[cid:image001.png@01CE39B0.901D9C10] Monday, 15 April 2013 [cid:image006.jpg@01CE39B0.AE8481F0]
Snapshot � Company news highlights: Bumi plc announces further delays to the release of its FY12 results, Sierra Rutile signs contract, Shanta Gold operational update and FY12 results, Norilsk Nickel profits fall, EMED permitting update indicates progress, ZincOx announces finalisation of working capital facility, Avalon Minerals signs MOU to raise A$25m to advance its Viscaria project, Tigers Realm Coal announces Amaam prefeasibility study results, Cokal receives EIS for BBM mine. � Commodity review highlights: Base metals fall on China GDP news, Gold prices collapsed Friday and continue this morning despite a small initial rally. � Other Economic News: China GDP growth below expectations. � African Resources Update: SA platinum sector hoping for gold/coal style collective bargaining, Skills shortage could hamper Africa mining growth. � FTSE futures of 7 points (7am): Weak markets expected today despite a potential resolution of the Cyprian bailout matter.

Markets in Asia were led down sharply (Nikkei of 1.55%, Hang Seng off 1.41% and ASX 200 off 0.91%) by unexpected poor economic growth data out of China.

GDP rose at 7.7% YoY compared to the 8% forecast and industrial production also came in below forecast (8.89% versus 10.1% YoY).

Investors are concerned that the global recovery in struggling with the IMF set to lower its forecast for US growth. Commodity markets are under continued heavy pressure this morning, precious metals off - gold down 1.94%, silver down 5.27%, platinum down 2.34%.

Base metals off - copper down 1.43%, zinc down 2.08%, nickel down 2.58%. Economic news today:- US: Empire State Manufacturing Survey (forecast 7%), long-term investment flows (forecast US$40bn).

EU: - Euro Zone trade balance Feb (forecast 5bn).
Company News � Bumi plc (BUMI LN) announces further delays to the release of its FY12 results.

Having previously announced on 19 March that it would not release its FY12 results until 24 April, on Friday afternoon announced that due to the ongoing balance sheet review and issues it has raised, it will now be unlikely to release its results on 24 April.

A new date has not been given.

The new management team at Berau (BRAU IJ) does not believe there is sufficient evidence to support capitalisation of USD56m of expenses, and USD38m of land acquisitions are not fully verified.

Source: Company Investec view: Given that BUMI is a main board listed company, theoretically it should release its results before 30 April.

If not, there must be a strong likelihood that the shares are suspended. � Sierra Rutile (SRX LN) signs contract.

SRX has announced it has signed a 70,000t agreement with a major pigment producer to supply one 10,000t shipment each quarter until December 2014.

Source: Company � Shanta Gold (SHG LN) operational update and FY12 results.

SHG reported a net loss of US$14.7m for FY12, and ended the last year with net debt of US$30m, although has raised additional equity and debt in 2013.

During Q1 2013, SHG has produced 12,000oz of gold, including almost 6,000oz in March and is on track to produce 70,000oz during this year at an average cost of US$800-850/oz, reducing to US$675-775/oz by the end of this year.

The group now estimates producing 430,000oz of gold during the next 5 years, an increase on the previous target of 225,000oz over 3 years.

Source: Company � Norilsk Nickel (GMKN RU) profits fall.

On Friday, GMKN announced a 41% fall in its profits to US$2.14bn for FY12.

This was due almost entirely to lower commodity prices.

GMKNs dividend will be announced later this month - this is important to Rusal (RUALR RU), which needs the dividends from GMKN to service its debt.

Source: FT � EMED Mining (EMED LN) permitting update indicates that the Andalucian Government is progressing with permits, namely the finalisation of Administrative Standing and of the Environmental Plan.

The regional government has cleared the companys economic, technical and legal capacities.

EMED is expecting the preliminary report from the national civil works work technical agency (CEDEX) with regards to the tailings management plan with final version due in May.

The approval by the Department of Environment of the Environmental Plan (AAU), remains outstanding, however progress on other fronts will help move this forward.

Source: Company Investec View: The progress made has led to management maintaining its target to trigger works in Q3 2013 and production to start a year later.

The greater clarity on the receipt of the preliminary report from CEDEX, is a positive and may well assist with moving the AAU forward to allow progress to continue. � ZincOx (ZOX LN) announces finalisation of working capital facility for its Koreak Subsidiary with Standard Chartered Bank Korea for US$5m at 4% over US Libor.

Source: Company � Avalon Minerals (AVM AU) signs MOU to raise A$25m to advance its Viscaria project, including completing a DFS.

The funds have yet to be secured, but are expected in two tranches of an initial A$5m with the issue of 100m shares, followed by a second tranche of A$20m for 400m shares subject to performance hurdles being achieved.

The first tranche is expected 31 days after the MOU signed on 12th April, and the second tranche by 31st August.

Source: Company � Tigers Realm Coal (TIG AU) announces Amaam prefeasibility study results.

TIG released PFS results for its Amaam coking coal project in far-east Russia that confirm the positive economics of a 13mtpa run-of-mine open pit and underground coking coal mine for total capex of USD2.1bn and average life-of-mine cash costs of USD96/t.

Source: Company Investec view: Capex and cash costs were not surprisingly higher than in the scoping study completed in October 2011 but the inclusion of an underground mine is NPV accretive.

We continue to focus on the potential to develop a low capex, direct shipping operation at Amaam North, where TIG expect to announce an initial resource in JunQ13, as first production from the Amaam project is only targeted for mid-2017. � Cokal (CKA AU) receives Environmental Impact Study approval for BBM mine.

Cokal has announced that it has received approval of its Environmental Impact Study (EIS) from the Central Kalimantan Provincial Government Environmental Agency (BPLH) for an integrated mining and logistics and operation at its 60% owned BBM coking coal tenement in Central Kalimantan, Indonesia.

Source: Company Investec view: Approval of the EIS will allow for the upgrading of the exploration license to a production license.

Cokal is targeting completion of a feasibility study and all permitting, including forestry licenses, by October 2013.

Commencement of project construction in DecQ13E could see first production as soon as JunH14E.

Cokal is targeting an initial 2mtpa direct shipping operation at the BBM mine with the possibility of an expansion of up to 6mtpa.

We conservatively forecast first production in late 2014E.
[cid:image007.png@01CE39B0.AE8481F0] Commodities News � Base metals fall on China GDP news.

Copper and other industrial metals have fallen since China missed its growth forecasts.

3 month copper fell by 1.1% to US$7,323/t, the lowest since August 2012.

Zinc and nickel both fell by 1.3% to US$1,850/t and US%15,640/t respectively.

Source: Bloomberg � Gold prices collapsed Friday and continue this morning despite a small initial rally.

The price of the metal is down from around US$1,560/oz on Friday morning and fallen to as low as US$1,425/oz this morning in a particularly severe move as investment sentiment moves against the metal.

Speculation over Cyprus having to sell its gold reserves triggered fears that other struggling European members may also have to sell their gold holdings.

According to the World Gold Council, physical gold holdings of selected EU economies stand at: France 2,435t (78moz), Italy 2,452t (78.8moz), Portugal 383t (12.3moz), Spain 282t (9.1moz), Greece 112t (3.6moz), and Cyprus 13.9t (447koz).

The Central Bank Gold Agreement limits countries to selling no more than 400tpa of gold, which will constrain potential sales that could evolve.

Annual global gold mine production is around 100moz.

Source: Bloomberg, World Gold Council Investec View: This latest rout is surprisingly severe, with market commentary suggests that it is largely due to technical selling.

Sharps Pixley reported that Merrill Lynch was said to have made a massive sale of 4moz at COMEX opening on Friday, while MineWeb highlights a Goldman Sachs recommendation, which a day earlier had suggested investors should sell gold short .

Fundamentally we retain a positive view on gold on the basis that the worlds economic problems are not solved.

Central banks outside of the EU have been buying the metal, and lower prices would likely trigger stronger physical demand from jewellery markets, particularly in India and China.

The rising Chinese market in particular is not about to go away.

Medium term, physical demand tends to pick up around June/July as seasonal restocking takes place driven initially from India, the worlds largest gold consumer.

At current levels, many miners will be feeling considerably pain with average all-in cash costs in the order of US$1,200-1,300/oz.

This pricing environment, if sustained, would likely have a material adverse impact on mine supply that would be supportive longer term. Other economic news � China GPD growth below expectations.

Chinas GDP grew at 7.7% YoY in MarQ13.

This was a deceleration from 7.9% growth in DecQ12 and below the Bloomberg consensus estimate of 8.0% growth.

Source: Bloomberg Investec view: Subdued Chinese economic data is exacerbating the selloff in equities and commodities.

Industrial commodities fell sharply today within China and Shanghai October 2013 rebar futures plummeted, dropping 2.6% to CNY3,728, meaning iron ore is likely to follow.
African Resources update � SA platinum sector hoping for gold/coal-style collective bargaining.

Platinum firms will hold talks today with AMCU, the largest union in the sector, to try to persuade it to negotiate an industry-wide wage deal instead of company-by-company contracts.

While the Chamber of Mines hopes to achieve this to avert the labour issues of last year, AMCU has a history of walking out of discussions instead working out agreements.

"Our members are not in favour of the process," AMCU national treasurer Jimmy Gama said on Friday.

Wage negotiations for the gold and coal industries are expected to start in May.

Source: Mining Weekly � Skills shortage could hamper Africa mining growth.

While the worlds second fastest growing region has boomed over the past decade, thanks largely to mineral resources investment, there remains a huge gap between the demand and supply of skilled labour.

One of the factors is a debilitating exodus of African talent to more developed nations, for example, from Zimbabwe.

Another is tertiary education not creating the right skills.

Africa has the highest share of social science and humanities graduates of any world region, according to a study last year by the OECD.

It concluded that African universities were failing to prepare young people for the labour market.

Nigerian billionaire entrepreneur Aliko Dangote, recently announced vacancies for 1,000 truck drivers in his cement and distribution businesses.

"Six people who applied for the job held a PhD degree, 641 had Masters degrees and over 1 000 had a university degree".

Source: MiningWeekly
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