CPA Australia Mining & Energy Conference
14th November 2013 – Gold Coast
Resources Outlook Asia and Australia
The Best is Yet to Come
Owen Hegarty Vice Chairman – G-Resources Group
Chairman - Tigers Realm Minerals Chairman – EMR Capital
Non-Executive Director – Fortescue Metals Group Director - The AusIMM
Australia and Asia are locked in a virtuous circle of
economic growth and prosperity of which the
resources industry is a driver and a beneficiary
2
DEMAND Resources demand will
continue to grow strongly
PROSPECTIVITY The region is highly
prospective and is still under-explored
PEOPLE Generally abundant. But skilled labour is crucial for success
TECHNICAL CAPABILITY
Australia leads the world in resources
capability and technology
CAPITAL Becoming
increasingly available within the
region
SUPPLY Will be constrained.
Reducing regulation will help.
China and Asia are the engine rooms for multi-decade
economic growth
3
■ China and other emerging nations are driving
demand for resources as their economies develop
and pass the point of economic take-off to
sustainable growth.
■ The region is experiencing rapid and rolling growth
in urbanisation.
■ The surge in infrastructure developments will
continue.
■ Asia is in the ‘metal intensive’ stage of economic
development.
■ The burgeoning middle class is accelerating
consumption and we will see gradual structural re-
shaping.
■ In China especially – the social imperative for
continued growth
Shengxian Lake
Chengdu Railway Station
Renmin Road North
Wenshu Monastery
Luomashi
Tianfu Square
Huaxiba
Sichuan Olympic Stadium
Nijiaqiao
Tongzillin
South Chengdu Railway Station
Jinjiang Hotel
Hi-Tech Zone
Financial City
Incubator Park
Ocean Park
Century City
1
1
2
2
Chengdu Subway Tokyo Subway
People’s President
Indonesia: The New Rising Tiger
4
■ Stable and growing economy
■ Rich in resources with track record of development
■ Large, young population
■ Internationally well connected
India: Pockets of Regional Prosperity High Growth States
5 Source: World Bank
■ The state accounted for 15% of the national industrial output and 35% of total FDI into India for the year 2012
■ The state capital Mumbai is the Business and Financial hub of the country
■ Existing major ports - Mumbai Port & Jawaharlal Nehru Port
■ The average annual GDP growth rate for 2006-2011 is 10.1 %
Maharashtra – ppl: 112 million (9.3 % of national population)
■ Well developed industries in gas, petrochemicals, biotechnology, gems & jewellery
■ Economic hubs and export processing zones have been developed around these industries
■ Top exporter in the country with 25% share of total exports from the country
■ Developed the Charanka Solar Park which is the largest in Asia
■ The average annual GDP growth rate for 2006-2011 is 12.6 %
Gujarat - ppl: 60 million (5.0 % of national population)
■ Leader in automobile and auto-components
■ Textiles is a sunrise sector
■ Qualified and skilled workforce
■ Most urbanised state in India enabling upward social mobility
■ Leader in research and development (R&D) of water treatment plants
■ The average annual GDP growth rate for 2006-2011 is 9.9 %
Tamil Nadu – ppl: 72 million (6.0 % of national population)
■ Strong knowledge based economy with skilled workforce
■ Has several premier educational and research institutions
■ Bangalore is the Information Technology (IT) outsourcing capital of the world
■ Manufacturing hub for some of the largest public sector industries in India
■ The average annual GDP growth rate for 2006-2011 is 8.4 %
Karnataka – ppl: 61 million (5.1 % of national population)
Excellent regional prospectivity
6
■ The region is abundant with resources and
underexplored
■ Asia-Australasia contains numerous resource
bearing mineral provinces (eg. Cu-Au-Mo)
■ Within this region the mineral provinces of
south-west Pacific contain the greatest
concentration of world class deposits
■ The north-west Pacific has identical tectonics
but lower levels of modern exploration
■ Despite multiple world class belts and giant
deposits there has been comparatively low
levels of exploration in SE Asia – SW Pacific
■ Australia & Americas subjected to decades of
sustained exploration
■ Western Pacific exploration commenced in
1960’s and has been sporadic since
Au
Cu-Au
Cu-Au-Mo
Asia-Australia copper - gold provinces
Exploration, Discovery &
Resource Definition
Scoping, PFS, DFS, BFS & Financing
Project Development
& EPCM
Sustainable Operations, Environment, Community
Continuous Improvement
& Growth
• Automation, robotics and remote sensing – leads to greater productivity, safety and efficiency.
Automation
• Energy availability and pricing issues have driven a renewed focus on energy efficiency.
Energy Efficiency
• Greater scale of projects and operations have been driven by demand growth, lower grades and increasing real costs.
Scale Efficiencies
• In Australia particularly, the new ore bodies will be deeper. Innovative methods have been developed to discover and analyse deeper mineral deposits.
Deep Search
Australia’s existing world class technical capability...
7
...and excellence in innovation. Bulk sensing
Scale efficiencies
Solar PV
Deep search
■ Major Asian Stock Exchanges have grown at a faster
pace than their developed peers.
■ Hong Kong IPO market is the most active globally.
From 2009 – 2012, more than US$130bn raised
through 250 listings
■ Chinese outbound investment will continue to set
records
■ Asia continues to attract significant M&A activity and in
2012 accounted for 21% of global M&A activity. And
Asia leads the world in terms of investment
attractiveness going forward
Regional capital becoming increasingly available
Most attractive areas for geographic
expansion via M&A 2009-12 IPO Funds by Exchange
(US$bn)
Stock Exchange Performance
130
116
38 37
20
HK NYSE LSE NASDAQ STI
Source: Standard Chartered, Dealogic, MS, internal
8
USAUSD 1.3 Billion
CANADAUSD 3.3 Billion
LATIN AMERICAUSD 17 Billion
EUROPEUSD 1.4 Billion
AUSTRALIAUSD 30 Billion
RUSSIAUSD 2.6 Billion
SOUTH EAST ASIAUSD 18 Billion
AFRICAUSD 23.2 Billion
ARABUSD 5.2 Billion
SOUTH ASIAUSD 7.7 Billion
*2005-30 June 2013. The above captures only investments above USD 100 million and therefore understates amount of Chinese investment in mining globally. Above also excludes potash investmentsSource: Heritage Foundation, USA
CHINA
China Outbound Investment in Mining
Supply Constraints -
Supply from Australia will continue to be constrained
■ Access to Land and Data Exploration and discoveries have been declining
Productivity Commission draft report a positive step
South Australia showing the way
Geoscience Australia key role
■ Access to Labour and Skills De-regulation not Re-regulation
Commitment to 457 Visa efficiency
■ Access to Infrastructure We a generation behind
Infrastructure Australia
■ Access to Capital Exploration Development Incentive
Greater access to Asian capital markets
■ Access to Markets For our products and our METS – now a + $20 billion industry
Free Trade Agreements
■ Above all we must a Competitive and Investor Friendly Australia Destination of choice for outbound Chinese resource investment dollars
■ And we must continue to build Regional Relationships Strategic investment partnerships. And commercial, financial, technical,
educational and cultural relationships.
9
Captive Resource Developments
10
Tigers Realm Coal
www.tigersrealmcoal.com
Location – in development driven Pacific
Russia
Location – 30 km from the coast, multiple
high quality coking coal deposits
Location – close to markets of China, Japan,
Korea
EMR Capital
www.emrcapital.com
New resources fund based in Melbourne
Deep linkages to Asia, especially China
Experienced and committed team
Focus on four key commodities
- Copper, powering the world
- Gold, fascinating the world
- Coking coal, building the world
- Potash, growing the world
G-Resources Group
www.g-resources.com
Indonesia’s and Asia’s newest gold mine of
scale
250,000 oz/a gold 2m oz/a silver
Low cost, long life, oodles of upside
Tigers Realm Metals
www.tigersrealmgroup.com
Beutong – Indonesia’s and Asia’s newest
copper/gold/moly discovery of scale
+500 Mt at .6% first resource
Open in all directions
Excellent access to infrastructure
In Summary
■ The boom is far from over
■ The best is yet to come
■ Fabulous opportunities for Australia
■ Plenty of work to do
Thank You
Owen Hegarty
www.owenhegarty.com.au
Ph: +61 3 8644 1300 11
Disclaimer
12
This presentation (“Presentation”) is provided solely for information purposes for use at presentation held in November 2013 and includes information relating to G-Resources Group Limited and Tigers Realm Coal Limited (each a “company”).
By viewing or attending this Presentation, you agree to be bound by the following conditions:
This Presentation is not a prospectus or disclosure document and does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities or an inducement to enter into any investment activity, nor shall any part or all of this Presentation form the basis of, or be relied on in connection with, any contract or investment decision in relation to any securities.
The information contained in this Presentation has not been independently verified. The Company does not make any representation or warranty, express or implied, as to the fairness, accuracy, correctness or completeness of the information, opinions and conclusions contained in this Presentation.
To the maximum extent permitted by law, the Company and its related bodies corporate and affiliates, and their respective directors, officers, employees or agents, disclaim any liability (including, without limitation, any liability arising out of fault or negligence) for any loss or damage arising from any use of the information contained in this Presentation, including any error or omission, or otherwise arising in connection with it.
The information in this Presentation is subject to change without notice. Subject to any obligations under applicable law, the Company does not undertake any obligation to update any information in this Presentation.
Forward-looking statements
This Presentation contains forward-looking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, ‘intends’ and other variations of such words that Involve risks and uncertainties.
These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, at the date of this Presentation, are expected to take place. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company. Actual results and developments may differ materially from those expressed or implied in such statements because of a number of factors, including uncertainty in estimating mineral resources due to the preliminary stage of the Company’s assessment of its projects, actual demand, price fluctuations, the ability to produce and transport products profitably, fluctuations in foreign currency exchange rates, operational problems, political risks, economic and financial market conditions in various countries and regions, industry competitors and activities by governmental authorities such as changes in taxation or regulation. The Company cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this Presentation will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements.
The Company does not intend to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this Presentation, except where required by law.
These forward-looking statements are subject to various risk factors that could cause the Company’s actual results to differ materially from the results expressed or anticipated in these statements.