining Limited (ASX:DRA)Papillon Resources Limited (ASX:PIR)

Group 150

4

193.2 240.0 228.7 242.6 226.8 212.8 209.5 223.3 206.2 216.6 233.3 237.8 251.6 245.6 255.6 257.3 252.9

67.1

152.5 138.2 153.8

141.4 131.7 130.8 138.5 137.5 150.6 162.2 161.3 167.7 164.9 166.6 165.3 159.9

88.0

111.6 101.7

113.1 114.9

108.1 109.5 113.0 121.2

133.2 142.2 144.5

153.7 147.2 151.1 150.0 148.2

8.4

12.8 12.1

13.7 14.5

13.1 12.3 13.8 14.8

17.8 19.4 20.5

23.4 21.6 21.9 21.7 21.0

3.1

5.4 5.2

5.7 5.9

5.1 4.8 5.5 5.8

6.6 7.6 8.3

9.9 9.9 10.2 9.4 9.5

359.8

522.3 486.0

528.8 503.5

470.8 467.0 494.1 485.5

524.8 564.7 572.4

606.3 589.2 605.4 603.8

0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

Jun-09 Dec-09 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11

Mar

ket V

alua

tion

(A$b

) -Gr

oup

150

BHPBilliton Rio Tinto Company 3 - 50 Company 51 - 100 Company 101 - 150

591.5

merGer & acquisiTions - announced in apriLDate

Announced Target Acquirer Value (A$m)

Percent Sought

(%)

Premium - 1 Day Prior

(%)

Premium - 1 Month Prior

(%)

Consideration Offered

28-Apr-2011 Rand Uranium (Pty) Ltd. Gold One International Limited (ASX:GDO) 228.9 100 - - Cash

25-Apr-2011 Equinox Minerals Ltd. (ASX:EQN) Barrick Gold Corporation (NYSE:ABX) 7,386.1 98 8.7 48.6 Cash

20-Apr-2011 Exco Resources Ltd., Cloncurry Copper Project Xstrata Queensland Limited 175.0 100 - - Cash

20-Apr-2011 Rocklands Richfield Limited (ASX:RCI) Jindal Steel And Power (Australia) Pty Ltd 94.7 86 47.1 61.3 Cash

18-Apr-2011 Gold One International Limited (ASX:GDO) Baiyin Nonferrous Metal (Group) Co., Ltd. 75.6 18 21.8 43.2 Cash

13-Apr-2011 Afarak Platinum (Proprietary) Limited Aquarius Platinum Ltd. (ASX:AQP) 103.7 74 - - Cash; Equity

4-Apr-2011 KCM Mining Ltd. Energio Limited (ASX:EIO) 40.0 95 - - Equity

3-Apr-2011 Equinox Minerals Ltd. (ASX:EQN) Minmetals Resources Limited (SEHK:1208) 6,437.1 96 22.4 20.1 Cash

1-Apr-2011 Jinka Minerals Ltd. Kentor Gold Limited (ASX:KGL) 10.8 100 - - Cash

Source: Capital IQ Announced Australian Resources (excluding oil and gas) Mergers and Acquisitions >A$10m

Group 150 markeT capiTaLisaTion

asX indeX performance - apriL

+64.4%

Group 150 mkT cap - By commodiTy

MAY 2011

5

aussie doLLar GoLd and The “consoLidaTion corridor”

Source: Bloomberg, Capital IQ

Gold Price – US$ vs A$ per ounce

June 2010 April 2011

Gold Price US$/oz $1,250 $1,550

Exchange Rate AUD:USD 0.85 1.09

Gold Price A$/oz $1,470 $1,422

Revisiting our “WA 2010 : Gresham Year in Review” report released last August, our crystal ball view on the gold sector provides for an interesting read:

Gold’s fresh all-time high of over US$1,260 an ounce in June of this year was conclusive evidence of what everybody already knows – gold is firmly back in vogue. The last decade has seen gold “return from the dead” as the world’s turmoils shine the spotlight on its credentials as an investment. Relative to other asset classes, returns to holders of physical gold since 2000 – when the industry was being told to adjust to US$250 an ounce – have been stellar.

Gold’s performance in Australian dollar terms has been somewhat diluted by an appreciating currency in recent months, but is nonetheless sufficiently impressive to bring Australian gold equities sharply back into focus.

Since that time, the gold price has advanced further and is currently trading around US$1,550 an ounce. Despite the increase, the continuing appreciation of the Australian dollar provides a comparable outcome in Australian dollar terms.

Interestingly this impact does not appear to be reflecting on the value of gold equities. In spite of a producers facing a margin squeeze from flat A$ revenues and increasing cost pressures, valuations have increased quite dramatically since June 2010.

Gold

Pric

e (pe

r oun

ce)

Group 150

6

aussie doLLar GoLd and The “consoLidaTion corridor”

Sentiment is King

The insatiable appetite for commodities from China and the recent emergence of India continues, and basic economic theory and current industry dynamics would point towards a sustainable and long-term increase in prices.

Many producers argue that gold price increases are justifiable on supply pressures alone. However, with most of the gold ever mined sitting in vaults (estimated at in excess of 40 years of current production rates), the source of secondary supply is potentially enormous.

While the greater portion of this stored gold is part of government reserves and “sticky”, sentiment towards gold as an investment and store of value is critical to medium-term prices. Just as the gold price has benefited from the renewed market attraction to gold as an investment class, if confidence in traditional financial investments recovered, any large move to lighten gold weighting could tip the sensitive supply–demand balance and result in a large fall in price.

But for the long-term gold bulls, the game is just beginning, and many suggest there is strong potential to see a US$2,000 gold price in the next 12 months and US$3,000 in the next 5 years. The gold bulls would have us believe that whether financial markets go into a further meltdown (e.g. through systematic sovereign default) or gradually suffer the crippling impacts of inflation, gold is the place to be.

These arguments continue to garner support, and as they gain traction the gold sector promises to remain an interesting place.

M&A Activity – “Consolidation Corridor”

Given the fundamental changes in gold sentiment, and a recent appetite to supplement gold revenues with copper exposure, we expect rationalisation in the sector to continue. Majors understand that M&A capability is critical. To replace reserve depletion and pursue growth, the majors continue to target the more nimble juniors which demonstrate greater efficiency in exploration and also have the advantage of commissioning new production while flying below the radar of NGOs and the lofty expectations that governments have of global producers.

The gold sector remains prospective for renewed M&A activity. We continue to believe that a “consolidation corridor” exists in the ASX-listed gold sector, encompassing late stage developers of gold mines and single project producers. Companies which successfully commission a project are rewarded by the market with a higher rated share price that positions them well to look to acquire other developers on the back of their proven track record. Yet these same companies also become attractive to larger producers seeking low risk growth and reserve replenishment. The emerging producers become both targets and acquirers – hence the expression “consolidation corridor”.

Size still matters, with significantly greater market ratings attributed to larger companies with production diversification and operating scale. This scale gives them a strong advantage to acquire the more lowly rated juniors. Notwithstanding this, and consistent with the past 10 years, we expect movement amongst the junior to bulk up to a size that justifies the M&A expense of the majors.

In recent years, West Africa has provided the foundation for a number of new companies which have enjoyed stellar runs in share price on the back of both exploration success and potential “blue-sky”. A number of market commentators questioned the valuations against underlying fundamentals but recent murmurs of unrest in a number of these countries has flowed through to the share price of late.

The gold sector continues to suffer a real investment void post the Lihir/Newcrest transaction and boards of companies in the “consolidation corridor” could face the prospect of receiving an offer which provides significant short term value creation for shareholders over the next 12 months.

Share Price Performance - Since 30 June 2010

MAY 2011

7

Share Price Performance - April 2011

Share Price Performance - Since 31 December 2010


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Copper Nickel Zinc

Group 150

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coaL - secTor performance

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MAY 2011

9




diversified - secTor performance

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indusTriaL mineraLs - secTor performance

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MAY 2011

11




iron ore - secTor performance

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uranium - secTor performance

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MAY 2011

13

Gold (US$/oz) Silver (US$/OZ)

Copper (US$/lb) Nickel (US$/lb)

Zinc (US$/lb) Lead (US$/lb)

Tin (US$/lb) Uranium (US$/lb)

AUD:USD NYMEX (US$/bbl)

$1,564 $1,444 $1,331 $1,231 $1,134

$0

$500

$1,000

$1,500

$2,000

$2,500

Spot 2011 2012 2013 2014

$47.91

$30.50$22.00 $20.00 $19.44

$0

$10

$20

$30

$40

$50

$60

Spot 2011 2012 2013 2014

$4.23 $4.43 $4.69$3.87 $3.71

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

Spot 2011 2012 2013 2014

$12.18 $11.56 $10.72$9.75 $10.29

$0.00

$4.00

$8.00

$12.00

$16.00

Spot 2011 2012 2013 2014

$1.02 $1.09 $1.11 $1.11 $1.09

$0.00

$0.50

$1.00

$1.50

Spot 2011 2012 2013 2014

$1.13 $1.16 $1.20 $1.12 $1.07

$0.00

$0.50

$1.00

$1.50

$2.00

Spot 2011 2012 2013 2014

$14.54 $13.66 $13.72

$9.07$10.36

$0.00$2.50$5.00$7.50

$10.00$12.50$15.00$17.50$20.00

Spot 2011 2012 2013 2014

$55.25$65.00 $63.25 $60.00

$53.00

$0

$25

$50

$75

$100

Spot 2011 2012 2013 2014

$1.09$1.01 $0.95 $0.89 $0.87

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

Spot 2011 2012 2013 2014

$112.68$95.00 $100.00 $107.50 $110.00

$0

$50

$100

$150

$200

Spot 2011 2012 2013 2014

consensus commodiTy price forecasTs - apriL

Source: Bloomberg Consensus Estimates - Median / High / Low

Group 150

14

Gresham Advisory Partners LimitedA.B.N. 97 003 344 269

Level 17, 167 Macquarie Street,

Sydney NSW 2000

Telephone: 61 2 9221 5133

Facsimile: 61 2 9221 6814

Level 10, 1 Collins Street,

Melbourne VIC 3000

Telephone: 61 3 9664 0300

Facsimile: 61 3 9650 7722

Level 3, 28 The Esplanade,

Perth WA 6000

Telephone: 61 8 9486 7077

Facsimile: 61 8 9486 7024

Website: www.gresham.com.au

Terms and ConditionsInformation contained in this publicationThe opinions, advice, recommendations and other information contained in this publication, whether express or implied, are published or made by Gresham Advisory Partners Limited (ABN 88 093 611 413), Australian financial services license (247113), and by its officers and employees (collectively “Gresham Advisory Partners”) in good faith in relation to the facts known to it at the time of preparation. Gresham Advisory Partners has prepared this publication without consideration of the investment objectives, financial situation or particular needs of any individual investor, and you should not rely on the publication for the purpose of making a financial decision. To whom this information is providedThis publication is only made available to persons who are wholesale clients within the meaning of section 761G of the Corporations Act 2001. This publication is supplied on the condition that it is not passed on to any person who is a retail client within the meaning of section 761G of the Corporations Act 2001.Disclaimer and limitation of liabilityTo the maximum extent permitted by law, Gresham Advisory Partners will not be liable in any way for any loss or damage suffered by you through use or reliance on this information. Gresham Advisory Partners’ liability for negligence, breach of contract or contravention of any law, which cannot be lawfully excluded, is limited, at Gresham Advisory Partners’ option and to the maximum extent permitted by law, to resupplying this information or any part of it to you, or to paying for the resupply of this information or any part of it to you.No warranties made as to contentGresham Advisory Partners makes no warranty, express or implied, concerning this publication. The publication provided by us on an “AS IS” basis at your sole risk. Gresham Advisory Partners expressly disclaims, to the maximum extent permitted by law, any implied warranty of merchant-ability or fitness for a particular purpose, including any warranty for the use or the results of the use of the publication with respect to its correctness, quality, accuracy, completeness, or reliability.CopyrightCopyright in this publication is owned by Gresham Advisory Partners. You may use the information in this publication for your own personal use, but you must not (without Gresham Advisory Partners’ consent) alter, reproduce or distribute any part of this publication, transmit it to any other person or incorporate the information into any other document.General mattersThese Terms and Conditions are governed by the law in force in the State of Victoria, and the parties irrevocably submit to the non-exclusive jurisdiction of the courts of Victoria and courts of appeal from them for determining any disputes concerning the Terms and Conditions.If the whole or any part of a provision of these Terms and Conditions are void, unenforceable or illegal in a jurisdiction it is severed for that jurisdiction. The remainder of the Terms and Conditions have full force and effect and the validity or enforceability of that provision in any other jurisdiction is not affected. This clause has no effect if the severance alters the basic nature of the Terms and Conditions or is contrary to public policy.If Gresham Advisory Partners do not act in relation to a breach by you of these Terms and Conditions, this does not waive Gresham Advisory Partners’ right to act with respect to subsequent or similar breaches.

Advised BHP Billiton on its

$204m offer for United Minerals

Corporation.

Advised BG Group on its $1bn takeover offer for

Pure Energy Resources Limited.

Advised IAMGOLD Corporation on its $265m acquisition

of Gallery Gold.

Advised Gem Diamonds on its

$300m acquisition of Kimberley Diamonds.

Advised Polaris Metals NL on

$178m takeover offer by Mineral

Resources Limited.

Advised Tethyan on its $220m

competing takeover offer by Crosby and Antogafasta/Barrick.

Advised Iluka on its $114m

institutional placement and

$353m accelerated right issue.

Advised Bannerman

Resources on its financing with

Resource Capital Funds.

Advised Iluka Resources on its

$54m Narama coal divestment to

Xstrata.

Advised Murchison Metals

on its joint venture with Mitsubishi.

2010

2010

Advised BHP Billiton on its

US$116bn iron ore production

joint venture with Rio Tinto.

2010

Introduced Denham Capital to

Trans Tasman Resources resulting

in NZ iron sands investment.

2010

2009

Advised Indophil on $545m

recommended offer from Zijin

2010

Advised BHP Billiton on the disposal of the Yabulu Nickel

refinery.

2009

Advised Allied Gold on its $54m

acquisition of Australian

Solomons Gold.

2009

Advised Brandrill Limited on its

$45m takeover offer by Ausdrill

Limited.

2009

2008

Advised Kalahari Minerals on its

$140m proposed merger with

Extract Resources.

2008

Advised Centaurus

Resources on its $20m merger

with Glengarry Resources.

2010

2009/08

2008

Advised Summit Resources on its

A$1.2bn takeover by Paladin Energy.

2007

2008

2006

2007

2008

Advised Guandong Rising on its $216m

cornerstone investment in Pan

Aust.

GRAM2009

Advised Energy Metals on its $86m

proportional takeover offer by China

Guangdong Nuclear Power Group.

2009

Mergers and Acquisitions

Takeover Defence

Strategic Advisory, Joint Ventures and Capital Markets

recenT resources TransacTions

Takeover Defence

Strategic Advisory, Joint Ventures and Capital Markets

Mergers and Acquisitions

Gresham "Group 150\' - May 2011

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