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					                 Australia Metals & Mining
ANCHOR REPORT

                                                                                                    EQUITY RESEARCH




                Gold - where is the froth?                                                   April 2, 2012


                                                                                             Research analysts 

                Putting the ‘e’ in gold PEs;                                                 Australia Metals & Mining


                cash generation to close the                                                 David Radclyffe - NIplc
                                                                                             david.radclyffe@nomura.com
                                                                                             +61 2 8062 8434

                physical & equities disconnect                                               David Cotterell - NAL
                                                                                             david.cotterell@nomura.com
                                                                                             +61 2 8062 8433
                                                                                             Puneet Saxena
                                                                                             puneet.saxena@nomura.com
                Margin expansion is finally putting the ‘e’ into gold equities PEs,          +44 20 7102 9162
                with strong cash generation offering opportunities for growth and
                more. The Australian gold sector offers attractive valuations
                compared to international peers, with further potential for
                consolidation.
                Low real interest rates, increasing central bank demand, Asian
                market growth and investment appeal are all supportive of gold
                prices. Prices could be volatile in the short term, but central bank
                buying and Chinese demand remain key to a robust price outlook.


                Key analysis in this anchor report includes:
                • Significant upside potential for equities on three-year view as ~2Moz of
                  growth is delivered and earnings expand.
                • Overall, Australian golds offer better relative growth, value and lower
                  sovereign risk than European peers.
                • Preferred exposure is through EVN, OGC, SBM and NCM, while RRL
                  is least preferred, trading well ahead of peers.                           See Appendix A-1 for analyst
                                                                                             certification, important
                                                                                             disclosures and the status of
                                                                                             non-US analysts.
Australia Metals & Mining
METALS & MINING
                                                                                                             EQ U I T Y R E S E A R C H




ANCHOR REPORT: Gold – where is the froth?                                                           April 2, 2012



Putting the ‘e’ in gold PEs; cash
generation to close the physical
& equities disconnect
Initiating on Australian mid-cap golds – prefer EVN, OGC, SBM and                                   Anchor themes
NCM; RRL is least preferred, trading well ahead of peers                                            Gold equities have
Herein we initiate on six Australian mid-cap gold companies,                                        underperformed the gold price,
complementing existing coverage of Newcrest. Preferred stocks are                                   however this is expected to
Evolution (for growth), OceanaGold (for higher risk/reward) and St Barbara                          reverse as earnings growth is
(for value). Conversely, the least preferred stock is Regis, which has                              delivered. Robust cash
outperformed the group and now appears well ahead on relative metrics                               generation supports growth,
and with ramp-up risks remaining.                                                                   M&A and capital management.
Margin expansion finally putting the ‘e’ into gold PEs; strong cash                                 Nomura vs consensus
generation offer opportunities for growth and beyond                                                Nomura forecasts a gold price
Gold companies have had a mixed performance relative to the gold price,                             of US$1,791/oz and
which itself has lagged other commodities in the mid term. However,                                 US$2,063/oz, respectively, for
margin expansion and growth delivery is expected to drive earnings and                              2012 and 2013. This is in line
provide momentum for the sector. Companies are well funded to grow                                  with consensus estimates. Our
organically or by M&A. “What-if” analysis highlights that on either Nomura                          Reduce rating on RRL is a key
gold price assumptions or using current spot and a prospective FY14F PE                             point of differentiation to the
of 10x, there is significant upside potential in EVN, OGC, PRU and SBM.                             Street.

Low real interest rates, increasing central bank demand, Asian                                      Research analysts
market growth and investment appeal all supportive of gold prices
Gold prices have pulled back ~10% from recent highs, yet central banks                              Australia Metals & Mining
continue to be net buyers of gold at the same time Asian demand has                                 David Radclyffe - NIplc
continued to grow. Significantly, China imported more gold than India in the                        david.radclyffe@nomura.com
                                                                                                    +61 2 8062 8434
last quarter. Prices may remain volatile in the short term, but persistence in
                                                                                                    David Cotterell - NAL
these themes supports a robust price outlook.                                                       david.cotterell@nomura.com
                                                                                                    +61 2 8062 8433
Sector offers attractive valuations to international peers, offering                                Puneet Saxena
further potential for consolidation                                                                 puneet.saxena@nomura.com
                                                                                                    +44 20 7102 9162
Comparing NCM to the top global gold producers and the Australian
midcaps to their European gold peers highlights attractive relative value.
What the Australian midcap golds sometimes lack in terms of resource
scale they make up for in relatively lower risk with predominantly
Australian/Asian assets and attractively priced growth (low PEG ratios).
Fig. 1: Australian Gold stock summary
 Company                   Ticker           Rating    Last Price   Target Price   Up/downside (%)
 Alacer                    AQG AU           Neutral        8.13           9.30             14.4%
 Evolution Mining          EVN AU           Buy            1.73           2.70             56.1%
 Newcrest                  NCM AU           Buy           30.23          45.00             48.9%
 OceanaGold                OGC AU           Buy            2.50           3.30             32.0%
 Perseus Mining            PRU AU           Neutral        2.34           2.65             13.2%
 Regis Resources           RRL AU           Reduce         3.98           3.65              -8.3%   See Appendix A-1 for analyst
 St Barbara                SBM AU           Buy            2.06           3.35             62.6%    certification, important
Priced as at 29 March 2012. Source: Nomura research
                                                                                                    disclosures and the status of
                                                                                                    non-US analysts.
Nomura | Australia Metals & Mining                           April 2, 2012



Contents
     3    Executive summary
  




     7    A view from our Strategist
  




     8    Setting the scene for gold equities
  




     9    Production growth
  




     10   Sector earnings growth
  




     11   Recent performance
  




     12   Benchmarking to European peers
  




     18   Benchmarking Newcrest to global peers
  




     20   Reinvesting in growth
  




     21   Gold supply/demand characteristics
  




     23   Supply – incentivised but taking time
  




     27   Demand driven by investment and now central bank
          buying
  




     36   Alacer Gold Corp
  




     44   Evolution Mining
  




     53   Newcrest Mining
  




     63   OceanaGold
  




     71   Perseus Mining
  




     78   Regis Resources
  




     86   St Barbara
  




     94   Appendix A-1
  




                                                                       2
Nomura | Australia Metals & Mining                                                                                                      April 2, 2012



Executive summary
Herein Nomura initiates on six mid-capitalisation gold companies representing the core
of the Australian gold sector.
Short-term volatility, yet gold price appears supported
The combination of low real interest rates, increasing central bank demand, Asian                               Nomura forecasts a gold price of
market growth and investment appeal all appear supportive of gold prices in our view.                           US$1,791/oz and US$2,063/oz,
Gold prices have pulled back some 10% from recent highs yet appear well supported;                              respectively, for 2012 and 2013.
central to this thesis is:                                                                                      This is in line with consensus
                                                                                                                estimates.
• Central banks continue to be active net buyers of gold as they seek to diversify their
 portfolios.
• Increased Chinese demand has more than offset weaker Indian demand as the INR
 has depreciated and import taxes have risen.
• It is early days, but potentially the linear relationship between scrap gold supply and
 price is beginning to plateau.
Gold equities are attractive, and Australian stocks are well placed to peers
Further, the global gold sector trading on a prospective PE of ~10x is at a historical low                      The Australian mid-cap gold
level at a time when margins are the highest in recent history (at +50%) and balance                            stocks offer attractively priced
sheets have rarely been stronger. In this context the Australian gold equities are well                         growth and lower risk exposure
placed to their peers, in our view; while domestic investors are concerned about the                            to the peer group.
deliverability of NCM’s pipeline, it rates well relative to the leading gold stocks. Further,
the Australian mid-cap gold stocks offer attractively priced growth and lower risk
exposure to the peer group.
Step change in gold prices drives earnings and upside for gold equities
Rising gold prices to over US$1,500/oz have driven an expansion in gold producer
margins outpacing cost inflation with the average sector cash cost of ~US$650/oz.
Higher gold prices support improved balance sheets and therefore the ability for
companies to invest in growth, embark on M&A and consider capital management.
On Nomura estimates the EV/EBITDA multiple for the sector is expected to halve to ~6x                           Attractive upside applying PE of
from FY11-FY13F as growth is delivered. Further, “what-if” analysis suggests significant                        10x to FY14F earnings on lower-
upside potential (>50%) to EVN, OGC, PRU and SBM applying a 10x PE multiple to                                  than-forecast spot earnings.
FY14F earnings at spot gold prices (below Nomura’s forecast).
Preferred exposure NCM, EVN, OGC, SBM, least preferred RRL
On a relative basis Newcrest continues to offer attractive value for a leading global gold
stock. In the mid capitalisation Australian gold sector, St Barbara offers significant value
to its peers, followed by Evolution, while OceanaGold offers an attractive higher risk /
reward proposition. Conversely, while Regis offers significant growth upside, after a
period of strong performance it now trades at a large premium to its peers.

Fig. 2: Summary financial table
 Company                   Code      Price Mkt cap Rating               Target   NPV*    P/NPV**           P/E                   EV/EBITDA
                                     in A$  US$bn                                A$bn        (x)   2011    2012F    2013F    2011 2012F 2013F
 Alacer                AQG AU         8.13      2.5 Neutral               9.30     2.0       0.8   28.9      11.3      9.7   12.7     4.4  4.0
 Evolution             EVN AU         1.73      1.3    Buy                2.70     1.6       0.6    N.M      23.3      5.1   41.7     6.3  2.0
 Newcrest              NCM AU        30.23    24.0     Buy               45.00    22.5       0.7   23.9      18.1     10.3   11.6    10.6  6.4
 OceanaGold            OGC AU         2.50      0.7    Buy                3.30     1.1       0.4   16.4      11.5      3.5     4.6    4.5  1.2
 Perseus               PRU AU         2.34      1.1 Neutral               2.65     1.2       0.6    N.M      23.5      5.4    N.M    21.8  3.3
 Regis                 RRL AU         3.98      1.8 Reduce                3.65     1.4       0.9   46.6      21.0      6.7   30.0    18.0  3.9
 St Barbara            SBM AU         2.06      0.7    Buy                3.35     1.0       0.5     9.8      5.1      3.4     4.6    2.4  1.4

 Weighted average                                                                            0.7   25.2     17.7       9.4   13.7     10.4         5.5
* Based on Nomura’s gold price profile. ** Spot NPV using US$1,660/oz
Prices as at 29 March, 2012.
Source: Nomura estimates




                                                                                                                                                    3
Nomura | Australia Metals & Mining                                                                                                                                                                                                                   April 2, 2012


Fig. 3: Gold price ($/oz)
 2,000


 1,500


 1,000


           500


                    0
                    Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12
                                                                         Gold price (AUD)                                                               Gold Price (USD)
Source: Datastream, Nomura research


Fig. 4: Capitalisation vs Spot P/NPV
                    50,000
 Log Mcap (US$mn)




                                                                                                                                                      Newcrest


                                                                                                                                                                                                                              Randgold

                                                                                                                                                      Polymetal
                     5,000
                                                                                       African Barrick                                                        Alacer Gold
                                                                                                                    Petropavlovsk                                      Regis
                                                                        Centamin                           Evolution
                                                                                                                            Perseus
                                                                                                            St Barbara
                                                                          OceanaGold                                        Avocet                                                                                                          (x)
                      500
                                          0.0                     0.2                      0.4                           0.6       0.8                                                  1.0                          1.2                      1.4
                                                                                                                          Spot P/NPV
Source: Nomura estimates


Fig. 5: “What-if”, FY14F PE scenario – Spot gold price
                                                                                Share price                                 PE 10x                           Upside                                            PE 15x                       Upside

 Alacer Gold                                                                                     8.13                               7.14                            -12%                                        10.71                         32%
 Evolution Mining                                                                                1.73                               3.14                             82%                                         4.71                        172%
 Newcrest                                                                                       30.23                              24.04                            -20%                                        36.07                         19%
 OceanaGold                                                                                      2.50                               5.56                            122%                                         8.34                        234%
 Perseus Mining                                                                                  2.34                               4.90                            109%                                         7.34                        214%
 Regis Resources                                                                                 3.98                               4.16                              4%                                         6.23                         57%
 St Barbara                                                                                              2.06                          3.33                         62%                                          4.99                        142%
Source: Nomura estimates


Fig. 6: PEG ratio (3yr average)
     2.0
                                                                       Global          Australian
     1.5

     1.0

     0.5

     0.0
                                                      Perseus Mining




                                                                                                                                                                                                                  Rand gold
                                                                                                                                                                                              Petrop avlovsk
                      Evo lution Mining




                                                                          OceanaGold




                                                                                                                         Alacer Gold




                                                                                                                                                         Newcrest
                                                                                       Regis Resources




                                                                                                                                                                      African Barrick
                                            Avo cet




                                                                                                                                                                                                                                 Centamin
                                                                                                             Polymetal




                                                                                                                                         St Barbara




Source: Nomura estimates




                                                                                                                                                                                                                                                               4
Nomura | Australia Metals & Mining                                                                                    April 2, 2012


Stock summary
Alacer Gold (Neutral, TP A$9.30) – Intermediate gold doubling production                    Key catalysts:
Alacer formed in 2011 from the merger of Anatolia and Avoca Minerals. The company           • Execution of growth pipeline
produces gold from operations in Turkey and Australia and in 2012 is targeting to           and targets
produce 420-440koz at the group level at US$668-693/oz (third quartile). In Australia       • Çöpler sulphide feasibility
AQG operates two hubs in the southern goldfields Higginsville and South Kalgoorlie,         study in 2H 2012 and
while in Turkey the company operates the Çöpler heap leach project. Production is           resource/reserve updates
targeted to grow to 800koz by 2015 through expansions in both Australia and Turkey.         • SKOEP study & underground
                                                                                            projects in Q2 2012.
Nomura initiates with a Neutral rating and A$9.30 target price, based on a combination of
our forward gold price NPV adjusted for growth and risks (representing 0.7x spot NPV).

Evolution Mining (Buy, TP A$2.70) – Newest Australian mid-tier gold company                 Key catalysts:
Evolution is a growth-focused Australian gold company. The company was formed from          • Development and
the merger of equals between Catalpa Resources and Conquest Mining, with the                commissioning of Mt Carlton
concurrent acquisition of the Cracow and Mt Rawdon mines from Newcrest Mining. EVN          • Continued exploration success
100% owns and operates four gold operations in Queensland and Western Australia and         across the portfolio
is currently developing a fifth gold operation in Queensland. The company is targeting      • Value-enhancing acquisitions
FY12 gold production of 335-375koz and expects to increase it to 410-465koz of gold         to grow the company
equivalent by FY13. If achieved, this would make EVN the third-largest Australian-listed
gold producer behind Newcrest and Alacer. The current suite of producing assets all
have exploration potential to extend the current mine life, and EVN has budgeted
accordingly. The balance is in a net cash position and allows both the flexibility to
develop Mt Carlton and build cash. The stock trades on what we view as attractive
multiples (FY13F P/E 6x and 2x EV/EBITDA). Nomura initiates coverage with a Buy
rating and A$2.70 target price, based on a combination of Nomura’s one-year-forward
gold price and the NPV adjusted for growth and risk (representing 0.7x spot NPV).

Newcrest Mining (Buy, TP A$45.00) – A cut above the rest                                    Key catalysts:
Newcrest is the largest ASX-listed gold producer and one of the top five gold producers     • Delivery of key growth projects:
in the world. The company has a number of world-class operations and projects               Cadia East and Lihir MOPU
including Cadia Valley, Telfer, Lihir and Wafi-Golpu. In FY11 NCM produced 2.5Moz of        • PFS results for Wafi-Golpu,
gold and 76kt of copper, and in FY12F has provided production guidance of 2.43 –            O’Callaghan’s and Namosi
2.55Moz of gold and 75-85kt of copper. The company intends to grow the business 5-          • Exploration success across the
10% per year, focusing on Oceania and utilising in-house exploration expertise and          portfolio
leveraging the knowledge of sub level and block caving. Nomura maintains a Buy rating
and target price of A$45.00, representing 0.9x spot NPV.

OceanaGold (Buy, TP A$3.30) – Stable production from low-risk jurisdiction                  Key catalysts:
OceanaGold is an emerging immediate gold producer, with three operations in New             • Didipio construction completed
Zealand and a gold-copper project in the Philippines. The company is targeting FY12F        on schedule
production of ~230–250kozpa at cash costs of ~US$900-980/oz. By 2016 the company            • Feasibility study results on
has ambitions to be a major gold producer in the Asia-Pacific region operating in a         expanding the mill at Didipio to
number of countries including the Philippines and New Zealand. The Didipio project in       5Mtpa
the Philippines is the first phase of growth, which OGC intends to leverage to support      • Exploration drilling results from
future production growth. OGC is trading at 0.5x NPV at spot gold prices and very           New Zealand and the
                                                                                            Philippines
attractive earnings multiples. Nomura initiates coverage with a Buy rating and a target
price of A$3.30/share, based on a combination of our forward gold price NPV adjusted
for growth and risks (representing 0.5x spot NPV).

Perseus Mining (Neutral, TP A$2.65) – Emerging intermediate gold producer                   Key catalysts:
Perseus Mining is an emerging West African gold producer targeting 400kozpa in the          • Successful ramp-up continuing
next few years. The company operates the recently commissioned Edikan Gold Mine             at EGM
(EGM) in Ghana and is awaiting environmental approval to commence construction on           • Resource and reserve
the Tengrela project in the Ivory Coast. FY12 production is forecast by PRU at 85-95koz,    upgrades at EGM and Tengrela
increasing to >275koz by FY13. The development of Tengrela would lift production over       • New mine plan at Tengrela
400koz by FY14. PRU is in a net cash position and is funded to develop the Tengrela
project. The company appears attractive, in our view, with FY13F P/E of 6x and
EV/EBITDA of 4x, however near-term growth appears to be priced into the stock at




                                                                                                                                  5
Nomura | Australia Metals & Mining                                                                                 April 2, 2012


current levels. Nomura initiates coverage with a Neutral rating and A$2.65 target price
based on a combination of our forward gold price NPV adjusted for growth and risks
(representing 0.6x spot NPV).

Regis Resources (Reduce, TP A$3.65) – Garden Well to lift production to >300koz            Key catalysts:
Regis is a gold producer and developer focussed on the Duketon area in WA. Gold is         • Commencement and ramp-up
currently produced from the Moolart Well operation, with RRL’s second mine Garden          of Garden Well in 2H 2012
Well due to commence in 2H 2012. Group production is expected to grow to ~350koz in        • Progression of Rosemont and
FY13F, with midterm upside from the potential inclusion of satellite feed to Garden Well   Erlistoun as potential
from Rosemont and Erlistoun. RRL appears funded to deliver on its growth ambitions         incremental sources of feed to
and second quartile cash costs translates to EBITDA potential of +A$400mn in FY13F.        Garden Well - upside towards
However RRL is not without execution risks at Garden Well. RRL offers attractive growth    400koz
yet trading at 1x spot NPV shares appear ahead of relatives and Nomura initiates with a    • Corporate potential as Duketon
                                                                                           pipeline is delivered
Reduce rating and A$3.65 target price, seeking value at lower levels (representing 0.7x
spot NPV).

St Barbara (Buy, TP A$3.35) – Potential for cash equal to capitalisation in 4yrs           Key catalysts:
SBM is a West Australia focussed gold producer with three operating mines and two          • Hit targets and progress
processing plants targeting to produce 320-350koz of gold in FY12F at A$790-830/oz         incremental production
(third quartile). The cornerstone asset is its Leonora operations including the Gwalia     opportunities
(Deeps) and King of the Hills (formerly Tarmoola) underground mines. The Southern          • A discovery or complementary
Cross region comprises the mature Marvel Loch operation, which is expected by SBM to       acquisition to enhance profiles
move to care and maintenance post FY12F. SBM has 7.7Moz of gold in resources with          • Demonstration of strong cash
                                                                                           generation potential relative to
current reserves of 2.8Moz, indicating a mine life of some 10 years. SBM has strong        its size
cash generation and an unleveraged balance sheet offering optionality to continue to
grow the business. Trading at 0.5x its spot NPV and very low multiples (EV/EBITDA ~2x)
SBM offers attractive deep value potential, and Nomura initiates coverage with a Buy
rating and A$3.35 target price, based on a combination of our forward gold price NPV
adjusted for growth and risks (representing 0.7x spot NPV).




                                                                                                                              6
Nomura | Australia Metals & Mining                                                                                      April 2, 2012



A view from our Strategist
The following is a view on gold from Michael Kurtz, Nomura’s Asia ex-Japan Strategist
and Global Head of Equity Strategy:

• Somewhat perversely, stabilization in European financial markets (assuming it holds)         We expect modest further gains
  and the slowly gathering global demand recovery that we anticipate may pose a                for the yellow metal over the
  headwind – or at least diminish the tailwinds – for spot gold. While we expect modest        next 24 months
  further gains for the yellow metal over the next 24 months, we would not expect annual
  percentage upside to exceed low-mid teens.
• In addition to reduced need for gold’s “safe haven” qualities, we also note that gold’s
  breathtaking six-fold US$ spot-price increase since 2002 (to a high last year of
  US$1900/oz.) mirrored an extended period of US dollar weakness (35% in trade-
  weighted exchange rate terms) as the Fed employed extraordinarily loose monetary
  policy to stimulate aggregate demand: first in the 2001 recessionary aftermath of the
  ’tech bubble’, then amidst the disinflationary and US trade-account pressures from
  globalization in the 2000s, and subsequently to combat balance sheet damage ensuing
  from the 2008 US subprime mortgage implosion and resulting global downturn.
• Yet tenacious inflationary risks – not least in oil prices – and growing dissent on the      Monetary policy “normalization”
  FOMC may limit the Fed’s ability to continue expanding US dollar money supply from           (however distant) puts a firmer
  here. And in any case the gradual pickup in US private-sector job growth may wean US         floor beneath the dollar, and by
  demand off such extraordinary stimulus, creating expectations for eventual monetary          extension a damper on gold’s
                                                                                               appreciation.
  policy “normalization” (however distant) that puts a firmer floor beneath the dollar, and
  by extension a damper on gold’s appreciation.
• Still, we are convinced that US officials appreciate the key contribution US dollar          Keeping real policy interest rates
  declines have made to the recovery in corporate earnings (particularly the substantial       negative for a substantial period
  share made up of overseas earnings) and the resultant strengthened outlook for hiring        minimise risks of a major gold
  and capital spending. As such, Chairman Bernanke would almost certainly look to              price correction.
  forestall any substantial dollar appreciation by keeping real policy interest rates
  negative for a substantial period – minimizing risks of a major gold-price correction over
  our forecast horizon.
• Moreover, we note the considerable gold demand factor represented by Asia’s rapidly          We still see the medium-term
  expanding middle class, for whom gold’s tangibility and transportability are key             bias of risks on gold skewed
  attractions as a savings vehicle and inflation hedge. As continued global recovery could     decidedly to the upside.
  underpin both a resumption of generalized inflationary pressures (particularly given
  historically massive money supply outstanding globally) and further Asian household
  income gains, we still see the medium-term bias of risks on gold skewed decidedly to
  the upside. Only in the smaller-probability scenario of a reactive monetary over-
  tightening to an explosive inflation break-out would we anticipate a sustained bear
  market in gold.




                                                                                                                                    7
Nomura | Australia Metals & Mining                                                                                    April 2, 2012



Setting the scene for gold equities
The following charts set the scene for the recent history of the global gold sector. Key
takeaways include:
• The PE of the sector has ranged from 10-35x over the past 20 years; currently the
  sector is priced at the bottom of this range, similar to the late 1990s / height of the GFC.
• Margins for the sector at ~60% are nearly double the average of the past two decades.
  On this basis cash flow generation and profitability for the sector is at record levels.
• Balance sheets are well placed and the sector dividend yield is once again rising.
Fig. 7: Gold equities - PE multiples (x)                            Fig. 8: Gold equities - EV/EBITDA multiples (x)
 45                                                                  25
 40
 35                                                                  20
 30
 25                                                                  15
 20
 15                                                                  10
 10
  5                                                                   5
  0
       Nov-00
       Jun-95
        Jul-96




       Jan-03




       Jun-08
        Jul-09
       May-94




       May-07
       Mar-92
       Apr-93




       Aug-97
       Sep-98
       Oct-99

       Dec-01




       Apr-06




       Aug-10
       Feb-04
       Mar-05




       Sep-11


                                                                      0


                                                                           1Q02
                                                                           3Q02
                                                                           1Q03
                                                                           3Q03
                                                                           1Q04
                                                                           3Q04
                                                                           1Q05
                                                                           3Q05
                                                                           1Q06
                                                                           3Q06
                                                                           1Q07
                                                                           3Q07
                                                                           1Q08
                                                                           3Q08
                                                                           1Q09
                                                                           3Q09
                                                                           1Q10
                                                                           3Q10
                                                                           1Q11
                                                                           3Q11
Source: Datastream, Nomura research                                 Source: Datastream, Nomura research




Fig. 9: Gold equities – EBITDA & capex (US$mn)                      Fig. 10: Gold equities – EBITDA margin (%)
 70,000                                                              70%

 60,000                                                              60%

 50,000                                                              50%
 40,000
                                                                     40%
 30,000
                                                                     30%
 20,000
                                                                     20%
 10,000
                                                                     10%
       0
           1Q01
           3Q01
           1Q02
           3Q02
           1Q03
           3Q03
           1Q04
           3Q04
           1Q05
           3Q05
           1Q06
           3Q06
           1Q07
           3Q07
           1Q08
           3Q08
           1Q09
           3Q09
           1Q10
           3Q10
           1Q11
           3Q11
           1Q12
           3Q12
           1Q13
           3Q13




                                                                      0%
                                                                           1Q91
                                                                           4Q91
                                                                           3Q92
                                                                           2Q93
                                                                           1Q94
                                                                           4Q94
                                                                           3Q95
                                                                           2Q96
                                                                           1Q97
                                                                           4Q97
                                                                           3Q98
                                                                           2Q99
                                                                           1Q00
                                                                           4Q00
                                                                           3Q01
                                                                           2Q02
                                                                           1Q03
                                                                           4Q03
                                                                           3Q04
                                                                           2Q05
                                                                           1Q06
                                                                           4Q06
                                                                           3Q07
                                                                           2Q08
                                                                           1Q09
                                                                           4Q09
                                                                           3Q10
                                                                           2Q11
                             EBITDA          Capex
Source: Datastream, Nomura research                                 Source: Datastream, Nomura research




Fig. 11: Gold equities – net debt to EBITDA (x)                     Fig. 12: Gold equities - dividend yield (%)
  5                                                                  3.5%
  4                                                                  3.0%

  3                                                                  2.5%
                                                                     2.0%
  2
                                                                     1.5%
  1
                                                                     1.0%
  0                                                                  0.5%
 (1)                                                                 0.0%
       1Q91
       1Q92
       1Q93
       1Q94
       1Q95
       1Q96
       1Q97
       1Q98
       1Q99
       1Q00
       1Q01
       1Q02
       1Q03
       1Q04
       1Q05
       1Q06
       1Q07
       1Q08
       1Q09
       1Q10
       1Q11
       1Q12
       1Q13




                                                                            1Q91
                                                                            1Q92
                                                                            1Q93
                                                                            1Q94
                                                                            1Q95
                                                                            1Q96
                                                                            1Q97
                                                                            1Q98
                                                                            1Q99
                                                                            1Q00
                                                                            1Q01
                                                                            1Q02
                                                                            1Q03
                                                                            1Q04
                                                                            1Q05
                                                                            1Q06
                                                                            1Q07
                                                                            1Q08
                                                                            1Q09
                                                                            1Q10
                                                                            1Q11
                                                                            1Q12
                                                                            1Q13




Source: Datastream, Nomura research                                 Source: Datastream, Nomura research




                                                                                                                                8
Nomura | Australia Metals & Mining                                                                                                                         April 2, 2012



Production growth
The following charts highlight the production profiles of the gold companies herein.

Fig. 13: Alacer - Gold production profile                                     Fig. 14: Evolution - Gold production profile
 800        (koz)                                                              500    (koz)

                                                                               400
 600
                                                                               300
 400
                                                                               200
 200
                                                                               100

   0                                                                             0
            2009    2010   2011 2012F 2013F                2014F 2015F                 2009  2010  2011 2012F 2013F 2014F 2015F
            Higginsville South Kalgoorlie Copler           Frog's Leg                  Cracow Edna May Mt Carlton Mt Rawdon Pajingo
Source: Company data, Nomura estimates                                        Source: Company data, Nomura estimates



Fig. 15: Newcrest - Gold production profile                                   Fig. 16: OceanaGold - Gold production profile
 4,000       (koz)                                                             600    (koz)
                                                                               500
 3,000
                                                                               400

 2,000                                                                         300
                                                                               200
 1,000
                                                                               100

        0                                                                        0
              2009     2010      2011    2012F     2013F   2014F    2015F              2009       2010  2011 2012F 2013F 2014F                               2015F
    Cadia Valley       Telfer   Lihir   Gosowong    Hidden Valley   Bonikro                          Macraes Reefton Didipio
Source: Company data, Nomura estimates                                        Source: Company data, Nomura estimates



Fig. 17: Perseus - Gold production profile                                    Fig. 18: Regis - Gold production profile
 600         (koz)                                                             600    (koz)
 500                                                                           500
 400                                                                           400
 300                                                                           300

 200                                                                           200

 100                                                                           100

    0                                                                            0
            2009      2010   2011       2012F 2013F 2014F 2015F                        2009   2010            2011 2012F 2013F 2014F 2015F
                         Edikan              Tengrela                                    Moolart Well         Garden Well Erlistoun Rosemont
Source: Company data, Nomura estimates                                        Source: Company data, Nomura estimates



Fig. 19: St Barbara - Gold production profile                                 Fig. 20: Three-year production growth (FY12-FY15)
 600        (koz)                                                              150
                                                                                      (%)
 500                                                                           100
 400                                                                             50
 300
                                                                                  0
 200
                                                                                -50
                                                                                                                                               Resources




 100
                                                                                                  Evolution




                                                                                                                         OceanaGold
                                                                                                              Newcrest




                                                                                                                                      Alacer
                                                                                        Barbara




                                                                                                                                                             Perseus
                                                                                                                                                              Mining
                                                                                                                                      Gold
                                                                                                   Mining




                                                                                                                                                 Regis
                                                                                           St




   0
            2009      2010      2011 2012F 2013F 2014F 2015F
                     Gwalia       King of the Hills Marvel Loch
Source: Company data, Nomura estimates                                        Source: Nomura estimates




                                                                                                                                                                       9
Nomura | Australia Metals & Mining                                                                                                      April 2, 2012



Sector earnings growth
Nomura’s gold universe is expected to demonstrate growth through a combination of
additional production from new projects and current mines, together with continued
strength in the gold price. The seven Australian gold stocks under coverage all have
attractive EPS and PE’s, with the majority of companies trading on single-digit PEs.
On Nomura estimates, these companies are expected to deliver earnings growth of
>100% in FY12F and FY13F, moderating to levels of ~9% in FY14F. On this basis, the
simple average PE of the sector is expected to fall from ~16x in FY12F to ~6x in FY15F.

Fig. 21: Australian Golds EPS (¢) - Nomura estimates                     Fig. 22: Australian Golds PEs (x) - Nomura estimates
                           FY11      FY12F    FY13F    FY14F    FY15F                               FY11     FY12F    FY13F    FY14F    FY15F
 Alacer Gold                29.0       73.3     88.0     86.1    101.2    Alacer Gold                28.9      11.3      9.7      9.9      6.5
 Evolution Mining           -1.3        7.4     34.5     48.2     38.8    Evolution Mining           N.M       23.3      5.0      3.6      4.5
 Newcrest                  126.4      167.5    293.7    330.8    338.8    Newcrest                   23.9      18.1     10.3      9.1      8.9
 OceanaGold                 15.7       22.0     75.0     62.7     44.8    OceanaGold                 16.4      11.5      3.5      4.2      4.5
 Perseus Mining             -6.7       10.0     43.3     69.4     72.2    Perseus Mining             N.M       23.5      5.4      3.4      3.2
 Regis Resources             8.5       18.9     59.4     55.4     58.7    Regis Resources            46.6      21.0      6.7      7.2      6.8
 St Barbara                 21.0       40.3     60.9     45.4     42.0    St Barbara                  9.8       5.1      3.4      4.5      4.9
 Average Growth                      >100%    >100%       9%      -4%     Average                    25.1      16.2      6.3      6.0      5.6
Source: Nomura estimates                                                 Source: Nomura estimates


This analysis yields similar results on a spot gold price basis, with significant earnings
growth maintained in FY12F and FY13F, moderating to levels of ~18% in FY14F and
~34% in FY15F. The FY15F implied PE on this basis falls to ~5x.

Fig. 23: Australian Golds EPS (¢) – Spot price                           Fig. 24: Australian Golds PEs (x) – Spot price
                           FY11      FY12F    FY13F    FY14F    FY15F                               FY11     FY12F    FY13F    FY14F    FY15F
 Alacer Gold                29.0       59.8     53.2     71.9    123.9    Alacer Gold                28.9      13.8     16.0     11.9      5.3
 Evolution Mining           -1.3        6.2     25.7     37.2     39.3    Evolution Mining           N.M       28.0      6.7      4.6      4.4
 Newcrest                  126.4      160.0    223.1    242.1    347.6    Newcrest                   23.9      18.9     13.5     12.5      8.7
 OceanaGold                 15.7       13.6     42.9     52.4     55.3    OceanaGold                 16.4      18.6      6.1      5.0      3.7
 Perseus Mining             -6.7        9.1     32.1     52.2     74.2    Perseus Mining             N.M       25.7      7.3      4.5      3.2
 Regis Resources             8.5       18.6     49.8     41.8     60.9    Regis Resources            46.6      21.4      8.0      9.5      6.5
 St Barbara                 21.0       38.8     47.0     33.6     42.2    St Barbara                  9.8       5.3      4.4      6.1      4.9
 Average Growth                      >100%    >100%      18%      34%     Average                    25.1      18.8      8.9      7.7      5.2
Source: Nomura estimates                                                 Source: Nomura estimates


On the basis of increasing earnings driven by production growth, the following tables
analyse the “what-if” upside. In this scenario we look at the potential implied share prices
applying a 10x and 15x PE multiple to FY14F earnings. Both these scenarios represent
lower multiples than the simple sector average for FY11 and FY12F. PE expansion could
be supported by robust cash generation, capital management and M&A activity.
Offsetting this could be shorter mine lives however given robust balance sheets and
midterm cash generation companies appear well funded to conduct exploration and
development of new projects. The “what if” scenario highlights EVN, OGC, PRU and
SBM as the most attractive stocks at both Nomura’s gold forecast and spot gold. This
also supports our ratings for EVN, OGC and SBM.

Fig. 25: “What-if”, FY14F PE scenario – Nomura gold price                Fig. 26: “What-if”, FY14F PE scenario – Spot gold price
                           Share PE 10x Upside PE 15x Upside                                        Share    PE 10x   Upside   PE 15x   Upside
                            price                                                                    price
 Alacer Gold                 8.13  8.61    6%   12.91   59%               Alacer Gold                 8.13     7.19    -12%     10.78     33%
 Evolution Mining            1.73  4.82  178%    7.23  318%               Evolution Mining            1.73     3.72    115%      5.58    223%
 Newcrest                  30.23  33.08    9%   49.63   64%               Newcrest                  30.23     24.21    -20%     36.32     20%
 OceanaGold                  2.50  6.27  151%    9.41  276%               OceanaGold                  2.50     5.24    109%      7.86    214%
 Perseus Mining              2.34  6.94  197%   10.41  345%               Perseus Mining              2.34     5.22    123%      7.83    235%
 Regis Resources             3.98  5.54   39%    8.30  109%               Regis Resources             3.98     4.18      5%      6.27     58%
 St Barbara                 2.06       4.54    121%      6.82   231%      St Barbara                 2.06      3.36     63%      5.04    145%
Source: Nomura estimates                                                 Source: Nomura estimates




                                                                                                                                                  10
Nomura | Australia Metals & Mining                                                              April 2, 2012



Recent performance
The performance of Australian gold stocks under coverage has been mixed over the last
12 months at a time when the gold price has appreciated by ~20%.
• The standout performer has been Regis, which has outperformed the gold price,
  doubling in value on the back of exploration success and progression of its business.
• In comparison, the remaining gold stocks have all lagged the gold price; however,
  Alacer, Evolution and St Barbara have shown reasonable correlation to gold.
• Conversely, Newcrest, OceanaGold and Perseus have all underperformed the gold
  price by some 40% over the last 12 months. This reflects poor operational performance
  and risk aversion as new projects are ramped up.
Fig. 27: Share price performance over 12 months
120%
100%
  80%
  60%
  40%
  20%
   0%
 -20%
 -40%
    Feb-11           Apr-11           Jun-11       Aug-11     Oct-11       Dec-11      Feb-12
               AQG AU Equity                      EVN AU Equity             OGC AU Equity
               PRU AU Equity                      RRL AU Equity             NCM AU Equity
               SBM AU Equity                      GOLDS Comdty

Source: Bloomberg, Nomura research




Fig. 28: Gold price ($/oz)
 2,000


 1,500


 1,000


   500


     0
     Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12
                               Gold price (AUD)              Gold Price (USD)
Source: Datastream, Nomura research




                                                                                                          11
Nomura | Australia Metals & Mining                                                                                                       April 2, 2012



Benchmarking to European peers
The following section benchmarks the Australian gold companies against Nomura’s
European gold coverage.
In terms of both reserves and resources, the Australian mid-cap gold sector’s key                             The European gold sector on
physical differential to their European peers is the quantum of reserves and resources.                       average represents a
The European gold sector on average represents a significantly larger inventory than its                      significantly larger inventory
Australian peers (ex-NCM as a top 5 global producer). Resources for Petropavlovsk,                            than its Australian peers.
Randgold, African Barrick and Polymetal all exceed 20Moz, whereas the Australian mid-
caps average is 5-10Moz. This is both a factor of geography and geology, as European
golds have predominantly Russia and Africa exposure. Gold grades are a similar story,
with the European stocks generally having higher resource and reserve grades than the
Australian stocks. The standout is St Barbara with gold grades of ~6g/t in reserves,
reflecting its high-grade inventory at the deep underground Gwalia mine.

Fig. 29: Reserve gold grade                                                 Fig. 30: Reserves contained gold
Average reserve grade is 2.1g/t                                             Group represents 165Moz of reserves or 5,100t of gold

         St Barbara                                                                   Newcrest
    African Barrick                                                             African Barrick
         Randgold                                                                    Randgold
         Polymetal                                                                   Polymetal
            Avocet                                                               Petropavlovsk
       Alacer Gold                                                                   Centamin
  Regis Resources                                              Australian          Alacer Gold                                      Australian
  Evolution Mining                                                                OceanaGold
                                                               European                                                             European
   Perseus Mining                                                              Perseus Mining
      OceanaGold                                                              Evolution Mining
     Petropavlovsk                                                            Regis Resources
         Centamin                                                                    St Barbara
          Newcrest                                                                      Avocet

                      0           2         4              6           8                          0                  50                   100
                                          Gold (g/t)                                                               (Moz)
Source: Nomura estimates                                                    Source: Nomura estimates




Fig. 31: Resources gold grade                                               Fig. 32: Resources contained gold
Average resource grade is 1.9g/t                                            Group represents 322Moz of resources or ~10,000t of gold

         St Barbara                                                                   Newcrest
         Randgold                                                               African Barrick
    African Barrick                                                                  Randgold
         Polymetal                                                               Petropavlovsk
       Alacer Gold                                                                   Polymetal
  Evolution Mining                                                                 Alacer Gold
            Avocet                                             Australian         OceanaGold                                        Australian
      OceanaGold                                                                     Centamin
                                                               European                                                             European
  Regis Resources                                                                    St Barbara
   Perseus Mining                                                              Perseus Mining
         Centamin                                                             Regis Resources
     Petropavlovsk                                                            Evolution Mining
          Newcrest                                                                      Avocet
                      0               2                4               6                          0           50            100           150
                                          Gold (g/t)                                                               (Moz)
Source: Nomura estimates                                                    Source: Nomura estimates




                                                                                                                                                   12
Nomura | Australia Metals & Mining                                                                                                                 April 2, 2012


The enterprise value per ounce of reserves and resources metric is the value which the                                 On average these producing
market places on a company’s mines and/or projects. Usually a low enterprise value                                     stocks are valued at
implies the market is factoring in operational issues or risk, despite potentially large                               ~US$385/oz of reserve and
resources or reserves. Conversely, a high enterprise value implies the market views                                    ~US$190/oz of resource
                                                                                                                       inventory.
lower risk or higher potential. Nomura’s gold universe of 13 stocks has an average
EV/Reserve of ~US$350/oz and an EV/Resource of ~US$170/oz. The companies with
the highest EV/Reserve (or Resource) are Alacer, Polymetal, Randgold and Regis.
Companies with the lowest EV/Reserve (or Resource) are African Barrick, OceanaGold
and St Barbara.

Fig. 33: EV/Reserves                                                       Fig. 34: EV/Resources
Average EV per oz of reserves is ~US$350                                   Average EV per oz of resources is ~US$170

  Regis Resources                                                                     Randgold
         Polymetal                                                                   Polymetal
         Randgold                                                            Regis Resources
       Alacer Gold                                                                 Alacer Gold
            Avocet                                                            Evolution Mining
  Evolution Mining                                                                    Newcrest
   Perseus Mining                                             Australian              Centamin                                                Australian
          Newcrest                                                             Perseus Mining
                                                              European                                                                        European
     Petropavlovsk                                                                       Avocet
         Centamin                                                                Petropavlovsk
      OceanaGold                                                                  OceanaGold
         St Barbara                                                                  St Barbara
    African Barrick                                                             African Barrick
                      0        200          400         600         800                            0             100        200         300         400
                                         (US$/oz)                                                                         (US$/oz)
Source: Nomura estimates                                                   Source: Nomura estimates


In 2011 Australia produced 264t of gold (or 8.5Moz), placing it behind China but ahead of                              Group targeting to produce
the US in global production. In a stock context this group of companies in 2012 is                                     ~7Moz in 2012. Conversely,
forecast to produce ~7Moz of gold, with 4Moz produced by the Australian companies,                                     Australia produces 8.5Moz a
led by Newcrest. On average cash costs in 2012 for the group are expected to average                                   year as the 2nd largest region.
~US$755/oz; this represents an average position in the third quartile of the cash cost
curve. Australian stocks OceanaGold, Evolution and St Barbara are the highest-cost
producers.

Fig. 35: 2012F Gold production                                             Fig. 36: 2012F by-product cash costs
In total the group is forecast to produce ~7Moz in 2012                    The average cash cost for the sector is ~US$755/oz

          Newcrest                                                               OceanaGold

    African Barrick                                                          Evolution Mining
         Randgold                                                                   St Barbara
     Petropavlovsk                                                             African Barrick
       Alacer Gold                                                             Petropavlovsk
         Polymetal                                                                      Avocet
  Evolution Mining                                                            Perseus Mining
                                                          Australian
        St Barbara                                                                  Polymetal
                                                          European
         Centamin                                                                 Alacer Gold
      OceanaGold                                                                    Randgold                                              Australian
            Avocet                                                                   Newcrest                                             European
 Regis Resources                                                            Regis Resources
   Perseus Mining                                                                   Centamin

                      0              1              2                3                            0      200       400     600    800    1000     1200
                                         (Moz)                                                                            (US$/oz)

Source: Nomura estimates                                                   Note: Equivalent cost for Polymetal
                                                                           Source: Nomura estimates




                                                                                                                                                             13
Nomura | Australia Metals & Mining                                                                                                  April 2, 2012


Nomura’s gold universe is targeting to add ~3Moz of production over the next three                          Alacer, Perseus, Polymetal and
years. The largest contribution (+900koz) is forecast to come from Newcrest with the                        Regis are all expected to
commencement of Cadia East and the expansion of Lihir. Alacer, Perseus, Polymetal                           increase production by +300koz
and Regis are all expected to add >300koz over the same time period. Conversely,                            in the next three years.
African Barrick and St Barbara are expected to see production declines as operations
cease / grades fall. On a percentage basis Perseus and Regis are expected to have the
highest growth, albeit off a low base.

Fig. 37: 3 year production growth                                          Fig. 38: Percentage 3 year production growth
In total the group is targeting to add ~3Moz                               On average volume growth over 3yrs is ~60%

          Newcrest                                                           Perseus Mining

   Perseus Mining                                                           Regis Resources

         Polymetal                                                                 Centamin
  Regis Resources                                                                  Polymetal
       Alacer Gold                                                               Alacer Gold
         Centamin                                                               OceanaGold
         Randgold                                                                     Avocet
                                                         Australian                                                            Australian
  Evolution Mining                                                                  Newcrest
                                                         European                                                              European
      OceanaGold                                                                   Randgold
            Avocet                                                          Evolution Mining
     Petropavlovsk                                                             Petropavlovsk
    African Barrick                                                           African Barrick
         St Barbara                                                                St Barbara

                      -0.5           0.0           0.5            1.0                        -50%     0%    50%    100%      150%   200%
                                           (Moz)                                                               (%)
Source: Nomura estimates                                                   Source: Nomura estimates



On average these companies trade on an EV per 2012 production basis of                                      Sector trades on a prospective
~US$7,300/oz, however the range is reasonably large. Significantly, this measure tends                      EV/EBITDA of 8x.
to penalise the higher-growth names such as Regis and Perseus.
Similarly, the average EV/EBITDA multiple for the group of 8x has a wide range from St
Barbara at ~2.5x to high-growth Perseus at ~20x. Australian golds appear to trade at
slightly higher multiples, reflecting higher growth and global scale for Newcrest.

Fig. 39: EV/Production                                                     Fig. 40: 2012F EV/EBITDA
Average EV per oz of production is ~US$7,300/oz                            Average 2012F EV/EBITDA multiple is ~8x
Regis Resources                                                               Perseus Mining
        Polymetal                                                            Regis Resources
        Randgold                                                                     Newcrest
  Perseus Mining                                                                    Randgold
         Newcrest                                                            Evolution Mining
        Centamin                                                                       Avocet
      Alacer Gold                                                                   Polymetal
                                                              Australian                                                       Australian
           Avocet                                                                OceanaGold
                                                              European                                                         European
    Petropavlovsk                                                               Petropavlovsk
 Evolution Mining                                                                 Alacer Gold
     OceanaGold                                                                     Centamin
   African Barrick                                                             African Barrick
        St Barbara                                                                  St Barbara
                      0       5,000        10,000    15,000      20,000                          0         10           20            30
                                            (US$/oz)                                                            (x)
Source: Nomura estimates                                                   Source: Nomura estimates




                                                                                                                                              14
Nomura | Australia Metals & Mining                                                                                                 April 2, 2012


Nomura estimates spot price P/NPVs for the sector using a gold price of US$1,660/oz                     Should AQG and RRL trade at a
and 5% discount rate to range between 0.4x to 1.2x. This wide range reflects a number                   premium to NCM?
of factors including scale, growth, sovereign and operational risk, and potential corporate
appeal. In terms of the Australian golds, Regis attracts the highest premium for its growth             On average sector trades at 0.7x
and exploration potential while OceanaGold receives the largest discount reflecting its                 spot NPV.
sovereign and operational risk profile. Significantly, Alacer and Regis both trade at a
premium to Newcrest, which appears to reflect these are more fully priced on a relative
basis.
Free cash flow (FCF) yield is a measure to identify surplus capacity to invest in growth,               SBM’s FCF yield in 2012F
conduct M&A or capital management. On average the Australian golds with near-term                       approaching 20%.
growth requirements have lower free cash generation than their European peers. The
exception, however, is St Barbara with a FCF yield approaching 20% – the highest of the
group.

Fig. 41: Spot P/NPV                                                 Fig. 42: 2012F FCF Yield
The average spot P/NPV is 0.7x; OGC & SBM offer a larger discount   SBM has the highest near-term free cash flow yield

         Randgold                                                            St Barbara
  Regis Resources                                                       African Barrick
       Alacer Gold                                                           Centamin
         Polymetal                                                           Polymetal
     Petropavlovsk                                                         Alacer Gold
          Newcrest                                                           Randgold
            Avocet                                     Australian     Regis Resources                                         Australian
   Perseus Mining                                                             Newcrest
                                                       European                                                               European
  Evolution Mining                                                    Evolution Mining
    African Barrick                                                             Avocet
         St Barbara                                                       OceanaGold
      OceanaGold                                                       Perseus Mining
         Centamin                                                        Petropavlovsk

                      0.0            0.5         1.0          1.5                         -20     -10        0           10          20
                                           (x)                                                             (%)
Source: Nomura estimates                                            Source: Nomura estimates




                                                                                                                                             15
Nomura | Australia Metals & Mining                                                                                                                                             April 2, 2012


Plotting capitalisation to P/NPV can highlight relative value within the sector, as                                                               NCM offers the better relative
traditionally larger companies trade at a premium to their smaller-capitalisation peers (i.e.                                                     value of the group.
cheaper companies trade to the top left and more expensive stocks to the lower right
quadrant on the chart). On this basis Newcrest appears to offer the better relative value
of the sector, while Regis appears more fully priced compared with its peers.
An interesting way to look at these names is to use a PEG ratio (PE / EPS growth),                                                                EVO and PRU offer attractively
which is calculated for these stocks using a three-year forward average for the sector.                                                           priced growth.
Traditionally in this analysis any company that plots <1 is viewed as having attractively
priced growth. For the group, all stocks with the exception of Centamin are below 1x,
however on a relative basis Evolution and Perseus offer the better value to their peers.

Fig. 43: Mcap vs. Spot P/NPV                                                                                 Fig. 44: PEG ratio (3yr average)
On a relative basis NCM offers better value                                                                  Australian stocks better placed using PEG analysis

                50,000                                                                                                Centamin
                                                                                                                      Randgold
                                                                     Newcrest                                     Petropavlovsk
                                                                                                                 African Barrick
 Log Mcap (US$mn)




                                                                                                                       Newcrest
                                                                                            Randgold
                                                                                                                      St Barbara
                                                                     Polymetal
                    5,000                                                                                           Alacer Gold                                         Australian
                                                                                                                      Polymetal
                                                                                                                                                                        Global
                                         African Barrick                  Alacer Gold                          Regis Resources
                                                 Petropavlovsk                   Regis                             OceanaGold
                                  Centamin                    Evolution
                                                                Perseus                                         Perseus Mining
                                                 St Barbara                                                              Avocet
                                    OceanaGold                  Avocet
                                                                                                       (x)     Evolution Mining
                      500
                            0.0                     0.5                      1.0                       1.5                         0.0     0.5         1.0        1.5            2.0
                                                           Spot P/NPV                                                                                (x)
Source: Nomura estimates                                                                                     Source: Nomura estimates



On average these stocks are implying a flat long-run gold price of US$1,400 per ounce,                                                            SBM implies a ~25% discount to
or a ~15% discount to spot prices. On this basis RRL is the most expensive of the                                                                 spot gold, while RRL is more
Australian golds, pricing close to spot prices; conversely, St Barbara trades at a 25%                                                            fully priced at spot.
discount.

Fig. 45: Implied gold price                                                                                  Fig. 46: Gold hedging / reserves
Average implied gold price is US$1,400/oz, a ~15% discount to spot                                           Industry has moved away from hedging
                        Randgold                                                                                          Avocet
Regis Resources                                                                                                Regis Resources
                      Alacer Go ld                                                                              Perseus Mining
                    Petropavlovsk                                                                                     St Barbara
                            Avocet                                                                             Evolution Mining
                        Newcrest                                                                                    OceanaGold
         Perseus Mining                                                                                              Alacer Gold
                                                                                         Australian                                                                          Australian
              African Barrick                                                                                          Newcrest
                                                                                         European                                                                            European
                       Polymetal                                                                                       Centamin
   Evolution Mining                                                                                                    Polymetal
                       St Barbara                                                                                 Petropavlovsk
                     OceanaGold                                                                                        Randgold
                        Centamin                                                                                 African Barrick

                                     0          500        1,000 1,500             2,000      2,500                                  0        5           10            15             20
                                                               (US$/oz)                                                                                 (%)
Source: Nomura estimates                                                                                     Source: Nomura estimates




                                                                                                                                                                                            16
Nomura | Australia Metals & Mining                                                                                               April 2, 2012


The combination of investors seeking exposure to spot gold prices and more robust
balance sheets has seen levels of physical gold hedging fall drastically to historical
levels. Australian golds carry relatively more gold hedging than their European peers,
albeit at a very low level of <10% of gold in reserves.
Balance sheets for the gold sector are well placed to historical levels, with some two-                  Australian gold sector could be
thirds of Nomura’s gold coverage currently in a net cash position. The Australian gold                   ungeared by the end of 2013F.
companies follow this trend, with 2012F debt to equity ratios estimated at <20%. Further,
by the end of 2013F this is expected to further improve, with the sector moving to an
ungeared position on our expectations.

Fig. 47: Net cash (debt)                                               Fig. 48: 2012F net debt to equity
Majority of the sector running net cash                                Russian golds are the most leveraged
    African Barrick                                                        Petropavlovsk
         Randgold                                                               Polymetal
         Centamin                                                            OceanaGold
  Evolution Mining                                                               Newcrest
        St Barbara                                                      Regis Resources
            Avocet                                                        Perseus Mining
      Alacer Gold                                                        Evo lution Mining
                                                          Australian                                                        Australian
  Perseus Mining                                                              Alacer Gold
                                                          European                                                          European
 Regis Resources                                                                Centamin
     OceanaGold                                                            African Barrick
         Newcrest                                                               Rand gold
    Petropavlovsk                                                                  Avocet
        Polymetal                                                              St Barbara
                 -1,000       -500          0       500        1,000                         0    10    20      30    40    50     60
                                          (US$mn)                                                             (%)
Source: Nomura estimates                                               Source: Nomura estimates




                                                                                                                                           17
Nomura | Australia Metals & Mining                                                                                                   April 2, 2012



Benchmarking Newcrest to global peers
Newcrest recently listed on the Toronto Stock Exchange (TSX), and while trading of the
stock has been thin, the secondary listing provides investors the opportunity to finally
compare Australia’s largest gold producer against its global peers, the majority of which
are listed on the TSX.
The top 10 global gold producers comprise of three Canadian companies (Barrick,                             The majority of the senior gold
Goldcorp and Kinross), three South African (AngloGold, Gold Fields and Harmony), one                        stocks are listed on the TSX
American (Newmont), one Australian (Newcrest), one Russian (Polyus) and one
Peruvian (Buenaventura) company. Of these stocks, half are listed on the TSX. In FY12F
this senior gold group is forecast to produce ~32Moz of gold, with Newcrest expected to
be the seventh-largest producer (down from a top 5 position in FY11) as a result of
revised guidance.

Fig. 49: 2012F Gold Production                                        Fig. 50: EV/Production
This senior gold group are forecast to produce ~32Moz in 2012         Average EV per oz of production is ~US$6,640/oz

             Barrick                                                          Goldcorp

          Newmont                                                        Buenaventura

        AngloGold                                                             Newcrest

        Gold Fields                                                             Barrick

           Goldcorp                                                           Newmont

            Kinross                                                              Polyus

          Newcrest                                                              Kinross
             Polyus                                                         AngloGold
           Harmony                                                          Gold Fields
     Buenaventura                                                             Harmony
                       0           2          4           6      8                        0              5,000        10,000        15,000
                                            (Moz)                                                                (US$/oz)
Source: Company data, Bloomberg, Nomura estimates                     Source: Company data, Bloomberg, Nomura estimates


The senior golds trade on an EV per 2012 production basis of ~US$6,640/oz, lower than
the mid-cap Australian and European stocks average, but also across a large range.
Stocks highlighted are Goldcorp and Newcrest, with higher growth.

Fig. 51: Reserves contained gold                                      Fig. 52: Resources contained gold
Group represents 739Moz of reserves or ~26,000t of gold               Group represents ~1,465Moz of resources or ~52,000t of gold

             Barrick                                                               Barrick

          Newmont                                                             Gold Fields

             Polyus                                                           AngloGold

          Newcrest                                                               Harmony

        Gold Fields                                                                Polyus

        AngloGold                                                               Newcrest

           Goldcorp                                                             Newmont

            Kinross                                                              Goldcorp

           Harmony                                                                Kinross

     Buenaventura                                                          Buenaventura

                       0               50           100         150                           0     50       100     150   200    250     300
                                            (Moz)                                                                  (Moz)
Source: Company data, Bloomberg, Nomura estimates                     Source: Company data, Bloomberg, Nomura estimates




                                                                                                                                                18
Nomura | Australia Metals & Mining                                                                                                     April 2, 2012


In terms of EV/Resource and EV/Reserve the senior gold stocks have an average of                             High-growth stock Goldcorp has
US$173/oz and US$341/oz, respectively. These averages are similar to those shown by                          the high enterprise values, with
the Australian and European gold stocks. Buenaventura on these metrics, followed by                          Newcrest in the middle of the
Goldcorp, has the highest EV/Resource and EV/Reserve. Conversely, the South African                          pack
and Russian producers display the lowest enterprise values.

Fig. 53: EV/Resources                                                 Fig. 54: EV/Reserves
Average EV per oz of resources is ~US$173                             Average EV per oz of reserves is ~US$341

     Buenaventura                                                         Buenaventura

          Goldcorp                                                             Goldcorp

          Newmont                                                                Barrick

            Barrick                                                            Newmont

          Newcrest                                                             Newcrest

            Kinross                                                          AngloGold

        AngloGold                                                                Kinross

             Polyus                                                          Gold Fields

        Gold Fields                                                            Harmony

          Harmony                                                                 Polyus

                      0     100      200     300    400   500   600                         0     200       400     600    800    1000 1200
                                           (US$/oz)                                                               (US$/oz)
Source: Company data, Bloomberg, Nomura estimates                     Source: Company data, Bloomberg, Nomura estimates



The average EV/EBITDA multiple for the senior group of 6x shows a wide range from
Gold Fields at ~3.4x to high-growth stocks Goldcorp and Newcrest at ~9.6x and 10.6x,
respectively.
These large global producers are targeting substantial growth over the next few years,
with average EPS growth over the next two years of 28%. Newcrest is expected to have
the largest EPS growth, followed by Harmony, Goldcorp and Polyus. Conversely, modest
growth from Barrick and Kinross is expected, while Gold Fields has declining EPS over
this period.

Fig. 55: 2012F EV/EBITDA                                              Fig. 56: FY12-FY14F EPS growth
Average 2012F EV/EBITDA multiple is ~7x                               Average EPS growth over next 2yrs is ~28%

          Newcrest                                                              Newcrest

          Goldcorp                                                              Harmony

     Buenaventura                                                               Goldcorp

            Polyus                                                                Polyus

            Barrick                                                        Buenaventura

          Harmony                                                                 Barrick

          Newmont                                                                Kinross

            Kinross                                                           AngloGold

        AngloGold                                                               Newmont

        Gold Fields                                                          Gold Fields

                      0               5             10          15                          -50         0            50          100     150
                                           (x)                                                                     (%)
Source: Company data, Bloomberg, Nomura estimates                     Source: Company data, Bloomberg, Nomura estimates




                                                                                                                                                 19
Nomura | Australia Metals & Mining                                                                                          April 2, 2012



Reinvesting in growth
Nomura’s Global Mining Team currently has 14 gold stocks under coverage, ranging in
market capitalisation from US$600mn to US$27bn. The majority of gold stocks (12)
together with one base metal company (PanAust) have gold projects set to add to the
future production profile.
The table below highlights US$15.5bn in gold projects within Nomura’s coverage                      While not extensive, gold stocks
universe which are forecast to commence production within the next five years and                   covered by Nomura research
adding a total of ~5Mozpa. The 22 projects are a mix of brownfield and greenfield, with             considering US$15.5bn of
the larger capital-intensive projects (i.e. >US$1bn) controlled by the two largest gold             growth projects.
stocks under coverage, Newcrest and Randgold.
Nomura calculates that on average the capacity cost to construct these 22 projects is
US$2,900/oz, with average production ~230kozpa and capital cost of ~US$700mn.
Companies with the highest number of projects are Newcrest and Petropavlovsk, both
with four, followed by Randgold and Regis with three projects each.
Nomura forecasts six new gold projects to commence production in 2012, bringing online
a combined 1.5Moz. A further 1.1Moz of production (from seven projects) and 1Moz of
production (from four projects) are expected to start in 2013 and 2014, respectively.

Fig. 57: Nomura gold sector – key growth projects
 Project               Company              Country        Type                Assumed Capex        First   Capacity     Capacity Cost
                                                                                     (US$mn)   Production       (pa)        (US$/unit)
 Cadia Valley (East) Newcrest               Australia      Brownfields                 2,200        2012    +300koz             7,333
 Lihir               Newcrest               PNG            Brownfields                 1,300        2012    +400koz             3,250
 Ban Houayxai          PanAust              Laos           Brownfields                  195         2012      100koz             1,950
 Garden Well           Regis                Australia      Greenfields                  145         2012      180koz                806
 Amursk Hub            Polymetal            Russia         POX hub                      650         2012      400koz             1,625
 Albyn                 Petropavlovsk        Russia         Brownfields                  100         2012      100koz             1,000
 Mt Carlton            Evolution            Australia      Greenfields                  145         2013      +80koz             1,813
 Didipio               OceanaGold           Philippines    Greenfields                  185         2013     ~100koz             1,850
 SKOEP                 Alacer               Australia      Brownfields                  170         2013      ~75koz             2,267
 Inata Expansion       Avocet               Burkina Faso   Brownfields                  140         2013       80koz             1,750
 Sukari Stage IV       Centamin             Egypt          Brownfields                  255         2013      250koz             1,020
 Bulyanhulo CIL        African Barrick      Tanzania       Brownfields                 1,150        2013       90koz             1,666
 Pokrovskiy Hub        Petropavlovsk        Russia         POX hub                      480         2013      400koz             1,200
 Rosemont              Regis                Australia      Satellite Orebody             50         2013      ~80koz               625
 Tengrela              Perseus              Ivory coast    Greenfields                  115         2014     ~170koz               676
 Çöpler Pox            Alacer               Turkey         Brownfields                  450         2014     +220koz             2,045
 Kibali                Randgold             DRC            Greenfields                 1,700        2014      600koz             2,833
 Erlistoun             Regis                Australia      Satellite Orebody             50         2014      ~40koz             1,250
 Koulehoun             Avocet               Guinea         Greenfields                  250         2015     +250koz             1,000
 Gounkoto u/g          Randgold             Mali           Brownfields                   Na         2015          Na                 Na
 Nyanzaga              African Barrick      Tanzania       Greenfields                  400         2016      200koz             2,000
 Wafi-Golpu            Newcrest             PNG            Greenfields                 3,650        2017      800koz             4,563
 Namosi                Newcrest             Fiji           Greenfields                 1,200          Na       75koz            16,000
 Massawa               Randgold             Senegal        Greenfields                  PFS           Na     ~250koz               PFS
 Golden Ridge          African Barrick      Tanzania       Greenfields                  PFS           Na      ~50koz               PFS
 Yamal projects        Petropavlovsk        Russia         Greenfields                  PFS           Na         PFS               PFS
 Visokoe               Petropavlovsk        Russia         Greenfields                  PFS           Na         PFS               PFS
Source: Company data and Nomura estimates




                                                                                                                                       20
Nomura | Australia Metals & Mining                                                                                                           April 2, 2012



Gold supply/demand characteristics
The following section reviews the key supply / demand characteristics for the ~4,500tpa
gold market. The gold sector, not dissimilar to those of other commodities, has struggled
to match growing demand in recent years. The higher gold price over the past five years
has led to increased levels of reinvestment; however, this has not offset the drag effect
of underinvestment in the sector over many years.
This section of this report closely follows the global view on gold as outlined in Nomura’s
18 January, 2012 report, European Gold Anchor Report – A new era for gold.
Gold price forecast – peaking at US$2,100/oz in 2H 2013
Nomura forecasts higher gold prices in 2012 and 2013, US$1,791/oz and US$2,063/oz                              Nomura forecasts a gold price of
respectively, before gradually declining to the long-term estimate of US$1,200/oz. One of                      US$1,791/oz and US$2,063/oz
the key risks to Nomura’s gold price forecast is slower supply-side reaction to increased                      respectively for 2012 and 2013.
demand, which could result in higher gold prices. Conversely, slowing investment                               This is in line with consensus
                                                                                                               estimates.
demand could see the price stabilise or begin to fall.

Fig. 58: Nomura long-term gold price forecasts
Nomura research assumes a LT gold price of US$1,200/oz
 2,500
           (US$/oz)
 2,000

 1,500

 1,000

   500

      0
           2007     2008     2009     2010    2011    2012F 2013F 2014F 2015F 2016F 2017F
                                             Historical    Nomura forecast

Source: Bloomberg, Nomura estimates



Gold ~6% of market value, but consistent performer
Broadly, the current value of gold reserves is estimated to represent ~6% of the market
value of assets measured in terms of global bonds and equities. However, as an asset
class gold has persistently outperformed the S&P 500 and MSCI world index in the 40
years since the end of the gold standard.

Fig. 59: Gold outperformance vs. S&P 500                                Fig. 60: Market asset values
 20                                                                      120
 18                                                                               (USDtrn)
                                                                                                                                           98.7
 16                                                                      100               93.9                     91.0
 14
 12                                                                          80
 10
                                                                             60                              52.0
  8                                                                                 45.4                                            45.9
  6                                                                          40
  4
  2                                                                          20                                            7.6                    8.5
                                                                                                  5.8
  0
                                                                              0
      Aug-71
      Aug-73
      Aug-75
      Aug-77
      Aug-79
      Aug-81
      Aug-83
      Aug-85
      Aug-87
      Aug-89
      Aug-91
      Aug-93
      Aug-95
      Aug-97
      Aug-99
      Aug-01
      Aug-03
      Aug-05
      Aug-07
      Aug-09
      Aug-11




                                                                                           2009                 2010                       2011
                                                                                                    Equity     Bond          Gold
Source: Datastream, Nomura research                                     Source: Bank of International Settlements, WGC, Bloomberg, Nomura research




                                                                                                                                                        21
Nomura | Australia Metals & Mining                                                                              April 2, 2012


Gold market forecast could reach 5,000tpa in 2013
The following table summarises Nomura’s gold supply / demand expectations for the
global gold market, outlined in more detail in the following sections of this report.
Overall, we expect mine supply to continue to represent around 60% of total global
supply, with the balance being met by scrap in the absence of net central bank selling as
observed in 2010. Jewellery demand is expected to remain the cornerstone of the
industry at 40-45% of total global demand. The largest delta in demand is expected to be
increased central bank and investment demand.

Fig. 61: Forecast supply and demand model
We expect the market to increase to ~5,000tpa in 2013F
                                                         2007    2008       2009        2010    2011F   2012F       2013F
 Supply
 Mine production                                         2,472   2,408      2,581       2,688   2,794   2,988        3,005
 Net central bank and IMF sales                            484     235         34           0       0       0            0
 Scrap gold                                                982   1,316      1,695       1,651   1,679   1,949        2,105
 Hedging                                                     0       0          0           0      32       0            0
 Implied disinvestment                                       0      58          0           0       0       0            0
 Total supply                                            3,938   4,017      4,310       4,339   4,505   4,937        5,111
 Mine production (% of supply)                              63      60         60          62      62      61           59

 Demand
 Jewellery                                               2,423   2,304      1,814       2,035   2,066   2,048        2,037
 Industrial and other                                      679     718        697         767     809     817          811
 Net central bank and IMF demand                             0       0          0          77     336     750          800
 Physical bar investment                                   244     645        531         859   1,065     953          823
 Hedging                                                   440     350        236         180       0      25            0
 Implied investment                                        152       0      1,032         421     229     343          639
 Total demand                                            3,938   4,017      4,310       4,339   4,505   4,937        5,111
 YoY Change (%)                                             -1       2          7           1       4      10            4


 Gold Price (US$/oz)                                      697     872        974        1,225   1,571   1,791        2,063
Source: GFMS, Nomura estimates




                                                                                                                          22
Nomura | Australia Metals & Mining                                                                                                                   April 2, 2012



Supply – incentivised but taking time
Unlike most other commodities gold is a store of wealth and as a result almost all the
gold that has been historically mined (~165kt) still exists. This means that supply comes
from scrap gold as well as new mine production. It also means that changes in demand
consumption can have a large impact on the scrap gold supply.
Annual global gold supply has changed over the past decade, with net investment (new
investment demand vs. previous investment sold back onto the market) positive except
briefly after the global financial crisis. In recent years Central Banks have again become
buyers of gold, which has removed one source of gold, but has also reinforced the golds’
position as a physical store of wealth. This trend leaves only two sources of gold supply;
new mine production and scrap supply.
In the last 10 years global mine production has remained consistent at ~2,500tpa of gold
or ~60% of total supply. Increased gold prices from 2007 onwards have also resulted in
higher scrap gold supply, with scrap in 2010 contributing 1,650t or ~38% to total supply.

Fig. 62: Global gold supply
Net central bank selling has stopped, leaving mine production and scrap gold the main sources of supply
 6,000
          (t)                                                                                            Hedg ing
 5,000
                                                                                                         Implied
 4,000                                                                                                   d isinvestment
 3,000                                                                                                   Net central ban k
                                                                                                         and IMF sales
 2,000
                                                                                                         Scrap gold
 1,000
                                                                                                         Mine production
      0
                                                                                 2011F

                                                                                         2012F

                                                                                                 2013F
           2001

                  2002

                         2003

                                2004

                                       2005

                                              2006

                                                     2007

                                                            2008

                                                                   2009

                                                                          2010




Source: GFMS, Nomura research



Gold production from mines has increased in recent years as current operations have                                          Mining and scrap supply is
expanded output and converted previously uneconomic resources, taking advantage of                                           unlikely to meet additional
higher gold prices. Increased mine supply is forecast to continue as new projects are                                        increases in demand
constructed. However, offsetting this is the lack of large gold discoveries, as well as the
time frame required, the environmental hurdles and capital costs to develop the current
suite of projects.
In terms of scrap gold supply, recent data from GFMS indicates lower figures in 2010
and 2011 than were expected. This suggests a weakening of the positive correlation
between scrap supply and gold prices, and potentially a change in the level of available
stocks or investment perspective.




                                                                                                                                                               23
Nomura | Australia Metals & Mining                                                                                                                                   April 2, 2012


Mine production has declined in recent years and now appears to be lifting
Gold mine production declined from 2003 to 2008, falling by an average of 1% per year
during the 2000s. The fall in production was a result of low gold prices in the later 1990s
and early 2000s, which saw underinvestment in operations and exploration.

Fig. 63: Global new mine supply                                             Fig. 64: Expansion capital expenditure
Peak gold? Production is rising again, but for how long?                    Capital expenditure for expansions has not kept pace with the gold price
 3,500                                                                                                                                                 (USD/oz)
              (t)                                                            10                                                                                           1,800
 3,000                                                                                                                                                                    1,600
 2,500                                                                        8                                                                                           1,400
                                                                                                                                                                          1,200
 2,000                                                                        6
                                                                                                                                                                          1,000
 1,500                                                                                                                                                                    800
                                                                              4
 1,000                                                                                                                                                                    600
                                                                              2                                                                                           400
   500
                                                                                                                                                                          200
        0                                                                     0                                                                                           0
             1999
             2000
             2001
             2002
             2003
             2004
             2005
             2006
             2007
             2008
             2009
             2010
             2011
            2012F
            2013F
            2014F
            2015F
            2016F
            2017F
            2018F




                                                                                   2000

                                                                                          2001

                                                                                                 2002

                                                                                                        2003

                                                                                                               2004

                                                                                                                      2005

                                                                                                                              2006

                                                                                                                                      2007

                                                                                                                                             2008

                                                                                                                                                    2009

                                                                                                                                                           2010

                                                                                                                                                                   2011
    adj possible     ad j probable adj base case     adj operating mines                   Capital expenditure (LHS)                          Gold price (RHS)

Source: Brook Hunt, Nomura research                                         Source: Brook Hunt, Nomura research



Nomura estimates global gold mine supply to increase over the next couple of years,
peaking in 2014 at ~3,200t. The increase in production is forecast to come from a
combination of expansions of existing mines together with new projects.
Capital expenditure for mine expansions has generally increased in line with high gold                                        Growth capex has 13%
                                                                                                                              Peak production is fallen higher
prices, hitting a peak of US$8.5bn in 2008. However, expenditure in recent years has                                          recently, but is expected to
                                                                                                                              than current levels
fallen successively to ~US$5bn in 2011. Nomura expects expansion expenditure to                                               increase as new projects are
increase in conjunction with forecast increases in new mine supply to 2014.                                                   built

One of the consequences of higher gold prices is that operations in production can lower                                      High gold prices increase the
cut-off grades, expanding the known reserve. Previously discovered, but uneconomic                                            incentive for new production and
deposits are now economic, and smaller and less scalable operations (i.e. heap or dump                                        projects
leaching of oxide material) also become viable. In addition the now robust balance
sheets in the gold sector could result in higher exploration budgets.
Globally, mine production over the last 10 years has seen some changes in volumes by
region and country. Regionally Asia, Latin America, Russia and Africa (ex-South Africa)
have seen increasing production, while North America has seen decreasing production.
Country-wise South Africa, the US, Australia and other developed countries have seen
decreasing production, whilst China has seen a dramatic increase and is now the largest
gold producer globally.

Fig. 65: Key geographical shifts in gold production 2000-2010                                                   Fig. 66: Production by region, 2010
 600
            (t)                                                                                                                      Former
                                                                                                                                     Soviet        North
                                                                                                                                     Union Europe America
                                                                                                                                      12%    1%     12%
 400
                                                                                                                             Oceania
                                                                                                                              10%                                  Latin
                                                                                                                                                                  America
 200                                                                                                                                                               20%
                                                                                                                               Africa
                                                                                                                                20%
    0
            2000 2001 2002 2003           2004 2005 2006         2007      2008 2009        2010                                                       Asia
                                                                                                                                                       25%
              Africa ex-South Africa        South Africa                     China
              North America                 Russia                           Peru
              Australia
Source: GFMS, Nomura research                                                                                   Source: GFMS, Nomura research




                                                                                                                                                                               24
Nomura | Australia Metals & Mining                                                                                                                                            April 2, 2012


Scrap gold availability is price sensitive
Recycled gold mainly from jewellery accounts for ~40% of Nomura’s near-term supply
estimates and has increased from ~780t in 2001 to ~1,650t in 2010. The availability of
scrap has historically been related to gold prices and since the 2008 global financial
crisis there has been a marked increase in the level of scrap supply in conjunction with
higher gold prices.
However, in Nomura’s modelling we assume new supply begins to move below trend,
reflecting a potential plateau in supply as seen in 2009-2010.

Fig. 67: Scrap gold supply by country                                                                       Fig. 68: Scrap gold and the gold price
Asia and the Middle East have become leading scrap providers                                                A higher gold price has meant higher scrap supply
 1,800                                                                                  Former Soviet        2,500        (USD/oz)
           (t)                                                                          Union
 1,600
                                                                                        Africa                                                                               2013F
 1,400                                                                                                       2,000                                                   2012F
                                                                                                                                                      2009
 1,200                                                                                  East Asia                                                                2011F
 1,000                                                                                                       1,500                                        2010
                                                                                        Indian Sub                                             2008
                                                                                                                                       2006
   800                                                                                  Continent                               2003
                                                                                        Middle East          1,000           2002             2007
   600                                                                                                                                2005
                                                                                                                           2001   2004
   400                                                                                  Latin America          500                                                y = 730.23e0.0006x
   200
                                                                                                                                                                     R² = 0.9108
     0                                                                                  North America
                                                                                                                  0
                                                                                2011F
          2001
                 2002
                        2003
                               2004
                                      2005
                                             2006
                                                    2007
                                                           2008
                                                                  2009
                                                                         2010




                                                                                        Europe                        0          500          1,000    1,500        2,000        2,500
                                                                                                                                              Scrap supply (t)
Source: GFMS, Nomura research                                                                               Source: GFMS, Nomura research



Regionally Asia and the Middle East are the global leaders for scrap supply. Difficult
economic conditions in the industrialised world since 2008 have also resulted in higher
scrap levels. This change is consistent with the deleveraging ongoing among Western
consumers.
Risks to Nomura’s moderate scrap supply forecast therefore are partly dependent on no
large downturns in growth in emerging economies that lead to increased scrap supply.
Conversely, if scrap availability is beginning to plateau, then our estimates may
overestimate future supply.

Fig. 69: European jewellery demand vs. recycled scrap supply
The stock of jewellery available to return to the market has decreased as consumption falls
 700
         (t)
 600
 500
 400
 300
 200
 100
    0
          2001            2002               2003           2004            2005        2006     2007      2008       2009      2010
                               European gold jewellery consumption                                    European scrap supply

Source: GFMS, Nomura research




                                                                                                                                                                                         25
Nomura | Australia Metals & Mining                                                                                       April 2, 2012


Producer hedging has decreased dramatically
Gold miners over the past 10 years have progressively de-hedged as alternative sources
of capital emerged and equity investors preferred unhedged exposure to the gold price.
As a result, the majority of producers are now unhedged, removing the impact on
demand. There was minor net producer hedging in 2011, largely related to project
financing, which supplied ~30t to the market.

Fig. 70: Hedging annual impact on demand (supply) and total hedge book
The impact of hedging is great reduced and unlikely to return to historical levels
 3,500
           (t)
 3,000
 2,500
 2,000
 1,500
 1,000
   500
      0
  -500
           2002     2003     2004     2005 2006        2007 2008 2009 2010           2011F 2012F
                                     Annual impact       To tal hedge book gold

Source: GFMS, Nomura research



The global hedge book is fragmented and accounts for less than 200t. Nomura forecasts              We do not expect to see
limited supply impact from hedging through 2013 as global producers are unlikely to                demand for producer hedging in
hedge given the cash built up on balance sheets and alternative capital available.                 the short to medium term




                                                                                                                                    26
Nomura | Australia Metals & Mining                                                                                                          April 2, 2012



Demand driven by investment and now
central bank buying
Gold demand over the past 10 years has remained relatively constant in total volume
terms; however, the demand volume has increased dramatically in value terms from
US$34bn in 2001 to ~US$240bn in 2011.
Nomura expects demand will meet the forecast supply, as gold investment and central                               Nomura forecasts the current
bank buying is likely to continue to increase. The traditional sources of gold demand                             gold price is supported by
(jewellery, industrial demand and physical bar investment) remain the dominant areas.                             demand
However, a key change in the last few years has been the reversal of central bank
selling and emergence of buying, led by emerging market central banks. Continued
central bank buying together with stronger investment demand could potentially put
pressure on supply side, leading to higher gold prices.

Fig. 71: Segmental gold demand in volume terms                                 Fig. 72: Segmental gold demand in value terms
The aggregate level of gold demand has stayed constant, but has seen           A weaker USD has contributed to the value uplift
shifts towards investment demand
 6,000                                                                          400                                          70        Implied
          (t)                                             Implied                        (USDbn)
                                                                                                                             75        investment
                                                          investment            350
 5,000                                                                                                                       80
                                                                                                                                       Hedging
                                                          Hedging
                                                                                300
 4,000                                                                                                                       85        Net central bank
                                                          Net central bank      250                                          90        and IMF demand
 3,000                                                    and IMF demand        200                                          95        Physical bar
                                                                                                                                       investment
                                                          Physical bar
                                                                                150                                          100       Industrial and
 2,000                                                    investment
                                                                                                                             105       other
                                                          Industrial and        100
                                                                                                                             110       Jewellery
 1,000                                                    other                    50                                        115
                                                          Jewellery                                                                    DXY inverted
     0                                                                              0                                        120       (RHS)




                                                                                         2011F
                                                                                         2012F
                                                                                         2013F
                                                                                          2001
                                                                                          2002
                                                                                          2003
                                                                                          2004
                                                                                          2005
                                                                                          2006
                                                                                          2007
                                                                                          2008
                                                                                          2009
                                                                                          2010
          2001
          2002
          2003
          2004
          2005
          2006
          2007
          2008
          2009
          2010
         2011F
         2012F
         2013F




Source: GFMS, Nomura estimates                                                 Source: GFMS, Nomura estimates



One of the traditional downsides to investing in gold is the lack of yield, and it generally                      Low real interest rates will likely
underperforms in periods of higher interest rates. However, in the current environment of                         support the attractiveness of
low interest rates Nomura expects investment in gold to remain positive over the next                             gold as an investment
few years. In addition gold has historically performed well in times of rising inflation
expectations.

Fig. 73: Real interest rates in major economies
With the exception of China, real interest rates are forecast by Nomura to stay negative through 2013
    8%
    6%
    4%
    2%
    0%
   -2%
   -4%
   -6%
   -8%
 -10%
                2006     2007         2008      2009         2010          2011         2012F       2013F
                         US              UK            ECB                 China                India
Source: Datastream, Nomura research




                                                                                                                                                        27
Nomura | Australia Metals & Mining                                                                                                                           April 2, 2012


Jewellery demand maintained at 40-50% of the total market
Gold jewellery demand represents some 2,000t of consumption per year, or 40-50% of
total demand. Volumes from jewellery are reasonably price sensitive, and while we
assume the dollar value of jewellery demand to increase in coming years to >US$100bn
a year, volumes are expected to remain relatively flat. India is the largest purchaser of
gold for jewellery at around 600tpa, and this is expected to remain constant in the
midterm. Falling jewellery rates from the West are expected to be offset by increasing
demand from China.

Fig. 74: Gold jewellery demand in total tonnage terms                                         Fig. 75: Gold jewellery demand in USD billion
Higher prices are reducing gold demand on a volume basis                                      Gold jewellery demand in dollar terms continues to be driven by India and
                                                                                              China
 700    (t)                                                                 Europe               45,000         (USDbn)                                       Europe

 600                                                                                             40,000
                                                                            North                                                                             North
                                                                            America
                                                                                                 35,000
 500                                                                                                                                                          America
                                                                            Latin
                                                                                                 30,000
                                                                                                                                                              Latin
 400                                                                        America              25,000                                                       America
 300                                                                        Middle               20,000                                                       Middle
                                                                            East                                                                              East
 200                                                                                             15,000
                                                                            Indian Sub
                                                                            Continent            10,000                                                       Indian Sub
 100                                                                                                                                                          Continent
                                                                            China                 5,000
    0                                                                                                                                                         China
                                                                                                      0
        2011F
        2012F
        2013F
         2001
         2002
         2003
         2004
         2005
         2006
         2007
         2008
         2009
         2010




                                                                                                                2011F
                                                                                                                2012F
                                                                                                                2013F
                                                                                                                 2001
                                                                                                                 2002
                                                                                                                 2003
                                                                                                                 2004
                                                                                                                 2005
                                                                                                                 2006
                                                                                                                 2007
                                                                                                                 2008
                                                                                                                 2009
                                                                                                                 2010
Source: GFMS, Nomura research                                                                 Source: GFMS, Nomura research


Chinese Imports at +400tpa through Hong Kong
Gold imports into China from Hong Kong have increased substantially in the last 12                                                  Recent surge in Chinese gold
months according to the Census and Statistics department of Hong Kong. In 2011                                                      imports.
imports jumped by ~3.5 times on 2010 levels to 426t. Further in 2012 January data
suggest the potential for imports to remain high at around 400t. Media reports suggest
that this is attributable to a switch of funds from the volatile domestic property market or
perhaps even PBOC buying. Certainly the growth in imports is far in excess of estimated
growth in jewellery demand.
Further in the last quarter of 2011 Chinese imports of gold through Hong Kong for the
first time exceeded Indian gold import levels.

Fig. 76: Hong Kong gold imports have overtaken Indian levels
Indian imports are seasonal however in the last quarter China has imported more gold
 140
        (t)
 120
 100
  80
  60
  40
  20
   0
         Dec-10




                                             Apr-11




                                                                                     Aug-11


                                                                                              Sep-11


                                                                                                       Oct-11


                                                                                                                  Nov-11


                                                                                                                           Dec-11
                  Jan-11




                                                                 Jun-11


                                                                          Jul-11
                           Feb-11


                                    Mar-11




                                                        May-11




                                                      India Hong Kong
Source: GFMS, Nomura research




                                                                                                                                                                          28
Nomura | Australia Metals & Mining                                                                                                                                                                                                                            April 2, 2012


Indian imports impacted by rupee weakness and import tax
Indian gold imports are expected to remain relatively strong, although some short-term,                                                                                                                                         Indian demand – short term
volatility is likely. Recently, Indian imports have been impacted by the strengthening                                                                                                                                          volatility with strong domestic
rupee, causing record local gold prices over INR2,500/g. In addition in March the                                                                                                                                               price and import tax rise.
government announced in the budget an increase in the gold import tax to 4%.
Indian imports are seasonal, reflecting the wedding seasons in the second and last
quarter of the year.

Fig. 77: Indian vs. Chinese gold price performance                                                                                                                                                                     Fig. 78: Indian gold price
Weakening Indian demand in part reflects strengthening domestic price                                                                                                                                                  Weakening INR has pushed up prices
 100                                                                                                                                                                                                                    3,500
           (%)                                                                                                                                                                                                                     (INR/g)
                                                                                                                                                                                                                        3,000
  80
                                                                                                                                                                                                                        2,500
  60
                                                                                                                                                                                                                        2,000
  40                                                                                                                                                                                                                    1,500

  20                                                                                                                                                                                                                    1,000

                                                                                                                                                                                                                          500
   0
   Mar-10May-10 Jul-10 Sep -10Nov-10Jan-11Mar-11May-11 Jul-11 Sep-11Nov-11Jan -12Mar-12                                                                                                                                     0
                            Gold price (INR)   Go ld price (RMB)                                                                                                                                                            Mar-10            Mar-11               Mar-12

Source: Datastream, Nomura estimates                                                                                                                                                                                   Source: Datastream, Nomura estimates


Central banks shifting from sellers to buyers
Gold has traditionally held an important place within the balance sheets of central banks
who collectively hold some 30,000t of bullion. However, in the late 1990s with low gold
prices many of the industrialised world’s central banks began to reduce their gold
holdings driving gold prices lower.
As a result of central bank selling in 1999 the European Central Bank and a group of                                                                                                                                            Significantly, since 2009 and the
euro zone central banks signed the Washington Agreement to restrict the sale of gold                                                                                                                                            GFC central banks have once
reserves to 500t a year for five years. This was a successful and stabilising mechanism,                                                                                                                                        again become buyers of gold
and the agreement was extended in 2004 and then again in 2009 for additional five year                                                                                                                                          tightening the market.
periods. The latest agreement restricts sales to 400t per annum and no more than 2,000t
over the period.
The IMF is another large holder of gold ,and the end of the IMF’s sale of 400t of gold in
November 2010 also removed a source of supply.

Fig. 79: Top 20 central bank gold holdings
The gold held in the central banks is mainly held by US and Europe
 10,000
             (t)
  8,000
  6,000
  4,000
  2,000
       0
                                                                                                                                                                         United Kingdom
                                                    Ch ina


                                                                           Russia


                                                                                            Neth erlands




                                                                                                                                                          Saudi Arabia
                                                                                                                                   Portugal
                   Germany




                                           France


                                                             Switzerland




                                                                                                           Ind ia




                                                                                                                                                                                          Lebano n


                                                                                                                                                                                                             Austria
             US




                                   Italy




                                                                                                                          Taiwan


                                                                                                                                              Venezuela
                                                                                    Japan




                                                                                                                                                                                                     Spain
                             IMF




                                                                                                                    ECB




Source: World Gold Council, Nomura research




                                                                                                                                                                                                                                                                        29
Nomura | Australia Metals & Mining                                                                                                                                                                                                              April 2, 2012


Emerging market central banks hold lower levels of reserves in gold
There is a general divergence between the levels of gold held by central banks in                                                                                                                                      There is a divergence between
developed and emerging markets. Developed countries’ central banks tend to hold gold                                                                                                                                   the levels of gold held by central
from an era where reserves were held both in US dollars and in gold (prior to the end of                                                                                                                               banks in developed and
the gold standard). Emerging economies by contrast have largely generated their                                                                                                                                        emerging markets.
reserves over the past 40 years in the modern US dollar reserve currency system (and
notably post gold standard). Emerging market central banks have far lower gold holdings
as a percentage of total US dollar reserves (of ~5%).
RBA has ~9% of reserves in gold                                                                                                                                                                                        Australia sold 167t in 1997.
The Reserve Bank of Australia holds some 80t of gold in reserves, making it around the
35th largest holder by country. This holding is worth ~US$4.3bn, the equivalent of 9% of
total reserves. Historically, Australia held significantly higher gold reserves; however, in
1997 the position was sold down by 167t.

Fig. 80: G20 members & respective Central Bank gold holding as % of reserves
Turkey, Russia, Mexico and Korea have been increasing their gold holdings
 80%

 60%

 40%

 20%

  0%
                                France




                                                                                       Ind ia



                                                                                                         Australia




                                                                                                                                                                                       South Korea



                                                                                                                                                                                                              Canada
                                                               South Africa




                                                                                                                     Arg entina




                                                                                                                                                                               China
                                              United Kingdom




                                                                                                Russia




                                                                                                                                           Indo nesia
              Germany




                                                                                                                                                        Japan

                                                                                                                                                                Saudi Arabia
                                                                              Turkey




                                                                                                                                  Mexico
         US



                        Italy



                                         EU




                                                                                                                                                                                                     Brazil

Source: World Gold Council, Nomura research


Central banks have become net buyers of gold
In 2010 central banks became net buyers of gold for the first time in recent history. In the                                                                                                                           The move by Central Banks to
current environment a number of central banks, especially in emerging regions, are                                                                                                                                     being net buyers has been a
seeking to diversify their foreign exchange portfolios.                                                                                                                                                                significant driver of the gold
                                                                                                                                                                                                                       price in recent years.
It is this move to being net buyers that has been a significant driver of the gold price in
recent years. On Nomura assumptions this trend could continue, with central banks
estimated to buy 400-800tpa of gold over the next few years.

Fig. 81: Net change in central bank divestments / (purchases)
In 2010 central banks become net buyers of gold
  800
            (t)
  600
  400
  200
     0
 (200)
 (400)
 (600)
 (800)
          2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011F 2012F 2013F
Source: Nomura estimates


Recent data suggests that emerging market economies are increasing their asset
allocation of reserves to gold. The following figure provides the notable net changes in
2011, led by Mexico, Russia and Thailand.




                                                                                                                                                                                                                                                            30
Nomura | Australia Metals & Mining                                                                                                                                                                                                                                                 April 2, 2012


Fig. 82: 2011 changes in gold holdings
Multiple emerging market central banks have been buying significant amounts of gold
 120
        (t)
 100
  80
  60
  40
  20
   0
 -20
                          Russia




                                                                                                                                            Philippines
                                                          Thailand




                                                                                                                                                                 Columbia

                                                                                                                                                                                     Tajikistan




                                                                                                                                                                                                                    Sri Lanka
                                                                                                                                                                                                         Other
                                                                                            Kazakhstan




                                                                                                                                 Bolivia
                                     Turkey
         Mexico




                                                                              Korea




                                                                                                                     Venezuela
                                                                                                           Belarus
Source: World Gold Council Nov. estimates, Nomura research


“What-if” analysis – Central banks lift gold to 10% of reserves
The potential impact if we continue to see a shift in sentiment towards increased gold
holdings by Central Banks could be significant. Nomura has conducted a “what-if”
analysis highlighting additional gold demand of ~3,400t if the 18 largest non-US/EU US
dollar reserve holders moved their allocation of gold to 10% of total reserves.
We have not included China in this scenario analysis, as in our view China is relatively                                                                                                                                                     Just to maintain ~2% of Chinese
unlikely to shift from its current 1.7% gold allocation in a straightforward manner, given                                                                                                                                                   reserves in gold implies 160tpa
this might be interpreted as a lack of faith in its US$3.3tn of US dollar reserves. If China                                                                                                                                                 of demand.
were to maintain its 1.7% allocation in future years, based on the recent growth rates of
its reserves, it would need to purchase approximately 160t of gold a year. If China were
to increase its gold holdings to 10%, it would need to purchase 5,146t of gold, or more
than total global estimated annual demand (and therefore unlikely).
In the short term we expect central banks will continue to seek to diversify their reserve
portfolios through the acquisition of gold. In our supply/ demand assumptions we assume
central bank net purchases of 1,550t in 2012 and 2013, reflecting this trend.
It is this expectation of continued central bank demand that supports our near-term
expectations for gold prices to continue to appreciate.

Fig. 83: Scenario analysis to increase gold holdings to 10% allocation
Significant purchases could come from multiple buyers
 900
 800
 700
 600
 500
 400
 300
 200
 100
   0
                                              Singapore




                                                                                                         Thailand


                                                                                                                     Algeria




                                                                                                                                                                                                                 Poland




                                                                                                                                                                                                                                         In dia




                                                                                                                                                                                                                                                         Argentina




                                                                                                                                                                                                                                                                                     Australia
                                                                                      Malaysia




                                                                                                                                                    Ind onesia
                             Korea




                                                                                                                                                                            Russia


                                                                                                                                                                                                  Den mark




                                                                                                                                                                                                                                                                     Philippines
          Saud i Arabia




                                                                                                                                   Mexico




                                                                                                                                                                                                                                Turkey
                                                                     Taiwan




                                                                                                                                                                                                                                                  Peru




                                                                                                                     Current holdings                                       Implied increase
Source: World Gold Council, Nomura research




                                                                                                                                                                                                                                                                                                 31
Nomura | Australia Metals & Mining                                                                                          April 2, 2012


Investment demand has shifted from western countries to India and Asia
Investment demand occurs as physical bars and coins, exchange traded funds (ETFs)
and other financial products. The market for these products has shifted over time from
North America and Europe to emerging economies of India and East Asia.
Emerging markets comprise >50% of global demand for physical gold investment. This                   In 2010, physical investment
demand has been driven by rising income levels, with gold regarded as a sign of                      demand increased by 60% in
prosperity (particularly in China and India), where certain holidays, weddings and other             India and 72% in China
religious ceremonies are occasions when gold is purchased.
This cultural affinity with gold in developing markets has grown in recent years, despite
rising gold prices, and is forecast to continue and potentially increase.
Alternative investments have grown significantly
The vast majority of alternative investments relate to ETFs (~350 tonnes in 2010), which
were launched in 2003. These investments have enabled investors to gain exposure to
the gold price without the distortions of gold equities. Since 2003 the number of
investment vehicles and the total holdings has increased rapidly, with gold ETFs holding
around 2,360t of gold by the end of 2011 (up 171t since 2010).
Nomura expects these vehicles to continue to invest in gold through 2013, but at lower
levels than in 2009 and 2010.

Fig. 84: All known gold ETF holdings
Consistent retail buying of gold ETF products have helped support the gold price
 100
          (Moz)
   80


   60


   40


   20


    0
    Oct-03      Oct-04     Oct-05     Oct-06     Oct-07     Oct-08      Oct-09     Oct-10   Oct-11

Source: Bloomberg, Nomura research




                                                                                                                                      32
Nomura | Australia Metals & Mining                                                                        April 2, 2012


Commodity assumptions
Fig. 85: Nomura’s global commodity price deck
                                                2012F    2013F     2014F     2015F     2016F     2017F           LT
 Precious Metals
 Gold (US$/oz)                                  1,791     2,063     1,775     1,500     1,300     1,300       1,200
 Silver (US$/oz)                                42.00     49.00     35.00     25.00     20.00     20.00       20.00
 Platinum (US$/oz)                              1,325     1,250     1,500     1,550     1,750     1,750       1,750
 Palladium (US$/oz)                               500       525       700       650       550       550         550
 Rhodium (US$/oz)                               1,500     2,000     2,500     2,500     2,500     2,500       2,500

 Base Metals
 Aluminium (USc/lb)                              1.00      1.07      1.10      1.10      1.10      1.10       1.10
 Aluminium (US$/t)                              2,200     2,350     2,424     2,424     2,424     2,424      2,424
 Copper (USc/lb)                                 3.75      3.50      3.25      3.00      2.75      2.75       2.75
 Copper (US$/t)                                 8,265     7,714     7,163     6,612     6,061     6,061      6,061
 Lead (USc/lb)                                   0.97      1.02      1.04      1.05      0.98      0.98       0.98
 Lead (US$/t)                                   2,138     2,248     2,292     2,314     2,160     2,160      2,160
 Nickel (USc/lb)                                 8.75      9.38      9.00      9.00      9.00      9.00       9.00
 Nickel (US$/t)                                19,285    20,663    19,836    19,836    19,836    19,836     19,836
 Zinc (USc/lb)                                   0.91      0.95      1.00      1.02      0.95      0.95       0.95
 Zinc (US$/t)                                   2,006     2,094     2,204     2,248     2,094     2,094      2,094
 Cobalt (USc/lb)                                12.00     10.00     10.00     10.00     10.00     10.00      10.00
 Cobalt (US$/t)                                26,448    22,040    22,040    22,040    22,040    22,040     22,040
 Moly (USc/lb)                                  22.00     20.00     18.00     16.00     15.00     15.00      15.00
 Moly (US$/t)                                  48,488    44,080    39,672    35,264    33,060    33,060     33,060
 Copper TC (US$/t)                                 64        50        50        50        50        50         50
 Copper RC (US$/lb)                              0.06      0.05      0.05      0.05      0.05      0.05       0.05

 Bulks & Energy
 Alumina (US$/t)                                  330       353       364       364       364       364        364
 Coking Coal (US$/t FOB)                          220       220       200       180       160       160        160
 Low Vol PCI (US$/t FOB)                          190       174       146       124       124       124        124
 Semisoft Coal (US$/t FOB)                        180       164       136       114       114       114        114
 Thermal coal (N'stle, US$, FOB)                  125       130       130       110        90        90         90
 South African Thermal (US$/t)                    120       125       135       105        85        85         85
 Ferrochrome (US$/lb)                            1.20      1.30      1.20      1.20      1.20      1.20       1.20
 Iron Ore (China Spot 62%, Dry, CIF)              155       150       120       100        95        90         90
 Freight Aus-China (US$/t)                         10        10        10        10        10        10         10
 Freight Brazil-China (US$/t)                      22        22        22        22        22        22         22
 Freight Brazil-Europe (US$/t)                     12        12        12        12        12        12         12
 Australian Lump (FOB, US$/t, Dry, 64%)           170       165       134       113       108       103        103
 Australian Lump (FOB, USc/%Fe)                   266       258       209       177       169       161        161
 Australian Fines (FOB, US$/t, Dry, 62%)          145       140       110        90        85        80         80
 Australian Fines (FOB, USc/%Fe)                  227       219       172       141       133       125        125
 Pellets CVRD-Europe (FOB, US$/t, Dry, 66%)       195       189       162       132       122       115        114
 Pellets CVRD-Europe (FOB, USc/%Fe)               302       293       243       194       186       178        178
 Manganese (US$/%Mn, FOB Europe)                 9.00      8.00      7.50      7.00      7.00      7.00       7.00
 Oil (WTI, US$/bbl)                                83        85        85        85        85        85         85
 Oil (Brent US$/bbl)                              100        95        95        95        95        95         95
 LNG (US$/boe)                                     78        74        74        74        74        74         74
 Australian Domestic Gas (A$/mmcf)               4.88      5.00      5.00      5.00      5.00      5.00       5.00
 Henry Hub Gas (US$/mmcf)                        3.00      3.50      5.50      5.50      5.50      5.50       5.50
 Uranium (US$/lb)                                  50        50        50        49        49        48         47
 Uranium (US$/t)                              110,200   110,200   110,200   107,996   107,996   105,792    103,588

 Currencies
 AUD/USD                                         1.02      1.05      1.05      0.81      0.81      0.81        0.81
 Rand                                            7.05      7.25      7.25      7.15      7.15      7.15        7.15
 Euro/USD                                        1.33      1.35      1.35      1.25      1.25      1.25        1.25
 GBP/USD                                         1.61      1.65      1.65      1.65      1.65      1.65        1.65
 CAD/USD                                         0.96      0.96      0.96      0.96      0.96      0.96        0.96
 USD/BRL                                         1.72      1.75      1.75      1.75      1.75      1.75        1.75
Source: Nomura estimates




                                                                                                                      33
                                                                                                                                                                                                                                                        Nomura |
 Fig. 86: Global metals & mining stock coverage summary
     Company name                     Code         Price       Mcap       EV         Rating             TP     NPV/Share     P/NPV    PE (x)       EV/EBITDA (x)    EPS (US¢)        FCF yield (%)   Net debt to   Net debt to      Primary analyst
                                                            (US$mn)   (US$mn)                                                        FY1     FY2      FY1   FY2     FY1       FY2     FY1      FY2    equity (%)   EBITDA (x)
     Diversified Miners
     Anglo American                  AAL LN      £22.97      46,972    49,389       Neutral         £33.00         £40.24      0.6    7.5    6.0      4.3    3.6   478.9     605.3     9.7    14.9         13.7           0.5         Patrick Jones




                                                                                                                                                                                                                                                        Australia Metals & Mining
     BHP Billiton                    BHP AU     A$34.25     187,507   212,299           Buy        A$48.00        A$48.85      0.7   10.0    9.0      6.0    5.4   352.0     393.1     1.9     4.5         35.5           0.7       David Radclyffe
     ENRC                          ENRC LN        £5.84      11,998    12,957       Reduce           £7.00          £8.39      0.7    7.6    6.4      4.7    3.9   122.4     146.3     5.7    13.9         13.5           0.6         Patrick Jones
     Glencore                       GLEN LN       £3.87      45,267               Restricted                                                                                                                                          Patrick Jones
     Rio Tinto                       RIO AU     A$64.36     122,309   137,604           Buy        A$97.00        A$95.44      0.7    8.3    7.3      5.2    4.6   782.4     919.8     1.2     4.2         21.0            0.6      David Radclyffe
     Teck Resources                TCK/B CN     C$34.70      20,499    23,879       Neutral        C$40.00            NA       NA     9.3   10.5      4.9    5.0   374.9     329.6     4.9     8.4         17.1            0.7      Curt Woodworth
     Vale                           VALE US      $23.02     119,499   123,713           Buy         $31.00            NA       NA     6.5    5.4      4.1    2.8   355.1     425.5    11.6    18.2          4.2            0.1      Curt Woodworth
     Xstrata                         XTA LN      £10.64      50,713               Restricted                                                                                                                                          Patrick Jones
                                                            508,784   559,841                                                  0.7    8.5    7.5      5.1    4.4                       4.9     9.0         21.4            0.5
     Copper companies
     Antofagasta                   ANTO LN       £11.22      17,648    16,508         Buy           £15.00         £14.68      0.8   10.5    9.3      5.9    5.6   170.0     192.3    13.1    11.6         -31.8          -0.9        Patrick Jones
     First Quantum                   FM CN      C$19.10       9,096     8,707         Buy          C$30.00        C$29.75      0.6    7.6   12.3      4.8    6.5   250.1     155.2     4.2    -3.8         -11.5          -0.3        Patrick Jones
     Freeport                       FCX US       $37.61      35,918    34,971       Neutral         $40.00            NA       NA     8.9    7.8      3.9    3.4   422.3     483.1    20.2    15.3          -5.0          -0.1      Curt Woodworth
     Kazakhmys                      KAZ LN        £8.93       7,601     7,831       Neutral         £11.00         £13.06      0.7    7.6    6.3      3.7    3.2   191.4     230.7     1.1     6.3          11.3           0.5        Patrick Jones
     Oz Minerals                    OZL AU       A$9.60       3,063     2,227       Neutral        A$11.50        A$13.18      0.7   13.3   11.7      5.2    4.4    75.1      84.9     4.6     8.4         -32.3          -2.0      David Radclyffe
     PanAust                        PNA AU       A$3.00       1,809     1,634       Neutral         A$3.40         A$2.97      1.0   13.1   10.9      4.7    4.2    23.3      29.0     6.8    -2.9         -14.8          -0.5       David Cotterell
                                                             75,135    71,880                                                  0.7    9.3    8.8      4.5    4.3                      13.7    10.5         -11.8          -0.4
     Iron Ore companies
     Atlas Iron                     AGO AU       A$2.84       2,600     2,232         Buy           A$4.00         A$3.64      0.8   17.6    9.5      7.5    6.1    16.8      30.9     0.7   -17.4        -16.2           -1.3       David Radclyffe
     Cliffs Natural                  CLF US      $70.70      10,116    12,682       Neutral         $68.00            NA       NA     7.2    6.7      4.9    4.1   979.9    1050.5    13.7    15.9         31.1            1.0      Curt Woodworth
     Fortescue Metals               FMG AU       A$5.85      18,736    24,092         Buy           A$6.40         A$5.02      1.2   12.4   10.6      8.6    8.3    48.5      56.6   -18.6   -11.7        143.4            1.9       David Radclyffe
     Mt Gibson                      MGX AU       A$1.14       1,269       827       Neutral         A$1.40         A$1.63      0.7    5.1    2.8      2.1    0.5    23.0      41.9    16.6    40.7        -34.8           -1.1       David Radclyffe
     Sesa Goa                       SESA IN     INR 189       3,191     3,879       Neutral        INR 220            NA       NA     7.2    4.7      6.9    6.9    50.9      78.9    10.9     8.4         24.7            1.2   Alok Kumar Nemani
                                                             35,913    43,713                                                  1.1   10.6    8.6      7.1    6.5                      -4.2    -0.7         83.4            1.3
     Coal companies
     Adaro Energy                  ADRO IJ     IDR 1,920      6,703     7,946          Buy      IDR 2,450.0    IDR 2,450.0     0.8   13.1   10.9      6.2    5.0      1.6      1.9     0.2     9.4         44.9           1.0     Isnaputra Iskandar
     Alpha Natural Resources       ANR US          $15.26     3,346     5,495       Neutral          $20.00            NA      NA    N.M    N.M       4.4    4.8    -34.7   -100.3    11.7     8.5         29.2           1.7       Curt Woodworth
     Arch Coal                       ACI US        $10.90     2,309     6,050       Reduce           $12.00            NA      NA    15.6   21.8      6.2    6.2     69.8     50.0    10.6     7.8        103.9           3.8       Curt Woodworth
     Aston Resources                AZT AU        A$9.58      2,015     1,883       Neutral         A$10.20        A$10.38     0.9   N.M    N.M      N.M    N.M      -1.4    -10.8   -15.7   -26.1        -14.5          12.8         David Cotterell
     Bumi Plc                      BUMI LN          £6.35     2,441     3,748       Neutral          £10.00         £12.11     0.5    9.3    5.6      3.2    1.8    109.2    180.5    13.2    18.8         19.0           0.8          Patrick Jones
     Bumi Resources                 BUMI IJ    IDR 2,375      5,385     8,073          Buy      IDR 3,000.0    IDR 3,000.0     0.8   13.7    8.3      6.1    4.3      1.9      3.1     0.0     0.0        120.7           2.0     Isnaputra Iskandar
     Coal India                    COAL IN       INR 333     40,940    29,692          Buy        INR 398.0      INR 204.6     NA    12.5   13.8      8.2    7.1     51.8     47.0    10.3     8.5         -1.0          -3.1     Anirudh Gangahar
     Consol Energy                 CNX US          $33.86     7,765    10,451          Buy           $45.00            NA      NA    26.0   19.3      8.7    7.6    130.0    175.0    -3.6    -6.9         62.6           2.2       Curt Woodworth
     Harum Energy                  HRUM IJ     IDR 8,150      2,402     2,233          Buy      IDR 9,400.0    IDR 9,400.0     0.9   12.9   11.3      7.4    6.1      6.9      7.9     5.3     8.8        -36.1          -0.6     Isnaputra Iskandar
     Indika Energy                  INDY IJ    IDR 2,575      1,464     1,932       Neutral     IDR 2,500.0    IDR 2,500.0     1.0    8.5    6.4     19.8   15.9      3.3      4.4    10.2    17.0         57.0           4.8     Isnaputra Iskandar
     Indo Tambangraya Megah         ITMG IJ   IDR 43,000      5,303     4,857       Reduce     IDR 37,300.0   IDR 37,300.0     1.2   12.7    9.5      7.9    5.6     36.9     49.5     0.0     0.0        -41.8          -0.7     Isnaputra Iskandar
     Patriot Coal                  PCX US           $6.56       599       982       Reduce            $6.00            NA      NA    N.M    N.M       7.0   22.7   -150.5   -274.8   -19.4   -22.1         72.4           2.7       Curt Woodworth
     Peabody                       BTU US          $29.62     8,006    13,592       Neutral          $38.00            NA      NA    11.0    8.1      6.2    5.0    269.6    365.0     3.4     8.9         89.4           2.5       Curt Woodworth
     Tambang Batubara Bukit Asam    PTBA IJ   IDR 20,400      5,131     4,452          Buy     IDR 26,000.0   IDR 26,000.0     0.8   13.9   12.3      9.3    7.9     16.0     18.1     5.1     6.1        -61.7          -0.6     Isnaputra Iskandar
     Walter Energy                 WLT US          $60.25     3,781     5,725       Neutral          $70.00            NA      NA     9.9    7.6      6.5    5.2    610.1    789.8     6.0     6.5         76.8           2.2       Curt Woodworth
     Whitehaven                    WHC AU         A$5.64      2,869     2,968       Neutral          A$6.00         A$5.98     0.9   20.0   14.1     21.9    7.4     10.6     41.5    -5.2     8.9          9.7           0.7         David Cotterell
                                                            100,459   110,079                                                  0.9   13.8   12.5      8.0    6.5                       5.3     5.8         22.8          -0.2
     Gold companies
     African Barrick Gold           ABG LN        £3.88       2,540     1,956          Buy           £6.85          £7.06      0.5   10.0    4.9      3.8    2.3    62.2     126.0    14.2    26.8         -26.5          -1.6          Tyler Broda
     Alacer Gold                   AQG AU        A$8.13       2,417     2,119       Neutral         A$9.30         A$6.33      0.8   11.3    9.7      4.4    4.0    73.3      88.0     3.4    -1.5         -14.6          -0.6       David Radclyffe
     Avocet Mining                  AVM LN        £1.86         590       498          Buy           £3.10          £2.91      0.6    9.1    5.6      4.6    3.2    32.7      52.9    -4.8    13.1         -10.1          -0.4          Tyler Broda
     Centamin Egypt                 CEY LN        £0.68       1,189     1,049       Neutral          £1.20          £2.11      0.3    6.2    4.4      3.8    1.8    17.5      24.8    11.6    34.4         -26.4          -1.0          Tyler Broda
     Evolution Mining               EVN AU       A$1.73       1,247     1,108          Buy          A$2.70         A$2.23      0.6   23.3    5.1      6.3    2.0     7.4      33.8    -3.0    12.8         -11.8          -0.8        David Cotterell
     Newcrest Mining               NCM AU       A$30.23      23,802    25,303          Buy         A$45.00        A$41.54      0.7   18.1   10.3     10.6    6.4   167.5     293.7    -1.5     6.7           9.7           0.6        David Cotterell
     OceanaGold                    OGC AU        A$2.50         667       737          Buy          A$3.30         A$4.22      0.4   11.5    3.5      4.5    1.2    22.0      75.0    -7.0    28.6          10.7           0.4        David Cotterell
     Perseus Mining                 PRU AU       A$2.34       1,097     1,051       Neutral         A$2.65         A$2.64      0.9   23.5    5.4     21.8    3.3    10.0      43.3   -11.5     4.2         -12.9          -1.0        David Cotterell
     Petropavlovsk                  POG LN        £5.85       1,753     2,406       Neutral          £9.10          £9.11      0.6    9.8    3.1      5.5    2.5    95.0     297.1   -20.6     8.3          48.3           2.5          Tyler Broda
     Polymetal                     POLY LN        £9.15       5,291     6,127       Reduce          £14.00         £12.64      0.7    9.2    4.0      6.2    3.0   158.9     364.4     7.0    17.6          20.5           0.5          Tyler Broda

 Priced as at 29 March 2012. Source: Datastream, company data, Nomura estimates




                                                                                                                                                                                                                                                        April 2, 2012
34
                                                                                                                                                                                                                                                  Nomura |
 Fig. 87: Global metals & mining stock coverage summary (cont’d)
     Company name                    Code            Price      Mcap       EV     Rating          TP    NPV/Share   P/NPV    PE (x)       EV/EBITDA (x)      EPS (US¢)          FCF yield (%)   Net debt to   Net debt to      Primary analyst
                                                             (US$mn)   (US$mn)                                              FY1     FY2      FY1   FY2       FY1       FY2       FY1      FY2    equity (%)   EBITDA (x)
     Gold companies (cont'd)
     Randgold Resources            RRS LN          £54.70      7,959     7,471    Neutral     £71.15       £48.12     1.1   12.9    9.3      7.8    5.7     678.1       940.1     0.0     9.5         -15.0          -0.5          Tyler Broda




                                                                                                                                                                                                                                                  Australia Metals & Mining
     Regis Resources               RRL AU          A$3.98      1,798     1,808    Reduce      A$3.65       A$3.28     0.9   21.0    6.7     18.0    3.9      18.9        59.4    -0.7    12.1           3.8           0.1       David Radclyffe
     St Barbara                    SBM AU          A$2.07        693       530       Buy      A$3.35       A$2.99     0.5    5.1    3.4      2.4    1.4      40.3        60.9    18.9    26.5         -27.2          -0.7       David Radclyffe
     Seabridge Gold                 SA.US          £19.93      1,104     1,070       Buy      £31.80          NA      NA     NA     NA       NA     NA        NA          NA      NA      NA            NA            NA           Tyler Broda
                                                              52,147    53,233                                        0.8   15.0    8.2      8.9    4.9                           0.2    10.5           2.6           0.2
     Other Metals companies
     Alcoa                           AA US         $10.03     10,676    16,138    Neutral    $12.00           NA      NA    N.M    15.4      8.5    4.6       0.1        65.3   -12.3     9.4          31.8           2.9      Curt Woodworth
     Hindustan Zinc                   HZ IN     INR 126.9     10,439     6,668    Neutral INR 120.0            -        -    9.6    9.8      5.6    5.0      25.8        25.3     9.1     8.0         -70.0          -3.2   Alok Kumar Nemani
     Korea Zinc                  010130 KS    KRW 391,500      6,501     6,034      Buy KRW 620,000            -        -    6.7    6.0      4.6    3.7    5119.9      5703.4     0.6     0.6         -11.4          -0.4            Cindy Park
     Sterlite Industries           STLT IN        INR 109      7,126     4,502      Buy     INR 169             -       -    6.0    6.2      2.2    1.5      35.5        34.0    13.8    12.3          -0.2          -1.3   Alok Kumar Nemani
     Sumitomo Metal Mining         5713 JP      JPY 1,179      8,039     9,350    Neutral JPY 1,200            -        -   11.8    8.3      6.5    6.2     120.8       172.7    -1.5     4.2          17.0           0.9       Yuji Matsumoto
                                                              42,780    42,692                                               8.8    9.7      5.8    4.3                           1.3     7.2          -7.7          -0.2
     Chinese Steels
     Angang Steel                   347 HK        HKD 4.8      4,510     9,629    Reduce     HKD 3.5            -       -   50.8   17.4      5.9    4.7       1.2         3.6    -2.6     9.8         62.8           3.2        Matthew Cross
     Baosteel                    600019 CH        CNY 4.8     13,191    20,880    Neutral    CNY 5.2            -       -   12.2   11.9      5.5    5.0       6.2         6.3     8.5    12.9         43.8           2.0        Matthew Cross
     Maanshan                       323 HK        HKD 2.2      2,202     4,236    Reduce     HKD 1.5            -       -   33.1   17.6      4.1    3.1       0.9         1.6    23.4    31.5         46.2           2.0        Matthew Cross
     Shougang International         697 HK        HKD 0.5        519     1,984    Neutral    HKD 0.5            -       -   N.M    11.3     10.2    7.5      (0.1)        0.5   -33.1   -25.6        121.7          15.0        Matthew Cross
                                                              20,422    36,730                                              23.2   13.7      5.6    4.8                           6.6    13.3         50.2           2.6
     European Steels
     Acerinox                      ACX SM         EUR 9.5      3,147     5,024    Neutral   EUR 10.0            -       -   14.8   11.7      8.7    7.6     85.3       107.6      7.9    10.5          52.8           2.2          Neil Sampat
     Aperam                       APAM NA        EUR 13.6      1,413     2,634       Buy    EUR 16.0            -       -   22.9   13.0      5.9    5.2     79.0       139.1     11.6    10.7          21.0           1.9          Neil Sampat
     ArcelorMittal                  MT NA        EUR 14.1     29,006    56,239    Neutral   EUR 17.0            -       -   10.7    6.5      5.7    4.7    175.0       286.8     12.1     7.5          38.3           2.2          Neil Sampat
     Kloeckner                     KCO GR        EUR 10.8      1,436     2,325    Reduce    EUR 11.0            -       -   32.4   13.1      6.6    5.5     44.5       109.8      1.3     9.1          24.2           1.7          Neil Sampat
     Salzgitter                    SZG GR        EUR 40.6      3,107     4,949       Buy    EUR 52.0            -       -   13.2   10.0      5.4    4.9    408.6       536.6     17.1    15.2         -22.8          -1.3          Neil Sampat
     SSAB                        SSABA SS        SEK 61.2      2,973     6,065    Reduce    SEK 72.0            -       -   10.4    9.0      6.9    6.3    780.8       904.2      8.0    15.2          58.4           3.2          Neil Sampat
     ThyssenKrupp                  TKA GR        EUR 18.4     12,569    28,345       Buy    EUR 24.0            -       -   18.0    7.3      7.6    5.4    135.7       335.1      9.0    17.8           8.1           0.5          Neil Sampat
     Voestalpine                   VOE AV        EUR 24.9      5,585    13,469    Neutral   EUR 27.0            -       -    9.5    7.9      6.9    6.4    348.7       417.1      9.1    15.0          44.0           1.6          Neil Sampat
                                                              59,236   119,050                                              13.3    7.7      6.4    5.3                          10.7    11.4          30.3           1.6
     Indian Steels
     JSW Steel                     JSTL IN       INR 707.8     3,075     6,091       Buy    INR 739.0           -       -   15.9    7.7      6.0    5.2     86.8       178.9     -6.2    -4.5         87.9           3.0    Alok Kumar Nemani
     SAIL                           SAIL IN       INR 90.9     7,308     9,750       Buy    INR 120.0           -       -   10.3    9.3      7.7    7.7     17.2        19.1    -20.6   -21.2         31.3           1.9    Alok Kumar Nemani
     TATA Steel                    TATA IN       INR 453.1     8,571    17,080       Buy    INR 568.0           -       -    4.9    7.2      5.7    5.0    181.0       122.7      7.9     8.1        100.1           2.8    Alok Kumar Nemani
                                                              18,954    32,922                                               8.8    8.1      6.5    6.0                          -5.4    -5.3         71.6           2.5
     Japanese Steels
     Aichi Steel                   5482 JP       JPY 430       1,023     1,310    Neutral     JPY 550           -       -   14.1    8.4      4.2    3.5      37.1       61.9     11.1    13.9         19.2            0.9       Yuji Matsumoto
     Daido Steel                   5471 JP       JPY 574       3,021     3,870      Buy       JPY 600           -       -   11.9   12.5      6.1    5.6      58.7       55.9      5.8     8.0         36.8            1.3       Yuji Matsumoto
     Hitachi Metals                5486 JP      JPY 1,017      4,349     6,108    Neutral     JPY 980           -       -   16.3   12.0      6.5    6.1      75.7      103.2     -5.3     7.0         65.9            1.9       Yuji Matsumoto
     JFE Holdings                  5411 JP      JPY 1,777     11,434    29,460    Neutral   JPY 1,400           -       -   N.M    33.0      9.0    9.7    (113.7)      65.3     -1.7    12.2        109.0            5.5       Yuji Matsumoto
     Kobe Steel                    5406 JP       JPY 135       4,917    14,040    Neutral    JPY 125            -       -   N.M    N.M       7.0    8.3      (2.8)      (0.8)   -12.1     1.7        146.9            4.6       Yuji Matsumoto
     Kyoei Steel                   5440 JP      JPY 1,610        850       606    Neutral   JPY 1,680           -       -   25.9   15.6      5.4    4.2      75.3      125.4      2.1   -12.1        -16.5           -2.2       Yuji Matsumoto
     Maruichi Steel Tube           5463 JP      JPY 1,932      2,016     1,285      Buy     JPY 2,150           -       -   18.3   16.4      5.4    4.8     128.0      143.1      3.9     4.8        -29.5           -3.0       Yuji Matsumoto
     Nippon Steel                  5401 JP       JPY 227      17,323    32,414    Neutral     JPY 200           -       -    NM    28.6      7.9    8.6       -          9.6     -2.6     6.0         70.5            3.7       Yuji Matsumoto
     Osaka Steel                   5449 JP      JPY 1,624        774       142    Neutral   JPY 1,635           -       -   14.5   12.8      1.1    1.1     135.6      154.4      0.5     8.2        -43.0           -5.0       Yuji Matsumoto
     Sanyo Special Steel           5481 JP       JPY 449         879     1,262      Buy       JPY 565           -       -    9.7    9.1      4.3    3.9      56.4       60.2      4.1    10.5         32.9            1.3       Yuji Matsumoto
     Sumitomo Metal Industries     5405 JP       JPY 166       9,336    23,650    Neutral    JPY 147            -       -   N.M    19.2     10.0    9.7     (13.1)      10.5     -8.1     7.9        183.5            6.1       Yuji Matsumoto
     Tokyo Steel Mfg               5423 JP       JPY 703       1,271     1,113      Buy       JPY 750           -       -   N.M    N.M      14.1    6.8    (105.9)     (28.5)    -5.7     9.2         -5.9           -2.0       Yuji Matsumoto
     Yamato Kogyo                  5444 JP      JPY 2,405      1,987     1,424      Buy     JPY 2,920           -       -   19.2   16.3     11.2    8.7     151.7      178.7     -6.7     3.1        -25.6           -4.4       Yuji Matsumoto
                                                              59,178   116,684                                              16.0   23.5      8.1    8.2                          -3.4     7.2         87.6            3.3
     Korean Steels
     Dongkuk Steel               001230 KS     KRW 21,450      1,167     2,390       Buy KRW 50,000             -       -    5.7    7.0      4.1    4.3     331.3       267.8    -0.1     0.0         43.1           2.1            Cindy Park
     Hyundai Steel               004020 KS     KRW 99,600      7,478    12,142       Buy KRW 170,000            -       -    6.3    NA       6.3    NA    1,382.5         NA      0.0     NA          51.6           2.4            Cindy Park
     POSCO                       005490 KS    KRW 377,500     28,963    36,025       Buy KRW 670,000            -       -    6.1    2.9      4.7    2.5   5,443.3    11,619.2     0.0     0.2         19.1           0.9            Cindy Park
                                                              37,608    50,557                                               6.1    3.0      5.0    2.6                           0.0     0.2         26.3           1.3

 Priced as at 29 March 2012. Source: Datastream, company data, Nomura estimates




                                                                                                                                                                                                                                                  April 2, 2012
35
Alacer Gold Corp.                                      AQG.AX AQG AU

METALS & MINING
                                                                                                                    EQ U I T Y R E S E A R C H




Australian Gold Miners initiation                                                                       April 2, 2012

                                                                                                        Rating
                                                                                                                                     Neutral
Attractive growth pipeline, yet                                                                         Starts at

                                                                                                        Target price
                                                                                                                                     AUD 9.30
better value from NCM                                                                                   Starts at

                                                                                                        Closing price
                                                                                                        March 29, 2012               AUD 8.13
                                                                                                        Potential upside               +14.4%


Intermediate producer targeting to double production                                                    Anchor themes
Alacer formed in 2011 from the merger of Anatolia and Avoca Minerals.                                   Gold equities have
The company produces gold from operations in Turkey and Australia and                                   underperformed the gold price
in 2012 is targeting to produce 420-440koz at the group level at US$668-                                however this is expected to
693/oz (third quartile). In Australia AQG operates two hubs in the southern                             reverse as earnings growth is
goldfields at Higginsville and South Kalgoorlie, while in Turkey the                                    delivered. Robust cash
company operates the Çöpler heap leach project. Production is targeted to                               generation supports growth,
grow to 800koz by 2015 through expansions in both Australia and Turkey.                                 M&A and capital management.
Nomura initiates with a Neutral rating and A$9.30 target price, based on a
combination of our forward gold price NPV adjusted for growth and risks.                                Nomura vs consensus
                                                                                                        Nomura’s estimate for FY12F
Catalysts                                                                                               NPAT is below consensus
 Execution of growth pipeline and targets                                                              estimates.
 Çöpler sulphide feasibility study in 2H 2012 (potential +220kozpa), oxide
  mill potential and resource/reserve updates                                                           Research analysts

 SKO plant expansion study and HBJ and Mt Marion underground                                           Australia Metals & Mining
  projects in Q2 2012. Frog’s Legs potential sale by La Mancha                                          David Radclyffe - NIplc
                                                                                                        david.radclyffe@nomura.com
Targeting 800koz by 2015                                                                                +61 2 8062 8434
Through current studies at SKO and Çöpler AGQ is looking at the                                         David Cotterell - NAL
potential to double current production levels to ~800koz in 2015. At Çöpler                             david.cotterell@nomura.com
                                                                                                        +61 2 8062 8433
the company is currently studying plans to develop a pressure oxidisation
circuit to exploit 5Moz of sulphide resources. In Australia AGQ is seeking                              Puneet Saxena
                                                                                                        puneet.saxena@nomura.com
to expand the SKO plant to 2.5Mtpa and increase high-grade throughput                                   +44 20 7102 9162
at Higginsville. On this basis future production would be roughly equally
split between Turkey and Australia. Total group capex in 2012 is
estimated at ~US$195mn.

31 Dec                              FY11                FY12F               FY13F              FY14F
Currency (USD)                      Actual      Old       New       Old         New    Old       New

Revenue (mn)                         557                  832                   932            1,053
Reported net profit (mn)                 75               213                   255              250
Normalised net profit (mn)               75               213                   255              250
Normalised EPS                    29.04c               72.68c              87.18c             85.42c
Norm. EPS growth (%)                     na             150.3                   20.0             -2.0
Norm. P/E (x)                        29.2      N/A       11.5       N/A          9.9   N/A      10.1
EV/EBITDA (x)                        12.2                  4.2                   3.9              3.3
Price/book (x)                           1.7   N/A         1.2      N/A          1.0   N/A        0.9
Dividend yield (%)                       na    N/A         na       N/A          na    N/A        2.0
ROE (%)                                  9.9             12.4                   11.3              9.2   See Appendix A-1 for analyst
Net debt/equity (%)              net cash             net cash            net cash           net cash   certification, important
Source: Company data, Nomura estimates
                                                                                                        disclosures and the status of
                                                                                                        non-US analysts.
Key company data: See page 2 for company data and detailed price/index chart.
Nomura | Alacer Gold Corp.                                                                                                       April 2, 2012



Key data on Alacer Gold Corp.
Income statement (USDmn)                                                               Relative performance chart (one year)
Year-end 31 Dec                           FY10      FY11    FY12F    FY13F    FY14F
Revenue                                       0       557      832      932    1,053
Cost of goods sold                          -21      -238     -349     -384     -459
Gross profit                                -21       320      483      548      594
SG&A                                        -19      -221     -127     -105     -163
Employee share expense
Operating profit                            -40       99      357      444      431

EBITDA                                      -39      191       483      548      594
Depreciation                                  0      -92      -127     -105     -163   Source: ThomsonReuters, Nomura research
Amortisation                                                                            
                                                                                        (%)                                    1M     3M 12M
EBIT                                        -40        99     357      444      431
                                                                                           Absolute (AUD)                     -8.6 -23.5   -5.1
Net interest expense                          1       -25       3        4        6
                                                                                           Absolute (USD)                     -9.9 -20.8   -2.6
Associates & JCEs
                                                                                           Relative to index                  -9.4 -26.8   5.4
Other income
                                                                                           Market cap (USDmn)              2,409.6
Earnings before tax                         -38       74      360       448      437
                                                                                           Estimated free float (%)
Income tax                                    0       10      -90      -112     -109
                                                                                           52-week range (AUD)            12.3/7.6
Net profit after tax                        -38       84      270       336      327
                                                                                           3-mth avg daily turnover
Minority interests                            0       -9      -57       -81      -77       (USDmn)
                                                                                                                             6.00
Other items                                                                                Major shareholders (%)
Preferred dividends                                                                        Pala Investments Holdings         19.4
Normalised NPAT                             -38       75      213      255      250        M&G Investment
                                                                                                                               9.6
Extraordinary items                                                                        Management Ltd
Reported NPAT                               -38       75      213      255      250        Source: Thomson Reuters, Nomura research

Dividends                                     0        0        0        0      -50
Transfer to reserves                        -38       75      213      255      200
                                                                                       Notes
Valuation and ratio analysis                                                                Trading on prospective average
FD normalised P/E (x)                        na      29.2     11.5      9.9     10.1
FD normalised P/E at price target (x)        na      37.4     14.7     12.6     12.9        EV/EBITDA of ~4x.
Reported P/E (x)                             na      29.2     11.5      9.9     10.1
Dividend yield (%)                           na        na       na       na      2.0
Price/cashflow (x)                           na       8.5      6.2      5.7      5.1
Price/book (x)                             16.5       1.7      1.2      1.0      0.9
EV/EBITDA (x)                                na      12.2      4.2      3.9      3.3
EV/EBIT (x)                                  na      23.5      5.7      4.9      4.5
Gross margin (%)                             na      57.3     58.1     58.8     56.4
EBITDA margin (%)                            na      34.2     58.1     58.8     56.4
EBIT margin (%)                              na      17.7     42.9     47.6     40.9
Net margin (%)                               na      13.5     25.6     27.4     23.8
Effective tax rate (%)                       na     -13.5     25.0     25.0     25.0
Dividend payout (%)                          na       0.0      0.0      0.0     20.0
Capex to sales (%)                           na      21.9     38.1     52.3     25.5
Capex to depreciation (x)                 460.2       1.3      2.5      4.7      1.6
ROE (%)                                      na       9.9     12.4     11.3      9.2
ROA (pretax %)                               na      10.9     20.8     20.8     17.1

Growth (%)
Revenue                                      na       na      49.2     12.1     13.0
EBITDA                                       na       na     153.6     13.5      8.4
EBIT                                         na       na     261.2     24.5     -2.9
Normalised EPS                               na       na     150.3     20.0     -2.0
Normalised FDEPS                             na       na     150.3     20.0     -2.0

Per share
Reported EPS (USD)                       -27.29c   29.04c   72.68c   87.18c   85.42c
Norm EPS (USD)                           -27.29c   29.04c   72.68c   87.18c   85.42c
Fully diluted norm EPS (USD)             -27.29c   29.04c   72.68c   87.18c   85.42c
Book value per share (USD)                  0.46     4.97     6.97     8.48    10.10
DPS (USD)                                   0.00     0.00     0.00     0.00     0.17
Source: Company data, Nomura estimates
                                                                                        




                                                                                                                                                  37
Nomura | Alacer Gold Corp.                                                                                                 April 2, 2012


Cashflow (USDmn)                                                                              
Year-end 31 Dec                          FY10      FY11      FY12F      FY13F      FY14F     Notes
EBITDA                                     -39       191        483        548        594        Projecting EBITDA of >US$500mn
Change in working capital                    0        80        -84         -3         -4        from 2013F on Nomura assumptions.
Other operating cashflow                     7       -12         -3       -105       -100
Cashflow from operations                   -32       258        396        441        491
Capital expenditure                        -69      -122       -317       -488       -269
Free cashflow                             -101       136         79        -47        222
Reduction in investments                               0          0          0          0
Net acquisitions
Reduction in other LT assets                         -24          0          0          0
Addition in other LT liabilities                      47          0          0          0
Adjustments                                 2         63         38          0          0
Cashflow after investing acts             -99        221        117        -47        222
Cash dividends                              0          0          0          0        -21
Equity issue                                1         13        129          0          0
Debt issue                                 23         -1       -168        -52          0
Convertible debt issue
Others                                     16          4          0          0          0
Cashflow from financial acts               40         15        -39        -52        -21
Net cashflow                              -59        237         79        -99        201
Beginning cash                             78         19        250        328        230
Ending cash                                19        255        328        230        431
Ending net debt                           115        -49       -296       -249       -450
Source: Company data, Nomura estimates



Balance sheet (USDmn) 
As at 31 Dec                             FY10      FY11      FY12F      FY13F      FY14F     Notes
Cash & equivalents                         19       250        328        230        431         AQG appears well financed for
Marketable securities                                                                            growth initiatives.
Accounts receivable                        20         21         42         47         53
Inventories                                15         74         67         75         84
Other current assets                        6          0          0          0          0
Total current assets                       59        345        436        351        567
LT investments                              0          0          0          0          0
Fixed assets                              221      1,431      1,700      2,158      2,397
Goodwill
Other intangible assets                     0          0         48         78        108
Other LT assets                             2         26         26         26         26
Total assets                              282      1,803      2,211      2,613      3,098
Short-term debt                             1        145          0          0          0
Accounts payable                           21        155         83         93        105
Other current liabilities                   0          2          2          2          2
Total current liabilities                  22        301         85         95        107
Long-term debt                            133         56         33        -19        -19
Convertible debt
Other LT liabilities                        7         53         53         53         53
Total liabilities                         162        410        171        129        141
Minority interest
Preferred stock
Common stock
Retained earnings
Proposed dividends
Other equity and reserves                 120      1,393      2,040      2,484      2,957
Total shareholders' equity                120      1,393      2,040      2,484      2,957
Total equity & liabilities                282      1,803      2,211      2,613      3,098

Liquidity (x)
Current ratio                            2.65       1.15       5.15       3.70       5.31
Interest cover                             na        4.0         na         na         na

Leverage
Net debt/EBITDA (x)                        na    net cash   net cash   net cash   net cash
Net debt/equity (%)                      95.8    net cash   net cash   net cash   net cash

Activity (days)
Days receivable                            na       13.5       13.9       17.3       17.2
Days inventory                             na       68.7       74.0       67.1       63.2
Days payable                               na      134.9      124.9       83.9       79.0
Cash cycle                                 na      -52.7      -37.0        0.5        1.4
Source: Company data, Nomura estimates




                                                                                                                                       38
Nomura | Alacer Gold Corp.                                                                                                     April 2, 2012



Investment view
Fig. 88: Map of operations




                                                               TURKEY
                                                          Çöpler Operations




                                                                                              AUSTRALIA
                                                                                              Frog’s Leg
                                                                                              Higginsville
                                                                                              South Kalgoorlie




Source: Nomura research

Key projects
Higginsville
The Higginsville project is located 150km south of Kalgoorlie and was the principal asset
of Avoca Resources. In 2012 AQG is targeting to produce 150-155koz of gold at a cash
cost of US$950-980/oz, and capex is estimated at US$56mn. The project comprises a
1.3Mtpa gravity, CIL processing plant and a number open-pit and underground mines
with 1.3Moz of resources. Trident is the principle underground operation, representing
~1Mtpa of ore and comprising three key zones Apollo, Artemis (in 2013) and Helios.
Chalice is expected to commence underground production in 2012 through mining of the
Atlas (in Q3 2012) and Olympus zones. Open-pit mining occurs at Vine, which the
company expects to finish in mid 2012 and replace with Fairplay commencing in April
2012. AQG is targeting to increase production through the combination of open-pit and
underground ore sources at Higginsville to around 1.5Mtpa at 4.5g/t.
In terms of exploration at Higginsville the company is positive of the potential from the               New potential at the Corona
Corona discovery announced in early 2012 and 2.5km to the south of the plant. Its early                 discovery.
days for Corona with its narrow yet high grade intersections (~2m with visible gold), a
number of follow up holes have now been drilled into the prospect with an update
expected in the short term.

Fig. 89: Higginsville – Production and cost profile                Fig. 90: Higginsville – EBITDA and capex profile

 200     (koz)                                (US$/oz)   1,200        200     (US$mn)
                                                                      150
                                                         1,000
 150                                                                  100
                                                         800            50
 100                                                     600             0
                                                                      (50)
                                                         400
  50                                                                 (100)
                                                         200
                                                                     (150)
   0                                                     0           (200)
          2011     2012F       2013F   2014F    2015F                          2011          2012F      2013F  2014F          2015F
             Gold Production (LHS)        Cash costs (RHS)                                           EBITDA Capex
Source: Nomura research                                            Source: Nomura research




                                                                                                                                           39
Nomura | Alacer Gold Corp.                                                                                                      April 2, 2012


SKO & Frog’s Legs
AQG’s South Kalgoorlie Operations (SKO) are located 30km south of Kagloorlie in                        Study to increase SKO capacity
Western Australia. The core of the SKO project is the 1.2Mtpa Jubilee CIL processing                   to 2.5Mtpa lifting net production
plant acquired by Avoca as part of the Dioro takeover in March 2010. Four deposits are                 to >150koz.
the focus of the project and include the core HBJ (Hampton-Boulder-Jubilee) pit and
Triumph, Pernatty, and Mt Martin open pits. AQG currently has 0.5Moz of reserves and
1.9Moz of resources in inventory at SKO.
The current focus of the project is the SKO expansion project (SKOEP) to replace the
current Jubilee plant with a new 2.5Mtpa plant on the site of the old New Celebration
plant. The company has announced US$25mn in the first stage of a project expected to
cost ~US$170mn (new plant and pre strip) with approvals expected in Q2 2012 and
targeting first ore in Q1 2013. As part of current studies AQG is looking at the
underground potential at HBJ and Mt Marion West. Conceptually, SKOEP envisages
~1.7Mtpa of ore from open-pit operations (lead by HBJ), and ~0.8Mtpa of underground
ore from split between HBJ / Mt Marion West and Frog’s Legs.
In addition to SKO AQG also has 49% interest in the Frog’s Legs project operated by La
Mancha. Frog’s Legs is a high-grade underground project, and AQG’s share of
production is trucked 45km to the Jubilee plant for processing. AQG’s share of gold
reserves is 0.4Moz at 5.8g/t. We value the project interest at ~US$200mn.
Significantly, La Mancha has recently announced its intention to enter an auction                      La Mancha sale offers potential
process for its business, and this could see either the whole company or assets sold                   at Frog’s Legs.
individually. AQG with their plans to expand the SKO plant are expected to be interested
in the sales process with respect to consolidating the other 51% of Frog’s Legs.
In 2012 AQG is targeting to produce from SKO and Frog’s Legs 90-95koz of gold at a
cash cost of US$725-750/oz, capex is estimated at US$61mn.

Fig. 91: South Kalgoorlie – Production and cost profile            Fig. 92: South Kalgoorlie – EBITDA and capex profile

 200     (koz)                                 (US$/oz)   1,200      200     (US$mn)
                                                                     150
                                                          1,000
 150                                                                 100
                                                          800         50
 100                                                      600           0
                                                                     (50)
                                                          400
  50                                                                (100)
                                                          200
                                                                    (150)
   0                                                      0         (200)
          2011     2012F       2013F   2014F    2015F                          2011          2012F      2013F  2014F           2015F
             Gold Production (LHS)        Cash costs (RHS)                                           EBITDA Capex

Source: Nomura research                                            Source: Nomura research




Fig. 93: Frog’s Legs – Production and cost profile                 Fig. 94: Frog’s Legs – EBITDA and capex profile

  200    (koz)                                 (US$/oz)      800     200     (US$mn)
                                                             700     150
  150                                                        600     100
                                                             500      50
  100                                                        400        0
                                                             300     (50)
   50                                                        200    (100)
                                                             100    (150)
    0                                                         0     (200)
           2011     2012F      2013F   2014F    2015F                          2011          2012F      2013F  2014F           2015F
             Gold Production (LHS)       Cash costs (RHS)                                            EBITDA Capex

Source: Nomura research                                            Source: Nomura research




                                                                                                                                            40
Nomura | Alacer Gold Corp.                                                                                                    April 2, 2012


Çöpler
Çöpler is the group’s key asset (ex Anatolia Minerals) located in the eastern region of               Potential of >400koz with
Turkey 120km southwest of Erzincan. AQG has an 80% interest in the epithermal project                 development of refectory
which commenced in April 2011, with 20% now held by Turkish partner Lydia Mining.                     sulphide project.
Çöpler is a shalow open-pit heap leach operation with recovery of gold from sulphide
mineralisation expected in the future. In 2012 AQG is targeting to produce 180-190koz of
gold at a cash cost of US$400-420/oz from Çöpler, and capex is estimated at US$77mn.
The project represents 7.5Moz of gold in resources split between 2.2Moz of oxide gold                 Resource grade increase points
and 5.3Moz of refractory gold in sulphide mineralisation. A recent resource upgrade and               to upside to 2012.
ongoing drilling suggests upside to the current reserve of 4.6Moz especially for grades.
The company has advised it is reviewing the mine plan and reserves over 2012 with
potential upside to expectations including 2012 guidance. Nomura therefore assumes
production in 2012 of 215koz some 15% above current guidance.
Significantly, the company is expected to complete a prefeasibility study into the                    Upside through POX and Oxide
development of a pressure oxidisation circuit (POX) at the project to allow the recovery              plant projects.
of refractory gold in sulphide mineralisation in the second half of 2012. Conceptually, the
project seeks to add 220kozpa from 2015, with an estimated capital cost of US$450mn.
Alacer expected the POX development could lift total production from the project to
>400koz pa with a mine life of at least 16 years. POX would also allow for the recovery
of some copper and silver.
In addition to the POX project, the company is also accessing the potential to upgrade
the oxide business through the addition of an oxide plant. This was an original plan for
the project, but more capital intensive; the trade-off relates to higher recoveries. AQG
has stated an oxide plant might cost in the order of US$60mn and would like to make a
decision by the end of 2012 (in tandem with the reserve review). The concept if it
proceeds would be to treat higher-grade ores through a new conventional plant, with
lower-grade ores continued to be treated by heap leaching.

Fig. 95: Çöpler– Production and cost profile                      Fig. 96: Çöpler– EBITDA and capex profile

  500    (koz)                                 (US$/oz)     400     600     (US$mn)
                                                            350
  400                                                               400
                                                            300
  300                                                       250     200
                                                            200
  200                                                       150        0
                                                            100
  100                                                              (200)
                                                            50
    0                                                       0      (400)
           2011     2012F      2013F   2014F    2015F                         2011          2012F      2013F  2014F          2015F
             Gold Production (LHS)       Cash costs (RHS)                                           EBITDA Capex

Source: Nomura research                                           Source: Nomura research

Balance sheet
At the end of September 2011 AQG had cash on hand of US$250mn and net cash
totalling US$50mn. However, the majority of debt is represented by US$129mn of
convertible debentures these are in the money and expire in April 2012 (Nomura
assumes conversion to equity at this time at C$8/share). The company is therefore well
funded to pursue its growth targets, with a further US$38mn having been received from
the exercise of the Lidya option to increase its equity in Çöpler to 20%.
NPV & risk analysis
Nomura values AQG at A$6.29/share based on DCF analysis using a 5% discount rate
and Nomura’s long term gold price forecast US$1,200/oz. In addition, Nomura estimates
a flat spot gold price NPV of A$9.92/share. On this basis AQG currently trades on 0.5x
NPV (spot). The figures below highlight the asset composition of the NPV and how NPV
changes through time as capital is invested in the business and growth is delivered.
Our target price for AQG of A$9.30/share is based on a combination of our forward gold
price NPV adjusted for growth and risks. Risks to the achievement of our target price




                                                                                                                                          41
Nomura | Alacer Gold Corp.                                                                                                                                                 April 2, 2012


include operational performance at Çöpler and in Australia, cost control and gold price
volatility.

Fig. 97: NPV waterfall chart                                                                                     Fig. 98: Valuation trend
 10.00     (A$)                                                                                                   10.00      (A$)
  8.00                                         $4.65     $0.68                        $0.16          $6.33
                                                                                                                   8.00
  6.00                                                                 -$1.18
  4.00                                                                                                             6.00
                           $1.17
  2.00     $0.85
  0.00                                                                                                             4.00




                                                                         Corporate
                                                Çöpler
            Higginsville


                            South Kalgoorlie




                                                                                                         Total
                                                          Frog's Leg




                                                                                        Net Cash
                                                                                                                   2.00

                                                                                                                   0.00
                                                                                                                             Current Per          +1 Yr       +2 Yr        +3 Yr
                                                                                                                               Share
Source: Nomura estimates                                                                                         Source: Nomura estimates


Fig. 99: Production and cost profile                                                                             Fig. 100: EBITDA and capex profile

  1,000    (koz)                                                                     (US$/oz)             800     1,000           (US$mn)
                                                                                                          700
                                                                                                                    750
    750                                                                                                   600
                                                                                                                    500
                                                                                                          500
    500                                                                                                   400       250
                                                                                                          300
                                                                                                                        0
    250                                                                                                   200
                                                                                                          100      (250)
       0                                                                                 0                         (500)
            2011      2012F    2013F                                   2014F   2015F                                              2011       2012F       2013F 2014F      2015F
           Total Eqv Gold Payable (LHS)                                    Cash Costs (RHS)                                                          EBITDA Capex

Source: Nomura estimates                                                                                         Source: Nomura estimates


Fig. 101: Debt profile and debt ratio                                                                            Fig. 102: Earnings & P/E ratio

 1,000     (US$mn)                                                                                 (x)     0.5    150       (c)                                           (x)      20

                                                                                                           0.4    125
   750                                                                                                                                                                             15
                                                                                                                  100
                                                                                                           0.3
   500                                                                                                             75                                                              10
                                                                                                           0.2
                                                                                                                   50
   250                                                                                                                                                                             5
                                                                                                           0.1
                                                                                                                   25
      0                                                                                                    0.0      0                                                              0
             2011      2012F      2013F     2014F    2015F                                                                    2011          2012F     2013F   2014F     2015F
            Net cash (debt) (LHS)       Net debt/EBITDA (RHS)                                                                                  EPS (LHS)      P/E (RHS)
Source: Nomura estimates                                                                                         Source: Nomura estimates

Management & significant shareholders
Board/Management
Chairman – Timothy Haddon
President/CFO – Edward Dowling
CFO – Douglas Tobler
COO – Luow Smith

Shareholders
Pala Investment Holdings – 19.4%
M&G Investment Management Ltd – 9.6%




                                                                                                                                                                                        42
Nomura | Alacer Gold Corp.                                                                                                April 2, 2012


Fig. 103: Alacer Gold Corp. – Model summary
                                               Alacer Gold Corp (AQG.AX)
 Primary Analyst: David Radclyffe                                           P&L (US$mn)                FY11    FY12F    FY13F FY14F
                                                                            Revenues                     557      835      944 1,063
 Rating                              Neutral Price (C$)             8.50    Operating Costs             -238     -349     -384  -459
 Target Price (A$)                     9.30 NPV (C$)                6.57    Other                       -129        0        0     0
                                                                            EBITDA                       191      486      560   604
 Price (A$)                            8.13 Price (US$)             8.43    D&A                          -92     -127     -107  -166
 NPV (A$)                              6.33 NPV (US$)               6.56    EBIT                          99      359      453   438
                                                                            Net Interest                 -25        3        4     6
 Shares (mn)                            293                                 Taxes                         10      -91     -114  -111
 Mcap (A$mn)                          2,381 Mcap (US$mn)           2,467    Adjustments                   -9      -57      -85   -81
 EV (A$mn)                            2,332 EV (US$mn)             2,416    Net Profit                    75      215      258   252

 Year End                               Dec                                 EPS (¢)                     29.0     73.3    88.0    86.1
                                                                            DPS (¢)                      0.0      0.0     0.0    17.2

 Assumptions                          FY11     FY12F FY13F FY14F            Cash Flows (US$mn)         FY11    FY12F    FY13F FY14F

 Gold (US$/oz)                        1,571    1,791      2,063    1,775    Receipts                    429       835     944   1,063
 Silver (US$/oz)                         36       42         49       35    Payments                   -138      -349    -384    -459
 Copper (USc/lb)                         4.0      3.8        3.5      3.3   Net Interest                 -7         3       4       6
 AUD/USD                                 1.0      1.0        1.1      1.1   Taxes                        -2       -91    -114    -111
                                                                            Other                       -24         0       0       0
                                                                            Operating Cash Flows        258       398     450     499
 Key Ratios                           FY11     FY12F FY13F FY14F
                                                                            Capex                      -122      -269    -458    -239
 PE (x)                                28.9     11.3        9.7      9.9    Disposals                     0         0       0       0
 EV/EBITDA (x)                         12.7      4.4        4.0      3.4    Exploration                   0       -48     -30     -30
 EPS Growth (%)                        N.M     152.4       20.1     -2.2    Other                        85        38       0       0
 ROE (%)                                5.4     10.5       10.3      8.5    Investing Cash Flows        -37      -279    -488    -269
 Net Debt to Equity (%)                -3.5    -14.6      -10.4    -15.8
 Net Debt to EBITDA (x)                -0.3     -0.6       -0.5     -0.8    Change in Borrowings         -1      -168     -52        0
 Dividend Yield (%)                     0.0      0.0        0.0      2.0    Dividends                     0         0       0      -21
 FCF Yield (%)                          5.8      3.4       -1.5      9.2    Equity                       13       129       0        0
                                                                            Other                         0         0       0        0
                                                                            Financing Cash Flows         11       -39     -52      -21

 Production & Costs                   FY11     FY12F FY13F FY14F            Balance Sheet (US$mn)      FY11    FY12F    FY13F FY14F

 Higginsville                           146      154       163      163     Cash                        250      330      241     450
 South Kalgoorlie                        32       43        42      119     Receivables                  21       42       47      53
 Copler                                 185      216       168      228     Inventories                  74       67       76      85
 Frog's Leg                              58       52        60       60     Other                         0        0        0       0
 Total Gold (koz)                       421      464       432      569     Current Assets              345      439      364     588

 By-Product Cash Costs (US$/oz)         621      657       676      643     Receivables                    0        0       0       0
                                                                            Investments                    0        0       0       0
 EV/Production (US$/oz)               5,741    4,677      5,106    3,513    Property, Plant & Equip.   1,431    1,700   2,158   2,397
 EV/Reserve (US$/oz)                    458      411        418      378    Intangibles                    0       48      78     108
 EV/Resource (US$/oz)                   255      229        233      211    Other                         26       26      26      26
                                                                            Non Current Assets         1,458    1,775   2,262   2,531
 Reserves (Moz)                          5.3 Resources (Moz)         9.5
                                                                            Total Assets               1,803    2,213   2,626   3,119
 EBIT (US$mn)                         FY11     FY12F FY13F FY14F
                                                                            Borrowings                  145        0        0       0
 Higginsville                            22       67       121       77     Payables                    155       83       94     106
 South Kalgoorlie                         0       13        31       56     Provisions                    0        0        0       0
 Çöpler                                 172      286       285      306     Other                         2        2        2       2
 Frog's Leg                              32       36        55       39     Current Liabilities         301       85       96     108

 NPV                                (US$mn)        Per Share                Payables
                                                                            Borrowings                   56       33      -19      -19
 Higginsville                           258               $0.88             Provisions                   41       41       41       41
 South Kalgoorlie                       352               $1.20             Other                        12       12       12       12
 Çöpler                               1,404               $4.79             Non Current Liabilities     109       86       34       34
 Frog's Leg                             205               $0.70
 Investments                              0               $0.00             Total Liabilities           410      171      130     142
 Net Cash                                49               $0.17
 Total                                1,910               $6.52             Total Equity               1,393    2,042   2,496   2,977
Source: Nomura estimates




                                                                                                                                      43
Evolution Mining                                      EVN.AX EVN AU

METALS & MINING
                                                                                                                    EQ U I T Y R E S E A R C H




Australian Gold Miners initiation                                                                       April 2, 2012

                                                                                                        Rating
                                                                                                                                         Buy
The new consolidator for the                                                                            Starts at

                                                                                                        Target price
                                                                                                                                     AUD 2.70
gold sector?                                                                                            Starts at

                                                                                                        Closing price
                                                                                                        March 29, 2012               AUD 1.73
                                                                                                        Potential upside               +56.1%


The newest Australian mid-tier gold stock plans to be Top 3 producer                                    Anchor themes
Evolution (EVN) is a growth-focused Australian gold company. The
company formed in 2011 from the merger of equals between Catalpa                                        Gold equities have
Resources and Conquest Mining. Concurrently EVN acquired the Cracow                                     underperformed the gold price
and Mt Rawdon mines from Newcrest Mining (NCM, Buy, A$45 target                                         however this is expected to
price). The company owns and operates four gold operations in                                           reverse as earnings growth is
Queensland and Western Australia and is currently developing a fifth                                    delivered. Robust cash
operation in Queensland. The company is targeting FY12F gold production                                 generation supports growth,
of 335-375koz and expects to increase it to 410-465koz of gold equivalent                               M&A and capital management.
by FY13F. If achieved, this would place EVN as the third-largest Australian-                            Nomura vs consensus
listed gold producer behind Newcrest and Alacer Gold (AQG, Neutral,
                                                                                                        Nomura’s estimate for FY12F
A$9.30 target price). In our view the stock trades on attractive FY13F
                                                                                                        NPAT is below consensus
multiples of P/E 5x and 2x EV/EBITDA. Nomura initiates coverage with a
                                                                                                        estimates.
Buy rating and A$2.70 target price, based on a combination of Nomura’s
one-year-forward gold price and the NPV adjusted for growth and risk.
                                                                                                        Research analysts
Catalysts
 Development and commissioning of Mt Carlton                                                           Australia Metals & Mining

 Continued exploration success across the portfolio                                                    David Cotterell - NAL
                                                                                                        david.cotterell@nomura.com
 Value-enhancing acquisitions to grow the company                                                      +61 2 8062 8433
                                                                                                        David Radclyffe - NIplc
Growth aspirations beyond current operations                                                            david.radclyffe@nomura.com
EVN has indicated its intention is to grow beyond the current portfolio of                              +61 2 8062 8434

assets through acquisitions in the gold and silver sector. Targets include                              Puneet Saxena
projects or operations in Australia or Southeast Asia that add meaningful                               puneet.saxena@nomura.com
                                                                                                        +44 20 7102 9162
growth and reduce the cash operating costs of the overall production
base. In addition the current suite of producing assets has exploration
potential to extend the current mine lives.

30 Jun                              FY11                FY12F               FY13F              FY14F
Currency (AUD)                      Actual      Old       New       Old         New    Old       New

Revenue (mn)                         123                  440                   797              995
Reported net profit (mn)                  -2               40                   259              381
Normalised net profit (mn)                -2               40                   259              381
Normalised EPS                     -1.27c                7.43c             34.48c             48.18c
Norm. EPS growth (%)               -132.4                  na               364.2               39.7
Norm. P/E (x)                            na    N/A        23.9      N/A          5.1   N/A        3.7
EV/EBITDA (x)                        42.8                  6.5                   2.0              0.7
Price/book (x)                           0.4   N/A         1.1      N/A          0.9   N/A        0.7
Dividend yield (%)                       na    N/A         na       N/A          na    N/A        na
ROE (%)                              -0.5                  4.2                  19.0            20.7    See Appendix A-1 for analyst
Net debt/equity (%)                      2.4          net cash            net cash           net cash   certification, important
Source: Company data, Nomura estimates
                                                                                                        disclosures and the status of
                                                                                                        non-US analysts.
Key company data: See page 2 for company data and detailed price/index chart.
Nomura | Evolution Mining                                                                                                       April 2, 2012



Key data on Evolution Mining
Income statement (AUDmn)                                                              Relative performance chart (one year)
Year-end 30 Jun                          FY10    FY11     FY12F     FY13F    FY14F
Revenue                                     22    123        440       797      995
Cost of goods sold                         -18     -81      -254      -345     -381
Gross profit                                 4      42       186       451      614
SG&A                                        -7     -33       -81       -90      -94
Employee share expense
Operating profit                            -3       9       105      361      520

EBITDA                                      -3      29       171      445      608
Depreciation                                 0     -20       -66      -84      -88    Source: ThomsonReuters, Nomura research
Amortisation                                                                           
                                                                                       (%)                                    1M     3M 12M
EBIT                                        -3        9      105      361      520
                                                                                          Absolute (AUD)                     -8.0 10.9   -0.1
Net interest expense                         1       -5        0        8       24
                                                                                          Absolute (USD)                     -9.4 14.8    2.5
Associates & JCEs
                                                                                          Relative to index                  -8.8    7.7 10.4
Other income
                                                                                          Market cap (USDmn)              1,308.8
Earnings before tax                        -2         4      105       370      544
                                                                                          Estimated free float (%)          63.0
Income tax                                 10        -6      -42      -111     -163
                                                                                          52-week range (AUD)           2.07/1.22
Net profit after tax                        8        -2       63       259      381
                                                                                          3-mth avg daily turnover
Minority interests                         -2         0      -24         0        0       (USDmn)
                                                                                                                            3.43
Other items                                                                               Major shareholders (%)
Preferred dividends                                                                       Newcrest Mining                   32.7
Normalised NPAT                             6        -2       40      259      381        Ruffer Investment
                                                                                                                              2.5
Extraordinary items                                                                       Management
Reported NPAT                               6        -2       40      259      381        Source: Thomson Reuters, Nomura research

Dividends                                   0         0        0        0        0
Transfer to reserves                        6        -2       40      259      381
                                                                                      Notes
Valuation and ratio analysis                                                               Earnings multiples are attractive
FD normalised P/E (x)                     45.2      na      23.9       5.1      3.7
FD normalised P/E at price target (x)     68.7      na      36.4       7.8      5.6        with FY13F P/E of ~5x and
Reported P/E (x)                          45.2      na      23.9       5.1      3.7        EV/EBITDA of 2x
Dividend yield (%)                          na      na        na        na       na
Price/cashflow (x)                        66.0    13.3       6.8       3.8      2.9
Price/book (x)                             2.1     0.4       1.1       0.9      0.7
EV/EBITDA (x)                               na    42.8       6.5       2.0      0.7
EV/EBIT (x)                                 na   137.1      10.5       2.4      0.9
Gross margin (%)                          17.6    34.0      42.4      56.7     61.7
EBITDA margin (%)                        -13.0    23.9      38.8      55.9     61.1
EBIT margin (%)                          -13.0     7.5      23.9      45.4     52.3
Net margin (%)                            24.9    -1.7       9.0      32.5     38.3
Effective tax rate (%)                      na   158.2      39.7      30.0     30.0
Dividend payout (%)                        0.0      na       0.0       0.0      0.0
Capex to sales (%)                       403.1    18.6      40.5      22.5     11.4
Capex to depreciation (x)                   na     1.1       2.7       2.1      1.3
ROE (%)                                     na    -0.5       4.2      19.0     20.7
ROA (pretax %)                              na     1.7      10.5      29.9     37.4

Growth (%)
Revenue                                  -99.1    454.4     256.3     81.0     24.9
EBITDA                                   -99.8       na     479.4    160.7     36.5
EBIT                                     -99.8       na   1,042.6    243.6     43.9
Normalised EPS                           -97.8   -132.4        na    364.2     39.7
Normalised FDEPS                            na   -132.4        na    364.2     39.7

Per share
Reported EPS (AUD)                       3.93c   -1.27c    7.43c    34.48c   48.18c
Norm EPS (AUD)                           3.93c   -1.27c    7.43c    34.48c   48.18c
Fully diluted norm EPS (AUD)             3.93c   -1.27c    7.43c    34.48c   48.18c
Book value per share (AUD)                0.85     4.24     1.60      2.07     2.64
DPS (AUD)                                 0.00     0.00     0.00      0.00     0.00
Source: Company data, Nomura estimates
                                                                                       




                                                                                                                                                45
Nomura | Evolution Mining                                                                                                April 2, 2012


Cashflow (AUDmn)                                                                           
Year-end 30 Jun                          FY10    FY11     FY12F      FY13F      FY14F     Notes
EBITDA                                      -3      29       171        445        608        FY12F EBITDA is forecast at
Change in working capital                    0      37       -50        -11         -6        ~A$170mn, increasing in subsequent
Other operating cashflow                     7     -44        19        -80       -121
                                                                                              years as Mt Carlton commences
Cashflow from operations                     4      22       140        355        481
Capital expenditure                        -90     -23      -178       -179       -113
Free cashflow                              -86      -1       -38        176        367
Reduction in investments                             1         0          0          0
Net acquisitions
Reduction in other LT assets                        -7       -36          0          0
Addition in other LT liabilities                    69       -40          0          0
Adjustments                                 2      -72        89          0          0
Cashflow after investing acts             -84      -10       -25        176        367
Cash dividends                              0        0         0          0         -8
Equity issue                               21       23       188         59         59
Debt issue                                 63      -18        -9          0          0
Convertible debt issue
Others                                      3       0         -5          0          0
Cashflow from financial acts               86       5        174         59         51
Net cashflow                                3      -5        149        235        419
Beginning cash                             32      35         30        179        414
Ending cash                                35      30        179        414        833
Ending net debt                            26      18       -135       -370       -789
Source: Company data, Nomura estimates



Balance sheet (AUDmn) 
As at 30 Jun                             FY10    FY11     FY12F      FY13F      FY14F     Notes
Cash & equivalents                         35      30       179        414        833         Balance sheet is in a strong net cash
Marketable securities                                                                         position
Accounts receivable                         1       3         22         40         50
Inventories                                10      18         35         64         80
Other current assets                        2       1          0          0          0
Total current assets                       48      52        236        518        962
LT investments                              1       0          0          0          0
Fixed assets                              154     782        972      1,139      1,240
Goodwill
Other intangible assets                     0      80          5         17         29
Other LT assets                            19      27         63         63         63
Total assets                              222     941      1,276      1,736      2,294
Short-term debt                            23      18          0          0          0
Accounts payable                           16      58         44         80        100
Other current liabilities                   2       6          5          5          5
Total current liabilities                  40      82         49         85        105
Long-term debt                             39      30         44         44         44
Convertible debt
Other LT liabilities                        5      73         33         33         33
Total liabilities                          83     185        126        162        181
Minority interest
Preferred stock
Common stock
Retained earnings
Proposed dividends
Other equity and reserves                 139     756      1,150      1,575      2,113
Total shareholders' equity                139     756      1,150      1,575      2,113
Total equity & liabilities                222     941      1,276      1,736      2,294

Liquidity (x)
Current ratio                            1.20     0.64      4.82       6.11       9.21
Interest cover                             na      1.8     593.9         na         na

Leverage
Net debt/EBITDA (x)                        na     0.61   net cash   net cash   net cash
Net debt/equity (%)                      18.8      2.4   net cash   net cash   net cash

Activity (days)
Days receivable                            na      5.7       10.3      14.2       16.4
Days inventory                             na     63.2       38.5      52.3       68.6
Days payable                               na    164.8       73.5      65.4       85.7
Cash cycle                                 na    -96.0      -24.8       1.1       -0.7
Source: Company data, Nomura estimates




                                                                                                                                      46
Nomura | Evolution Mining                                                                                               April 2, 2012



Investment view
Fig. 104: Map of operations




                                                                                                                    AUSTRALIA
                                                                                                                    Cracow
                                                                                              Edna May              Mt Carlton
                                                                                                                    Mt Rawdon
                                                                                                                    Pajingo




Source: Nomura research


Key projects
Evolution Mining formed in 2011 through a merger of equals between Catalpa
Resources and Conquest Mining Limited (both ASX listed companies) and the
concurrent purchase of Newcrest Mining’s stakes in the Cracow and Mt Rawdon mines.

Cracow
The Cracow mine is located in Queensland, 500km northwest of Brisbane. The Cracow
region has a long history of gold mining, with 850koz produced from 1932-1992,
predominantly from open-pit mining. The current underground operation commenced
production in 2004. The mine consists of five ore bodies (Royal Shoot, Crown Shoot,
Sovereign Shoot, Klondyke North and Kilkenny Shoot), each averaging five metres in
width. Gold production in FY11 totalled 102koz, with EVN forecasting 90-107koz in
FY12F at cash costs of A$670-A$740/oz.
The recent discovery of Kilkenny North continues to highlight the potential of near mine
exploration. EVN has budgeted A$5M for exploration in FY12F.

Fig. 105: Cracow - Production and cost profile                   Fig. 106: Cracow - EBITDA and capex profile

  120    (koz)                                   (A$/oz)   800     120     (A$mn)
                                                                   100
  100
                                                           600      80
   80
                                                                    60
   60                                                      400
                                                                    40
   40
                                                           200      20
   20                                                                 0
    0                                                      0       (20)
          2011     2012F      2013F     2014F    2015F                       2011         2012F      2013F  2014F     2015F
         Gold Eq Production (LHS)       By-Product Costs (RHS)                                    EBITDA Capex

Source: Company data, Nomura research                            Source: Company data, Nomura research




                                                                                                                                    47
Nomura | Evolution Mining                                                                                                April 2, 2012


Edna May
Edna May is located 350km east of Perth in Western Australia. The mine was first
operated in the 1950s and has had three historical periods of mining. Catalpa Resources
acquired the operation in 2007 and constructed the current open pit and process plant in
2009-2010, with first gold poured in April 2010. The process plant is a conventional
crushing, grinding, carbon-in-leach circuit producing a gold dore. Design capacity of the
plant is 2.8Mtpa and is planned to be expanded to 3.1Mtpa in FY12F.
Production in FY11 was 66koz, with EVN guidance of 85-93koz in FY12F at cash costs
of A$890-A$990/oz.

Fig. 107: Edna May - Production and cost profile                   Fig. 108: Edna May - EBITDA and capex profile

 120     (koz)                                   (A$/oz)   1,200     150    (A$mn)

 100                                                       1,000     100
  80                                                       800
                                                                      50
  60                                                       600
                                                                       0
  40                                                       400

  20                                                       200       (50)

   0                                                        0       (100)
         2011     2012F      2013F      2014F    2015F                         2011       2012F      2013F  2014F     2015F
         Gold Eq Production (LHS)        By-Product Costs (RHS)                                   EBITDA Capex

Source: Company data, Nomura research                              Source: Company data, Nomura research


Mt Rawdon
The Mt Rawdon operation is located 75km southwest of Bundaberg in Queensland. The
project has been in production since 2001, producing ~100kozpa of gold, with additional
silver credits. The process plant has throughput capacity of 3.5Mtpa, producing a gold-
silver dore. Gold production in FY11 was 90koz, with EVN forecasting 90-105koz in
FY12F at cash costs of A$760-870/oz.

Fig. 109: Mt Rawdon - Production and cost profile                  Fig. 110: Mt Rawdon - EBITDA and capex profile

 120     (koz)                                   (A$/oz)   1,200     140     (A$mn)
                                                                     120
 100                                                       1,000
                                                                     100
  80                                                       800        80
  60                                                       600        60
                                                                      40
  40                                                       400
                                                                      20
  20                                                       200
                                                                        0
   0                                                       0         (20)
         2011     2012F      2013F      2014F    2015F                         2011         2012F      2013F  2014F     2015F
         Gold Eq Production (LHS)        By-Product Costs (RHS)                                     EBITDA Capex
Source: Company data, Nomura research                              Source: Company data, Nomura research


Pajingo
The Pajingo mine, located in North Queensland 50km south of Charters Towers, is a
mature operation which commenced production in 1986. Ore is mined from both
underground and open pits and then processed onsite to produce a gold-silver dore.
Currently the processing plant’s design capacity is 650ktpa, but is currently operated at
350-450ktpa due to mine constraints. The mine produced 46koz in FY11 and is forecast
to increase production to 70koz in FY12F, at cash costs of A$800/oz, as capacity in the
plant is increased.
The mine life is short at five years, however exploration continues to be successful, with
new gold zones discovered along strike and adjacent to current mine development.
History has also demonstrated a strong conversion of resources to reserves.




                                                                                                                                     48
Nomura | Evolution Mining                                                                                                 April 2, 2012


Fig. 111: Pajingo - Production and cost profile                     Fig. 112: Pajingo - EBITDA and capex profile

  80    (koz)                                     (A$/oz)   1,200     100     (A$mn)

                                                            1,000      80
  60
                                                            800        60

  40                                                        600        40

                                                            400        20
  20
                                                            200          0

   0                                                        0         (20)
         2011     2012F      2013F      2014F    2015F                          2011         2012F      2013F  2014F     2015F
         Gold Eq Production (LHS)        By-Product Costs (RHS)                                      EBITDA Capex
Source: Company data, Nomura research                               Source: Company data, Nomura research


Mt Carlton
The Mt Carlton gold-silver-copper project is located in North Queensland, 150km south
of Townsville. The project consists of two near surface deposits, the larger V2 deposit
and the smaller A39 deposit, discovered in 2006. Mining is planned to be via open pit,
with conventional crushing, grinding and flotation to produce a polymetallic concentrate.
EVN was granted a mining lease in 2011 and commenced construction in December
2011. The current schedule is targeting commissioning of the plant in December 2012.
Nomura estimates commercial production in 2HFY13F ramping up to ~150kozpa of gold
equivalent production by 2015, at co-product cash costs of ~A$700/oz. EVN currently
forecasts a mine life of 12 years, with potential at depth beneath A39 and also nearby to
increase the mine life. EVN has budgeted A$5.5mn in FY12F at Mt Carlton to
exploration.

Fig. 113: Mt Carlton - Production and cost profile                  Fig. 114: Mt Carlton - EBITDA and capex profile

  100    (koz)                                    (A$/oz)    800      300    (A$mn)
                                                             700      250
   80                                                                 200
                                                             600
   60                                                        500      150
                                                             400      100
   40                                                        300       50
                                                             200        0
   20
                                                             100      (50)
    0                                                        0       (100)
           2011     2012F      2013F     2014F     2015F                        2011       2012F      2013F  2014F     2015F
           Gold Production (LHS)        Co-Product Costs (RHS)                                     EBITDA Capex
Source: Company data, Nomura research                               Source: Company data, Nomura research


Balance sheet
EVN has a reasonably strong balance sheet, which as at December 31, 2011 was in a
net cash position of A$124mn. Nomura estimates EBITDA in FY12F of ~A$170mn, with
capital expenditure expected to be ~A$170mn. Capex requirements in FY12F largely
relate to the plant expansion at Edna May and the development and construction of Mt
Carlton. Nomura assumes no dividends until FY14F, following the completion of
development and subsequent ramp-up of Mt Carlton.

Hedging
EVN has a small gold hedge book covering production from the Edna May mine. The
hedge book is a legacy from Catalpa Resources and consists of forward contracts
settled on a quarterly basis by physical delivery of gold. As at December 31, 2011
remaining hedges totaled 255,333oz at a fixed gold price of A$1,573/oz, expiring in
FY15F. Nomura estimates hedging in FY13F and FY14F at ~24% and ~20% of the total
production.




                                                                                                                                      49
Nomura | Evolution Mining                                                                                                                                                                                     April 2, 2012


Fig. 115: Evolution – EV/Reserves and EV/Resources                                                                                                 Fig. 116: Evolution – hedging profile
 450                                                                                                                                                           2012F          2013F        2014F      2015F
            (US$/oz)
 400                                                                                                                                                   0                                                            5
 350
                                                                                                                                                      20
 300                                                                                                                                                                                                                (5)
 250                                                                                                                                                  40
 200
                                                                                                                                                      60                                                            (15)
 150
 100                                                                                                                                                  80
                                                                                                                                                                                                                    (25)
  50
                                                                                                                                                    100
   0                                                                                                                                                        (koz)                                      (A$mn)
                2011                  2012F     2013F                                    2014F     2015F                                            120                                                             (35)
                                     EV/Reserves                                      EV/Resources                                                                     Hedged (LHS)          Gain/Loss (RHS)
Source: Company data, Nomura research                                                                                                              Source: Company data, Nomura research


NPV & risk analysis
Nomura values EVN at A$2.26/share, based on DCF analysis using a 5% discount rate
and Nomura’s long-term gold price forecast of US$1,200/oz. The charts below highlight
the NPV breakdown by asset and also the change in NPV through time.
Nomura’s target price for EVN of A$2.70/share is based on a combination of Nomura’s
one-year-forward gold price and the NPV adjusted for growth and risk. Risks to the
achievement of the target price include operational performance of each mine, cost
inflation, AUD/USD fluctuations and commodity price volatility.

Fig. 117: NPV waterfall chart                                                                                                                      Fig. 118: Valuation trend
 3.0       (A$)                                                                                                                                     3.00    (A$)
 2.5                                                       $0.23                                                     $0.18$2.26
                                              $0.48                                 $0.08                       $0.01                               2.50
 2.0                            $0.53                                 -$0.21                        -$0.07
 1.5                                                                                                                                                2.00
                    $0.65
 1.0                                                                                                                                                1.50
           $0.39
 0.5
                                                                                                                                                    1.00
 0.0
                                                                        Corporate
                                                            Pajingo




                                                                                      Exploration

                                                                                                      Hedging

                                                                                                                 Investments
           Cracow




                                                                                                                                           Total
                     Edna May

                                 Mt Carlton

                                               Mt Rawdon




                                                                                                                               Net Cash




                                                                                                                                                    0.50

                                                                                                                                                    0.00
                                                                                                                                                            Current Per          +1 Yr        +2 Yr       +3 Yr
                                                                                                                                                              Share
Source: Nomura research                                                                                                                            Source: Nomura research




Fig. 119: Evolution - Production and cost profile                                                                                                  Fig. 120: Evolution - EBITDA and capex profile

  600           (koz)                                                                                           (A$/oz)                   1,000      700     (A$mn)
                                                                                                                                                     600
  500                                                                                                                                     800        500
  400                                                                                                                                                400
                                                                                                                                          600        300
  300                                                                                                                                                200
                                                                                                                                          400        100
  200
                                                                                                                                                       0
  100                                                                                                                                     200       (100)
                                                                                                                                                    (200)
       0                                                    0                                                                                       (300)
               2009 2010 2011 2012F 2013F 2014F 2015F                                                                                                        2009      2010    2011 2012F 2013F 2014F 2015F
                Total Equiv Gold Payable (LHS) Cash costs (RHS)                                                                                                                   EBITDA Capex

Source: Company data, Nomura research                                                                                                              Source: Company data, Nomura research




                                                                                                                                                                                                                           50
Nomura | Evolution Mining                                                                                                 April 2, 2012


Fig. 121: Evolution - Debt profile and debt ratio                 Fig. 122: Evolution - Earnings & P/E ratio

 1,200     (A$mn)                                   (x)   0.5       60    (c)                                       (x)      25
 1,000                                                              50                                                       20
                                                          0.4
                                                                                                                             15
   800                                                              40
                                                          0.3                                                                10
   600                                                              30                                                       5
                                                          0.2
   400                                                              20                                                       0
                                                          0.1                                                                (5)
   200                                                              10
                                                          0.0                                                                (10)
     0                                                               0                                                       (15)
  (200)                                                   (0.1)   (10)                                                       (20)
           2009 2010 2011 2012F 2013F 2014F 2015F                         2009     2010    2011 2012F 2013F 2014F 2015F
            Net cash (debt) (LHS) Net debt/EBITDA (RHS)                                    EPS (LHS)     P/E (RHS)
Source: Company data, Nomura research                             Source: Company data, Nomura research


Management & significant shareholders
Board/Management
Executive Chairman - Jake Klein
CFO – Tim Churcher
VP Operations – Mark Le Messurier

Shareholders
Newcrest Mining – 32.7%
Ruffer Investment Management – 2.5%




                                                                                                                                      51
Nomura | Evolution Mining                                                                                                      April 2, 2012


Fig. 123: Evolution Mining – Model Summary
                                                    Evolution Mining (EVN.AX)
 Primary Analyst: David Cotterell                                              P&L (A$mn)                 FY11    FY12F    FY13F    FY14F
                                                                               Revenues                    123       440      797      995
 Rating                                     Buy                                Operating Costs              -81     -254     -345     -381
 Target Price (A$)                          2.70                               Other                       -13       -16       -6       -6
                                                                               EBITDA                        29      171      445      608
 Price (A$)                                 1.73 Price (US$)            1.79   D&A                         -20       -66      -84      -88
 NPV (A$)                                   2.26 NPV (US$)              2.34   EBIT                           9      105      361      520
                                                                               Net Interest                  -5        0        8       24
 Shares (mn)                                701                                Taxes                         -6      -42     -111     -163
 Mcap (A$mn)                              1,213 Mcap (US$mn)           1,257   Adjustments                    0      -24        0        0
 EV (A$mn)                                1,231 EV (US$mn)             1,275   Net Profit                    -2       40      259      381

 Year End                                  June                                EPS (¢)                     -1.3      7.4     34.5     48.2
                                                                               DPS (¢)                      0.0      0.0      0.0      2.0

 Assumptions                               FY11    FY12F       FY13F FY14F     Cash Flows (A$mn)          FY11    FY12F    FY13F    FY14F

 Gold (US$/oz)                            1,373    1,707       1,919   1,963   Receipts                    122      436      797       995
 Silver (US$/oz)                             29       39          46      42   Payments                    -97     -275     -345      -381
 Copper (USc/lb)                           3.94     3.75        3.63    3.38   Net Interest                 -3        2        8        24
                                                                               Taxes                         0      -25     -111      -163
 AUD/USD                                    0.99     1.03       1.03    1.05   Other                         0        3        6         6
                                                                               Operating Cash Flows         22      140      355       481

 Key Ratios                                FY11    FY12F       FY13F FY14F     Capex                       -23     -173     -167      -101
                                                                               Disposals                     0        0        0         0
 PE (x)                                     N.M      23.3        5.0     3.6   Exploration                   0       -5      -12       -12
 EV/EBITDA (x)                              41.7      6.3        1.9     0.7   Other                       -10       13        0         0
 EPS Growth (%)                           -132.4   -683.9      364.2    39.7   Investing Cash Flows        -33     -165     -179      -113
 ROE (%)                                    -0.3      3.5       16.4    18.0
 Net Debt to Equity (%)                      2.4    -11.8      -23.5   -37.3   Change in Borrowings        -18       -9        0         0
 Net Debt to EBITDA (x)                      0.6     -0.8       -0.8    -1.3   Dividends                     0        0        0        -8
 Dividend Yield (%)                          0.0      0.0        0.0     1.1   Equity                       23      188       59        59
 FCF Yield (%)                              -0.2     -3.0       13.4    26.5   Other                         0       -5        0         0
                                                                               Financing Cash Flows          5      174       59        51

 Production & Costs                        FY11    FY12F       FY13F FY14F     Balance Sheet (A$mn)       FY11    FY12F    FY13F    FY14F

 Total Gold (koz)                           304      341         398    458    Cash                         30      179      414       833
 Total Silver (koz)                         180      287         433    586    Receivables                   3       22       40        50
 Total Copper (kt)                            0        0           1      3    Inventories                  18       35       64        80
                                                                               Other                         1        0        0         0
 Total Equivalent Gold Payable (koz)        294      321         432    535    Current Assets               52      236      518       962

 Gold By-Product Cash Costs (A$/oz)         787      883         525    281    Receivables                   0         0        0        0
                                                                               Investments                   0         0        0        0
 EV/Production (US$/oz)                   4,015    3,255    2,176       971    Property, Plant & Equip.    782       972    1,139    1,240
 EV/Reserves (US$/oz)                       388      353      275       142    Intangibles                  80         5       17       29
 EV/Resources (US$/oz)                      207      188      147        76    Other                        27        63       63       63
 Resources (Moz)                             5.9 Reserves (Moz)          3.1   Non Current Assets          889     1,040    1,219    1,332

 EBIT (A$mn)                               FY11    FY12F       FY13F FY14F     Total Assets                941     1,276    1,736    2,294
 Cracow                                      48       60          83    86
 Edna May                                    11       22         100   104     Borrowings                   18        0        0         0
 Mt Carlton                                   0        0          60   218     Payables                     58       44       80       100
 Mt Rawdon                                   47       54         104    98     Provisions                    6        5        5         5
 Pajingo                                      4       39          61    64     Other                         0        0        0         0

 NPV                                     (A$mn)         Per Share
 Cracow                                      275             $0.39             Current Liabilities          82       49       85       105
 Edna May                                    455             $0.65
 Mt Carlton                                  371             $0.53             Payables
 Mt Rawdon                                   334             $0.48             Borrowings                   30       44       44        44
 Pajingo                                     162             $0.23             Provisions                   22       33       33        33
 Exploration                                  59             $0.08             Other                        52        0        0         0
 Corporate                                  -147            -$0.21             Non Current Liabilities     103       77       77        77
 Hedging                                     -56            -$0.08
 Investments                                   6             $0.01             Total Liabilities           185      126      162       181
 Net Cash                                    124             $0.18
 Total                                     1,583             $2.26             Total Equity                756     1,150    1,575    2,113
Source: Company data, Nomura estimates




                                                                                                                                           52
Newcrest Mining                                    NCM.AX NCM AU

METALS & MINING
                                                                                                                   EQ U I T Y R E S E A R C H




Australian Gold Miners initiation                                                                        April 2, 2012

                                                                                                         Rating
                                                                                                                                          Buy
A cut above the rest                                                                                     Remains

                                                                                                         Target price
                                                                                                         Remains                      AUD 45.00
                                                                                                         Closing price
                                                                                                         March 29, 2012               AUD 30.23
                                                                                                         Potential upside               +48.9%


World-class gold portfolio, looking to remain regionally dominant                                        Anchor themes
Newcrest Mining (NCM) is the largest ASX-listed gold producer and one of                                 Gold equities have
the top five gold producers in the world. The company has several world-                                 underperformed the gold price,
class operations and rojects including Cadia Valley, Telfer, Lihir and Wafi-                             however this is expected to
Golpu. In FY11 NCM produced 2.5Moz of gold and 76kt of copper, and in                                    reverse as earnings growth is
FY12F has provided production guidance of 2.43-2.55Moz of gold and 75-                                   delivered. Robust cash
85kt of copper (reflecting operational issues). The company intends to grow                              generation supports growth,
the business 5-10% per year, focusing on Oceania and utilising in-house                                  M&A and capital management.
exploration expertise and leveraging the knowledge of sub-level and block
caving. Nomura maintains a Buy rating and target price of A$45.00, based                                 Nomura vs consensus
on a combination of our forward gold price NPV adjusted for growth and                                   Nomura's estimates for FY12F
risks.                                                                                                   are in line with consensus
                                                                                                         estimates.
Catalysts
 Delivery of key growth projects – Cadia East and Lihir expansion                                       Research analysts


 Pre-Feasibility Study results for Wafi-Golpu, O’Callaghans and Namosi                                  Australia Metals & Mining

 Continued exploration success across the portfolio                                                     David Cotterell - NAL
                                                                                                         david.cotterell@nomura.com
                                                                                                         +61 2 8062 8433
Targeting ~4Mozpa production                                                                             David Radclyffe - NIplc
NCM is targeting to lift production from a FY11 level of 2.5Moz of gold and                              david.radclyffe@nomura.com
76kt of copper to ~4Moz of gold and 150kt of copper by FY16F. The five-                                  +61 2 8062 8434

year growth plan is driven by development of Cadia East and the Lihir                                    Puneet Saxena
                                                                                                         puneet.saxena@nomura.com
plant expansion, both of which are due for completion in 2012. Planned                                   +44 20 7102 9162
growth beyond these levels is dependent on development of the Wafi-
Golpu project. Exploration remains a key focus, with NCM highly
successful in discovering, developing and expanding world-class deposits.

30 Jun                              FY11               FY12F                FY13F               FY14F
Currency (AUD)                      Actual       Old     New        Old         New       Old     New

Revenue (mn)                        4,103      4,919    4,816     6,155     6,106      6,453     6,569
Reported net profit (mn)             908       1,357    1,281     2,281     2,249      2,445     2,533
Normalised net profit (mn)           908       1,357    1,281     2,281     2,249      2,445     2,533
Normalised EPS                       1.26       1.77     1.67      2.98         2.94     3.19     3.31
Norm. EPS growth (%)                     9.8    40.2     32.4      68.0         75.4      7.2     12.7
Norm. P/E (x)                        23.1       N/A      17.5       N/A         10.0     N/A       8.8
EV/EBITDA (x)                        11.2       11.5     10.3       7.2          6.2      6.6      5.4
Price/book (x)                           1.6    N/A       1.5       N/A          1.3     N/A       1.1
Dividend yield (%)                       1.7    N/A       1.1       N/A          2.0     N/A       2.3
ROE (%)                                  9.6     9.4      8.9      14.0         13.8     13.0     13.5   See Appendix A-1 for analyst
Net debt/equity (%)                      4.4     9.2      9.7       1.1          1.6 net cash net cash   certification, important
Source: Company data, Nomura estimates
                                                                                                         disclosures and the status of
                                                                                                         non-US analysts.
Key company data: See page 2 for company data and detailed price/index chart.
Nomura | Newcrest Mining                                                                                                        April 2, 2012



Key data on Newcrest Mining
Income statement (AUDmn)                                                              Relative performance chart (one year)
Year-end 30 Jun                           FY10     FY11    FY12F    FY13F    FY14F
Revenue                                   2,815    4,103    4,816    6,106    6,569
Cost of goods sold                       -1,268   -1,900   -2,365   -2,364   -2,490
Gross profit                              1,547    2,203    2,452    3,742    4,079
SG&A                                       -423     -659     -720     -698     -683
Employee share expense
Operating profit                         1,124    1,544     1,731    3,044    3,396

EBITDA                                   1,425    2,045     2,324    3,682    4,019
Depreciation                              -301     -501      -592     -638     -623   Source: ThomsonReuters, Nomura research
Amortisation                                                                           
                                                                                       (%)                                   1M      3M 12M
EBIT                                     1,124    1,544     1,731    3,044    3,396
                                                                                          Absolute (AUD)                    -12.7    -7.0 -24.5
Net interest expense                       -33      -36       -49      -59        5
                                                                                          Absolute (USD)                    -14.0    -3.7 -22.5
Associates & JCEs
                                                                                          Relative to index                 -13.5 -10.2 -14.1
Other income
                                                                                          Market cap (USDmn)            23,551.9
Earnings before tax                      1,090    1,508     1,682    2,985    3,401
                                                                                          Estimated free float (%)         100.0
Income tax                                -209     -334      -482     -895   -1,020
                                                                                          52-week range (AUD)          42.68/28.7
Net profit after tax                       882    1,174     1,200    2,089    2,381
                                                                                          3-mth avg daily turnover
Minority interests                        -325     -266        82      159      152       (USDmn)
                                                                                                                          115.03
Other items                                                                               Major shareholders (%)
Preferred dividends                                                                       Blackrock Investment
                                                                                                                             12.6
Normalised NPAT                            557      908     1,281    2,249    2,533       Management LLC
Extraordinary items                                                                       Fidelity Management and
                                                                                                                              7.0
                                                                                          Research
Reported NPAT                              557      908     1,281    2,249    2,533       Source: Thomson Reuters, Nomura research
Dividends                                 -121     -373      -247     -450     -507
Transfer to reserves                       436      535     1,034    1,799    2,027

Valuation and ratio analysis                                                          Notes
FD normalised P/E (x)                     25.4     23.1      17.5     10.0      8.8        Earnings multiples are attractive
FD normalised P/E at price target (x)     41.7     38.0      28.7     16.3     14.5        for a company of this size
Reported P/E (x)                          25.4     23.1      17.5     10.0      8.8
Dividend yield (%)                         0.5      1.7       1.1      2.0      2.3
Price/cashflow (x)                        10.9     12.1      11.3      7.9      7.2
Price/book (x)                             4.5      1.6       1.5      1.3      1.1
EV/EBITDA (x)                             15.6     11.2      10.3      6.2      5.4
EV/EBIT (x)                               19.7     14.9      13.8      7.5      6.4
Gross margin (%)                          55.0     53.7      50.9     61.3     62.1
EBITDA margin (%)                         50.6     49.8      48.2     60.3     61.2
EBIT margin (%)                           39.9     37.6      35.9     49.8     51.7
Net margin (%)                            19.8     22.1      26.6     36.8     38.6
Effective tax rate (%)                    19.1     22.1      28.7     30.0     30.0
Dividend payout (%)                       21.7     41.1      19.3     20.0     20.0
Capex to sales (%)                         7.2     11.7      48.2     21.4     23.4
Capex to depreciation (x)                  0.7      1.0       3.9      2.0      2.5
ROE (%)                                     na      9.6       8.9     13.8     13.5
ROA (pretax %)                              na     13.6       9.5     15.3     15.8

Growth (%)
Revenue                                   10.9     45.8      17.4     26.8      7.6
EBITDA                                    37.5     43.6      13.6     58.5      9.2
EBIT                                      45.3     37.4      12.1     75.8     11.6
Normalised EPS                              na      9.8      32.4     75.4     12.7
Normalised FDEPS                            na      9.8      32.4     75.4     12.7

Per share
Reported EPS (AUD)                        1.15     1.26      1.67     2.94     3.31
Norm EPS (AUD)                            1.15     1.26      1.67     2.94     3.31
Fully diluted norm EPS (AUD)              1.15     1.26      1.67     2.94     3.31
Book value per share (AUD)                6.55    18.15     19.59    22.88    26.29
DPS (AUD)                                 0.16     0.49      0.32     0.59     0.66
Source: Company data, Nomura estimates
                                                                                       




                                                                                                                                                  54
Nomura | Newcrest Mining                                                                                                 April 2, 2012


Cashflow (AUDmn)                                                                           
Year-end 30 Jun                            FY10      FY11    FY12F    FY13F     FY14F     Notes
EBITDA                                     1,425     2,045    2,324    3,682     4,019        Cashflow remains strong despite the
Change in working capital                      0      -210      808      -39       -14        project buildout
Other operating cashflow                    -121      -106   -1,144     -795      -881
Cashflow from operations                   1,303     1,729    1,987    2,848     3,124
Capital expenditure                         -202      -482   -2,324   -1,307    -1,537
Free cashflow                              1,102     1,247     -337    1,541     1,586
Reduction in investments                                 0        0        0         0
Net acquisitions
Reduction in other LT assets                        -4,174     -716        0         0
Addition in other LT liabilities                     1,330       47        0         0
Adjustments                                 -685     1,032      650        0         0
Cashflow after investing acts                417      -565     -356    1,541     1,586
Cash dividends                              -112      -231     -391     -371      -525
Equity issue                                 -16         0        4        4         0
Debt issue                                     0       427      744        0         0
Convertible debt issue
Others                                       -12       -89      -42        0         0
Cashflow from financial acts                -140       107      315     -368      -525
Net cashflow                                 277      -458      -40    1,173     1,062
Beginning cash                               366       643      185      142     1,315
Ending cash                                  644       185      145    1,315     2,376
Ending net debt                             -217       615    1,459      286      -775
Source: Company data, Nomura estimates



Balance sheet (AUDmn) 
As at 30 Jun                               FY10      FY11    FY12F    FY13F     FY14F     Notes
Cash & equivalents                          643       185      142     1,315     2,376        Gearing levels remain very low at
Marketable securities                                                                         ~8%
Accounts receivable                          280       441      241      305       328
Inventories                                  267       691      385      488       526
Other current assets                         220       225        0        0         0
Total current assets                       1,411     1,542      768    2,109     3,230
LT investments                                 0         0        0        0         0
Fixed assets                               4,320    10,985   12,981   14,168    15,585
Goodwill
Other intangible assets                       83        61      174      294       414
Other LT assets                              520     4,694    5,410    5,410     5,410
Total assets                               6,334    17,282   19,332   21,980    24,639
Short-term debt                                6       116        0        0         0
Accounts payable                             209       432      482      611       657
Other current liabilities                    113       269      296      296       296
Total current liabilities                    327       817      778      907       953
Long-term debt                               421       684    1,601    1,601     1,601
Convertible debt
Other LT liabilities                         576     1,906    1,953    1,953     1,953
Total liabilities                          1,324     3,407    4,332    4,461     4,507
Minority interest
Preferred stock
Common stock
Retained earnings
Proposed dividends
Other equity and reserves                  5,010    13,875   15,001   17,519    20,132
Total shareholders' equity                 5,010    13,875   15,001   17,519    20,132
Total equity & liabilities                 6,334    17,282   19,332   21,980    24,639

Liquidity (x)
Current ratio                               4.31      1.89     0.99     2.33      3.39
Interest cover                              33.8      42.9     35.1     52.0        na

Leverage
Net debt/EBITDA (x)                      net cash     0.30     0.63     0.08   net cash
Net debt/equity (%)                      net cash      4.4      9.7      1.6   net cash

Activity (days)
Days receivable                               na      32.1     25.9     16.3      17.6
Days inventory                                na      92.0     83.3     67.5      74.3
Days payable                                  na      61.6     70.7     84.3      92.9
Cash cycle                                    na      62.5     38.5     -0.5      -1.0
Source: Company data, Nomura estimates




                                                                                                                                     55
Nomura | Newcrest Mining                                                                                                     April 2, 2012


Fig. 124: Map of operations




                                           IVORY COAST
                                              Bonikro
                                                                                             INDONESIA               PAPUA NEW GUINEA
                                                                                              Gosowong               Wafi-Golpu
                                                                                                                     Hidden Valley
                                                                                              AUSTRALIA              Lihir          FIJI
                                                                                                                                   Namosi
                                                                                              Telfer
                                                                                              O’ Callaghans
                                                                                                                          Cadia Hill
                                                                                                                          Cadia East
                                                                                                                          Ridgeway




Source: Company data, Nomura research


Key operations/projects
Lihir
Lihir is located on Niolam Island, 900km north of Port Moresby in Papua New Guinea.                   FY12F production guidance is
The mine was acquired in 2010 through the merger with ASX-listed Lihir Gold. Lihir is a               715-750koz of gold
world-class deposit with 32Moz in reserves and 57Moz in resources. The mine consists
of a single ore body with three linked open pits (Lienetz, Minifie and Kapit). The gold
present in the ore is refractory, which requires pressure oxidation using autoclaves
followed by a conventional carbon-in-leach (CIL) circuit.
The process plant is currently undergoing an expansion (involving installation of an
additional large autoclave; additional crushing; grinding; thickening; oxygen and cyanide
leach circuits), due for completion at the end of CY12, which would see gold production
lift to 1.2-1.3Mozpa. Total capital cost for the plant upgrade is US$1.3bn.
NCM estimates that further plant optimisation could potentially increase production to
1.4-1.5Mozpa in five years. Nomura assumes the operation reaches 1.2Mozpa by
FY14F, but has taken a conservative view on an optimisation to 1.5Mozpa and currently
excludes it from the base-case valuation.

Fig. 125: Lihir – Production and cost profile                    Fig. 126: Lihir – EBITDA and capex profile
 1,400 (koz)                                    (A$/oz)   600      2,000    (A$mn)
 1,200                                                    500      1,500
 1,000
                                                          400      1,000
   800
                                                          300        500
   600
                                                          200          0
   400
   200                                                    100       (500)

     0                                                 0          (1,000)
         2009 2010 2011 2012F 2013F 2014F 2015F                              2009     2010     2011 2012F 2013F 2014F 2015F
         Gold Production (LHS) By-Product Cash Costs (RHS)                                       EBITDA Capex
Source: Company data, Nomura estimates                           Source: Company data, Nomura estimates




                                                                                                                                         56
Nomura | Newcrest Mining                                                                                                         April 2, 2012


Cadia Valley Operations
The Cadia Valley Operations are located ~250km west of Sydney near Orange in central                      FY12F production guidance
New South Wales. The operation comprises the Cadia Hill open pit mine, the Ridgeway                       from Cadia Valley is 520-550koz
underground mine and the Cadia East project. Cadia Hill has been in production since                      of gold and 40-45kt of copper
1996, with Ridgeway commencing in 2002.
NCM is currently completing development of the Cadia East project, which is forecast to
commence production in the December quarter of 2012. Cadia East is a world-class
deposit, containing reserves of 22Moz gold and 4Mt copper, with resources of 33Moz
gold and 7Mt copper. The deposit is on the eastern edge of the Cadia Hill orebody, a key
part of NCM’s production base for >15 years. NCM is developing Cadia East as a panel
cave (series of block caves), with the potential for production in the first 10 years of 700-
800koz of gold and 75-100kt of copper from the Cadia Valley Operations (including
Ridgeway). The timing of the production ramp-up at Cadia East is expected to occur as
the Cadia Hill open pit operation begins to close.

Fig. 127: Cadia Valley – Production and cost profile                 Fig. 128: Cadia Valley – EBTIDA and capex profile

 1,000 (koz)                                     (A$/oz)       600     1,500      (A$mn)

                                                               500     1,000
   800
                                                               400       500
   600
                                                               300           0
   400
                                                               200     (500)
   200                                                         100    (1,000)

       0                                                   0          (1,500)
             2009 2010 2011 2012F 2013F 2014F 2015F                                2009    2010    2011 2012F 2013F 2014F 2015F
            Gold Production (LHS) By-Product Cash costs (RHS)                                        EBITDA Capex

Source: Company data, Nomura estimates                               Source: Company data, Nomura estimates


Telfer
The Telfer operation is located in northwest Western Australia, ~450km southeast of Port                  FY12F production guidance is
Hedland. The operation comprises of an open pit mine (Main Dome and West Dome                             525-560koz of gold and 30-35kt
deposits) and an underground mine (beneath Main Dome open pit). Telfer has been a                         of copper
key operation for NCM since 1990, with the original mine operating until 2000 before
being placed on care and maintenance due to issues with cyanide soluble copper. NCM
completed a feasibility study on the operation in November 2002 and, following an
extensive rebuild process, reopened the mine in July 2005.
The process plant is designed to process a range of mineralization and ore types and
involves two processing trains containing two stage grinding circuits, a gravity gold
circuit, flotation and a carbon-in-leach circuit. Oxide ores, found in the top 200m of the
deposits, are treated on dump leach pads to produce gold doré. The gold doré and gold-
copper concentrate are trucked to Port Hedland for shipping to smelters in East Asia.

Fig. 129: Telfer – Production and cost profile                       Fig. 130: Telfer – EBTIDA and capex profile
 800       (koz)                                (A$/oz)    1,400       600       (A$mn)
                                                                       500
                                                           1,200
                                                                       400
 600                                                       1,000
                                                                       300
                                                           800         200
 400
                                                           600         100
                                                                         0
 200                                                       400
                                                                     (100)
                                                           200
                                                                     (200)
   0                                                       0         (300)
           2009 2010 2011 2012F 2013F 2014F 2015F                                 2009    2010    2011 2012F 2013F 2014F 2015F
            Gold Production (LHS) By-Product Cash Costs (RHS)                                        EBITDA Capex
Source: Company data, Nomura estimates                               Source: Company data, Nomura estimates




                                                                                                                                             57
Nomura | Newcrest Mining                                                                                                       April 2, 2012


Gosowong
The Gosowong operation is situated 2,400km northeast of Jakarta on Halmahera Island,                    NCM production guidance for
Indonesia. The operation consists of the Kencana high grade underground mine, which                     FY12F is 450koz of gold
is the third mine NCM has developed at the Gosowong and is the first underground mine.
Production commenced in 2006, with ore processed through the existing Gosowong
processing plant. The processing plant comprises crushing and grinding, followed by a
cyanide leach circuit. The Merrill-Crowe process is then used to recover gold and silver
and smelted to produce doré.

Fig. 131: Gosowong – Production and cost profile                   Fig. 132: Gosowong – EBTIDA and capex profile

         (koz)                                   (A$/oz)            1,000     (A$mn)
  600                                                       500

  500                                                                 800
                                                            400
  400                                                                 600
                                                            300
  300                                                                 400
                                                            200
  200                                                                 200

  100                                                       100          0

    0                                                  0             (200)
         2009 2010 2011 2012F 2013F 2014F 2015F                               2009      2010     2011 2012F 2013F 2014F 2015F
         Gold Production (LHS) By-Product Cash Costs (RHS)                                         EBITDA Capex

Source: Company data, Nomura estimates                             Source: Company data, Nomura estimates


Hidden Valley
The Hidden Valley mine is located 90km southwest of Lae, in the Morobe province of
Papua New Guinea. The operation forms part of the Morobe Mining Joint Ventures, a
50/50 joint venture with South African gold producer Harmony (HAR: JSE; NYSE, not
rated), which also includes the Wafi-Golpu copper/gold deposit and exploration
tenements.
Hidden Valley has two open pits 5km apart, Hamata and Hidden Valley, producing gold
and silver. The operation commenced commercial production in 2010 and in FY11
produced 100koz of gold and 673koz of silver (50% basis). The JV is currently looking to
optimise plant capacity and improve performance during FY12F.

Fig. 133: Hidden Valley – Production and cost profile              Fig. 134: Hidden Valley – EBTIDA and capex profile
 140    (koz)                                   (A$/oz)    1,600     600     (A$mn)
                                                           1,400     500
 120
                                                                     400
 100                                                       1,200
                                                                     300
                                                           1,000
  80                                                                 200
                                                           800
  60                                                                 100
                                                           600
                                                                       0
  40                                                       400
                                                                    (100)
  20                                                       200      (200)
   0                                                       0        (300)
        2009 2010 2011 2012F 2013F 2014F 2015F                                2009     2010      2011 2012F 2013F 2014F 2015F
         Gold Production (LHS) By-Product Cash Costs (RHS)                                          EBITDA Capex

Source: Company data, Nomura estimates                             Source: Company data, Nomura estimates


Bonikro
Bonikro is located in southern Ivory Coast, approximately 240km north-west of Abidjan                   NCM’s FY12F production
and 9km from the town of Hiré. The mine was acquired through the merger with Lihir                      guidance is 95-105koz of gold
Gold, via Lihir’s merger with Equigold in 2008. NCM owns 89.9% of the mine, with the
Ivorian government holding 10% and the remaining 0.1% held by a substantial
shareholder. The operation is an open-pit mine, recovering gold via gravity and carbon in
leach circuits.




                                                                                                                                           58
Nomura | Newcrest Mining                                                                                                   April 2, 2012


Fig. 135: Bonikro – Production and cost profile                   Fig. 136: Bonikro – EBTIDA and capex profile
  120    (koz)                                  (A$/oz)   1,400     150     (A$mn)
                                                          1,200
  100                                                               100
                                                          1,000
   80                                                                50
                                                          800
   60                                                     600         0
                                                          400
   40                                                               (50)
                                                          200
   20                                                              (100)
                                                          0
    0                                                 -200         (150)
         2009 2010 2011 2012F 2013F 2014F 2015F                              2009     2010      2011 2012F 2013F   2014F     2015F
         Gold Production (LHS) By-Product Cash Costs (RHS)                                         EBITDA Capex

Source: Company data, Nomura estimates                            Source: Company data, Nomura estimates


Wafi-Golpu
Wafi-Golpu project is part of the Morobe Mining Joint Ventures and is located 65km
southwest of Lae, in the Morobe Province of Papua New Guinea. The world-class
deposit comprises the Wafi epithermal gold deposit, the Nambonga copper-gold
porphyry deposit and the Golpu copper-gold porphyry deposit. Current reserves are
0.7Moz of gold and 0.4Mt copper (50% basis), with resources of 13.3Moz gold, 17.5Moz
of silver and 4.5Mt of copper (50% basis).
The JV is currently completing a prefeasibility study, with results expected in June 2012.
Development assumptions are for an open pit operation (Wafi) and a block cave
underground mine (Golpu) commencing in FY17F. Production estimates are 600-
800kozpa of gold and 300-500ktpa of copper (100% basis), with initial capital costs
estimated at A$3-4bn (100% basis).
The deposit remains open at depth and along strike to the north. NCM’s stated
exploration target for the Wafi-Golpu project area is 1.2-1.7Bt, containing >40Moz of gold
and 15Mt of copper. The exploration budget for FY12F is A$30mn.

Namosi
Namosi is located in southeastern Viti Levu, Fiji and is a 70/30 JV between NCM and
Nittetsu/Mitsubishi. The deposit comprises the Waisoi copper-gold porphyry deposit and
the recently discovered Wainaulo copper-gold porphyry deposit. Current reserves are
2.7Moz of gold and 2.6Mt copper (70% basis), with resources of 7.9Moz of gold and
7.8Moz of gold (70% basis). The prefeasibility study on the Waisoi deposit is nearing
completion and envisages an open pit operation, with a 16Mtpa plant producing 50ktpa
of copper and 75koz of gold. Capital costs are estimated at A$1bn (100% basis), with
production commencing in FY16F. NCM is continuing exploration (A$15mn in FY12F) on
the Waivaka Corridor (6km from Waisoi), which hosts the Wainaulo deposit; with
expectations that other discoveries could add to the attractiveness of Waisoi.
Development of Namosi would require significant infrastructure, including a power plant.
Balance sheet
As at December 31, 2011 NCM had net debt of A$1.3bn, consisting of A$265mn in cash
and debt of A$1.6bn as at June 30, 2011. The gearing ratio (net debt/net debt + equity)
remains low at 8%. Debt consists of US$1bn in corporate bonds, US$270mn in bilateral
debt and US$350mn in long-term senior unsecured notes. In addition, NCM has
undrawn bilateral debt facilities of US$1.7bn. The corporate bonds are due in November
2021 and 2041 and pay a coupon of 4.45% and 5.75%, respectively. The senior notes
comprise five tranches, with a repayment profile from May 2012 to May 2020, at an
average fixed interest rate of 5.6%. The first repayment is due in May 2012 and totals
US$120mn.




                                                                                                                                       59
Nomura | Newcrest Mining                                                                                                                                                                                        April 2, 2012


NPV and risk analysis
NCM is valued at A$29.35/share based on a DCF analysis using a discount rate of 5%
and Nomura’s long-term gold price forecast of US$1,200/oz and US$2.75/lb for copper.
The charts below highlight the asset composition of the NPV and how NPV changes
through time as capital is invested in the business and growth is delivered.
Nomura’s target price of A$45/share is based on a factor applied to the one-year-forward
NPV using a spot gold price assumption and represents 1.5x NPV. Risks to the
achievement of our target price include volatility of gold and copper prices, currency
movements in AUD, PGK and IDR, operational issues, industrial action and sovereign
risks.

Fig. 137: NPV waterfall chart                                                                                                                    Fig. 138: Valuation trend
 35 (A$)                                                                                                                                           35       (A$)
                                        $5.34 $0.13        $0.42      $29.35
 30                                                                                                                                                30
                      $2.48 $0.33 $0.16             -$0.81       -$0.80
 25             $12.73
 20                                                                                                                                                25
 15                                                                                                                                                20
 10 $7.84 $1.68
                                                                                                                                                   15
  5
  0                                                                                                                                                10
                                                                                                  Corporate
                                       Gosowong




                                                                            Wafi-Golpu
                                                                  Bonikro




                                                                                                              Investments



                                                                                                                                       Total
                               Lihir
       Cadia Valley




                                                  Hidden Valley




                                                                                         Namosi
                      Telfer




                                                                                                                            Net Cash




                                                                                                                                                    5
                                                                                                                                                    0
                                                                                                                                                            Current Per            +1 Yr      +2 Yr     +3 Yr
                                                                                                                                                              Share
Source: Nomura research                                                                                                                          Source: Nomura research




Fig. 139: Production and cost profile                                                                                                            Fig. 140: EBITDA and capex profile

  4,000               (koz)                                                                                          (A$/oz)               700     5,000           (A$mn)
                                                                                                                                           600     4,000
  3,000                                                                                                                                    500     3,000
                                                                                                                                                   2,000
                                                                                                                                           400
  2,000                                                                                                                                            1,000
                                                                                                                                           300
                                                                                                                                                        0
  1,000                                                                                                                                    200
                                                                                                                                                  (1,000)
                                                                                                                                           100
                                                                                                                                                  (2,000)
       0                                                                                                                                   0      (3,000)
                      2009        2010         2011 2012F 2013F 2014F 2015F                                                                                        2009     2010      2011 2012F 2013F 2014F 2015F
                                              Total Gold Production (LHS)
                                              By-product Cash Costs (RHS)                                                                                                               EBITDA Capex

Source: Company data, Nomura estimates                                                                                                           Source: Company data, Nomura estimates




Fig. 141: Debt profile and debt ratio                                                                                                            Fig. 142: Earnings and P/E ratio

  2,500 (A$mn)                                  (x) 0.6                                                                                           400       (c)                                             (x)        25
  2,000                                              0.5                                                                                          350                                                                  20
  1,500                                                                                                                                           300                                                                  15
                                                     0.4
  1,000                                                                                                                                                                                                                10
                                                                                                                                                  250
    500                                              0.3                                                                                                                                                               5
                                                                                                                                                  200
      0                                              0.2                                                                                                                                                               0
   (500)                                                                                                                                          150
                                                     0.1                                                                                                                                                               (5)
 (1,000)                                                                                                                                          100                                                                  (10)
 (1,500)                                             0.0
                                                                                                                                                   50                                                                  (15)
 (2,000)                                             (0.1)                                                                                          0                                                                  (20)
         2009 2010 2011 2012F 2013F 2014F 2015F                                                                                                              2009         2010   2011 2012F 2013F 2014F 2015F
         Net cash (debt) (LHS) Net debt/EBITDA (RHS)                                                                                                                             EPS (LHS)     P/E (RHS)
Source: Company data, Nomura estimates                                                                                                           Source: Company data, Nomura estimates




                                                                                                                                                                                                                              60
Nomura | Newcrest Mining                 April 2, 2012


Management & significant shareholders
Board/Management
Chairman – Don Mercer
CEO – Greg Robinson
CFO – Gerard Bond

Shareholders
Blackrock – 12.6%
Fidelity – 7.0%
Commonwealth Bank of Australia – 6.8 %




                                                     61
Nomura | Newcrest Mining                                                                                                         April 2, 2012


Fig. 143: Newcrest – Model summary
                                                   Newcrest Mining (NCM.AX)
 Primary Analyst: David Cotterell                                               P&L (A$mn)                  FY11    FY12F    FY13F    FY14F
                                                                                Revenues                    4,103    4,816    6,106    6,569
 Rating                                    Buy                                  Operating Costs            -1,900   -2,365   -2,364   -2,490
 Target Price (A$)                        45.00                                 Other                        -158     -128      -60      -60
                                                                                EBITDA                      2,045    2,324    3,682    4,019
 Price (A$)                               30.23 Price (US$)             31.33   D&A                          -501     -592     -638     -623
 NPV (A$)                                 29.35 NPV (US$)               30.41   EBIT                        1,544    1,731    3,044    3,396
                                                                                Net Interest                  -36      -49      -59        5
 Shares (mn)                                765                                 Taxes                        -334     -482     -895   -1,020
 Mcap (A$mn)                             23,141 Mcap (US$mn)           23,981   Adjustments                  -266       82      159      152
 EV (A$mn)                               23,756 EV (US$mn)             24,618   Net Profit                    908    1,281    2,249    2,533

 Year End                                  June                                 EPS (¢)                     126.4    167.5    293.7    330.8
                                                                                DPS (¢)                      50.0     32.3     58.7     66.2
 Assumptions                              FY11    FY12F       FY13F    FY14F
                                                                                Cash Flows (A$mn)           FY11    FY12F    FY13F    FY14F
 Gold (US$/oz)                            1,373    1,707       1,919    1,963
 Silver (US$/oz)                           29.2     38.7        45.5     42.0   Receipts                    4,013    4,977    6,106    6,569
 Copper (US$/lb)                           3.94     3.75        3.63     3.38   Payments                   -2,157   -2,617   -2,364   -2,490
 Moly (US$/lb)                             16.3     18.0        21.0     19.0   Net Interest                  -20      -43      -59        5
 AUD/USD                                   0.99     1.03        1.03     1.05   Taxes                        -107     -380     -895   -1,020
                                                                                Other                           0       50       60       60
 Key Ratios                               FY11    FY12F       FY13F    FY14F    Operating Cash Flows        1,729    1,987    2,848    3,124

 PE (x)                                    23.9     18.1        10.3      9.1   Capex                        -356   -2,158   -1,187   -1,417
 EV/EBITDA (x)                             11.6     10.6         6.4      5.6   Disposals                       0        0        0        0
 EPS Growth (%)                             9.8     32.4        75.4     12.7   Exploration                  -126     -166     -120     -120
 ROE (%)                                    6.5      8.5        12.8     12.6   Other                      -1,812      -19        0        0
 Net Debt to Equity (%)                     4.4      9.7         1.6     -3.9   Investing Cash Flows       -2,294   -2,343   -1,307   -1,537
 Net Debt to EBITDA (x)                     0.3      0.6         0.1     -0.2
 Dividend Yield (%)                         1.7      1.1         1.9      2.2   Change in Borrowings          427      744        0        0
 FCF Yield (%)                              5.4     -1.5         6.7      6.9   Dividends                    -231     -391     -371     -525
                                                                                Equity                          0        4        4        0
                                                                                Other                         -89      -42        0        0
 Production & Costs                       FY11    FY12F       FY13F    FY14F    Financing Cash Flows          107      315     -368     -525

 Total Gold (koz)                         2,538    2,435       2,995    3,260   Balance Sheet (A$mn)        FY11    FY12F    FY13F    FY14F
 Total Silver (koz)                       1,768    2,295       2,748    2,809
 Total Copper (kt)                           75       75          89      104   Cash                          185     142     1,315    2,376
                                                                                Receivables                   441     241       305      328
 Total Equivalent Gold Payable (koz)      2,792    2,795       3,270    3,543   Inventories                   691     385       488      526
                                                                                Other                         225       0         0        0
 Gold By-Product Cash Costs (A$/oz)         483      643         528      529   Current Assets              1,542     768     2,109    3,230
 EV / Production (US$/oz)                 9,276   10,393       8,036    7,203
 EV / Reserves (US$/oz)                     292      301         305      310   Receivables                     2        0        0        0
 EV / Resources (US$/oz)                    154      159         161      163   Investments                     0        0        0        0
                                                                                Property, Plant & Equip.   10,985   12,981   14,168   15,585
 Reserves (Moz)                            78.4 Resources (Moz)         148.7   Intangibles                    61      174      294      414
 EBIT (A$mn)                              FY11    FY12F FY13F          FY14F    Other                       4,692    5,410    5,410    5,410
                                                                                Non Current Assets         15,740   18,565   19,872   21,409
 Cadia Valley                               318      481        795      987
 Telfer                                     192      353        407      327    Total Assets               17,282   19,332   21,980   24,639
 Lihir                                      597      620       1240     1476
 Gosowong                                   393      487        720      719    Borrowings                   116        0        0         0
 Hidden Valley                                2       41         66       47    Payables                     432      482      611       657
 Bonikro                                     -8       15          3       30    Provisions                   170      176      176       176
                                                                                Other                         99      120      120       120
 NPV                                     (A$mn)         Per Share

 Cadia Valley Operations                  5,998                $7.84            Current Liabilities          817      778      907       953
 Telfer                                   1,289                $1.68
 Lihir                                    9,742               $12.73            Payables
 Gosowong                                 1,897                $2.48            Borrowings                    684    1,601    1,601    1,601
 Hidden Valley                              255                $0.33            Provisions                    232      224      224      224
 Bonikro                                    122                $0.16            Other                       1,674    1,729    1,729    1,729
 Wafi-Golpu                               4,090                $5.34            Non Current Liabilities     2,590    3,554    3,554    3,554
 Namosi                                      99                $0.13
 Investments                                318                $0.42            Total Liabilities           3,407    4,332    4,461    4,507
 Net Cash                                  -615               -$0.80
 Total                                   22,466               $29.35            Total Equity               13,875   15,001   17,519   20,132
Source: Company data, Nomura estimates




                                                                                                                                             62
OceanaGold                               OGC.AX OGC AU

METALS & MINING
                                                                                                                    EQ U I T Y R E S E A R C H




Australian Gold Miners initiation                                                                       April 2, 2012

                                                                                                        Rating
                                                                                                                                         Buy
Entering a new phase of growth                                                                          Starts at

                                                                                                        Target price
                                                                                                        Starts at                    AUD 3.30
                                                                                                        Closing price
                                                                                                        March 29, 2012               AUD 2.50
                                                                                                        Potential upside                 +32%


Stable production from low-risk jurisdiction                                                            Anchor themes
OceanaGold (OGC) is an emerging immediate gold producer, with three                                     Gold equities have
operations in New Zealand and a gold-copper project in the Philippines.                                 underperformed the gold price
The company is targeting FY12F production of ~230–250kozpa at cash                                      however this is expected to
costs of ~US$900-980/oz. By 2016 the company has ambitions to be a                                      reverse as earnings growth is
major gold producer in the Asia-Pacific region operating in a number of                                 delivered. Robust cash
countries including the Philippines and New Zealand. The Didipio project                                generation supports growth,
in the Philippines is the first phase of growth, which OGC intends to                                   M&A and capital management.
leverage to support future production growth. OGC is trading at 0.4x NPV
at spot gold prices and very attractive earnings multiples. Nomura initiates                            Nomura vs consensus
coverage with a Buy rating and a target price of A$3.30/share, based on a                               Nomura’s estimate for FY12F
combination of our forward gold price NPV adjusted for growth and risks.                                NPAT is above consensus
                                                                                                        estimates.
Catalysts
 Didipio construction completed on schedule                                                            Research analysts

 Feasibility study results on expanding the mill at Didipio to 5Mtpa                                   Australia Metals & Mining
 Exploration drilling results from New Zealand and the Philippines                                     David Cotterell - NAL
                                                                                                        david.cotterell@nomura.com
                                                                                                        +61 2 8062 8433
Philippines driving near-term growth
                                                                                                        David Radclyffe - NIplc
In the near term Nomura forecasts a strong lift in OGC’s production in
                                                                                                        david.radclyffe@nomura.com
FY13F to >300kozpa, as production commences from Didipio. The project                                   +61 2 8062 8434
is expected to add ~60koz gold and 14t copper in its first year, increasing                             Puneet Saxena
to ~100koz of gold at full production. Exploration remains a focus and                                  puneet.saxena@nomura.com
                                                                                                        +44 20 7102 9162
aimed at extending the mine lives of the Macraes and Reefton operations,
as well as promising near mine targets at Didipio.


31 Dec                               FY11              FY12F                 FY13F             FY14F
Currency (USD)                      Actual      Old      New         Old        New    Old       New

Revenue (mn)                         396                 441                    764              721
Reported net profit (mn)                 41                61                   217              190
Normalised net profit (mn)               41                61                   217              190
Normalised EPS                    15.74c              22.11c                75.26c            62.73c
Norm. EPS growth (%)                -20.5                40.4                240.4              -16.7
Norm. P/E (x)                        16.5      N/A       11.6       N/A          3.5   N/A        4.2
EV/EBITDA (x)                            4.6              4.5                    1.3              0.9
Price/book (x)                           1.4   N/A        1.1       N/A          0.8   N/A        0.6
Dividend yield (%)                       na    N/A         na       N/A          na    N/A        3.7
ROE (%)                                  7.1             10.7                   26.1            16.5    See Appendix A-1 for analyst
Net debt/equity (%)                  11.7                10.7              net cash          net cash   certification, important
Source: Company data, Nomura estimates
                                                                                                        disclosures and the status of
                                                                                                        non-US analysts.
Key company data: See page 2 for company data and detailed price/index chart.
Nomura | OceanaGold                                                                                                             April 2, 2012



Key data on OceanaGold
Income statement (USDmn)                                                              Relative performance chart (one year)
Year-end 31 Dec                           FY10     FY11    FY12F    FY13F    FY14F
Revenue                                     306      396      441      764      721
Cost of goods sold                         -151     -217     -276     -360     -382
Gross profit                                155      179      165      405      339
SG&A                                        -69     -104      -77      -93      -79
Employee share expense
Operating profit                            86       75       88      311      260

EBITDA                                     156      161      165      405      339
Depreciation                               -69      -86      -77      -93      -79    Source: ThomsonReuters, Nomura research
Amortisation                                                                           
                                                                                       (%)                                   1M      3M 12M
EBIT                                         86       75      88      311      260
                                                                                          Absolute (AUD)                     3.7 19.4   -8.4
Net interest expense                        -15      -13      -2       -1       12
                                                                                          Absolute (USD)                     2.2 23.6   -5.9
Associates & JCEs
                                                                                          Relative to index                  2.9 16.2   2.1
Other income
                                                                                          Market cap (USDmn)               696.4
Earnings before tax                          72       62       86     310      272
                                                                                          Estimated free float (%)
Income tax                                  -27      -21      -26     -93      -82
                                                                                          52-week range (AUD)           3.06/1.86
Net profit after tax                         44       41       61     217      190
                                                                                          3-mth avg daily turnover
Minority interests                            0        0        0       0        0        (USDmn)
                                                                                                                            1.21
Other items                                                                               Major shareholders (%)
Preferred dividends                                                                       CF Ruffer Baker Steel Gold         5.5
Normalised NPAT                             44       41       61      217      190        Source: Thomson Reuters, Nomura research
Extraordinary items
Reported NPAT                               44       41       61      217      190
Dividends                                    0        0        0        0      -30
                                                                                      Notes
Transfer to reserves                        44       41       61      217      160
                                                                                           Earnings multiples are very
Valuation and ratio analysis                                                               attractive.
FD normalised P/E (x)                      11.7     16.5     11.6      3.5      4.2
FD normalised P/E at price target (x)      15.3     21.7     15.2      4.6      5.5
Reported P/E (x)                           11.7     16.5     11.6      3.5      4.2
Dividend yield (%)                           na       na       na       na      3.7
Price/cashflow (x)                         10.0      4.4      5.1      2.5      3.0
Price/book (x)                              0.9      1.4      1.1      0.8      0.6
EV/EBITDA (x)                               4.1      4.6      4.5      1.3      0.9
EV/EBIT (x)                                 7.3      9.8      8.4      1.6      1.2
Gross margin (%)                           50.7     45.2     37.4     52.9     47.1
EBITDA margin (%)                          50.9     40.7     37.4     52.9     47.1
EBIT margin (%)                            28.3     19.0     20.0     40.7     36.1
Net margin (%)                             14.5     10.4     13.7     28.4     26.4
Effective tax rate (%)                     38.0     33.7     30.0     30.0     30.0
Dividend payout (%)                         0.0      0.0      0.0      0.0     15.9
Capex to sales (%)                         35.5     37.0     42.3     11.9     13.5
Capex to depreciation (x)                   1.6      1.7      2.4      1.0      1.2
ROE (%)                                      na      7.1     10.7     26.1     16.5
ROA (pretax %)                               na     10.0     11.9     34.5     25.6

Growth (%)
Revenue                                    29.0     29.5     11.5     73.2     -5.7
EBITDA                                     -5.3      3.4      2.4    145.2    -16.2
EBIT                                      -12.1    -12.9     17.3    252.6    -16.5
Normalised EPS                            -37.5    -20.5     40.4    240.4    -16.7
Normalised FDEPS                             na    -20.5     40.4    240.4    -16.7

Per share
Reported EPS (USD)                       19.79c   15.74c   22.11c   75.26c   62.73c
Norm EPS (USD)                           19.79c   15.74c   22.11c   75.26c   62.73c
Fully diluted norm EPS (USD)             19.79c   15.74c   22.11c   75.26c   62.73c
Book value per share (USD)                 2.63     1.82     2.35     3.45     4.22
DPS (USD)                                  0.00     0.00     0.00     0.00     0.10    




Source: Company data, Nomura estimates




                                                                                                                                               64
Nomura | OceanaGold                                                                                                     April 2, 2012


Cashflow (USDmn)                                                                         
Year-end 31 Dec                          FY10    FY11    FY12F     FY13F      FY14F     Notes
EBITDA                                     156     161      165      405        339         EBITDA is forecast to double as
Change in working capital                    0      -3       -2       -10          1        Didipio commences in FY13F.
Other operating cashflow                  -103      -4      -25       -84        -71
Cashflow from operations                    52     155      137      310        269
Capital expenditure                       -108    -147     -187       -91        -97
Free cashflow                              -56       8      -50      219        172
Reduction in investments                             0        0         0          0
Net acquisitions
Reduction in other LT assets                      -22         0         0          0
Addition in other LT liabilities                  -41         0         0          0
Adjustments                                 1      63         0         0          0
Cashflow after investing acts             -56       8       -50       219        172
Cash dividends                              0       0         0         0        -15
Equity issue                              201       0        35        35         35
Debt issue                                 -4     -16       -76      -122        -18
Convertible debt issue
Others                                     -3      -3        0          0          0
Cashflow from financial acts              194     -19      -41        -86          3
Net cashflow                              139     -11      -91        133        174
Beginning cash                             42     181      170         79        212
Ending cash                               181     170       79        212        387
Ending net debt                            26      56       70       -184       -376
Source: Company data, Nomura estimates



Balance sheet (USDmn) 
As at 31 Dec                             FY10    FY11    FY12F     FY13F      FY14F     Notes
Cash & equivalents                        181     170       79       212        387         The balance sheet is currently in a
Marketable securities                                                                       net debt position of US$56mn.
Accounts receivable                        10       7       22         38         36
Inventories                                36      47       35         61         58
Other current assets                        1       2        0          0          0
Total current assets                      229     226      137        312        480
LT investments                              0       0        0          0          0
Fixed assets                              751     149      320        395        477
Goodwill
Other intangible assets                     24    380      396        412        428
Other LT assets                             40     62       62         62         62
Total assets                             1,044    818      915      1,181      1,447
Short-term debt                             24     73        0          0          0
Accounts payable                            34     46       44         76         72
Other current liabilities                   10      5        5          5          5
Total current liabilities                   69    124       49         82         77
Long-term debt                             183    153      150         28         10
Convertible debt                             0      0        0          0          0
Other LT liabilities                       103     63       63         63         63
Total liabilities                          355    339      262        172        150
Minority interest
Preferred stock
Common stock
Retained earnings
Proposed dividends
Other equity and reserves                  689    478      653      1,008      1,297
Total shareholders' equity                 689    478      653      1,008      1,297
Total equity & liabilities               1,044    818      915      1,181      1,447

Liquidity (x)
Current ratio                             3.31   1.83      2.76      3.81       6.20
Interest cover                             5.8    5.8      48.3     293.3         na

Leverage
Net debt/EBITDA (x)                       0.16   0.35      0.43   net cash   net cash
Net debt/equity (%)                        3.7   11.7      10.7   net cash   net cash

Activity (days)
Days receivable                                   8.2      12.2      14.4       18.8
Days inventory                                   69.6      54.5      48.9       56.8
Days payable                                     67.4      59.4      61.2       71.0
Cash cycle                                 0.0   10.4       7.3       2.2        4.6
Source: Company data, Nomura estimates




                                                                                                                                    65
Nomura | OceanaGold                                                                                                           April 2, 2012



Investment view
Fig. 144: Map of operations




                                                                                                            PHILIPPINES
                                                                                                            Didipio Project




                                                                                                                NEW ZEALAND
                                                                                                               Reefton Open Pit
                                                                                                               Macraes Open Pit
                                                                                                               Frasers Underground




Source: Nomura research


Key projects
Macraes
The Macraes operation is New Zealand's largest gold mine, located 100km north of
Dunedin. The mine has been in production since 1990 and consists of the Macraes open
pit and Frasers underground mine (which commenced in January 2008). The open pit
has a mine life of around eight years and produces ~125-145kozpa. Frasers is the down-
dip extension to Macraes, produces ~40-50kozpa and remains open at depth. Mining is
selective and focused on the higher-grade hanging wall.
The processing plant consists of crushing, grinding and flotation circuits, combined with
an autoclave for pressure oxidation of sulphide ore, followed by a carbon-in-leach plant
and smelting facilities.

Fig. 145: Macraes - Production and cost profile                   Fig. 146: Macraes - EBITDA and capex profile

  250     (koz)                                (US$oz)    1,400     250     (US$mn)
                                                          1,200     200
  200
                                                          1,000
                                                                    150
  150                                                     800
                                                                    100
  100                                                     600
                                                                      50
                                                          400
    50
                                                          200          0
     0                                             0                (50)
          2009 2010 2011 2012F 2013F 2014F 2015F                             2009     2010     2011 2012F 2013F 2014F 2015F
             Gold Production (LHS)   Cash costs (RHS)                                             EBITDA Capex
Source: Company data, Nomura estimates                            Source: Company data, Nomura estimates


The Macraes plant is also used to treat refractory concentrate from Reefton, which is
transported by road and rail to Macraes. The treatment of Reefton concentrate utilises
spare capacity in the autoclave circuit.




                                                                                                                                          66
Nomura | OceanaGold                                                                                                             April 2, 2012


The combined reserves currently indicate a relatively short mine life of eight years.
Exploration is targeting the deeper extensions of the Macraes ore body with the objective
of identifying and developing additional underground resources. Additionally, exploration
is also targeting other potential mineable targets on surface close to Macraes.

Reefton
The Reefton mine is located 7km southeast of Reefton on the West Coast of New
Zealand’s South Island. The operation was commissioned in 2007 and comprises a
series of open pits following a major regional shear structure. The processing plant
capacity is 1Mtpa, however the plant has consistently run well above design capacity.
The plant produces a gold concentrate which is transported 600km south to the Macraes
operation for final processing. The current reserves are 6.25Mt at 1.84g/t gold, which
should support a mine life until ~2017.

Fig. 147: Reefton - Production and cost profile                     Fig. 148: Reefton - EBITDA and capex profile

  100     (koz)                              (US$/oz)       1,200     100      (US$mn)

    80                                                      1,000       80

                                                            800         60
    60
                                                            600         40
    40
                                                            400         20
    20                                                      200          0
     0                                             0                  (20)
          2009 2010 2011 2012F 2013F 2014F 2015F                               2009     2010     2011 2012F 2013F 2014F 2015F
             Gold Production (LHS)   Cash costs (RHS)                                               EBITDA Capex

Source: Company data, Nomura estimates                              Source: Company data, Nomura estimates


Didipio
The Didipio gold-copper project is located ~270km north of Manila on the island of Luzon
in the Philippines. Didipio is covered by a Financial and Technical Assistance Agreement
                                                                           2
(FTAA-001) with the Republic of the Philippines and encompasses 159km across the
provinces of Nueva Vizcaya and Quirino. OGC previously commenced construction at
Didipio in 2008 (spending ~US$80mn) before rising capital costs and the global financial
crisis forced the project to be placed on care and maintenance.

Fig. 149: Didipio - Production and cost profile                     Fig. 150: Didipio - EBITDA and capex profile

  120    (koz)                              (US$/oz)    700           250      (US$mn)
                                                        600           200
  100
                                                                      150
                                                        500
   80
                                                                      100
                                                        400
   60                                                                   50
                                                        300
   40                                                                    0
                                                        200
                                                                      (50)
   20                                                   100          (100)
    0                                                   0            (150)
         2009 2010 2011 2012F 2013F 2014F 2015F                                2009     2010     2011 2012F 2013F 2014F 2015F
            Gold Production (LHS)  Cash costs (RHS)                                                 EBITDA Capex

Source: Company data, Nomura estimates                              Source: Company data, Nomura estimates


In late 2010 OGC announced results of a re-optimisation study on Didipio and received                    DFS results expected in 2013 on
Board approval in mid-2011 to restart the project. The current mine plan envisages a 16-                 Didipio Stage II to expand
year mine life producing ~100kozpa of gold and 14ktpa of copper, with capital costs of                   throughput to 5Mtpa (from
US$185mn. The original process plant was designed for 2.5Mtpa, but plans are to                          3.5Mtpa), increasing production
                                                                                                         by 50kozpa gold and 6ktpa
expand it to 3.5Mtpa by year two of operation. OGC is also completing a feasibility study                copper.
to increase the plant further to 5Mtpa, which could increase production to ~150kozpa of
gold and ~20ktpa of copper.




                                                                                                                                            67
Nomura | OceanaGold                                                                                                          April 2, 2012


Ore is expected to be sourced from the open pit for the first seven years of mine life,
followed by concurrent underground mining in year eight. Processing is via conventional
crushing, grinding and flotation to produce a gold/copper concentrate, which is then
transported to local and/or overseas smelters. Project construction recommenced in mid-
2011, with commissioning expected to begin in late 2012.
Regional exploration potential remains high, with approximately 30 gold-copper
prospects known within the FTAA. OGC has budgeted US$10mn for exploration and is
targeting 80% to be spent at Didipio.

Fig. 151: OceanaGold – EV/Reserves and EV/Resources             Fig. 152: OceanaGold – Hedging profile
profile
 250     (US$/oz)                                                          2012F           2013F          2014F         2015F
                                                                   0                                                                 5
 200

 150

 100

  50

   0                                                                    (koz)                                          (US$mn)
         2009     2010   2011 2012F      2013F 2014F 2015F        20                                                                -5
                     EV/Reserves         EV/Resources                             Hedged (LHS)                 Gain/Loss (RHS)

Source: Company data, Nomura estimates                          Source: Company data, Nomura estimates


Exploration
OGC’s exploration focus is mine life extensions at Macraes and Reefton and near mine
targets at Didipio. The exploration budget in recent years has been ~US$10mn and for
FY12F has been increased to US$16mn. The company is allocating ~US$10mn to
exploration in the Philippines, with the bulk of this to be spent at Didipio.
Balance sheet
As at December 31, 2011 OGC had net debt of US$56mn, consisting of cash on hand of                   OGC has US$170mn in cash to
US$170mn and debt of US$226mn. Debt comprises capital leases totalling US$61mn                       fund completion of Didipio. An
and three tranches (5.75% and two 7% issues) of convertible notes totalling US$164mn.                additional debt facility is being
                                                                                                     negotiated to ensure financing of
The 5.75% convertible notes are due to mature in December 2012 and are redeemable                    convertible notes.
at 109% of the principal amount unless converted to common shares. The 7% notes
were issued in two separate transactions (A$70mn and A$30mn) and are both due for
redemption in December 2013. The redemption value is equal to the principal amount
plus the capitalised interest, unless converted to common shares.
OGC has stated that negotiations are underway on a debt facility to ensure the refinance
of the convertible notes and also for additional funds if required.
NPV & risk analysis
Nomura values OGC at A$4.22/share based on DCF analysis using a 5% discount rate
and Nomura’s long-term gold price forecast of US$1,200/oz. OGC currently trades on
0.4x NPV at spot gold prices. The figures below highlight the asset composition of the
NPV and how NPV changes through time as capital is invested in the business and
growth is delivered.
Nomura’s target price for OGC of A$3.30/share is based on a combination of our forward
gold price NPV adjusted for growth and risks. Risks to the achievement of our target
price include operational performance at Macraes and Reefton, construction and ramp-
up difficulties at Didipio, cost inflation, NZD/USD exchange rates and commodity price
volatility.




                                                                                                                                         68
Nomura | OceanaGold                                                                                                                                        April 2, 2012


Fig. 153: NPV waterfall chart                                                                        Fig. 154: Valuation trend
 6.00    (A$)                                                                                         5.00     (A$)
 5.00                           $3.13                   $0.09                      $4.22              4.00
 4.00
                                           -$0.49                      -$0.21
 3.00                                                                                                 3.00
 2.00                $0.40
         $1.30                                                                                        2.00
 1.00
 0.00                                                                                                 1.00

                                            Corporate
                                 Didipio




                                                         Exploration
           Macraes


                      Reefton




                                                                                     Total
                                                                        Net Cash
                                                                                                      0.00
                                                                                                               Current Per        +1 Yr      +2 Yr      +3 Yr
                                                                                                                 Share
Source: Nomura research                                                                              Source: Nomura research


Fig. 155: Production and cost profile                                                                Fig. 156: EBITDA and capex profile

  500     (koz)                                                         (US$oz)              1,200     500      (US$mn)
                                                                                                       400
  400                                                                                        1,000
                                                                                                       300
                                                                                             800
  300                                                                                                  200
                                                                                             600       100
  200                                                                                                      0
                                                                                             400
                                                                                                      (100)
  100                                                                                        200
                                                                                                      (200)
    0                                                                                        0        (300)
         2009 2010 2011 2012F 2013F 2014F 2015F                                                                  2009     2010     2011 2012F 2013F 2014F 2015F
          Total Equiv Gold Payable (LHS) Cash costs (RHS)                                                                             EBITDA Capex
Source: Company data, Nomura research                                                                Source: Company data, Nomura research


Fig. 157: Debt profile and debt ratio                                                                Fig. 158: Earnings & P/E ratio

  200     (US$mn)                                                                  (x)        1.0     90       (USc)                                      (x)    25
  100                                                                                                 80                                                         20
                                                                                              0.5
    0                                                                                                 70                                                         15
                                                                                              0.0     60                                                         10
 (100)
                                                                                                      50                                                         5
 (200)                                                                                       (0.5)
                                                                                                      40                                                         0
 (300)
                                                                                             (1.0)    30                                                         (5)
 (400)
                                                                                                      20                                                         (10)
                                                                                             (1.5)
 (500)                                                                                                10                                                         (15)
 (600)                                                                                       (2.0)     0                                                         (20)
          2009 2010 2011 2012F 2013F 2014F 2015F                                                               2009     2010     2011 2012F 2013F 2014F 2015F
           Net debt (cash) (LHS) Net debt/EBITDA (RHS)                                                                           EPS (LHS)      P/E (RHS)

Source: Company data, Nomura research                                                                Source: Company data, Nomura research


Management & significant shareholders
Board/Management
Chairman - James Askew
CEO/MD - Michael Wilkes
CFO/Secretary - Mark Chamberlain
COO - Mark Cadzow

Shareholders
CF Ruffer Baker Steel Gold – 5.5%
Ruffer LLP – 5.4%
Van Eck Associates – 5.1%




                                                                                                                                                                        69
Nomura | OceanaGold                                                                                                              April 2, 2012


Fig. 159: OceanaGold – Model Summary
                                                       OceanaGold (OGC.AX)
 Primary Analyst: David Cotterell                                                 P&L (US$mn)                FY11    FY12F    FY13F FY14F
                                                                                  Revenues                     396      441      764   721
 Rating                                      Buy                                  Operating Costs             -217     -276     -360  -382
 Target Price (A$)                           3.30                                 Other                        -18        0        0     0
                                                                                  EBITDA                       161      165      405   339
 Price (A$)                                  2.50 Price (US$)             2.59    D&A                          -86      -77      -93   -79
 NPV (A$)                                    4.22 NPV (US$)               4.37    EBIT                          75       88      311   260
                                                                                  Net Interest                 -13       -2       -1    12
 Shares (mn)                                262.7                                 Taxes                        -21      -26      -93   -82
 Mcap (A$mn)                                  657 Mcap (US$mn)             681    Adjustments                    0        0        0     0
 EV (A$mn)                                    713 EV (US$mn)               739    Net Profit                    41       61      217   190

 Year End                                December                                 EPS (¢)                    15.7      22.0    75.0      62.7
                                                                                  DPS (¢)                     0.0       0.0     0.0       9.9

 Assumptions                                FY11     FY12F FY13F FY14F            Cash Flows (US$mn)         FY11    FY12F    FY13F FY14F

 Gold (US$/oz)                              1,571    1,791      2,063    1,775    Receipts                    399      441      764      721
 Silver (US$/oz)                             35.5     42.0       49.0     35.0    Payments                   -217     -276     -360     -382
 Copper (USc/lb)                              4.0       3.8        3.5      3.3   Net Interest                -17       -2       -1       12
 Moly (USc/lb)                               15.6     22.0       20.0     18.0    Taxes                       -21      -26      -93      -82
 AUD/USD                                     1.03     1.02       1.05     1.05    Other                        11        0        0        0
                                                                                  Operating Cash Flows        155      137      310      269
 Key Ratios                                 FY11     FY12F FY13F FY14F
                                                                                  Capex                      -144     -171      -75       -81
 PE (x)                                       16.4    11.5        3.5      4.2    Disposals                     0        0        0         0
 EV/EBITDA (x)                                 4.6     4.5        1.2      0.9    Exploration                  -2      -16      -16       -16
 EPS Growth (%)                              -20.5    39.8      240.7    -16.3    Other                         0        0        0         0
 ROE (%)                                       8.6     9.3       21.5     14.7    Investing Cash Flows       -147     -187      -91       -97
 Net Debt to Equity (%)                       11.7    10.7      -18.3    -29.0
 Net Debt to EBITDA (x)                        0.3     0.4       -0.5     -1.1    Change in Borrowings        -16       -76    -122       -18
 Dividend Yield (%)                            0.0     0.0        0.0      3.8    Dividends                     0         0       0       -15
 FCF Yield (%)                                 1.2    -7.0       28.6     21.3    Equity                        0        35      35        35
                                                                                  Other                        -3         0       0         0
                                                                                  Financing Cash Flows        -19       -41     -86         3

 Production & Costs                         FY11     FY12F FY13F FY14F            Balance Sheet (US$mn)      FY11    FY12F    FY13F FY14F

 Total Gold (koz)                             252      246        332      349    Cash                        170       79      212      387
 Total Copper (kt)                              0        0         14       19    Receivables                   7       22       38       36
                                                                                  Inventories                  47       35       61       58
                                                                                  Other                         2        0        0        0
 Total Equivalent Gold Payable (koz)          252      246        379      423    Current Assets              226      137      312      480

 Gold By-Product Cash Costs (A$/oz)         1,057    1,002        806      763    Receivables                   3        3        3        3
                                                                                  Investments                   0        0        0        0
 EV/Production (US$/oz)                     2,832    2,957      1,424      803    Property, Plant & Equip.    149      320      395      477
 EV/Reserves (US$/oz)                         196      200        130       77    Intangibles                 380      396      412      428
 EV/Resources (US$/oz)                         77       79         51       30    Other                        60       60       60       60
                                                                                  Non Current Assets          591      778      869      967
 Resources (Moz)                              9.2 Reserves (Moz)           3.6
                                                                                  Total Assets                818      915    1,181    1,447

 EBIT (US$mn)                               FY11     FY12F FY13F FY14F            Borrowings                   73        0        0         0
                                                                                  Payables                     46       44       76        72
 Macraes                                      109       87        168       82    Provisions                    0        0        0         0
 Reefton                                       82       32         52       31    Other                         5        5        5         5
 Didipio                                        0        0        121      178

                                                                                  Current Liabilities         124       49       82        77
 NPV                                     (US$mn)        Per Share
                                                                                  Payables
 Macraes                                      340              $1.30              Borrowings                  153      150       28        10
 Reefton                                      104              $0.40              Provisions                    0        0        0         0
 Didipio                                      822              $3.13              Other                        63       63       63        63
 Corporate                                   -126             -$0.48              Non Current Liabilities     216      212       91        73
 Exploration                                   23              $0.09
 Investments                                    0              $0.00              Total Liabilities           339      262      172      150
 Net Cash                                     -55             -$0.21
 Total                                      1,109              $4.22              Total Equity                478      653    1,008    1,297
Source: Company data, Nomura estimates




                                                                                                                                             70
Perseus Mining                                 PRU.AX PRU AU

METALS & MINING
                                                                                                                    EQ U I T Y R E S E A R C H




Australian Gold Miners initiation                                                                       April 2, 2012

                                                                                                        Rating
                                                                                                                                     Neutral
West Africa, the new gold                                                                               Starts at

                                                                                                        Target price
                                                                                                                                     AUD 2.65
frontier                                                                                                Starts at

                                                                                                        Closing price
                                                                                                        March 29, 2012               AUD 2.34
                                                                                                        Potential upside               +13.2%


Emerging intermediate gold producer                                                                     Anchor themes
Perseus Mining (PRU) is an emerging West African gold producer                                          Gold equities have
targeting 400kozpa in the next few years. The company operates the                                      underperformed the gold price
recently commissioned Edikan Gold Mine (EGM) in Ghana and is awaiting                                   however this is expected to
environmental approval to commence construction on the Tengrela project                                 reverse as earnings growth is
in the Ivory Coast. FY12F production is forecast by PRU at 85-95koz,                                    delivered. Robust cash
increasing to >275koz by FY13F. The development of Tengrela would lift                                  generation supports growth,
production over 400koz by FY14F. PRU appears attractive, in our view,                                   M&A and capital management.
with FY13F P/E of 6x and EV/EBITDA of 4x, however near-term growth
appears to be priced into the stock at current levels. Nomura initiates                                 Nomura vs consensus
coverage with a Neutral rating and A$2.65 target price, based on a                                      Nomura’s estimate for FY12F
combination of our forward gold price NPV adjusted for growth and risks.                                NPAT is below consensus
                                                                                                        estimates.
Catalysts
 Successful completion of the ramp-up at EGM                                                           Research analysts


 Resource and reserve upgrades at EGM and Tengrela                                                     Australia Metals & Mining

 New mine plan at Tengrela                                                                             David Cotterell - NAL
                                                                                                        david.cotterell@nomura.com
                                                                                                        +61 2 8062 8433
Strong growth profile, could become a target                                                            David Radclyffe - NIplc
The EGM ramp-up to full production is key in the near term. The                                         david.radclyffe@nomura.com
advancement of Tengrela is the next major catalyst and would increase                                   +61 2 8062 8434

total production to >400koz pa. The region around both assets is highly                                 Puneet Saxena
                                                                                                        puneet.saxena@nomura.com
prospective and could result in increasing the resource base through                                    +44 20 7102 9162
discovery of additional deposits. As the company grows, it could attract
corporate interest.


30 Jun                              FY11                FY12F               FY13F              FY14F
Currency (AUD)                      Actual      Old       New       Old         New    Old       New

Revenue (mn)                              0               145                   516              785
Reported net profit (mn)                 -48               46                   204              330
Normalised net profit (mn)               -48               46                   204              330
Normalised EPS                     -6.72c               9.97c              43.33c             69.38c
Norm. EPS growth (%)                     na                na               334.4               60.1
Norm. P/E (x)                            na    N/A       24.7       N/A          5.7   N/A        3.5
EV/EBITDA (x)                            na              23.0                    3.5              1.5
Price/book (x)                           8.9   N/A         3.2      N/A          1.9   N/A        1.2
Dividend yield (%)                       na    N/A         na       N/A          na    N/A        na
ROE (%)                             -18.1                16.3                   42.9            41.9    See Appendix A-1 for analyst
Net debt/equity (%)              net cash             net cash            net cash           net cash   certification, important
Source: Company data, Nomura estimates
                                                                                                        disclosures and the status of
                                                                                                        non-US analysts.
Key company data: See page 2 for company data and detailed price/index chart.
Nomura | Perseus Mining                                                                                                                   April 2, 2012



Key data on Perseus Mining
Income statement (AUDmn)                                                                        Relative performance chart (one year)
Year-end 30 Jun                              FY10        FY11       FY12F     FY13F    FY14F
Revenue                                         0            0        145        516      785
Cost of goods sold                             -7          -11         -94      -231     -319
Gross profit                                   -7          -11          51       285      466
SG&A                                           -5          -43         -20       -36      -76
Employee share expense
Operating profit                               -12         -54          32      249      390

EBITDA                                         -11         -53           47     285      466
Depreciation                                     0           0          -15     -36      -76    Source: ThomsonReuters, Nomura research
Amortisation                                                                                     
                                                                                                 (%)                                    1M     3M 12M
EBIT                                           -12         -54          32      249      390
                                                                                                    Absolute (AUD)                    -14.6    -4.7 -20.6
Net interest expense                             2           2           3        3        8
                                                                                                    Absolute (USD)                    -15.9    -1.3 -18.5
Associates & JCEs
                                                                                                    Relative to index                 -15.4    -7.9 -10.2
Other income
                                                                                                    Market cap (USDmn)              1,179.5
Earnings before tax                            -10         -51          34      252       398
                                                                                                    Estimated free float (%)          95.0
Income tax                                       0           0          -3      -76      -119
                                                                                                    52-week range (AUD)           4.05/2.28
Net profit after tax                           -10         -51          31      177       279
                                                                                                    3-mth avg daily turnover
Minority interests                               0           3          14       27        51       (USDmn)
                                                                                                                                      5.36
Other items                                                                                         Major shareholders (%)
Preferred dividends                                                                                 Dundee Corp                       11.1
Normalised NPAT                                -10         -48          46      204      330        Goodman & Co Investment
                                                                                                                                        8.9
Extraordinary items                                                                                 Counsel
Reported NPAT                                  -10         -48          46      204      330        Source: Thomson Reuters, Nomura research

Dividends                                        0           0           0        0        0
Transfer to reserves                           -10         -48          46      204      330
                                                                                                Notes
Valuation and ratio analysis                                                                         FY13F multiples aren’t
FD normalised P/E (x)                           na           na       24.7       5.7      3.5
FD normalised P/E at price target (x)           na           na       27.1       6.2      3.9        challenging at 6x P/E and 4x
Reported P/E (x)                                na           na       24.7       5.7      3.5        EV/EBITDA
Dividend yield (%)                              na           na         na        na       na
Price/cashflow (x)                              na           na       29.2       5.4      3.3
Price/book (x)                                 3.7          8.9        3.2       1.9      1.2
EV/EBITDA (x)                                   na           na       23.0       3.5      1.5
EV/EBIT (x)                                     na           na       34.1       4.0      1.8
Gross margin (%)                         -13,671.5   -12,886.5        35.3      55.2     59.3
EBITDA margin (%)                        -21,890.8   -62,923.3        32.3      55.2     59.3
EBIT margin (%)                          -22,458.4   -63,218.0        21.7      48.3     49.7
Net margin (%)                           -18,641.2   -56,876.7        31.6      39.5     42.1
Effective tax rate (%)                          na           na        8.1      30.0     30.0
Dividend payout (%)                             na           na        0.0       0.0      0.0
Capex to sales (%)                       125,608.3   181,215.9       112.3      32.2     10.1
Capex to depreciation (x)                    221.3       614.9        10.6       4.7      1.0
ROE (%)                                         na       -18.1        16.3      42.9     41.9
ROA (pretax %)                                  na        -23.8        9.1      49.0     57.9

Growth (%)
Revenue                                                   63.4    170,853.0    255.7     52.1
EBITDA                                                      na           na    508.0     63.5
EBIT                                                        na           na    690.9     56.4
Normalised EPS                                              na           na    334.4     60.1
Normalised FDEPS                                            na           na    334.4     60.1

Per share
Reported EPS (AUD)                          -2.00c      -6.72c        9.97c   43.33c   69.38c
Norm EPS (AUD)                              -2.00c      -6.72c        9.97c   43.33c   69.38c
Fully diluted norm EPS (AUD)                -2.00c      -6.72c        9.97c   43.33c   69.38c
Book value per share (AUD)                    0.66        0.28         0.76     1.27     2.05
DPS (AUD)                                     0.00        0.00         0.00     0.00     0.00
Source: Company data, Nomura estimates
                                                                                                 




                                                                                                                                                            72
Nomura | Perseus Mining                                                                                                         April 2, 2012


Cashflow (AUDmn)                                                                                 
Year-end 30 Jun                            FY10        FY11     FY12F      FY13F      FY14F     Notes
EBITDA                                       -11         -53        47        285        466        EBITDA is forecast to increase to
Change in working capital                      0           5        -3        -11         -8        A$285mn by FY13F.
Other operating cashflow                       8          42        -5        -62       -103
Cashflow from operations                      -3          -6        39        212        355
Capital expenditure                          -65        -154      -163       -166        -80
Free cashflow                                -68        -160      -124         46        275
Reduction in investments                                  -5        10          0          0
Net acquisitions
Reduction in other LT assets                             12        -37          0          0
Addition in other LT liabilities                         50          0          0          0
Adjustments                                  -20        -64         73          0          0
Cashflow after investing acts                -88       -167        -79         46        275
Cash dividends                                 0          0          0          0          0
Equity issue                                 200          9        109         24         16
Debt issue                                     0         80          0          0          0
Convertible debt issue
Others                                       -10          0          0          0          0
Cashflow from financial acts                 190         89        109         24         16
Net cashflow                                 102        -78         30         71        291
Beginning cash                               143        186         96        126        197
Ending cash                                  245        108        126        197        488
Ending net debt                             -186        -16        -45       -116       -407
Source: Company data, Nomura estimates



Balance sheet (AUDmn) 
As at 30 Jun                               FY10        FY11     FY12F      FY13F      FY14F     Notes
Cash & equivalents                          186          96       126        197        488         Cash on hand is sufficient to fund the
Marketable securities                                                                               ramp-up of EGM and development of
Accounts receivable                            0          9          7         26         39
Inventories                                    0          0         12         41         63
                                                                                                    Tengrela.
Other current assets                           1          3          0          0          0
Total current assets                         187        109        145        264        590
LT investments                                 4         10          0          0          0
Fixed assets                                 115        231        278        420        476
Goodwill
Other intangible assets                       26         32         64         88        112
Other LT assets                               15          4         41         41         41
Total assets                                 347        385        528        813      1,219
Short-term debt                                0         21          0          0          0
Accounts payable                              23         29         14         52         78
Other current liabilities                      0         11         28         28         28
Total current liabilities                     23         60         43         80        107
Long-term debt                                 0         59         81         81         81
Convertible debt
Other LT liabilities                           3         53         53         53         53
Total liabilities                             26        173        178        215        242
Minority interest
Preferred stock
Common stock
Retained earnings
Proposed dividends
Other equity and reserves                    321        212        351        598        977
Total shareholders' equity                   321        212        351        598        977
Total equity & liabilities                   347        385        528        813      1,219

Liquidity (x)
Current ratio                               8.03        1.80      3.38       3.30       5.52
Interest cover                                na          na        na         na         na

Leverage
Net debt/EBITDA (x)                            na         na   net cash   net cash   net cash
Net debt/equity (%)                      net cash   net cash   net cash   net cash   net cash

Activity (days)
Days receivable                               na    18,735.1       19.9      11.7       15.1
Days inventory                                na         7.1       23.4      41.8       59.5
Days payable                                  na       859.2       84.2      52.2       74.4
Cash cycle                                    na    17,883.0      -40.8       1.2        0.2
Source: Company data, Nomura estimates




                                                                                                                                            73
Nomura | Perseus Mining                                                                                                 April 2, 2012



Investment view
Fig. 160: Map of operations




                                             IVORY COAST
                                               Tengrela
                                                           GHANA
                                                           Edikan




Source: Nomura research


Key projects
Edikan Gold Mine (EGM)
EGM is located on the Ashanti Gold Belt of Ghana. PRU owns a 90% interest in EGM,
with the remaining 10% a free carried interest owned by the Ghanaian government. EGM
was commissioned in 2H 2011, with the company announcing commercial production as
of January 1, 2012. The operation continues to ramp-up towards full production, with
guidance for CY12 of 220-240koz gold at cash costs of US$650/oz.
PRU is also upgrading the plant to 8Mtpa throughput from the current design level of
5.5Mtpa. Current reserves are 3.3Moz, with a mine life of 11 years.
Exploration drilling continues to highlight upside potential to the current known resource.
PRU expects to announce an upgrade to resource and reserves at EGM during the June
quarter.

Fig. 161: Edikan - Production and cost profile                      Fig. 162: Edikan - EBITDA and capex profile

 350     (koz)                              (US$/oz)   1,000          350     (A$mn)
                                                                      300
 300
                                                       800            250
 250
                                                                      200
 200                                                   600
                                                                      150
 150                                                   400            100
 100                                                                    50
                                                       200               0
   50
                                                                      (50)
    0                                                  0             (100)
         2009 2010 2011 2012F 2013F 2014F 2015F                                2009     2010     2011 2012F 2013F 2014F 2015F
             Gold Production (LHS)  Cash Costs (RHS)                                                EBITDA Capex
Source: Company data, Nomura research                               Source: Company data, Nomura research




                                                                                                                                    74
Nomura | Perseus Mining                                                                                              April 2, 2012


Tengrela
The Tengrela gold project is located in the northern Ivory Coast on the border with Mali.
PRU owns 80% of Tengrela, with the Ivorian Government owning a 10% free carried
interest and the remaining 10% owned by a local joint venture partner. A number of gold
prospects occur within the project, with Sissingué the most advanced. A definitive
feasibility study (DFS) was completed on Sissingué in 2010 looking at an open-cut
operation with a conventional carbon in leach plant producing ~200kozpa.
PRU lodged an Environmental and Social Impact Assessment in September 2011 and
anticipate environmental approval during 2012. In preparation for environmental
approval, significant progress has been made on design of the process plant, with the
SAG mill ordered in late 2011. The company expects to have completed sufficient design
work by mid 2012 to enable construction to commence once the project receives
environmental approval.
PRU plans to announce a reserve and resource upgrade for Sissingué in mid-2012,
which should enable a new life of mine plan and extension of mine life beyond the
current 5.5 years. Nomura currently assumes initial capex of US$115mn (in line with
company guidance), with first production commencing in FY14F.

Fig. 163: Tengrela - Production and cost profile                 Fig. 164: Tengrela -EBITDA and capex profile

 250    (koz)                               (US$/oz)    600        300     (A$mn)
                                                                   250
 200                                                    500
                                                                   200
                                                        400        150
 150
                                                                   100
                                                        300
 100                                                                 50
                                                        200           0
  50                                                                (50)
                                                        100
                                                                  (100)
    0                                                   0         (150)
        2009 2010 2011 2012F 2013F 2014F 2015F                              2009     2010     2011 2012F 2013F 2014F 2015F
            Gold Production (LHS) Cash Costs (RHS)                                               EBITDA Capex
Source: Company data, Nomura research                            Source: Company data, Nomura research


Balance Sheet
PRU’s balance sheet as at December 31, 2011 was in net cash position of A$50mn.
Borrowings total A$81mn, drawn under the finance facility provided by Macquarie Bank
and Credit Suisse. During 2012 PRU intends to continue the ramp-up at EGM, with
A$52mn of capital expenditure budgeted for 2012. Development of Tengrela is likely to
be funded from cash flows, with a new life of mine plan expected later in 2012. Nomura
currently assumes capital costs of US$115mn, in line with company guidance.

Hedging
The company has forward contracts for 230koz of gold deliverable from March 2012 to
December 2014, at an average price of US$1,250/oz. The hedging was undertaken in
2010 as a requirement of the debt facility and represents ~28% of production over the
period. In addition, the company has purchased gold put options on 100koz of
production, with maturing dates between January 2012 and December 2013. The put
options give PRU the right to sell at a fixed price of US$850/oz.
NPV & risk analysis
Nomura values PRU at A$2.64/share based on DCF analysis using a 5% discount rate
and Nomura’s long-term gold price forecast US$1,200/oz. PRU currently trades on 0.7x
NPV at spot gold prices. The figures below highlight the asset composition of the NPV
and how NPV changes through time as capital is invested in the business and growth is
delivered.
PRU’s target price of A$2.65/share is based on a combination of our forward gold price
NPV adjusted for growth and risks. Risks to achievement of our target price include
production delivery and ramp-up to expectations, cost control and gold price volatility.




                                                                                                                                 75
Nomura | Perseus Mining                                                                                                                                               April 2, 2012


Fig. 165: NPV waterfall chart                                                                              Fig. 166: Valuation trend
 4.00   (A$)                                                                                                4.00      (A$)

 3.00
                   $0.56                    $0.44                      $0.03 $0.11 $2.64                    3.00
 2.00   $1.81                                               -$0.08
                               -$0.23
                                                                                                            2.00
 1.00

 0.00                                                                                                       1.00
                                Corporate
                    Tengrela




                                                             Hedging


                                                                        Investments
                                              Exploration
          Edikan




                                                                                                   Total
                                                                                      Net Cash
                                                                                                            0.00
                                                                                                                      Current Per        +1 Yr      +2 Yr      +3 Yr
                                                                                                                        Share
Source: Company data, Nomura research                                                                      Source: Company data, Nomura research


Fig. 167: Production and cost profile                                                                      Fig. 168: EBITDA and capex profile

 600    (koz)                                                                     (US$/oz)         1,000     600        (A$mn)
                                                                                                             500
 500                                                                                               800
                                                                                                             400
 400
                                                                                                   600       300
 300                                                                                                         200
                                                                                                   400       100
 200
                                                                                                   200            0
 100
                                                                                                            (100)
   0                                                  0                                                     (200)
        2009 2010 2011 2012F 2013F 2014F 2015F                                                                          2009     2010     2011 2012F 2013F 2014F 2015F
          Total Equiv Gold Payable (LHS) Cash costs (RHS)                                                                                    EBITDA Capex
Source: Company data, Nomura research                                                                      Source: Company data, Nomura research


Fig. 169: Debt profile and debt ratio                                                                      Fig. 170: Earnings & P/E ratio

 800     (A$mn)                                                                              (x)    0.5     80        (c)                                       (x)      25
 700                                                                                                        70                                                           20
                                                                                                    0.4     60                                                           15
 600
                                                                                                            50                                                           10
 500                                                                                                0.3     40
                                                                                                                                                                         5
 400                                                                                                        30
                                                                                                    0.2                                                                  0
 300                                                                                                        20
                                                                                                            10                                                           (5)
 200
                                                                                                    0.1      0                                                           (10)
 100                                                                                                                                                                     (15)
                                                                                                           (10)
   0                                                                                                0.0    (20)                                                          (20)
         2009 2010 2011 2012F 2013F 2014F 2015F                                                                       2009     2010    2011 2012F 2013F 2014F 2015F
           Net cash (debt) (LHS) Net debt/EBITDA (RHS)                                                                                EPS (LHS)     P/E (RHS)
Source: Company data, Nomura research                                                                      Source: Company data, Nomura research


Management & significant shareholders
Board/Management
Chairman - Reginald Gillard
MD & CEO - Mark Calderwood
CFO - Jeff Quartermaine
COO - Jon Yelland

Shareholders
Dundee Corp – 11.1%
Goodman & Co Investment Counsel – 8.9%
Van Eck Associates – 7.2%




                                                                                                                                                                                  76
Nomura | Perseus Mining                                                                                                      April 2, 2012


Fig. 171: Perseus Mining - Model summary
                                                   Perseus Mining (PRU.AX)
 Primary Analyst: David Cotterell                                            P&L (A$mn)                 FY11    FY12F    FY13F    FY14F
                                                                             Revenues                      0      145       516      785
 Rating                                Neutral                               Operating Costs             -11       -94     -231     -319
 Target Price (A$)                       2.65                                Other                       -42        -4        0        0
                                                                             EBITDA                      -53        47      285      466
 Price (A$)                              2.34 Price (US$)            2.42    D&A                           0      -15       -36      -76
 NPV (A$)                                2.64 NPV (US$)              2.73    EBIT                        -54        32      249      390
                                                                             Net Interest                  2         3        3        8
 Shares (mn)                            455.8                                Taxes                         0        -3      -76     -119
 Mcap (A$mn)                            1,067 Mcap (US$mn)          1,105    Adjustments                   3        14       27       51
 EV (A$mn)                              1,050 EV (US$mn)            1,089    Net Profit                  -48        46      204      330

 Year End                                June                                EPS (¢)                     -6.7     10.0     43.3      69.4
                                                                             DPS (¢)                      0.0      0.0      0.0       0.0
 Assumptions                            FY11     FY12F FY13F        FY14F
                                                                             Cash Flows (A$mn)          FY11    FY12F    FY13F    FY14F
 Gold (US$/oz)                          1,373     1,707     1,919   1,963
 Silver (US$/oz)                         29.2      38.7      45.5    42.0    Receipts                      0      145       516      785
                                                                             Payments                     -8      -97      -231     -319
 AUD/USD                                 0.99      1.03      1.03    1.05    Net Interest                  2        3         3        8
                                                                             Taxes                         0      -12       -76     -119
                                                                             Other                         0        0         0        0
 Key Ratios                             FY11     FY12F FY13F        FY14F    Operating Cash Flows         -6       39       212      355

 PE (x)                                  N.M       23.5       5.4      3.4   Capex                      -143      -132     -142       -56
 EV/EBITDA (x)                           N.M       21.8       3.3      1.4   Disposals                     0         0        0         0
 EPS Growth (%)                         235.7    -248.4     334.4     60.1   Exploration                 -10       -31      -24       -24
 ROE (%)                                -22.7      13.1      34.0     33.8   Other                        -7        45        0         0
 Net Debt to Equity (%)                  -7.7     -12.9     -19.3    -41.6   Investing Cash Flows       -161      -117     -166       -80
 Net Debt to EBITDA (x)                   0.3      -1.0      -0.4     -0.9
 Dividend Yield (%)                       0.0       0.0       0.0      0.0   Change in Borrowings         80        0        0          0
 FCF Yield (%)                           -8.9     -11.5       4.2     24.6   Dividends                     0        0        0          0
                                                                             Equity                        9      109       24         16
                                                                             Other                         0        0        0          0
 Production & Costs                     FY11     FY12F FY13F        FY14F    Financing Cash Flows         89      109       24         16

 Total Gold (koz)                           0       86       276      431    Balance Sheet (A$mn)       FY11    FY12F    FY13F    FY14F
 Total Silver (koz)                         0        0         0        0
                                                                             Cash                         96      126      197       488
                                                                             Receivables                   9        7       26        39
 Total Equivalent Gold Payable (koz)        0       86       276      431    Inventories                   0       12       41        63
                                                                             Other                         3        0        0         0
 Gold By-Product Cash Costs (A$/oz)                833       647      606    Current Assets              109      145      264       590

 EV/Production (US$/oz)                          12,219     3,541   1,609    Receivables                   4       19       19        19
 EV/Reserves (US$/oz)                     301       304       283     201    Investments                  10        0        0         0
 EV/Resources (US$/oz)                    129       130       121      86    Property, Plant & Equip.    231      278      420       476
                                                                             Intangibles                  32       64       88       112
 Resources (Moz)                          8.1 Reserves (Moz)          3.5    Other                         0       22       22        22
                                                                             Non Current Assets          276      383      549       628
 EBIT (A$mn)                            FY11     FY12F FY13F        FY14F
                                                                             Total Assets                385      528      813     1,219
 Edikan                                     0       49       269      306
 Tengrela                                   0        0         0      104    Borrowings                   21        0        0          0
                                                                             Payables                     29       14       52         78
                                                                             Provisions                    0        0        0          0
                                                                             Other                        11       28       28         28

 NPV                                   (A$mn)        Per Share               Current Liabilities          60       43       80       107

 Edikan                                   824               $1.81            Payables
 Tengrela                                 257               $0.56            Borrowings                   59       81       81        81
                                                                             Provisions                    4        7        7         7
 Exploration                              201              $0.44             Other                        48       47       47        47
 Corporate                               -105             -$0.23             Non Current Liabilities     112      135      135       135
 Investments                               12              $0.03
 Hedging                                  -37             -$0.08             Total Liabilities           173      178      215       242
 Net Cash                                  50              $0.11
 Total                                  1,202              $2.64             Total Equity                212      351      598       977
Source: Company, Nomura estimates




                                                                                                                                         77
Regis Resources                                       RRL.AX RRL AU

METALS & MINING
                                                                                                                    EQ U I T Y R E S E A R C H




Australian Gold Miners initiation                                                                       April 2, 2012

                                                                                                        Rating
                                                                                                                                     Reduce
Attractive home grown growth                                                                            Starts at

                                                                                                        Target price
                                                                                                                                     AUD 3.65
story, but what a run                                                                                   Starts at

                                                                                                        Closing price
                                                                                                        March 29, 2012               AUD 3.98
                                                                                                        Potential downside               -8.3%


Garden Well to lift production to >300koz                                                               Anchor themes
Regis is a gold producer and developer focussed on the Duketon area in WA.                              Gold equities have
Gold is currently produced from the Moolart Well operation, with RRL’s                                  underperformed the gold price
second mine, Garden Well, due to commence in 2H 2012. Group production                                  however this is expected to
is expected to grow to ~350koz in FY13F, with midterm upside from the                                   reverse as earnings growth is
potential inclusion of satellite feed to Garden Well from Rosemont and                                  delivered. Robust cash
Erlistoun. RRL appears funded to deliver on its growth ambitions and second                             generation supports growth,
quartile cash costs translates to EBITDA potential of more than A$400mn in                              M&A and capital management.
FY13F. However RRL is not without execution risks at Garden Well. RRL
offers attractive growth potential yet trading at 0.9x spot, NPV shares appear                          Nomura vs consensus
ahead of relatives, and Nomura initiates with a Reduce rating and A$3.65                                Nomura’s estimate for FY12F
target price, seeking value at lower levels. The price target is based on a                             NPAT is above consensus
combination of our forward gold price NPV adjusted for growth and risks.                                estimates.

Catalysts                                                                                               Research analysts
 Commencement and ramp-up of Garden Well in 2H 2012
 Progression of Rosemont and Erlistoun as potential incremental                                        Australia Metals & Mining

                                                                                                        David Radclyffe - NIplc
  sources of feed to Garden Well - upside towards 400koz                                                david.radclyffe@nomura.com
 Corporate potential as Duketon pipeline is delivered                                                  +61 2 8062 8434
                                                                                                        David Cotterell - NAL
Near-term growth, development of a regional play                                                        david.cotterell@nomura.com
                                                                                                        +61 2 8062 8433
Construction of the company’s second mine is well underway and due to
commence production in late in 2012, lifting production to >300koz pa.                                  Puneet Saxena
                                                                                                        puneet.saxena@nomura.com
Satellite deposits at both Rosemont and Erlistoun have the potential to                                 +44 20 7102 9162
incrementally lift production towards 400koz in the midterm. Post delivery
of the current Duketon pipeline, the company would likely look for new
opportunities or could itself attract the interest of its peers, in our view.

30 Jun                              FY11                FY12F               FY13F              FY14F
Currency (AUD)                      Actual      Old       New       Old         New    Old       New

Revenue (mn)                         109                  176                   628              655
Reported net profit (mn)                 36                73                   266              244
Normalised net profit (mn)               36                73                   266              244
Normalised EPS                      8.54c               18.84c             60.06c             53.42c
Norm. EPS growth (%)                     na              120.6              218.8               -11.1
Norm. P/E (x)                        45.2      N/A        20.5      N/A          6.4   N/A        7.2
EV/EBITDA (x)                        29.1                 17.2                   3.7              3.3
Price/book (x)                       11.9      N/A         6.5      N/A          2.8   N/A        2.1
Dividend yield (%)                       na    N/A         na       N/A          1.7   N/A        2.7
ROE (%)                              32.7                 36.2                  61.5            33.3    See Appendix A-1 for analyst
Net debt/equity (%)                      2.1               3.1            net cash           net cash   certification, important
Source: Company data, Nomura estimates
                                                                                                        disclosures and the status of
                                                                                                        non-US analysts.
Key company data: See page 2 for company data and detailed price/index chart.
Nomura | Regis Resources                                                                                                            April 2, 2012



Key data on Regis Resources
Income statement (AUDmn)                                                                  Relative performance chart (one year)
Year-end 30 Jun                             FY10       FY11    FY12F    FY13F    FY14F
Revenue                                         1       109      176       628      655
Cost of goods sold                              0        -45      -76     -222     -263
Gross profit                                    1         63     100       406      392
SG&A                                          -19        -24      -26      -51      -56
Employee share expense
Operating profit                              -19        39       75      355      336

EBITDA                                        -19         58       99     401      387
Depreciation                                    0        -19      -24     -46      -51    Source: ThomsonReuters, Nomura research
Amortisation                                                                               
                                                                                           (%)                                    1M     3M 12M
EBIT                                          -19        39       75      355      336
                                                                                              Absolute (AUD)                    -11.1    6.6 69.3
Net interest expense                            0        -3       -2        2       13
                                                                                              Absolute (USD)                    -12.4 10.4 73.8
Associates & JCEs
                                                                                              Relative to index                 -11.8    3.4 79.8
Other income
                                                                                              Market cap (USDmn)              1,782.8
Earnings before tax                           -19        36       73      357       349
                                                                                              Estimated free float (%)          94.0
Income tax                                      0         0        0      -91      -105
                                                                                              52-week range (AUD)           4.43/2.19
Net profit after tax                          -19        36       73      266       244
                                                                                              3-mth avg daily turnover
Minority interests                              0         0        0        0         0       (USDmn)
                                                                                                                                6.55
Other items                                                                                   Major shareholders (%)
Preferred dividends                                                                           Newmont Mining                    16.9
Normalised NPAT                               -19        36       73      266      244        Source: Thomson Reuters, Nomura research
Extraordinary items
Reported NPAT                                 -19        36       73      266      244
Dividends                                       0         0        0      -29      -49
                                                                                          Notes
Transfer to reserves                          -19        36       73      237      196
                                                                                               Profits to reflect the underlying
Valuation and ratio analysis                                                                   business in FY13/14F.
FD normalised P/E (x)                          na      45.2      20.5      6.4      7.2
FD normalised P/E at price target (x)          na      42.7      19.4      6.1      6.8
Reported P/E (x)                               na      45.2      20.5      6.4      7.2
Dividend yield (%)                             na        na        na      1.7      2.7
Price/cashflow (x)                             na      34.1      14.6      5.3      5.8
Price/book (x)                               18.6      11.9       6.5      2.8      2.1
EV/EBITDA (x)                                  na      29.1      17.2      3.7      3.3
EV/EBIT (x)                                    na      43.1      22.8      4.2      3.8
Gross margin (%)                            100.0      58.4      56.9     64.7     59.9
EBITDA margin (%)                        -3,383.5      53.7      56.1     63.9     59.1
EBIT margin (%)                          -3,383.5      36.3      42.4     56.6     51.3
Net margin (%)                           -3,368.3      33.4      41.5     42.4     37.3
Effective tax rate (%)                         na       0.0       0.0     25.4     30.0
Dividend payout (%)                            na       0.0       0.0     10.9     20.0
Capex to sales (%)                       10,822.2      50.6      64.6     16.9     10.7
Capex to depreciation (x)                      na       2.9       4.7      2.3      1.4
ROE (%)                                        na      32.7      36.2     61.5     33.3
ROA (pretax %)                                 na      28.0      32.1     92.5     66.8

Growth (%)
Revenue                                       na    19,336.7     62.4    256.0      4.3
EBITDA                                        na          na     69.6    305.1     -3.5
EBIT                                          na          na     89.8    375.0     -5.4
Normalised EPS                                na          na    120.6    218.8    -11.1
Normalised FDEPS                              na          na    120.6    218.8    -11.1

Per share
Reported EPS (AUD)                         -5.58c      8.54c   18.84c   60.06c   53.42c
Norm EPS (AUD)                             -5.58c      8.54c   18.84c   60.06c   53.42c
Fully diluted norm EPS (AUD)               -5.58c      8.54c   18.84c   60.06c   53.42c
Book value per share (AUD)                   0.21       0.32     0.60     1.36     1.87
DPS (AUD)                                    0.00       0.00     0.00     0.07     0.11    




Source: Company data, Nomura estimates




                                                                                                                                                    79
Nomura | Regis Resources                                                                                              April 2, 2012


Cashflow (AUDmn)                                                                         
Year-end 30 Jun                          FY10    FY11    FY12F     FY13F      FY14F     Notes
EBITDA                                     -19      58       99       401       387         RRL has the potential to generate
Change in working capital                    0     -24       -4       -14         -1        ~A$400mn of EBITDA from FY13F
Other operating cashflow                    15      13        8       -65        -81
                                                                                            on Nomura assumptions.
Cashflow from operations                    -3      48      103       322       305
Capital expenditure                        -60     -55     -114      -106        -70
Free cashflow                              -64      -7      -11       216       235
Reduction in investments                             0        0         0          0
Net acquisitions
Reduction in other LT assets                       -5        -1         0          0
Addition in other LT liabilities                    3         3         0          0
Adjustments                                -1       3        -2         0          0
Cashflow after investing acts             -65      -7       -11       216        235
Cash dividends                              0       0         0         0        -56
Equity issue                               58       9         6         3         11
Debt issue                                 11      15         0         0          0
Convertible debt issue
Others                                      2       0        0          0          0
Cashflow from financial acts               70      25        6          3        -44
Net cashflow                                5      18       -5        219        191
Beginning cash                              5      10       27         22        241
Ending cash                                10      27       22        241        432
Ending net debt                             5       3        8       -211       -402
Source: Company data, Nomura estimates



Balance sheet (AUDmn) 
As at 30 Jun                             FY10    FY11    FY12F     FY13F      FY14F     Notes
Cash & equivalents                         10      27       22       241        432         RRL is well funded to complete the
Marketable securities                                                                       Garden Well project.
Accounts receivable                         1       8        9         31         33
Inventories                                 0       4       14         50         52
Other current assets                        0       0        0          0          0
Total current assets                       11      40       45        323        517
LT investments                              0       0        0          0          0
Fixed assets                              106     120      247        343        403
Goodwill
Other intangible assets                     8      25       24         34         44
Other LT assets                             1       6        8          8          8
Total assets                              127     191      324        707        972
Short-term debt                            10      19        0          0          0
Accounts payable                           15      12       18         63         65
Other current liabilities                  10       0        0          0          0
Total current liabilities                  35      31       18         63         66
Long-term debt                              4      11       30         30         30
Convertible debt
Other LT liabilities                        6       8       12         12         12
Total liabilities                          45      51       60        105        108
Minority interest
Preferred stock
Common stock
Retained earnings
Proposed dividends
Other equity and reserves                  82     140      264        602        864
Total shareholders' equity                 82     140      264        602        864
Total equity & liabilities                127     191      324        707        972

Liquidity (x)
Current ratio                            0.32     1.28     2.49      5.11       7.85
Interest cover                             na     12.6     45.3        na         na

Leverage
Net debt/EBITDA (x)                         na    0.05     0.08   net cash   net cash
Net debt/equity (%)                        6.1     2.1      3.1   net cash   net cash

Activity (days)
Days receivable                            na     15.9     17.5      11.7       17.9
Days inventory                             na     18.2     44.6      52.9       71.2
Days payable                               na    107.0     70.9      66.1       89.1
Cash cycle                                 na    -72.9     -8.8      -1.5        0.1
Source: Company data, Nomura estimates




                                                                                                                                  80
Nomura | Regis Resources                                                                                                        April 2, 2012



Investment view
Fig. 172: Map of operations




                                                                                        Duketon Gold Project
                                                                                        Moolart Well
                                                                                        Garden Well
                                                                                        Erlistoun




Source: Nomura research


Key projects
Moolart Well
RRL’s current producing asset is Moolart Well, located 355km NNE of Kalgoorlie in                         RRL is currently producing
Western Australia. Moolart is an open-pit operation with a strip ratio of 1:3, processing a               ~90kozpa from Moolart Well.
blend of dominantly laterite and oxide ores with an average grade of 1.5g/t gold. The
plant has a capacity of 2Mtpa and is currently operating some 10% above nameplate,
with gold recovered through a CIL processing circuit. Base case production is estimated
at ~90kozpa at a cash cost of A$555/oz pre royalties. The operation has an expected
mine life of six years, with upside potential from the nearby Anchor deposit, where recent
results highlight the potential for a small yet high-grade resource.

Fig. 173: Moolart Well - Production and cost profile              Fig. 174: Moolart Well - EBITDA and capex profile

  250     (koz)                                  (A$/oz)   800      400     (A$mn)

  200                                                               300
                                                           600
  150                                                               200
                                                           400
  100                                                               100
                                                           200
   50                                                                  0

    0                                               0              (100)
          2009 2010 2011 2012F 2013F 2014F 2015F                             2009     2010     2011 2012F 2013F 2014F 2015F
             Gold Production (LHS)  Cash costs (RHS)                                              EBITDA Capex

Source: Company data, Nomura research                             Source: Company data, Nomura research




                                                                                                                                            81
Nomura | Regis Resources                                                                                                          April 2, 2012


Garden Well
The Garden Well standalone open-pit development project is located 30km south of the                      Garden Well is the key asset,
Moolart Well operations. The fully financed project has an estimated capital cost of                      due to commence production in
A$136mn, with some A$45mn having been spent to date on the project. The company                           the September quarter of 2012.
forecasts first gold for early in the September quarter of 2012, and the project has a mine
life of nine years with 2.6Moz of current reserves. Garden Well is a standard CIL project
with milling capacity of 4Mtpa and an average grade of 1.46g/t, and is expected to
produce ~180koz of gold a year. However, higher grades are expected in the first year,
with production likely to exceed 200koz. Cash costs are estimated at ~A$630/oz over the
life of the project.
Garden Well mineralisation occurs within a sheared ultramafic contact, with a black shale                 Black shale in hangwall has
located in the hangwall. The black shale represents ~10% of the resource and RRL has                      been tested for potential preg
tested for potential preg robbing to impact on recoveries. At Garden Well there is further                robbing.
upside to the current resource of 62Mt with a drilling program having commenced at the
southern area of the project, which was previously awaiting permits. Nomura assumes a
mine life of 10 years.

Fig. 175: Garden Well - Production and cost profile               Fig. 176: Garden Well - EBITDA and capex profile

   250     (koz)                                 (A$/oz)   800      350     (A$mn)
                                                                    300
   200                                                              250
                                                           600
                                                                    200
   150
                                                                    150
                                                           400
                                                                    100
   100
                                                                      50
                                                           200
    50                                                                 0
                                                                    (50)
     0                                                     0       (100)
          2009 2010 2011 2012F 2013F 2014F 2015F                             2009     2010     2011 2012F 2013F 2014F 2015F
             Gold Production (LHS)  Cash costs (RHS)                                              EBITDA Capex

Source: Company data, Nomura research                             Source: Company data, Nomura research

Rosemont and Erlistoun
The Rosemont and Erlistoun deposits both occur within 10km of the Garden Well project                     Rosemont is the likely next
and are therefore potential satellite ore sources for the project. Rosemont is the current                development as a satellite feed
priority with a current resource of 1.1Moz and a new reserve estimate of 0.5Moz at                        to Garden Well.
1.7g/t. RRL plans to evaluate the project as a satellite ore source for Garden Well
evaluating options such as trucking or conveying ore in addition to a stand-alone
operation (less likely, in our view). Nomura estimates Rosemont could produce supply
~1.5Mtpa of ore for ~six years, representing ~80kozpa from FY14F at an estimated
capital cost of A$50mn assuming studies are supportive. Erlistoun is a smaller project
and is modelled on the basis that it could follow Rosemont supplying ~0.5Mtpa of ore for
~40koz with following investment of ~$30mn. On this basis, Nomura sees potential for
the Garden Well plant capacity to be expanded to 5-6Mpta.

Fig. 177: Rosemont - Production and cost profile                  Fig. 178: Rosemont - EBITDA and capex profile

  250     (koz)                                  (A$/oz)   800      400       (A$mn)

  200                                                               300
                                                           600
  150                                                               200
                                                           400
  100                                                               100
                                                           200
   50                                                                  0

    0                                               0              (100)
          2009 2010 2011 2012F 2013F 2014F 2015F                             2009     2010     2011 2012F 2013F 2014F 2015F
             Gold Production (LHS)  Cash costs (RHS)                                              EBITDA Capex
Source: Company data, Nomura research                             Source: Company data, Nomura research




                                                                                                                                              82
Nomura | Regis Resources                                                                                                        April 2, 2012


Fig. 179: Erlistoun - Production and cost profile               Fig. 180: Erlistoun - EBITDA and capex profile

  250       (koz)                               (A$/oz)   800     400       (A$mn)

  200                                                             300
                                                          600
  150                                                             200
                                                          400
  100                                                             100
                                                          200
   50                                                                0

       0                                              0          (100)
            2009 2010 2011 2012F 2013F 2014F 2015F                         2009     2010     2011 2012F 2013F 2014F 2015F
               Gold Production (LHS)  Cash costs (RHS)                                          EBITDA Capex

Source: Company data, Nomura research                           Source: Company data, Nomura research


Balance sheet
At the end of 2011 RRL had cash on hand of A$34mn and a A$80mn debt facility with                       RRL is well funded and
Macquarie Bank drawn to A$30mn. In the near term the company will continue to invest                    additional debt draw downs may
in development of the Garden Well project, with ~A$90mn left to spend. On Nomura                        be very modest.
assumptions, the company remains well funded to complete development of Garden
Well, with operational cash flows likely sufficient to fund the balance of the project.

Hedging
RRL has a modest gold hedge book as a requirement of its Macquarie debt facility,
comprising 185koz of gold sold under forward and spot deferred contracts representing
~8% of reserves and ~25% of FY13F production. Forward contracts total 119koz at
A$1,401/oz and 66koz of spot deferred contracts priced at A$1,524/oz.

Fig. 181: Regis Resources – EV/Reserves and EV/Resources        Fig. 182: Regis Resources – Hedging profile
 700                                                                        2012F          2013F            2014F       2015F
           (US$/oz)
 600                                                                0                                                                 5

 500                                                               20                                                                 -5
 400
                                                                   40                                                                 -15
 300
 200                                                               60                                                                 -25

 100                                                               80                                                                 -35
   0                                                                      (koz)                                           (A$mn)
           2009     2010   2011 2012F   2013F 2014F 2015F         100                                                                 -45
                       EV/Reserves      EV/Resources                              Hedged (LHS)                   Gain/Loss (RHS)

Source: Company data, Nomura research                           Source: Company data, Nomura research


NPV & risk analysis
Nomura values RRL at A$3.28/share based on DCF analysis using a 5% discount rate
and Nomura’s long-term gold price forecast US$1,200/oz. In addition, Nomura estimates
a flat spot gold price NPV of A$4.25/share. On this basis RRL currently trades on 0.9x
NPV (spot). The figures below highlight the asset composition of the NPV and how NPV
changes through time as capital is invested in the business and growth is delivered.
Our target price for RRL of A$3.65/share is based on a combination of our forward gold
price NPV adjusted for growth and risks. Risks to the achievement of our target price
include production delivery and ramp-up to expectations, cost control and gold price
volatility.




                                                                                                                                            83
Nomura | Regis Resources                                                                                                                                                                   April 2, 2012


Fig. 183: NPV waterfall chart                                                                                                        Fig. 184: Valuation trend
 4.00 (A$)                                          $0.47                                                                             4.00      (A$)
                                                                             $0.04                                          $3.28
 3.00                    $2.07 $0.17
                                                                $0.12                             $0.14 $0.01
 2.00                                                                                                                                 3.00
         $0.80
 1.00
                                                                                                                                      2.00
 0.00




                                                                 Corporate
          Moolart Well


                          Garden Well




                                                     Rosemont
                                        Erlistoun




                                                                                                   Hedging




                                                                                                                             Total
                                                                             Collurabbie Nickel




                                                                                                                 Net Cash
                                                                               Exploration /
                                                                                                                                      1.00


                                                                                                                                      0.00
                                                                                                                                                Current Per         +1 Yr      +2 Yr      +3 Yr
                                                                                                                                                  Share

Source: Nomura research                                                                                                              Source: Nomura research




Fig. 185: Production and cost profile                                                                                                Fig. 186: EBITDA and capex profile

  500       (koz)                                                                                            (A$/o z)        800       500        (A$mn)
                                                                                                                                       400
  400
                                                                                                                             600       300
  300                                                                                                                                  200
                                                                                                                             400
  200                                                                                                                                  100

                                                                                                                             200            0
  100
                                                                                                                                      (100)
    0                                                                                                                        0        (200)
          2009 2010 2011 2012F 2013F 2014F 2015F                                                                                                  2009     2010     2011 2012F 2013F 2014F 2015F
           To tal Equiv Go ld Payable (LHS) Cash costs (RHS)                                                                                                           EBITDA Capex

Source: Company data, Nomura research                                                                                                Source: Company data, Nomura research




Fig. 187: Debt profile and debt ratio                                                                                                Fig. 188: Earnings & P/E ratio

  800     (A$mn)                                                                                                    (x)      0.5       80       (c)                                        (x)    25
  700                                                                                                                                  60                                                         20
                                                                                                                             0.4
  600                                                                                                                                                                                             15
                                                                                                                                       40
  500                                                                                                                        0.3                                                                  10
  400                                                                                                                                  20                                                         5
                                                                                                                             0.2
  300                                                                                                                                   0                                                         0
  200                                                                                                                        0.1                                                                  (5)
                                                                                                                                      (20)
  100                                                                                                                                                                                             (10)
                                                                                                                             0.0
    0                                                                                                                                 (40)                                                        (15)
 (100)                                                                                                                       (0.1)    (60)                                                        (20)
          2009 2010 2011 2012F 2013F 2014F 2015F                                                                                                2009     2010     2011 2012F 2013F 2014F 2015F
           Net cash (d ebt) (LHS) Net debt/EBITDA (RHS)                                                                                                           EPS (LHS)     P/E (RHS)
Source: Company data, Nomura research                                                                                                Source: Company data, Nomura research


Management & significant shareholders
Board/Management
Chairman - Nicola Giorgetta
MD - Mark Clark
CFO - Kim Massey

Shareholders
Newmont Mining – 16.8%
Nicola Giorgetta – 4.7%




                                                                                                                                                                                                         84
Nomura | Regis Resources                                                                                                   April 2, 2012


Fig. 189: Regis Resources - Model Summary
                                                 Regis Resources (RRL.AX)
 Primary Analyst: David Radclyffe                                           P&L (A$mn)                 FY11    FY12F    FY13F FY14F
                                                                            Revenues                    109      173       626   670
 Rating                                 Reduce                              Operating Costs              -45      -74     -225  -266
 Target Price (A$)                        3.65                              Other                         -5       -1       -5    -5
                                                                            EBITDA                        58       97      396   399
 Price (A$)                               3.98 Price (US$)           4.12   D&A                          -19      -24      -46   -51
 NPV (A$)                                 3.28 NPV (US$)             3.40   EBIT                          39       73      351   348
                                                                            Net Interest                  -3       -2        2    13
 Shares (mn)                               439                              Taxes                          0        0      -89  -108
 Mcap (A$mn)                             1,748 Mcap (US$mn)         1,811   Adjustments                    0        0        0     0
 EV (A$mn)                               1,751 EV (US$mn)           1,814   Net Profit                    36       72      263   253

 Year End                                 June                              EPS (¢)                      8.5     18.9    59.4      55.4
                                                                            DPS (¢)                      0.0      0.0     6.2      11.0

 Assumptions                             FY11    FY12F FY13F       FY14F    Cash Flows (A$mn)          FY11    FY12F    FY13F FY14F

                                                                            Receipts                    101      172      626      670
 Gold (US$/oz)                           1,373    1,707   1,919     1,963   Payments                    -52      -74     -225     -266
 AUD/USD                                  0.99     1.03    1.03      1.05   Net Interest                 -2       -1        2       13
 Moly (USc/lb)                            16.3     18.0    21.0      19.0   Taxes                         0        0      -89     -108
                                                                            Other                         0        4        5        5
 Key Ratios                              FY11    FY12F FY13F       FY14F    Operating Cash Flows         48      101      319      314

 PE (x)                                   46.6     21.0     6.7       7.2   Capex                       -38      -102     -96       -60
 EV/EBITDA (x)                            30.0     18.0     3.9       3.4   Disposals                     0         0       0         0
 EPS Growth (%)                           N.M     100.0   100.0      -6.8   Exploration                 -17       -12     -10       -10
 ROE (%)                                  25.9     27.3    44.1      29.1   Other                         0         0       0         0
 Net Debt to Equity (%)                    2.1      3.8   -34.5     -46.7   Investing Cash Flows        -55      -114    -106       -70
 Net Debt to EBITDA (x)                    0.1      0.1    -0.5      -1.0
 Dividend Yield (%)                        0.0      0.0     1.6       2.8   Change in Borrowings         15        0        0         0
 FCF Yield (%)                            -0.4     -0.7    12.1      13.3   Dividends                     0        0        0       -56
                                                                            Equity                        9        6        3        11
                                                                            Other                         0        0        0         0
 Production & Costs                      FY11    FY12F FY13F       FY14F    Financing Cash Flows         25        6        3       -44

 Moolart Well (koz)                         81     105       106     106    Balance Sheet (A$mn)       FY11    FY12F    FY13F FY14F
 Garden Well (koz)                           0       0       229     174
 Erlistoun (koz)                             0       0         0       0    Cash                         27       20      236      436
 Rosemont (koz)                              0       0         0      79    Receivables                   8        9       31       33
 Total Gold (koz)                           81     105       335     358    Inventories                   4       14       50       54
                                                                            Other                         0        0        0        0
 Gold By-Product Cash Costs (A$/oz)        571     614       539     662    Current Assets               40       43      318      523

 EV/Production (US$/oz)                 21,438   17,167   4,732     3,932   Receivables                   0        0        0        0
 EV/Reserves (US$/oz)                      605      631     552       492   Investments                   0        0        0        0
 EV/Resources (US$/oz)                     267      278     244       217   Property, Plant & Equip.    120      247      343      403
                                                                            Intangibles                  25       24       34       44
 Resources (Moz)                           6.5 Reserves (Moz)         2.9   Other                         6        8        8        8
 EBIT (A$mn)                             FY11 FY12F FY13F          FY14F    Non Current Assets          151      279      385      455

                                                                            Total Assets                191      322      703      978
 Moolart Well                               41      83       107     107
 Garden Well                                 0       0       293     194    Borrowings                   19        0        0         0
 Erlistoun                                   0       0         0       0    Payables                     12       17       63        67
 Rosemont                                    0       0         0      81    Provisions                    0        0        0         0
                                                                            Other                         0        0        0         0

 NPV                                    (A$mn)       Per Share
                                                                            Current Liabilities          31       18       63        67
 Moolart Well                              352             $0.80
 Garden Well                               910             $2.07            Payables
 Erlistoun                                  75             $0.17            Borrowings                   11       30       30        30
 Rosemont                                  209             $0.48            Provisions                    8       12       12        12
 Corporate                                 -54            -$0.12            Other                         0        0        0         0
 Exploration / Collurabbie Nickel           16             $0.04            Non Current Liabilities      20       42       42        42
 Hedging                                   -64            -$0.15
 Investments                                 0             $0.00            Total Liabilities            51       60      105      109
 Net Cash                                   -3            -$0.01
 Total                                   1,441             $3.28            Total Equity                140      262      598      869
Source: Company data, Nomura research




                                                                                                                                       85
St Barbara                       SBM.AX SBM AU

METALS & MINING
                                                                                                                    EQ U I T Y R E S E A R C H




Australian Gold Miners initiation                                                                       April 2, 2012

                                                                                                        Rating
                                                                                                                                         Buy
Classic value play, a private                                                                           Starts at

                                                                                                        Target price
                                                                                                                                     AUD 3.35
equity dream?                                                                                           Starts at

                                                                                                        Closing price
                                                                                                        March 29, 2012               AUD 2.06
                                                                                                        Potential upside               +62.6%


Potential to generate cash equal to capitalisation in four years                                        Anchor themes
SBM is a West Australia focussed gold producer with three operating mines                               Gold equities have
and two processing plants targeting to produce 320-350koz of gold in FY12F                              underperformed the gold price
at A$790-830/oz (3rd quartile). The cornerstone asset is its Leonora                                    however this is expected to
operations including the Gwalia (Deeps) and King of the Hills (formerly                                 reverse as earnings growth is
Tarmoola) underground mines. The Southern Cross region comprises the                                    delivered. Robust cash
mature Marvel Loch operation, which is expected by SBM to move to care                                  generation supports growth,
and maintenance post FY12F. SBM has strong cash generation and an                                       M&A and capital management.
unleveraged balance sheet offering optionality to continue to grow the
business. Trading at 0.5x its spot NPV and very low multiples (EV/EBITDA                                Nomura vs consensus
~2x) SBM offers attractive deep value, Nomura initiates coverage with a Buy                             Nomura’s estimate for FY12F
rating and A$3.35 target price, based on a combination of our forward gold                              NPAT is above consensus
price NPV adjusted for growth and risks.                                                                estimates.

Catalysts                                                                                               Research analysts
 Hit targets at Gwalia, and progress incremental production opportunities
 A discovery or complementary acquisition to enhance profile                                           Australia Metals & Mining

                                                                                                        David Radclyffe - NIplc
 Demonstration of strong cash generation potential relative to its size                                david.radclyffe@nomura.com
                                                                                                        +61 2 8062 8434
Growth discussion                                                                                       David Cotterell - NAL
SBM in the mid-term is expected to have flat production, with the pending                               david.cotterell@nomura.com
                                                                                                        +61 2 8062 8433
closure of Marvel Loch. However, the company is evaluating the potential
to expand the Gwalia plant, to develop an underground at Tower Hill and a                               Puneet Saxena
                                                                                                        puneet.saxena@nomura.com
shaft development at Gwalia. In addition, SBM is stepping up exploration                                +44 20 7102 9162
activities and evaluating potential acquisitions to strengthen its production
profile (i.e. the Catalpa proposal in 2010).


30 Jun                              FY11                FY12F               FY13F              FY14F
Currency (AUD)                      Actual      Old       New       Old         New    Old       New

Revenue (mn)                         369                  548                   495              461
Reported net profit (mn)                 69               133                   189              138
Normalised net profit (mn)               69               133                   189              138
Normalised EPS                    21.05c               41.79c              60.66c             43.91c
Norm. EPS growth (%)                     na              98.5                   45.2            -27.6
Norm. P/E (x)                        10.0      N/A         5.0      N/A          3.5   N/A        4.8
EV/EBITDA (x)                            4.7               2.4                   1.4              0.9
Price/book (x)                           1.6   N/A         1.1      N/A          0.8   N/A        0.6
Dividend yield (%)                       na    N/A         na       N/A          na    N/A        na
ROE (%)                              17.5                26.0                   26.0            14.1    See Appendix A-1 for analyst
Net debt/equity (%)              net cash             net cash            net cash           net cash   certification, important
Source: Company data, Nomura estimates
                                                                                                        disclosures and the status of
                                                                                                        non-US analysts.
Key company data: See page 2 for company data and detailed price/index chart.
Nomura | St Barbara                                                                                                              April 2, 2012



Key data on St Barbara
Income statement (AUDmn)                                                               Relative performance chart (one year)
Year-end 30 Jun                           FY10      FY11    FY12F    FY13F    FY14F
Revenue                                     304       369      548      495      461
Cost of goods sold                         -219      -222     -306     -239     -209
Gross profit                                 84       147      243      257      252
SG&A                                       -117       -75     -111      -78      -73
Employee share expense
Operating profit                            -33       72      132      179      179

EBITDA                                       39      131      221      247      242
Depreciation                                -72      -58      -89      -68      -63    Source: ThomsonReuters, Nomura research
Amortisation                                                                            
                                                                                        (%)                                   1M      3M 12M
EBIT                                        -33       72      132      179      179
                                                                                           Absolute (AUD)                     -5.8    3.4   -4.1
Net interest expense                         -7       -4        1       10       19
                                                                                           Absolute (USD)                     -7.2    7.1   -1.5
Associates & JCEs
                                                                                           Relative to index                  -6.6    0.2   6.4
Other income
                                                                                           Market cap (USDmn)               722.7
Earnings before tax                         -40       69      133      189      198
                                                                                           Estimated free float (%)          94.4
Income tax                                    0        0        0        0      -59
                                                                                           52-week range (AUD)           2.58/1.71
Net profit after tax                        -40       69      133      189      138
                                                                                           3-mth avg daily turnover
Minority interests                            0        0        0        0        0        (USDmn)
                                                                                                                             3.50
Other items                                                                                Major shareholders (%)
Preferred dividends                                                                        M&G Investment                    18.1
Normalised NPAT                             -40       69      133      189      138        Vanguard Group                    16.1
Extraordinary items                                                                        Source: Thomson Reuters, Nomura research
Reported NPAT                               -40       69      133      189      138
Dividends                                     0        0        0        0        0
Transfer to reserves                        -40       69      133      189      138
                                                                                       Notes

Valuation and ratio analysis                                                                Tax losses for next two years
FD normalised P/E (x)                         na     10.0      5.0      3.5      4.8        enhances earnings. No ability to
FD normalised P/E at price target (x)         na     15.9      8.0      5.5      7.6
Reported P/E (x)                              na     10.0      5.0      3.5      4.8
                                                                                            frank dividends.
Dividend yield (%)                            na       na       na       na       na
Price/cashflow (x)                           7.6      5.3      2.8      2.4      3.0
Price/book (x)                               2.0      1.6      1.1      0.8      0.6
EV/EBITDA (x)                               15.4      4.7      2.4      1.4      0.9
EV/EBIT (x)                                   na      8.6      4.0      1.9      1.2
Gross margin (%)                            27.7     39.9     44.3     51.8     54.6
EBITDA margin (%)                           12.9     35.5     40.3     49.8     52.4
EBIT margin (%)                            -10.8     19.6     24.1     36.1     38.8
Net margin (%)                             -13.2     18.6     24.2     38.2     30.0
Effective tax rate (%)                        na      0.0      0.0      0.0     30.0
Dividend payout (%)                           na      0.0      0.0      0.0      0.0
Capex to sales (%)                          34.2     41.9     21.3     21.4     21.7
Capex to depreciation (x)                    1.4      2.6      1.3      1.6      1.6
ROE (%)                                       na     17.5     26.0     26.0     14.1
ROA (pretax %)                                na     17.1     26.1     30.3     26.0

Growth (%)
Revenue                                      5.9     21.6     48.6     -9.7     -7.0
EBITDA                                      -8.8    235.4     68.9     11.6     -2.1
EBIT                                          na       na     82.6     35.4      0.0
Normalised EPS                                na       na     98.5     45.2    -27.6
Normalised FDEPS                              na       na     98.5     45.2    -27.6

Per share
Reported EPS (AUD)                       -13.64c   21.05c   41.79c   60.66c   43.91c
Norm EPS (AUD)                           -13.64c   21.05c   41.79c   60.66c   43.91c
Fully diluted norm EPS (AUD)             -13.64c   21.05c   41.79c   60.66c   43.91c
Book value per share (AUD)                  1.07     1.34     1.89     2.78     3.46
DPS (AUD)                                   0.00     0.00     0.00     0.00     0.00
Source: Company data, Nomura estimates                                                  




                                                                                                                                                   87
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Cashflow (AUDmn)                                                                                 
Year-end 30 Jun                            FY10       FY11      FY12F      FY13F      FY14F     Notes
EBITDA                                        39        131        221        247        242        Generating EBITDA of >A$200mn pa
Change in working capital                      0         -2         -5          2          1
Other operating cashflow                      43          1         28         29        -21
Cashflow from operations                      82        130        244        277        221
Capital expenditure                         -104       -155       -117       -106       -100
Free cashflow                                -22        -24        127        171        121
Reduction in investments                                  0          0          0          0
Net acquisitions
Reduction in other LT assets                            -11          8          0          0
Addition in other LT liabilities                        -26          9          0          0
Adjustments                                   10         42        -17          0          0
Cashflow after investing acts                -12        -19        127        171        121
Cash dividends                                 0          0          0          0          0
Equity issue                                 119          0        -30          5          6
Debt issue                                   -82         -4          0          0          0
Convertible debt issue
Others                                        24          0         -9          0          0
Cashflow from financial acts                  60         -3        -39          5          6
Net cashflow                                  48        -23         88        176        127
Beginning cash                                54        102         79        167        343
Ending cash                                  102         79        167        343        471
Ending net debt                              -86        -67       -164       -340       -468
Source: Company data, Nomura estimates



Balance sheet (AUDmn) 
As at 30 Jun                               FY10       FY11      FY12F      FY13F      FY14F     Notes
Cash & equivalents                          102         79        167        343        471         By 2015F SBM could have
Marketable securities                                                                               >A$500mn in cash.
Accounts receivable                           15         24         27         25         23
Inventories                                   18         18         44         40         37
Other current assets                           9         15          0          0          0
Total current assets                         145        137        238        408        531
LT investments                                 0          0          0          0          0
Fixed assets                                 329        390        444        530        610
Goodwill
Other intangible assets                        6         12         24         44         64
Other LT assets                                0         11          3          3          3
Total assets                                 479        548        709        984      1,207
Short-term debt                                7         10          0          0          0
Accounts payable                              38         49         55         50         46
Other current liabilities                      7          8         12         12         12
Total current liabilities                     52         68         66         61         58
Long-term debt                                 9          2          3          3          3
Convertible debt
Other LT liabilities                          69         43         52         52         52
Total liabilities                            130        112        121        116        112
Minority interest
Preferred stock
Common stock
Retained earnings
Proposed dividends
Other equity and reserves                    349        436        588        869      1,095
Total shareholders' equity                   349        436        588        869      1,095
Total equity & liabilities                   479        548        709        984      1,207

Liquidity (x)
Current ratio                               2.79       2.01       3.60       6.68       9.21
Interest cover                              -4.5       19.6         na         na         na

Leverage
Net debt/EBITDA (x)                      net cash   net cash   net cash   net cash   net cash
Net debt/equity (%)                      net cash   net cash   net cash   net cash   net cash

Activity (days)
Days receivable                               na        19.6      17.2       19.2       18.9
Days inventory                                na        29.6      36.8       63.7       66.7
Days payable                                  na        71.5      62.2       79.6       83.4
Cash cycle                                    na       -22.4      -8.2        3.3        2.3
Source: Company data, Nomura estimates




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Investment view
Fig. 190: Map of operations




                                                                                             AUSTRALIA
                                                                                             Leonora
                                                                                             Southern Cross




Source: Nomura research

Key projects
Brief history
Gwalia, Tarmoola and Marvel Loch were formerly owned by Sons of Gwalia before its
demise and bought as a package by SBM in 2005 for A$38mn. Carosue Dam was also
acquired as part of the transaction and later sold to Saracen.

Leonora - Gwalia Deeps
Gwalia is a deep, high-grade underground mine and the cornerstone asset for SBM, with a                   Producing >175koz from Gwalia,
10-year projected mine life. The reserve of 2.0Moz at 8.9g/t is located from 1,000mbs                     10 year mine life. Upside at
(meters below surface) with resources extending to 1,800mbs (and open down dip). In                       depth.
FY12F SBM is targeting to produce 175-190koz from Gwalia, key to this target is for the
mine to produce at >60kt/month of ore at a grade of >8g/t. This is a deep project and as a
result has potential operational risk relating to ground stress; however, this is currently
being well managed, in our view. FY12F cash costs are forecast by SBM at A$610-640/oz.
SBM is focused on improving costs and productivity at Gwalia with a haulage optimisation /
hoisting shaft pre-feasibility study due in June 2012. Conceptually, the development of a
hoisting shaft might take 2-3 years to develop (cost >A$50mn), the advantage being the
potential to mine at higher rates and lower haulage costs as the mine continues to deepen.

Fig. 191: Gwalia – Production and cost profile                    Fig. 192: Gwalia – EBITDA and capex

  250    (koz)                                   (A$/oz)   900      250     (A$mn)
                                                           800      200
  200                                                      700      150
                                                           600      100
  150
                                                           500
                                                                     50
                                                           400
  100                                                                  0
                                                           300
                                                           200      (50)
   50
                                                           100     (100)
    0                                                      0       (150)
          2009 2010 2011 2012F 2013F 2014F 2015F                             2009     2010     2011 2012F 2013F 2014F 2015F
             Gold Production (LHS)  Cash costs (RHS)                                              EBITDA Capex

Source: Company data, Nomura research                             Source: Company data, Nomura research




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Leonora - King of the Hills
King of the Hills (formally known as Tarmoola) is a satellite underground operation 42km
to the North of the Gwalia operation and was commissioned in mid 2011. The project
takes advantage of spare capacity in the Gwalia mill and is expected to produce 55-
60koz of gold per annum for some five years (0.2Moz of reserves).

Leonora - Gwalia plant expansion / Tower Hill
SBM expects to complete a scoping study to expand the current 1.2Mtpa Gwalia CIP
plant in 2H FY12F (to ~1.8Mtpa for a conceptual cost of ~A$30mn). This study is in-
conjunction with the haulage studies and the potential development of Tower Hill as a
potential underground ore source located 2km from the plant and with 0.4Moz of
estimated resources. Potentially, however, an additional source of ore will need to be
identified to justify such an expansion of the current plant.

Fig. 193: King of the Hills – Production and cost profile           Fig. 194: King of the Hills – EBITDA and capex
 175    (koz)                                   (A$/oz)     1,000     80     (A$mn)
 150                                                        800       60
 125
                                                            600       40
 100
                                                            400       20
  75
                                                            200         0
  50
  25                                                        0        (20)

   0                                                  -200           (40)
        2009      2010 2011 2012F 2013F 2014F 2015F                           2009     2010     2011 2012F 2013F 2014F 2015F
                Gold Production (LHS)   Cash costs (RHS)                                            EBITDA Capex

Source: Company data, Nomura research                               Source: Company data, Nomura research


Southern Cross – Marvel Loch
The mature Marvel Loch mine is the key asset in the Southern Cross region. Marvel                           Marvel Loch expected to close
Loch is now an underground mine processing ore at its 2.2Mtpa processing CIL plant.                         in FY13F.
Production in FY12F is forecast by SBM at 90-100koz. Reserves stand a 0.2moz and the
operation is due to continue to produce through to the December quarter 2012. However,
the project continues to have a large resource inventory of 2.2Moz (e.g. ~1Moz at
Nevoria and Transvaal).

Fig. 195: Marvel Loch – Production and cost profile                 Fig. 196: Marvel Loch – EBITDA and capex
  175    (koz)                                  (A$/oz)     1,600     80     (A$mn)
  150                                                       1,400
                                                                      60
                                                            1,200
  125
                                                            1,000     40
  100                                                       800
                                                                      20
   75                                                       600
                                                            400        0
   50
                                                            200
   25                                                                (20)
                                                            0
    0                                                       -200     (40)
         2009 2010 2011 2012F 2013F 2014F 2015F                              2009      2010     2011 2012F 2013F 2014F 2015F
             Gold Production (LHS)  Cash costs (RHS)                                                EBITDA Capex

Source: Company data, Nomura research                               Source: Company data, Nomura research


Exploration
SBM is investing some A$22mn pa on exploration with projects across Australia with
                2
some 4,700km of tenements. At Leonora, the company is planning to drill a number of
targets on the Gwalia mine trend such as Gwalia South, Gwalia North and Savannah. In
NSW SBM has an early-stage land package in the East Lachlan to the west of Dubbo,
where drilling is expected to commence in coming months.




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Balance sheet
At the end of 2011 SBM had a net cash position of A$107mn (or A$0.33 per share),                                                                 Robust balance sheet, cash to
placing the company in a strong position. In FY12F Nomura estimates SBM could                                                                    build strongly in absence of new
generate >A$220mn of EBITDA and with anticipated capex of ~A$90-100mn, the cash                                                                  projects.
position is expected to continue to build. Significantly, SBM has tax losses of A$342mn
and as a result is not expecting to pay tax for some two years. On Nomura’s current
assumptions SBM would have the potential to generate its capitalisation in cash in
around four years. However, Gwalia reinvestment has the potential to represent around
A$70mn of additional expenditures in the midterm.
Without the ability to offer franked dividends in the short term SBM has announced an
intention to buy up to a 15mn shares over the next six months, representing 5% of the
current issued capital (or ~A$30mn).

Hedging
SBM has a modest hedge book covering production from the higher-cost Southern Cross
and King of the Hills assets. Hedging comprises of 273koz through a collar structure
(floor at A$1,425/oz and ceiling at A$1,615/oz) expiring in FY15. In FY13F and FY14F
hedging represents 45% and 30%, respectively, of net production. The last reported
mark-to-market value of the hedge book was -A$20mn.

Fig. 197: St Barbara – EV/Reserves and EV/Resources                                                      Fig. 198: St Barbara – Hedging profile
 250                                                                                                                 2012F          2013F            2014F        2015F
         (US$/oz)
                                                                                                             0                                                                  5
 200
                                                                                                            20
 150
                                                                                                                                                                                (5)
                                                                                                            40
 100
                                                                                                            60
                                                                                                                                                                                (15)
  50
                                                                                                            80
   0                                                                                                              (koz)                                             (A$mn)
         2009      2010   2011 2012F                               2013F 2014F 2015F                      100                                                                   (25)
                      EV/Reserves                                  EV/Resources                                              Hedged (LHS)                Gain/Loss (RHS)
Source: Company data, Nomura research                                                                    Source: Company data, Nomura research

NPV & risk analysis
Nomura values SBM at A$2.99/share based on DCF analysis using a 5% discount rate
and Nomura’s long-term gold price forecast US$1,200/oz. In addition, Nomura estimates
a flat spot gold price NPV of A$3.85/share. On this basis, SBM currently trades on 0.5x
NPV (spot). The figures below highlight the asset composition of the NPV and how NPV
changes through time as capital is invested in the business and growth is delivered.
Nomura’s target price for SBM of A$3.35/share is based on a combination of our forward
gold price NPV adjusted for growth and risks. Risks to the achievement of our target
price include operational performance at Gwalia, cost control and gold price volatility.

Fig. 199: NPV waterfall chart                                                                            Fig. 200: Valuation trend
 3.50 (A$)  $0.22                                                                                         3.50   (A$)
                                             $0.33 $2.99
 3.00 $2.92                     $0.05                                                                     3.00
                  -$0.02
 2.50                    -$0.36       -$0.18                                                              2.50
 2.00
 1.50                                                                                                     2.00
 1.00                                                                                                     1.50
 0.50
                                                                                                          1.00
 0.00
                                                  Corporate




                                                                                                          0.50
                                                              Exploration
                    King of Hills


                                    Marvel Loch




                                                                            Hedging
          Gwalia




                                                                                                 Total
                                                                                      Net Cash




                                                                                                          0.00
                                                                                                                  Current Per          +1 Yr             +2 Yr         +3 Yr
                                                                                                                    Share

Source: Nomura research                                                                                  Source: Nomura research




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Management & significant shareholders
Board/Management
Chairman – Colin Wise
MD & CEO – Tim Lehany
CFO – Garth Campbell-Cowan

Shareholders
M&G Investments – 18.1%
Vanguard Group – 16.1%
Franklin Resources – 7.2%

Fig. 201: Production and cost profile                            Fig. 202: EBITDA and capex profile

  350     (koz)                              (A$/oz)    1,000      300     (A$mn)
                                                                   250
  300
                                                        800        200
  250
                                                                   150
  200                                                   600
                                                                   100
  150                                                               50
                                                        400
                                                                     0
  100
                                                        200        (50)
    50
                                                                  (100)
     0                                                  0         (150)
          2009 2010 2011 2012F 2013F 2014F 2015F                            2009     2010     2011 2012F 2013F 2014F 2015F
           Total Equiv Gold Payable (LHS) Cash costs (RHS)                                       EBITDA Capex

Source: Company data, Nomura research                            Source: Company data, Nomura research




Fig. 203: Debt profile and debt ratio                            Fig. 204: Earnings & P/E ratio
  700     (A$mn)                                  (x)              80     (c)                                        (x)    25
                                                         1.4
  600                                                                                                                       20
                                                                   60
  500                                                                                                                       15
  400                                                    0.9       40                                                       10
  300                                                                                                                      5
                                                                   20
                                                                                                                           0
  200
                                                         0.4        0                                                      (5)
  100
                                                                                                                           (10)
     0                                                            (20)
                                                                                                                           (15)
 (100)                                                   (0.1)    (40)                                                     (20)
          2009 2010 2011 2012F 2013F 2014F 2015F                          2009     2010     2011 2012F 2013F 2014F 2015F
           Net cash (debt) (LHS) Net debt/EBITDA (RHS)                                      EPS (LHS)     P/E (RHS)
Source: Company data, Nomura research                            Source: Company data, Nomura research




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Fig. 205: St Barbara – Model summary
                                                     St Barbara (SBM.AX)
 Primary Analyst: David Radclyffe                                            P&L (A$mn)                 FY11    FY12F    FY13F    FY14F
                                                                             Revenues                     369      537      496      471
 Rating                                   Buy                                Operating Costs             -222     -300     -238     -213
 Target Price (A$)                        3.35                               Other                        -16      -22      -10      -10
                                                                             EBITDA                       131      216      248      248
 Price (A$)                               2.06 Price (US$)            2.13   D&A                          -58      -89      -68      -63
 NPV (A$)                                 2.99 NPV (US$)              3.09   EBIT                          72      127      180      186
                                                                             Net Interest                  -4        1       10       19
 Shares (mn)                               326                               Taxes                          0        0        0      -61
 Mcap (A$mn)                               671 Mcap (US$mn)           695    Adjustments                    0        0        0        0
 EV (A$mn)                                 603 EV (US$mn)             625    Net Profit                    69      127      190      143

 Year End                                 June                               EPS (¢)                    21.0      40.3     60.9      45.4
                                                                             DPS (¢)                     0.0       0.0      0.0       0.0

 Assumptions                             FY11    FY12F FY13F FY14F           Cash Flows (A$mn)          FY11    FY12F    FY13F    FY14F

 Gold (US$/oz)                           1,373   1,707    1,919      1,963   Receipts                    354       536      496      471
 Silver (US$/oz)                          29.2    38.7     45.5       42.0   Payments                   -228      -308     -238     -213
 AUD/USD                                  0.99    1.03     1.03       1.05   Net Interest                  4         5       10       19
                                                                             Taxes                         0         0        0      -61
                                                                             Other                         0         5       10       10
                                                                             Operating Cash Flows        130       238      278      226
 Key Ratios                              FY11    FY12F FY13F FY14F
                                                                             Capex                      -133       -97      -86      -80
 PE (x)                                    9.8      5.1        3.4     4.5   Disposals                     5         0        0        0
 EV/EBITDA (x)                             4.6      2.4        1.4     0.8   Exploration                 -22       -20      -20      -20
 EPS Growth (%)                           N.M      91.7       50.9   -25.4   Other                         0         0        0        0
 ROE (%)                                  15.7     21.9       22.0    13.1   Investing Cash Flows       -150      -117     -106     -100
 Net Debt to Equity (%)                  -15.4    -27.2      -38.8   -42.7
 Net Debt to EBITDA (x)                   -0.5     -0.7       -1.4    -1.9   Change in Borrowings          -4        0       0          0
 Dividend Yield (%)                        0.0      0.0        0.0     0.0   Dividends                      0        0       0          0
 FCF Yield (%)                            -3.6     19.0       26.6    19.3   Equity                         0      -30       5          6
                                                                             Other                          0       -9       0          0
                                                                             Financing Cash Flows          -3      -39       5          6
 Production & Costs                      FY11    FY12F FY13F FY14F
                                                                             Balance Sheet (A$mn)       FY11    FY12F    FY13F    FY14F
 Gwalia (koz)                              131     178        184     192
 King of Hills (koz)                         7      53         59      59    Cash                         79      162      339       471
 Marvel Loch (koz)                         120      92         22       0    Receivables                  24       27       25        24
 Total Gold (koz)                          258     323        265     251    Inventories                  18       43       40        38
                                                                             Other                        15        0        0         0
 By-Product Cash Costs (A$/oz)             826     848        751     700    Current Assets              137      231      403       532
 By-Product Cash Costs (US$/oz)            819     873        772     735
                                                                             Receivables                   0        0        0         0
 EV/Production (US$/oz)                  2,313   1,629    1,300       848    Investments                   0        0        0         0
 EV/Reserves (US$/oz)                      216     191      125        77    Property, Plant & Equip.    390      444      530       610
 EV/Resources (US$/oz)                      78      69       45        28    Intangibles                  12       24       44        64
                                                                             Other                        11        3        3         3
 Resources (Moz)                           7.7 Reserves (Moz)          2.8   Non Current Assets          412      471      577       677

 EBIT (A$mn)                             FY11    FY12F FY13F FY14F           Total Assets                548      702      980     1,209

 Gwalia                                     48     135        178     191    Borrowings                   10        0        0          0
 King of Hills                               3      32         46      40    Payables                     49       53       50         47
 Marvel Loch                                39       9          4       0    Provisions                    8        9        9          9
                                                                             Other                         0        2        2          2
 NPV                                    (A$mn)       Per Share               Current Liabilities          68       65       61         59

 Gwalia                                    949             $2.91             Payables
 King of Hills                              72             $0.22             Borrowings                    2        3        3          3
 Marvel Loch                                -8            -$0.02             Provisions                   32       33       33         33
 Corporate                                -118            -$0.36             Other                        10       19       19         19
 Exploration                                16             $0.05             Non Current Liabilities      44       55       55         55
 Hedging                                   -47            -$0.14
 Investments                                 0             $0.00             Total Liabilities           112      120      116       113
 Net Cash                                  107             $0.33
 Total                                     972             $2.99             Total Equity                436      582      864     1,095
Source: Company data, Nomura research




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Appendix A-1
Analyst Certification
We, David Radclyffe and David Cotterell, hereby certify (1) that the views expressed in this Research report accurately reflect
our personal views about any or all of the subject securities or issuers referred to in this Research report, (2) no part of our
compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this
Research report and (3) no part of our compensation is tied to any specific investment banking transactions performed by
Nomura Securities International, Inc., Nomura International plc or any other Nomura Group company.


Issuer Specific Regulatory Disclosures
The term "Nomura Group Company" used herein refers to Nomura Holdings, Inc. or any affiliate or subsidiary of Nomura Holdings, Inc. Nomura
Group Companies involved in the production of Research are detailed in the disclaimer below.



Issuer name                          Ticker   Price          Price date      Stock rating     Sector rating    Disclosures
Alacer Gold Corp.                    AQG AU   AUD 8.13       29-Mar-2012     Not rated        Not rated
Evolution Mining                     EVN AU   AUD 1.73       29-Mar-2012     Not rated        Not rated
Newcrest Mining                      NCM AU   AUD 30.23      29-Mar-2012     Buy              Not rated
OceanaGold                           OGC AU   AUD 2.50       29-Mar-2012     Not rated        Not rated
Perseus Mining                       PRU AU   AUD 2.34       29-Mar-2012     Not rated        Not rated
Regis Resources                      RRL AU   AUD 3.98       29-Mar-2012     Not rated        Not rated
St Barbara                           SBM AU   AUD 2.07       29-Mar-2012     Not rated        Not rated

Previous Rating

Issuer name                                                                     Previous Rating                Date of change
Alacer Gold Corp.
Evolution Mining
Newcrest Mining                                                                 Not Rated                      28-Nov-2011
OceanaGold
Perseus Mining
Regis Resources
St Barbara


Alacer Gold Corp. (AQG AU)                                    AUD 8.13 (29-Mar-2012) Not rated (Sector rating: Not rated)
Chart Not Available

Valuation Methodology AQG is valued at A$6.33/share based on DCF analysis using a 5% discount rate and Nomura’s long-
term gold price forecast US$1,200/oz. In addition Nomura estimates a flat spot gold price NPV of A$9.92/share on this basis
AQG currently trades on 0.8x NPV (spot). Nomura's target price of A$9.30/share is based on a combination of forward gold
price NPV adjusted for growth/risks.
Risks that may impede the achievement of the target price Risks to the achievement of our target price include operational
performance at Çöpler and in Australia, cost control and gold price volatility.


Evolution Mining (EVN AU)                                     AUD 1.73 (29-Mar-2012) Not rated (Sector rating: Not rated)
Chart Not Available

Valuation Methodology EVN is valued at A$2.26/share based on DCF analysis using a 5% discount rate and Nomura’s long-
term gold price forecast US$1,200/oz. In addition Nomura estimates a flat spot gold price NPV of A$3.00/share and on this
basis EVN currently trades on 0.6x NPV (spot). Nomura's target price of A$2.70/share is based on a combination of forward
gold price NPV adjusted for growth/risks.
Risks that may impede the achievement of the target price Risks to the achievement of our target price include volatility of
oil, gold, silver and copper prices; currency movements in AUD; operational issues; industrial action and sovereign risks.




                                                                                                                                          94
Nomura | Australia Metals & Mining                                                                                    April 2, 2012



OceanaGold (OGC AU)                                     AUD 2.50 (29-Mar-2012) Not rated (Sector rating: Not rated)
Chart Not Available

Valuation Methodology OGC is valued at A$4.22/share based on DCF analysis using a 5% discount rate and Nomura’s long-
term gold price forecast US$1,200/oz. In addition Nomura estimates a flat spot gold price NPV of A$5.96/share. On this basis
OGC currently trades at 0.4x NPV (spot). Nomura's target price of A$3.30/share is based on a combination of forward gold price
NPV adjusted for growth/risks.
Risks that may impede the achievement of the target price Risks to the achievement of our target price include volatility of
gold and copper prices; currency movements in NZD and PHP; operational issues; sovereign and industrial action risks.


Perseus Mining (PRU AU)                                 AUD 2.34 (29-Mar-2012) Not rated (Sector rating: Not rated)
Chart Not Available

Valuation Methodology PRU is valued at A$2.64/share based on DCF analysis using a 5% discount rate and Nomura’s long-
term gold price forecast US$1,200/oz. In addition Nomura estimates a flat spot gold price NPV of A$3.68/share on this basis
PRU currently trades on 0.6x NPV (spot). Nomura's target price of A$2.65/share is based on a combination of forward gold price
NPV adjusted for growth/risks.
Risks that may impede the achievement of the target price Risks to the achievement of our target price include volatility of
gold and copper prices; currency movements in AUD, Ghana Cedi and CFA Franc; operational issues; industrial action and
sovereign risks.


Regis Resources (RRL AU)                                AUD 3.98 (29-Mar-2012) Not rated (Sector rating: Not rated)
Chart Not Available

Valuation Methodology RRL is valued at A$3.28/share based on DCF analysis using a 5% discount rate and Nomura’s long-
term gold price forecast US$1,200/oz. In addition Nomura estimates a flat spot gold price NPV of A$4.25/share on this basis
RRL currently trades on 0.9x NPV (spot). Nomura's target price of A$3.65/share is based on a combination of forward gold price
NPV adjusted for growth/risks.
Risks that may impede the achievement of the target price Risks to the achievement of our target price include volatility of
gold and copper prices; currency movements in AUD, PGK and IDR; operational issues; industrial action and sovereign risks.


St Barbara (SBM AU)                                     AUD 2.07 (29-Mar-2012) Not rated (Sector rating: Not rated)
Chart Not Available

Valuation Methodology SBM is valued at A$2.99/share based on DCF analysis using a 5% discount rate and Nomura’s long-
term gold price forecast US$1,200/oz. In addition Nomura estimates a flat spot gold price NPV of A$3.85/share and on this
basis SBM currently trades on 0.5x NPV (spot). Nomura's target price of A$3.35/share is based on a combination of forward
gold price NPV adjusted for growth/risks.
Risks that may impede the achievement of the target price Risks to the achievement of our target price include operational
performance at Gwalia, cost control and gold price volatility.




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Nomura | Australia Metals & Mining                                                                                                         April 2, 2012


Important Disclosures
Online availability of research and conflict-of-interest disclosures
Nomura research is available on www.nomuranow.com, Bloomberg, Capital IQ, Factset, MarkitHub, Reuters and ThomsonOne.
Important disclosures may be read at http://go.nomuranow.com/research/globalresearchportal/pages/disclosures/disclosures.aspx or requested
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The analysts responsible for preparing this report have received compensation based upon various factors including the firm's total revenues, a
portion of which is generated by Investment Banking activities. Unless otherwise noted, the non-US analysts listed at the front of this report are
not registered/qualified as research analysts under FINRA/NYSE rules, may not be associated persons of NSI, and may not be subject to
FINRA Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies, public appearances, and trading securities held
by a research analyst account.

Any authors named in this report are research analysts unless otherwise indicated. Industry Specialists identified in some Nomura International
plc research reports are employees within the Firm who are responsible for the sales and trading effort in the sector for which they have
coverage. Industry Specialists do not contribute in any manner to the content of research reports in which their names appear. Marketing
Analysts identified in some Nomura research reports are research analysts employed by Nomura International plc who are primarily responsible
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research reports in which their names appear and publish research on their sector.

Distribution of ratings (US)
The distribution of all ratings published by Nomura US Equity Research is as follows:
35% have been assigned a Buy rating which, for purposes of mandatory disclosures, are classified as a Buy rating; 11% of companies with this
rating are investment banking clients of the Nomura Group*.
59% have been assigned a Neutral rating which, for purposes of mandatory disclosures, is classified as a Hold rating; 2% of companies with this
rating are investment banking clients of the Nomura Group*.
6% have been assigned a Reduce rating which, for purposes of mandatory disclosures, are classified as a Sell rating; 0% of companies with this
rating are investment banking clients of the Nomura Group*.
As at 31 December 2011. *The Nomura Group as defined in the Disclaimer section at the end of this report.

Distribution of ratings (Global)
The distribution of all ratings published by Nomura Global Equity Research is as follows:
47% have been assigned a Buy rating which, for purposes of mandatory disclosures, are classified as a Buy rating; 40% of companies with this
rating are investment banking clients of the Nomura Group*.
43% have been assigned a Neutral rating which, for purposes of mandatory disclosures, is classified as a Hold rating; 45% of companies with
this rating are investment banking clients of the Nomura Group*.
10% have been assigned a Reduce rating which, for purposes of mandatory disclosures, are classified as a Sell rating; 21% of companies with
this rating are investment banking clients of the Nomura Group*.
As at 31 December 2011. *The Nomura Group as defined in the Disclaimer section at the end of this report.

Explanation of Nomura's equity research rating system in Europe, Middle East and Africa, US and Latin America
The rating system is a relative system indicating expected performance against a specific benchmark identified for each individual stock.
Analysts may also indicate absolute upside to target price defined as (fair value - current price)/current price, subject to limited management
discretion. In most cases, the fair value will equal the analyst's assessment of the current intrinsic fair value of the stock using an appropriate
valuation methodology such as discounted cash flow or multiple analysis, etc.

STOCKS
A rating of 'Buy', indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of 'Neutral',
indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of 'Reduce', indicates that
the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of 'Suspended' , indicates that the rating, target
price and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies in certain circumstances
including, but not limited to, when Nomura is acting in an advisory capacity in a merger or strategic transaction involving the company.
Benchmarks are as follows: United States/Europe: Please see valuation methodologies for explanations of relevant benchmarks for stocks
(accessible through the left hand side of the Nomura Disclosure web page: http://go.nomuranow.com/research/globalresearchportal);Global
Emerging Markets (ex-Asia): MSCI Emerging Markets ex-Asia, unless otherwise stated in the valuation methodology.

SECTORS
A 'Bullish' stance, indicates that the analyst expects the sector to outperform the Benchmark during the next 12 months. A 'Neutral' stance,
indicates that the analyst expects the sector to perform in line with the Benchmark during the next 12 months. A 'Bearish' stance, indicates that
the analyst expects the sector to underperform the Benchmark during the next 12 months.
Benchmarks are as follows: United States: S&P 500; Europe: Dow Jones STOXX 600; Global Emerging Markets (ex-Asia) : MSCI Emerging
Markets ex-Asia.




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Nomura | Australia Metals & Mining                                                                                                    April 2, 2012


Explanation of Nomura's equity research rating system in Japan and Asia ex-Japan
STOCKS
Stock recommendations are based on absolute valuation upside (downside), which is defined as (Target Price - Current Price) / Current Price,
subject to limited management discretion. In most cases, the Target Price will equal the analyst's 12-month intrinsic valuation of the stock,
based on an appropriate valuation methodology such as discounted cash flow, multiple analysis, etc.
A 'Buy' recommendation indicates that potential upside is 15% or more. A 'Neutral' recommendation indicates that potential upside is less than
15% or downside is less than 5%. A 'Reduce' recommendation indicates that potential downside is 5% or more. A rating of 'Suspended'
indicates that the rating and target price have been suspended temporarily to comply with applicable regulations and/or firm policies in certain
circumstances including when Nomura is acting in an advisory capacity in a merger or strategic transaction involving the subject company.
Securities and/or companies that are labelled as 'Not rated' or shown as 'No rating' are not in regular research coverage of the Nomura entity
identified in the top banner. Investors should not expect continuing or additional information from Nomura relating to such securities and/or
companies.

SECTORS
A 'Bullish' rating means most stocks in the sector have (or the weighted average recommendation of the stocks under coverage is) a positive
absolute recommendation. A 'Neutral' rating means most stocks in the sector have (or the weighted average recommendation of the stocks
under coverage is) a neutral absolute recommendation. A 'Bearish' rating means most stocks in the sector have (or the weighted average
recommendation of the stocks under coverage is) a negative absolute recommendation.



Target Price
A Target Price, if discussed, reflect in part the analyst's estimates for the company's earnings. The achievement of any target price may be
impeded by general market and macroeconomic trends, and by other risks related to the company or the market, and may not occur if the
company's earnings differ from estimates.




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Nomura | Australia Metals & Mining                                                                                                                              April 2, 2012


Disclaimers
This document contains material that has been prepared by the Nomura entity identified at the top or bottom of page 1 herein, if any, and/or, with the sole or joint
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document. Affiliates and subsidiaries of Nomura Holdings, Inc. (collectively, the 'Nomura Group'), include: Nomura Securities Co., Ltd. ('NSC') Tokyo, Japan;
Nomura International plc ('NIplc'), UK; Nomura Securities International, Inc. ('NSI'), New York, US; Nomura International (Hong Kong) Ltd. (‘NIHK’), Hong Kong;
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032 513), regulated by the Australian Securities and Investment Commission ('ASIC') and holder of an Australian financial services licence number 246412; P.T.
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or have long or short positions in, or buy or sell, the securities, commodities or instruments, or options or other derivative instruments based thereon, of issuers or
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distribution of third party content in any form is prohibited except with the prior written permission of the related third party. Third party content providers do not
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Additional information is available upon request and disclosure information is available at the Nomura Disclosure web page:
http://go.nomuranow.com/research/globalresearchportal/pages/disclosures/disclosures.aspx




                                                                                                                                                                           98
Nomura Asian Equity Research Group

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