«Managements»

Bernhard GrafPortfoliomanager AMG Gold – Mines & Metals Fund

March 2014

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Various ways to make investment decisions

Portfolio management – stocks selection

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Technicals: Charts, Momentum, Relative Strength, Trends

Fundamentals: much more complex criterias!- Large- or small-cap / market liquidity- Valuations: P/NAV, costs, balance sheet, grades- Risk: technical, financial, permitting, sovereign, personnel- Managements:

consistency, track record strategy & execution, business plan, cost control Values continua delivering on forecasts failure experience what have they learned?

Portfolio management – stocks selection

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Knowing the Managements, for the stocks selection, is very important to make the right investment decision

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Basic Challenges for Managements

Market/BusinessEnvironment

EmployeesRecruiting

Shareholders

Regulatory/Environmental standards

Executives (CEO/CFO)Board

Stock Price !!!

Large versus Small Caps – significant difference for shareholders

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Shareholder influence

Diversification / Structure

Flexibility / adopting changes

Cost efficiency / cost synergies

Values Continua

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Trustworthy

Loving

Courageous

Dignifying

Honest

Fair

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Untrustworthy

Unloving

Cowardly

Disrespectful

Dishonest

Unfair

Source: Denver Gold Forum 2013, Zurich

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Goldcorp (G CN) relative to XAU-Index (last 3 years)

March 2014, Source: Reuters / AMG

Company was withstanding shareholder demands to leverage their cash in 2011

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Randgold Resources (GOLD US) relative to XAU-Index (3 years)

March 2014, Source: Reuters / AMG

Only builds projects with an IRR >20% with a gold price calculation at USD 1’000

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Franco Nevada (FNV US) relative to XAU-Index (3 years)

March 2014, Source: Reuters / AMG

A business model, which obviously works very well

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Argonaut (AR CN) relative to XAU-Index (4 years)

March 2014, Source: Reuters / AMG

Perfectly run company with low grades in Mexico

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Pilot Gold (PLG CN) relative to XAU-Index (3 years)

March 2014, Source: Reuters / AMG

Management track record Fronteer Gold

Pilot Gold – PLG CN

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Turkey TV Tower, Halilaga; Nevada Mount Kinsley«Sience of discovery» means generally higher grades

Experience in Turkey with «Agi Dagi» & «Kirazli» (Alamos Gold)Nevada with «Long Canyon» (Newmont Mining)

Identical Management Team as with Fronteer Gold (Track record)

Market Cap: CAD 145mln

Key message

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Be critical but fair with managements

Sending a lot of companies home without money should not leave you with bad feelings

Management meetings will help you with a better stocks selection

Investing in good managements gets rewarded with good share price performances

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We wish you good luck with your investments