🕐06.02.14 - 10:27 Uhr

INVESTEC GLOBAL NATURAL RESOURCES DAILY - MINING - THURSDAY 6 FEBRUARY - RRS LN,
HAR SJ, CEY LN, JLP LN, TIG AU, CFE AU, JSTL IN



[cid:image001.png@01CF2312.B3A2FB20] Thursday, 06 February 2014 [cid:image006.jpg@01CF2312.C34DE800]
Snapshot � Company news highlights: Additional Randgold feedback from Cape Town lunch meeting, Harmony Gold Doornkop mine update, Centamin will not increase its offer price for Ampella Mining, Jubilee Platinum conversion of loan notes to equity, Tigers Realm Coal reconfirms A$7.9m institutional share placement, Cape Lambert to benefit from Mayoko royalty, JSW Steel and Essel Mining to bid for Stemcors Indian assets. � Commodity review highlights: Silver is set for longest rally since December as gold holds gains, LME announces measures to tackle warehouse load out queues, Nickel climbs as Chinas stainless steel output increases � Other economic news: Moodys gives Mexico A grade credit rating � African resources update: Ghana imposes forex controls, Zambia to increase power capacity by 39% to support mines, Platinum wage strike talks suspended after failure to reach a deal, Todays African proverb. � Market notes: FTSE futures + 21.5 points this morning.

US markets were quite choppy yesterday, falling initially due to weaker than expected ADP jobs and ISM data but recovered over the course of the afternoon (Dow -0.03%, S&P -0.20%).

Asian markets are mixed (Nikkei -0.18%, Hang Seng +0.62%, ASX200 +1.20%) with Australian performance driven by consumer goods.

There is a growing talk that US jobless and non-farm payrolls will also be weak that may leave markets concerned, particularly with comments from Philadelphia Fed President Plosser on speeding up tapering. Commodity markets - gold +0.01% $1,258.01/oz, silver +0.53% $19.9959/oz, platinum +0.01% $1,379.40/oz, copper +0.44%, $3.2025/lb, nickel -0.64% $13,716.50/t, iron ore 0.00% $122.40/t, thermal coal $78.20, WTI +0.21% $97.58/bbl, Brent +0.09% $106.35/bbl, zinc +0.96% $1,967.00/t.

Dual listed - BHP +0.82% A$35.57, RIO +1.64% A$65.65.

Silver jumped the most over 4 months and palladium bounced from its 34 month slump as the weaker US data boosted the safe haven trade.

Gold rose as well on news that sales of coins by the US Mint rose 63% MoM in January to 91.5Koz.

Onto the bulks and Chinese thermal coal port inventories rose 24.8% in January, the first increase since June, and to their highest levels since 2Q13, ahead of the usual seasonal pickup in production. Economic data due today:- US - trade balance (forecast -$36bn), initial jobless claims (335K), continuing claims (2998K).

Eurozone - UK Halifax House Prices (forecast 1.0% MoM), German factory orders (0.2%), BOE rate announcement (0.50%), BOE asset purchase target (�375bn), ECB rate announcement (0.25%).
Company News � Additional Randgold (RRS LN) feedback from Cape Town lunch meeting.

The most important point was RRSs clear intention to be a meaningful dividend payer.

On its own numbers, using a $1,200 gold price, RRS expects to generate excess cash of $1.6b over the next five years.

It wants to retain $400-500m on the balance sheet to give room to build new mines, if need be, and retain $100m/pa for exploration and corporate.

It intends to distribute the rest in dividends.

If that were to be the case, that is more than $0.6bn that will be paid in dividends, or a total of about $6.50 per share over the five year period.

We do not expect a big lift in dividends in 2014 as this is a cash-build year, but we should see dividends ratchet up in subsequent years.

It is interesting to note that while the cash balance is currently low, $180m of cash is currently tied up in VAT.

In terms of strategy, the group intends to operate a maximum of five mines, with a production base of 1-2moz.

In terms of exploration.

Ivory Coast the most prospective country in Africa, "by a mile", according to RRS, which is currently picking up new prospective ground.

Source: Investec � Harmony Gold (HAR SJ) Doornkop mine update.

HAR has announced that it has located the bodies of 8 of the 9 employees who were unaccounted for after the fire at the underground Doornkop mine in South Africa.

Source: Company � Centamin (CEY LN) will not increase its offer price for Ampella Mining (AMX AU).

According to Reuters, Centamin West Africa has extended its offer period for the acquisition of AMX, but will not increase its offer price.

Source: Reuters � Jubilee Platinum (JLP LN) conversion of loan notes to equity.

JLP has announced that it has received notice from Darwin Strategic to convert 24% of its �1.85m convertible loan notes into equity at a conversion price of 1.83p/share.

A total of 24.6m new shares will be issues to Darwin.

The company also announces that it remains on track for the commissioning of its third ARC furnace at the Middelburg Smelter, which is expected to commence in March.

Source: Company � Tigers Realm Coal (TIG AU) reconfirms A$7.9m institutional share placement.

Russian coking coal explorer Tigers Realm Coal has successfully reconfirmed the placement of 47.6m shares to sophisticated and professional investors as part of its larger A$62.5m capital raising at A$0.165/share announced in December 2013.

This action was necessitated by amendments to share subscription agreement and clears the way for TIG to resume trading, which it hasnt done since going into suspension on 17 December.

Management expect the capital raise to complete in mid-March 2014 following shareholder approval for the share issuance to PE funds Baring Vostok and the Russian Direction Investment Fund.

Source: Company Investec view: This is a best case outcome as all previously placed shares were reconfirmed and we expect TIG to be amply funded in mid-March on completion of the A$62.5m raising.

Our analysts continue to like the potential for a low capex, low cost, direct shipping operation at Project F (Amaam North) and look forward to impending resource and exploration target updates in MarQ14 following completion of the 15,000m winter drilling program that is currently underway.

The prefeasibility study for Amaam North (80% TIG) released in September 2013 suggests that TIG will be able to build a c.

1mtpa coking coal mine with a cash costs of c.

US$75/t for pre-production capex of USD52m and first production as soon as DecH15 at Amaam North.

See our analysts research report on TIG, Positive pre-feasibility study dated 3 September 2013, for more details. � Cape Lambert (CFE AU) to benefit from Mayoko royalty.

Australian resource company Cape Lambert expects to begin receiving a US$1/t royalty from iron ore sales at the Mayoko project in the Republic of Congo following the government granting mine owner Exxaro (EXX SJ) a mining convention.

Source: Company Investec view: Exxaro expects to begin production at a Mayoko in DecH14 at an initial 2mtpa rate.

This suggests Cape Lambert would receive c.

US$2m per year, material in the context of the CFEs A$78m market cap. � JSW Steel (JSTL IN) and Essel Mining to bid for Stemcors Indian assets.

Indian steel company JSW Steel has reportedly partnered with Kumar Mangalam Birlas Essel Mining to bid US$800m for UK steel trader Stemcors 73% stake in an Indian iron ore mining and pellet plant joint venture.

The transaction would help JSW secure iron ore supplies and increase its vertical integration.

Source: Bloomberg
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Commodities news � Silver set for longest rally since December as Gold holds gains.

Silver advanced the most in a month and is set for the longest rally since December as sign the US economy is slowing boosts haven demand.

Source: Bloomberg � LME announces measures to tackle warehouse load out queues.

The LME has strengthened its powers to investigate wait times and impose additional load out requirements at warehouses with long backlogs in response to complaints from aluminium consumers about the mismatch between rising physical premiums and falling metal prices.

The measures include a special committee with the ability to sanction enforcement actions.

Source: Bloomberg � Nickel climbs as Chinas stainless steel output increases.

Nickel climbed by 0.8% for the first time in four days amid speculation that demand for the metal will increase.

Source: Bloomberg
Other economic news � Moodys gives Mexico A grade credit rating.

Moodys has upgraded Mexicos sovereign debt by one notch to an A-grade for the first time in history.

The agency said that the promotion to A3 from Baa1 was motivated by reforms that were expected to strengthen the countrys potential growth prospects and fiscal fundamentals.

Source: FT
African resources update � Ghana imposes forex controls.

Ghanas central bank has introduced a string of foreign exchange controls in a bid to halt the depreciation of the national currency, resulting from chronic trade and current account imbalances.

The new measures limit access to foreign exchange and restrict trade transactions to the national currency, the cedi.

Source: FT � Zambia to increase power capacity by 39% to support mines.

Zambia will commission power projects this year that will boost generation capacity in the largest copper producing African country by 39%.

The country has an electricity shortage and needs to increase supply to mines that will grow output to more than 1Mt of metal from 2015.

Zambia will start producing 80MW from the Kariba North Bank hydropower plant extension this month.

The Itezhi Tezhi project will contribute an additional 60MW of power from August, increasing to 80MW by the end of the year.

Source: Bloomberg � Platinum wage strike talks suspended after failure to reach deal.

Anglo American Platinum (AMS SJ), Impala Platinum (IMP LN) and Lonmin (LMI LN) discussions with AMCU have been suspended after the parties were unable to reach a settlement with no date for resumption set.

According to a statement from the companys three chief executives, AMCUs demands have not moderated at all since negotiations began.

Source: Bloomberg � Todays African proverb.

"War has no eyes".

Source: BBC
Investec Global Natural Resources Research Team: UK Hong Kong South Africa Hunter Hillcoat Tel: +44 (0) 20 7597 5182
Matthew Whittall Tel: +852 3187 5075
Albert Minassian Tel: +27 (0) 21 416 1454
Marc Elliott Tel: +44 (0) 20 7597 5189
Leavitt Pope Tel: +852 3187 5074
Louise Collinge Tel: +44 (0) 20 7597 5779
Investec Global Natural Resources Sales Team: UK Hong Kong South Africa Jamie Campbell Tel: +44 (0) 20 7597 5038
Will Robbins Tel: +852 3187 5098
Hayden Smith Tel: +27 (0) 21 416 1401
USA Thomas Lawrence Tel: +1 212 2595604
Alistair Roberts Tel: +852 3187 5097
Investec Commodity Hedging Team: http://treasury.investec.co.uk/products-and-services/commodities.html UK Callum Macpherson Tel: +44 (0) 20 7597 5070
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