Thunderbird Natural Resources & Commodities

Club (TNRCC)Prepared By:

Ryan ScaliseFounder & President

MBA Candidate, 2012Thunderbird School of Global Management

Contents

• Summary

• Purpose & Intentions

• Focus Areas & Scope

• Club Activities

– Presentations & Lectures with Industry

– Industry Associations & Conferences

– Natural Resource Site Excursions

– Mentorship

• Research Resources

Summary: Why Resources• The natural resources industry is global in scope and scale, driving human progress by providing the primary products that enable all other forms of economic activity, growth, and commerce in both the developed and developing world.

• The industry faces many challenges including: resource scarcity and labor supply shortages; environmental, economic, and social challenges; in addition to increasing sovereign risks in countries that possess slowly maturing governance infrastructure and institutions. • The industry is critically important now more than ever, given the robust economic and population growth in emerging economies such as Brazil, India, & China (GDP Growth of 7.5%, 8.8%, and 10.3% respectively). • This growth has resulted in sharp increases in demand for these scarce resources, but demand outpaces supply. For example, in 2010 world refined copper usage was 19,314 (1000t) but production was 19,061 (1000t) more production shortages are forecasted.

TNRCC: Purpose & Intentions• The Thunderbird Natural Resources & Commodities Club (“TNRCC” or “The club”) is a professional club focused on the strategic management issues and challenges pertaining to the natural resources (i.e. “extractives”) and commodities industry.

• The club seeks to serve as a center of excellence for, and on, the industry; it also seeks to promote, encourage, and prepare its members with the requisite skills and experiences to build a career in the industry.

• This is accomplished through i) the study and research of the industry-specific issues by its members; ii) interaction with industry participants; iii) engaging in internships, conferences, workshops, lectures, & presentations. • Thunderbirds are well positioned to add value as leaders, managers, and analysts in this dynamic industry, given their linguistic, diplomatic, ethical, and technical business acumen.

Overview : Focus Areas & Scope• The club will focus strictly on the business of extracting and producing resources, primarily mining & metals, but also oil & gas (hydrocarbons), water resources, and certain mined agricultural commodities (i.e. potash).

• The club will also address mineral resources used as municipal & transportation fuel sources, such as coal, uranium, and rare earths used in certain alternative energy technologies.

• The club’s focus areas and scope broadly includes the financial, economic, social, political, operational, and environmental factors pertaining to the industry.

Focus Areas & ScopeTNRCC’s research & analysis focus areas include, but are not limited to:

• Sustainability & Environmental Management – understanding social & environmental impacts, conducting impact assessments & feasibility studies, water resource / tailings / reclamation management, stakeholder / NGO / IGO engagement

• Global Corporate Finance – cash management, capital budgeting, recapitalizations, hedging, risk management, and project financings

• Strategic Financial Transactions– acquisitions, asset/land purchases (green & brown field), divestitures, farm-outs, and joint ventures

• Resource Economics & Accounting– price & demand forecasting, hedging, feasibility study & engineering economics, resource accounting methods & rules, taxation, royalties, and fiscal regimes

Focus Areas & Scope• Resource Valuation Models

– partnership with exploration/engineering, use of DCF & real options models, comparable company & transaction analysis

• Global Corporate Strategy – competitive analysis, market-entry, labor & talent management, innovative resource uses

• Government Relations & Corporate Security– partnering with foreign governments & SOEs, geopolitical & public policy risk mitigation, managing resource access & fiscal regime issues; protecting company assets, infrastructure, and reputation

• Legal & Compliance– anti-corruption / FCPA compliance, contract enforcement, arbitration

• Commodity Markets & Logistics– understanding physical (shipping & warehousing) & financial markets

Focus Areas & Scope • There will be a comprehensive focus on industry participants.

• In addition to operating companies themselves, the club will discuss the associated service providers that support them, to include:

– Legal and financial advisors – Investment communities – Engineering-construction and “services” contractors – Transportation and logistics providers – Political / social / strategic risk advisors – Sustainability & environmental impact assessors

Activities: Industry LecturesProposed Presentations & Lectures Topics:

• Building an integrated social strategy – applied sustainability in action within the corporation.

• Sustainability & environmental management as a method of risk-adjusting corporate investment decisions.

• Overview of acquisitions, property purchases/leases, equity investments, farm-outs, partnering with juniors & SOEs, and other strategic transactions.

• Royalties, taxation, & fiscal regimes – auditing structures & maintaining diligence.

• Forecasting the price environment to time investments and capital expenditure.

• Legal structures of mining properties, and contract negotiations.

• Managing government relations in developing countries, and partnering with State-Owned Enterprises.

• Managing FCPA and corruption risk when negotiating contracts and during normal course of business.

• Strategic Minerals, and the evolving use and innovation of mineral assets.

Activities: Independent StudiesProposed Independent Studies Courses: • Mineral & Energy Resource Asset Valuation: utilizing the Investment Evaluations Corporation’s “Economic Evaluation & Investment Decision Methods” course materials and textbook. Note: this course is also offered to the Colorado School of Mines.

• Applied Resource Valuation Methods: specific use of Dynamic DCF and Real Options models. Course materials and textbook – TBD

• Other – TBD

Activities: Industry AssociationsMining & Metals Industry Associations & Conferences:

• Society of Mining, Metallurgy, & Exploration (“SME”)– Conferences, Resources at the National, Arizona, and campus chapter levels (to be established at Thunderbird).

• Society for Economic Geologists (“SEG”)

• International Council for Mining & Metals (“ICMM”)

• BSR

• PDAC Conference & Membership (Canada)

• Mining Indaba Conference (South Africa)

• Diggers & Dealers Conference (Australia)

• Mines & Money Conference (UK & PRC-HK)

Activities: Site ExcursionsProposed Company Site Excursions :

• FCX – Morenci / Sierrita / Green Valley• FCX – Miami Complex SX/EW, Smelter, & Rod Mill• Caterpillar – Green Valley Training Facility• Rio Tinto / BHP – Resolution Copper• Western Refining – Four Corners Refinery • Kinder Morgan – AZ Gas Terminal• APS – Palo Verde Nuclear Power Plant• Sempra Generation – Mesquite Power and Mesquite Solar• Climax Moly – Henderson Moly (Colorado)• MMR – tour of On/Offshore Rig in the G.O.M. (Texas)• Molycorp – Mountain Pass Operations (California) • Rio Tinto – Kennecott Copper (Utah)• Newmont or Barrick – Carlin Gold Trend (Nevada)

Activities: Mentorship• Student mentors: Second year students at Thunderbird who have had experience in the industry are encouraged to help first year students with recruiting and job searching in the natural resources industry.

• Industry advisory panel: the club, through its contact with industry participants, seeks to establish an industry advisory panel, which can serve as a platform for mentorship.

• Alumni outreach: the club will also undertake a thorough alumni outreach effort, in order to build mentorship relationships and counsel on the pursuit of opportunities in the industry.

Research ResourcesThe following is a partial list of information and data resources on the industry:

• AME Group• Wood Mackenzie (Brook Hunt)• U.S. CFTC• GFMS Analytics • PWC – mining & metals• International Molybdenum Association • Copper Development Association • International Copper Study Group • GMP International • CRU • USGS - Commodity & Mineral Stats• World Nuclear Association • MEPS International • World Steel Association • Bloomberg

• Northern Miner News• MineWeb / InfoMine• Intl Stainless Steel Forum• Intierra • Mining Journal • UN IPCC • The Bullion Desk • World Gold Council • CME – COMEX & LME London • World Bureau of Metal Statistics • Metals Economics Group • Bloomsbury Minerals Economics• China Customs Statistics • The London Gold Fixing • Many others

Long History, Coming a Long Way

Contact

Ryan ScaliseFounder & President

MBA Candidate, 2012Thunderbird School of Global Management

E: ryan.scalise@global.t-bird.edu M: 602-373-3530