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Resource Capital Research [RCR] - October 2010: Junior and mid tier copper companies

Resource Capital Research (�RCR�), an equity research company which focuses on small and mid size resource companies, today published its quarterly research report covering copper exploration, development and production companies.



RCR also publishes quarterly reviews of the uranium, gold, iron ore, and rare and minor metals sectors.

To access the free summary of the iron ore report or to purchase the 70 page Subscriber report, go to www.rcresearch.com.au/reports.

Key Points

Copper Market:
� The spot LME copper price hit a 27 month high of US$3.81/lb (13 Oct), and is up 28% over the past 3 months.

About a third of the gain (10%) occurred over the past month.
� The gains are driven by a strong demand outlook, constrained supply and declining LME stocks.
� The copper market is forecast to move from small surplus in 2010 to a deficit of 400kt 2011 (ICSG), reflecting a continuing surge in Chinese demand and tight supply.
� Global copper demand is forecast to grow to 18.9mt in 2010, up from 18.2mt (+3.8% or +692kt) in 2009, and is expected to grow a further 4.5% (+847kt) in 2011 to 19.7mt.
� The global demand growth in copper is expected to be in the range of 3-5%pa, representing a massive incremental annual consumption increase of 600kt to 900kt.
� Main market growth is expected in China, which now accounts for 36% of global copper consumption.



Copper Companies:
� The HSBC global copper mining index is up 40% over the past 3 months (to 13 Oct), half of the gain (20%) coming in the past 1 month.

The index is up 29% over the past 12 months.
� Market volatility, based on oscillating global macroeconomic outlook, remains the key uncertainty for copper equities� outlook.
� The valuations of Australian copper equities have partially priced in a recovery in the US economy, possibly prematurely, and subsequently, expectations of a weaker Australian dollar.

This suggests potential for partial retracement of recent AUD copper gains if the US receovery does not proceed as anticipated.

Please find more in the attached Media Release.

For further information, please contact:

John Wilson
Analyst, Resource Capital Research,
Phone: (+61- 2) 9252 9405