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Buying Canadian Gold Coins in Canada at a Bank

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					   The Outlook for
 Commodity Prices
and the Global Mining
      Industry

                                  Seminar on Surviving the Global
                                   Financial Crisis in the Mining
                                              Sector

                                            Mine Africa
  Patricia M. Mohr
  Vice-President, Economics       Radisson Admiral Harbourfront
  & Commodity Market Specialist         Toronto, Ontario
  The Scotiabank Group, Toronto
                                         February 28, 2009
                         Commodity Price Upswing
                 This Decade On a Par With 1970‘s Expansion
           Scotiabank Commodity Price Index1                                    Scotiabank Commodity
300                                                                  300        Price Index, % change yr/yr
          Index: 1997=100
280                                                                  280
                                                                                December 2002                 17.9%
260                         New record high in July                  260
                              2008 at 226% above
                                                                                December 2003                 17.3%
240                                                                  240
220
                                  cyclical low
                                                                     220
                                                                                December 2004                 19.0%
200                                                                  200        December 2005                 24.4%
180
                                                               *     180        December 2006                  5.4%
160                                                                  160        December 2007                 10.4%
                                      All Items
140                                                                  140        (January 2009, % change yr/yr)
120                                                                  120
                                                                                All Items                     -19.6
100                                                                  100
 80                                                                  80
                                                                                 Oil & Gas                    -38.9
 60                                                                  60          Metals & Minerals             -8.5
              Arab Oil              October 2001
 40                                   Bottom                         40          Forest Products               -6.0
              Embargo
 20                                                                  20
      72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10
                                                                                 Agriculture                  -20.9

      A trade-weighted U.S. dollar-based index of principal Canadian exports.
      Shaded areas represent U.S. recession periods.
      Scotiabank Commodity Price Index edged up in January.
Commodity Prices Retreat From Record High in July 2008
The ‗Bull-Run‘ in commodities continued in 2008:H1 due to ongoing
strength in China‘s GDP growth, under-investment in oil & gas and
metals during the 1990s and delays in expanding capacity this
decade.

Interest by investment funds in commodities as a ‗hedge against a
declining U.S. dollar‘ and a major rejuvenation in international grain &
oilseed prices – linked to biofuel development and tight global
supplies – also pushed up commodity prices. Fertilizer prices
(especially potash) rose to record levels.

However, after reaching a cyclical peak in July 2008, Scotiabank‘s
Commodity Price Index plunged by a sharp 39% through December
alongside a faltering global economy – ushered in by a U.S. and
European banking crisis, deleveraging by financial institutions and
much tighter global credit conditions. Most G7 economies are now
contracting.
        Hedge Funds Exit Oil & Metal Positions
While inter-bank lending has improved – following government guarantees on
inter-bank lending in Europe, government capital injections into financial
institutions to shore up their balance sheets and massive central bank
liquidity injections – tighter credit will contribute to sharply reducing global
growth from 5% in 2006 and 2007 to about -0.5% in 2009. This will occur, even
with relative strength in ‗emerging markets‘ such as China, where GDP growth
should still advance by 5.8% in 2009 – though well below the estimated 9.0%
of 2008 and 13.0% of 2007.

The sudden and unusually sharp decline in commodity prices since the July
peak reflects the exit of many hedge funds from long commodity ‗futures‘
positions and ‗commodity index-linked investments‘—forced by fund
redemptions and tighter credit – as well as a shift to record short positions by
funds and trading companies.

On a more positive note, the Scotiabank Commodity Price Index rose by 1.3%
in January 2009, as buying by China‘s State Reserve Bureau contributed to
stronger base metal and grain prices and oil prices steadied.
              China -- Vital to Global
               Commodity Markets
30                                                   30
       yr/yr % change
                                                           China Industrial Production:
                               *3 mth moving avg.
         China – Industrial                                December 2008                     5.7% yr/yr
20         Production*                               20
                                                           G7 Industrial Production         -7.8% (Nov)
                                                            U.S.                           -10.0% (Jan)
10                                                   10
                                                            Japan                          -22.6% (Dec)
                                                            Germany                        -12.0% (Dec)
 0                                                   0
                                                           China shifts policy in mid-September 2008 from
           G7 Industrial Production                        preventing ‗overheating‘ to supporting fast and
-10                                                  -10   steady growth; monetary policy has been
      98 99 00 01 02 03 04 05 06 07 08 09
                                                           eased decisively, while a massive fiscal
                                                           stimulus package (infrastructure spending
            Demand Growth in China                         totaling 4.16 tr RMB from 2008:Q4 through 2010
               (2007, % change)                            – equivalent to 6% of nominal GDP in each of
        Crude Oil        4.6   Nickel         24.0         2009 and 2010) was announced on Nov. 9, 2008.
        Copper          16.0   Aluminium      38.8         This spending has already been expanded.
                                                           Measures to bolster 10 key industries
        Slab Zinc       11.5   Iron Ore       10.3
                                                           (including nonferrous metals) have been
                                                           unveiled ahead of the National People‘s
                                                           Congress on March 5, 2009.
                  ‗Emerging Markets‘ Should                                                  GDP (% per annum)
            Provide Some Offset To G7 Contraction
14                                                                                          2006   2007    2008e     2009F     2010F
       yr/yr %
12     change
                                                               2007            WORLD*       5.1     5.0      3.3      -0.5       2.5
10                                                             2008F
8
                                                               2009F
                                                                               CANADA       3.1     2.7      0.7      -1.6       1.6
6
                                     Widening credit squeeze                    UNITED
                                                                                            2.8     2.0      1.1      -2.6       1.7
4                                    cuts growth prospects.                     STATES

2
                                                                                CHINA       11.6    13.0     9.0      5.8        8.5
0

-2
                                                                                 INDIA      9.6     9.0      6.8      5.3        6.5
-4

-6                                                                              SOUTH
                                                                                            5.0     5.0      2.5      -3.5       1.0
         World         China          United        Japan        Euro Zone      KOREA
                                      States
     A „seismic‟ shift in global growth has occurred from the G7 to
                                                                             *Global GDP estimate based on “purchasing power parity,”
     „emerging markets‟ this decade.
                                                                             as used by the IMF. + Negative growth in current dollars.
                                                                             Average 1988-1997: 3.4% p.a. prior to the “economic take-
                                                                             off” in China and India.
                   U.S. Housing Starts                                  U.S. Housing Start Outlook
2.75                                                           2.75
         millions of units, quarterly, annualized                             (million units)
2.50                                                           2.50

                 1978 – Strong ‗Baby-Boom‘ Demand
                                                                      2006                         1.81
2.25                                                           2.25

2.00                                                           2.00
                                                                      2007                         1.34
1.75                                                           1.75   2008F                        0.90
                                Total
1.50                                                           1.50   2009F                        0.55
1.25                                                           1.25
                                                                      2010F                        0.80
1.00                                                           1.00
                                                                      Tighter U.S. lending standards, an
0.75                                                           0.75   end to private-label mortgage
                    Single-Family Units                               securitization, high existing home
0.50                                                           0.50   inventories (exacerbated by near-
                                                                      record foreclosures) and severe
0.25                                                           0.25   employment losses point to
       76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10          prolonged U.S. slowdown.
        U.S. housing starts at 466,000 units in January 2009
        are the lowest in data back to 1959.
        Shaded areas represent U.S. recession periods.
                      The Fed Takes Action to Stem Fallout from Sub-prime
                                     Mortgage Meltdown
                      Federal Funds –                                               ―Real‖ Federal Funds Rate
                      Effective Rates                                                (Adjusted for Inflation)*
20                                                            20   15                                                            15
          per cent                                                           per cent
                                                                                              January 2009 = -1.41%
                                                                                              Average = 2.31%

15                                                            15   10                                                            10


                                                                                                                  Average
10                                                            10    5                                                            5




 5                                                            5     0                                                            0




 0                                                            0    -5                                                            -5
     60     65   70   75   80   85   90   95   00   05   10             60     65   70   75   80   85   90   95   00   05   10

Federal Funds Target Rate is 0.25% in February 2009.               * Inflation-adjusted with the U.S. Personal Consumption Deflator
Fed Funds expected to remain virtually flat through 2010:H1.       (PCE) and the core PCE. Shaded areas represent U.S. recession
                                                                   periods.
         Credit Conditions Tighten Globally In September & October 2008


              USD Libor Shows Significant
                                                               +
                                                               Inter-bank lending thaws
              Improvement in Late October
                     %
8                                                          8 following government
                                                             guarantees on inter-bank lending
                                                             and capital injections into banks
                      ‗Credit Squeeze‘                       and other financial institutions in
6                                                          6 the U.K. and Western Europe in
                                                             October. However, general credit
                                                             conditions remain tight world-
                                                             wide for corporate and consumer
4                     3-month                              4 loans in early 2009.




2                          Overnight                       2

                         +Inter-bank   lending
                                   thaws
0                                                          0
    02   03      04      05       06   07   08   09   10
     Data to February 25, 2009.
              Oil Prices Tumble from Record High                               After a Weak 2009, Oil Prices
150                                                                     150
                                                                               Will Likely Rebound Medium-
140
         US$ per barrel                                            *    140
                                                                               Term
130                                                                     130
120
                                  New Record High:                      120
                                  July 11, 2008: US$147.90                     1990-99         US$19.69/bbl
110                                                                     110    2006            US$66.22
100                                                                     100    2007            US$72.32
         OPEC announces output cuts of
 90      4.2 mb/d in Sept/08 – Jan/09 to                                90     2008            US$99.62
 80      shore up prices.                                               80     2009F           US$45–50
 70                                                                     70     2010F           US$65
 60                                                    Iraq             60     2011            US$75+
                           Iranian                     War
 50                                       Gulf                          50
                          Revolution
 40                                       War                           40
                                                                              A global capital spending slowdown
                                                                              on oil field development in 2009, due
 30        Arab Oil                                                     30
                                                                              to tighter credit and the slide in oil
 20        Embargo                                                      20    prices, sets the stage for a strong
 10                                                                     10    rebound in oil prices in 2011-13.
  0                                                                     0
      60 64 68 72 76 80 84 88 92                  96   00     04   08         U.S. demand for gasoline shows
      Source: Scotiabank Commodity Price Index.                               signs of stabilizing (rising 1.7% yr/yr
      WTI on February 27, 2009: US$44.64.                                     in latest 4 weeks); U.S. oil imports
                                                                              are also declining now, partly due to
                                                                              OPEC cutbacks.
                                 U.S. Economy Contracts

          Waning U.S. Industrial Activity                                    U.S. Employment Growth
6                                                          13
      yr/yr % change       million units, quarterly             2.0                                 yr/yr % change     2.0

4                                                          12
                                 Industrial
                                                           11   1.0                                                    1.0
                                Production
2
                                                                                                  U.S. Payrolls
                                                           10
0                                                               0.0                                                    0.0

                 U.S. Motor                                9                Latest Data:
-2               Vehicle                                                    Declines in
                 Assemblies                                8    -1.0        Payrolls                                   -1.0

-4
                                                                            Jan. 2009      -598,000
                                                           7
                                                                            Decline in     -3,422,000
                                                                -2.0                                                   -2.0
-6                                                                          Past Year
                                                           6


-8                                                         5    -3.0                                                   -3.0
     06         07         08          09             10               06         07         08         09        10

     U.S. motor vehicle assemblies (including General Motors, Mitsubishi, Nissan…) totalled 8.7 million units in
     2008, and are expected to drop to 7.3 million in 2009, before edging up to 7.6 million in 2010. Assemblies
     averaged about 12 million from 1993-2007.
           Scotiabank Metal and Mineral Price                                                 U.S. Equity Markets
              Index Retreats from Record                                                        Remain Jittery
390                                                             390   1800                                                              1800
           Index: 1997=100                                                        Index: 1941-43=10
350                                                             350
                                                                      1600                                    S&P 500                   1600
310                                                             310

270         Metal and Mineral Price Index in July               270   1400                                                              1400
            2008 reached a new record high –
230         123.8% above the June 1988 peak.                    230
                                                                      1200                                                              1200
190                                                             190

150                                                             150   1000                                                              1000

110                                                             110
                                                                       800                                                              800
 70                                                             70                An Indicator of Financial Market
                                                                                  Distress & Economic Sentiment          Feb 23/09
 30                                                             30     600                                                              600
      72     76   80   84    88   92   96   00   04   08   12                00     01   02    03   04   05    06   07   08   09   09
                                                                                                                                   10

      Shaded areas represent U.S. recession periods.                         Commodity prices recently trade down with weak
      Latest data: January 2009.                                             equity markets.
            Copper Prices Still at Profitable Level
4.50                                                                    4.50   Re-weighting     of   Dow
         US$ per pound
                                Record High: US$4.08                           Jones-AIG     Commodity
4.00                               on July 3, 2008             *        4.00   Price Index and S&P GSCI
                                                                               boosts base metals (at
3.50                                                                    3.50
                                                                               least temporarily) in early
                                                              +
3.00                                                                    3.00   January.

2.50                                                                    2.50   Buying by China‘s State
                                                                               Reserve    Bureau    also
2.00                                       Low During                   2.00
                                         Credit Squeeze                        boosts copper prices in
1.50
                                         (Aug. 17, 2007)
                                                                        1.50   January/February 2009.

1.00                                                                    1.00
                                                                                     Price Outlook
0.50                                                                    0.50      2007       US$3.23
0.00                                                                    0.00
                                                                                  2008       US$3.15
       72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10                2009F      US$1.40
        LME cash settlement prices. * Latest data: February 27, 2009.           (possibly as high as US$1.50)
                                                                                  2010F          US$1.40
                 Copper Prices Will Likely
               Outperform Other Base Metals
LME copper prices at US$1.54 per pound on February 27, 2009 are at profitable
levels -- yielding an 11% margin over average world break-even costs including
depreciation, interest expense & royalties. Prices have edged up in early 2009, after
falling as low as US$1.26 on December 24 (well below the 90th percentile of direct
cash costs) – triggering substantial production cuts and mine expansion deferrals.
Roughly 670,000 tonnes of production has recently been curtailed.

Significant buying of copper by China‘s State Reserve Bureau (recently as much as
300,000 tonnes via intermediaries from Latin American and European copper
suppliers) contributed to the rebound in prices in January & February. Should
recent rumours be true -- that China wishes to build its overall copper reserve to 1
million tonnes -- the additional buying would go a long way towards offsetting the
projected 2009 copper surplus.

Nevertheless, prices could move lower again later in 2009, given prospects for a
contraction in world copper consumption of about -4.6% in 2009, after last year‘s
marked deceleration in demand to only +0.3%. Global consumption should pick up
again modestly in 2010 (+1.0%).
 China‘s Copper Consumption Likely to Rise by
            5% in 2009 and in 2010
China‘s copper consumption will decelerate from last year‘s 8% growth (16% in
2007) to only 5%, given lower exports to the G7 and substantial inventory
liquidation in parts of its manufacturing sector (e.g. air conditioners) linked to a
domestic housing correction and industry rationalization. However, this inventory
correction should come to an end by mid-year and China‘s massive infrastructure
spending program (particularly on power transmission in urban areas – as well as
aluminium-intensive cross country transmission) will provide some support for
copper.
Japan‘s auto sector is dominated by export demand and, with declining car sales in
the United States and Europe, Japan‘s auto makers have been forced to cut output
(-41% in January). Copper consumption is also quite weak in Western Europe
(-9.8% expected in 2009).
LME copper inventories have surged by 67% since early January (from 324,000
tonnes to 542,300 tonnes in late February), but remain low on the Shanghai Futures
Exchange at only 28,332 tonnes. While global copper inventories may continue to
rise through early 2010, the increase is likely to be less than for nickel and
aluminium (in terms of days of global consumption). Copper prices should hold up
better than many other base metals.
                                                            Stainless steel production
                   Nickel Prices Retreat
                                                            slowdown in Asia and Europe
26                                                     26   pushes down prices in 2008.
       US$ per pound
24                                                     24

22                                                     22
                                                            Mine & refinery closures (at
                                   May 16, 2007             Ravensthorpe in Australia and
20                                                     20
                               New Record US$24.59          Loma de Niquel in Venezuela)
18                                                     18   and delays in ramping up new
16                              LME Nickel Prices      16   projects (possibly at Goro and
14                                                     14   Onça-Puma) together with
12
                 Previous Record
                                                       12
                                                            stronger consumption point
              US$10.84 in March 1988
                                                            to a modest rebound in prices
10                                                     10
                                                            by 2010.
 8                                                     8

 6                                                     6             LME Nickel Prices
 4                                                     4
                                                                      (US$ per pound)

 2                                                     2      2007                   16.88
 0                                                     0      2008                       9.57
     80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10
       Latest data: February 2009.                            2009F                      4.20
                                                              2010F                      4.80
                 U.S. Stainless Steel Prices
6500                                                             6500
            US$ per tonne                                               Expected       global   capital
6000        U.S. Midwest, spot prices                            6000   spending slowdown in 2009
                                                                        will pressure stainless steel
5500                                                             5500
                                                                        prices.      However, capital
5000                                                             5000   spending should reaccelerate
                              Stainless Steel                           early in the next decade.
4500                          Prices - CR304*                    4500

4000                                                             4000
                                                                        U.S. nickel surcharges on
3500                                                             3500   stainless steel prices have
                                                                        dropped from US$1.48 per
3000                                                             3000
                                                                        pound in January 2008 to
2500                                                             2500   US$0.54 in January 2009.
2000                                                             2000

1500                                                             1500

1000                                                             1000
       98        00      02      04      06       08        10
       Including alloy surcharges. Data to February 2009.
                          Zinc Prices Ease
2.50                                                                      2.50
         US$ per pound

                                                                                        LME Zinc Prices
                                                                                        (US$ per pound)
2.00                                                                      2.00

            Zinc producers announce
                                                                                 2007                     1.47
            pro-active output cuts to                                            2008                     0.85
1.50        shore up market conditions                                    1.50
                                                                                 2009F                    0.50

1.00                                                                      1.00
                                                                                 2010F                    0.60

                                                                                  Zinc prices should start to
0.50                                                                      0.50    recover in 2010, though
                                                                                  prices may remain at a low
                                                                                  ebb (below average world
0.00                                                                      0.00    break-even costs including
       80     84     88      92     96     00      04     08         12           depreciation).
       LME official cash settlement prices. Data to February 2009.
   Collapse in Global Auto Production & Weak
   Residential Construction Takes Toll on Zinc
The global supply/demand balance for zinc moved into a surplus in 2008, with
traders continuing to short the market through most of the year – initially in
anticipation of substantial new mine capability scheduled to come on stream and
later with growing realization that much of the G7 had entered recession.

Zinc prices fell to a low of US$0.47 per pound on December 12 – close to average
world cash costs – amid a collapse in demand in the global auto and construction
sectors. Prices peaked for the business cycle around US$2.09 in December 2006.

However, zinc prices rallied back in late December and averaged US$0.54 in
January. The market responded favourably to substantial mine and smelter
production cutbacks as well as the annual re-jigging of the Dow Jones-AIG
Commodity Index boosting the weighting of zinc and news that China‘s State
Reserves Bureau would buy about 200,000 tonnes of refined zinc from Chinese
smelters for its ‗strategic‘ stockpile (intended to bolster hard-pressed domestic
smelters as well as take advantage of bargain prices). Interestingly, Yunnan
province may also buy reserves to shore up its beleaguered zinc smelting
industry.
          Zinc Smelters Take Unusual Steps
            To Bolster Market Conditions
Twenty zinc smelters (including Zhuzhou in China -20%, Trail -20% to
mid-2009, Kidd Creek -30% to mid-2009) have now announced deep
production cuts – a very unusual step. Smelters often wait until mine
concentrate supplies dwindle before cutting output.

Weak demand for the sulphuric acid produced by some smelters and
insufficient storage capability for it could also cut smelter output in
coming months, as will a tightening supply of concentrates from mines.

While lower smelter output has bolstered market conditions, it would not
be surprising to see zinc prices retest previous lows in the first half of
2009. In fact, zinc has fallen back to US$0.49 in late February. Zinc prices
should start to rebound on a sustained basis by the second half of 2010.
                      Gold – A Hedge Against
                      Economic Uncertainty
1,200                                                             1,200
             US$ per ounce
                                                                              Price Outlook
1,000                                                    *        1,000
                                                                              2007     US$697
                                     New Record:                              2008     US$872
                                    March 17, 2008                            2009F    US$975
 800         Jan. 21, 1980           US$1,032.70                  800
             peak US$850                                                      2010F US$900-950

 600                                                              600
                                   Gold Prices
                                  London PM Fix
 400                                                              400



 200                                                              200



   0                                                              0
        75       80     85   90      95     00      05       10

        London PM Fix on Feb 26, 2009: US$945.
        Investor Interest in ETFs and retail interest in bars and coins remains strong.
   Gold Should Shine as ‗Safe-Haven‘ in 2009
Gold prices (London PM Fix) – traditionally considered a store of value
and a hedge against economic uncertainty – have held up better than
base metal prices.

However, a stronger trade-weighted U.S. dollar (especially against the
euro) from mid-July 2008 through November 20th – linked to some
improvement in the U.S. merchandise trade performance last summer,
but more importantly to a counter-intuitive flight to the ‗safe-haven‘ of
U.S. Treasury securities during the height of the banking credit crisis last
Fall, prevented gold from climbing back to its previous March 2008
record high of US$1,032.70 and – in fact – pushed prices down.
   Gold Should Shine as ‗Safe-Haven‘ in 2009
A largely ‗deflationary‘ economic environment, falling oil prices and the
forced exit of many hedge funds from commodity market positions also
contributed to a decline in gold prices to a low of US$712.50 on October
24.

Gold prices have subsequently rallied back, averaging US$859 in
January 2009 and surging as high as US$1,006 in intraday trading on the
spot market on February 20. Prices were pushed up by another global
selloff in equity markets, triggered by concern over the stability of the
U.S. banking industry.

While day-to-day prices remain volatile and retreated to US$942 (spot) on
February 27, the big picture outlook for gold remains bullish in 2009.
Asian and Middle East central banks and sovereign wealth funds could
be less supportive of U.S. debt markets in the next 12-24 months, in view
of large debt issuance to fund massive U.S. federal government
budgetary deficits (US$1.75 trillion in FY2009 and probably over US$1.2
trillion in FY2010). Gold should come into its own as a true ‗safe haven‘
in 2009.
           U.S. Dollar Trade Weighted vs. Euro                                             Canadian Dollar
120                                                             170   120                                                            120
           March 1973=100                       US cents                     US cents
           monthly averages             monthly averages                     monthly averages
                                                                160
110                                                                   110                                                            110
                                          euro                  150

100                                                             140   100                                                            100

                                                                130
 90                                                                    90                                                            90
                                                                120

 80                                                             110                                            Commodity
                                                                       80                                                            80
                                                                                                               prices slip

                                                                100
 70                                                                    70                                                            70
                              U.S. Dollar Trade Weighted
                                                                90

 60                                                             80     60                                                            60
      98       00     02         04      06      08        10               98      00       02       04       06      08       10

       *Data to February 26, 2009.                                          Canadian dollar reached parity with the U.S. dollar on
                                                                            Sept. 20th, 2007. Canadian Dollar: US$0.802 as of
                                                                            February 26, 2009.
           Spot Uranium Prices Will Rally in Medium Term
140                                                             140
        US$ per pound
130                                                             130
120           Feb 23, 2009                                      120
110           Spot             US$45.00                         110
100           LT Contract      US$70.00                         100
 90                                                             90
 80                                 Russian HEU                 80
                                     Agreement
 70                                                             70
                       Three Mile Cancelled Options
 60        US$43.40      Island                                 60
             Peak
 50                                                             50
 40                         Arab Oil                            40
 30                         Embargo Low US$7.10                 30
 20                                    in Dec. 2000             20
 10                 Nuclear                                     10
                 Disarmament
  0                                                             0
      72    76    80   84    88   92      96   00     04   08

      Source: Scotiabank Commodity Price Index.
 Spot Uranium Prices Will Rally in Medium-Term
The forced liquidation of commodity market investments by funds and individual
investors also affected the uranium market last October, when spot prices declined
to a low of US$44 per pound (an oversold position). Prices rallied back to US$55 in
late November -- as Asian utilities, commodity brokers and producers took advantage
of bargain prices – though bids have dropped back to the US$45 level as of late
February. Spot prices are expected to strengthen medium-term (to around US$70
from 2011-14). Term-contract prices remain lucrative.

‗Uncovered U3O8 requirements‘ by North American utilities will be low in 2009, given
the re-stocking and term contracting of recent years.

However, three developments point to firmer prices in the medium-term: 1) India will
return as an importer of uranium concentrates in 2009 after more than a 30-year
absence, given approval by the World Nuclear Suppliers Group, and has now signed
bilateral nuclear cooperation agreements with the United States, France and Russia
(from whom it may import concentrates and equipment). Canada requires a similar
agreement. India has been operating its nuclear reactors at 50% of capability, given
inadequate domestic uranium supplies, and has huge nuclear power expansion
plans. 2) Delays in commissioning the Cigar Lake project and in Olympic Dam
expansion will dramatically tighten world supplies around 2011-13; and 3) Higher
capital and operating costs will lift the medium-term floor on prices.
                                                                                   Western Canadian Coking
                                                                                Coal Prices Poised to Drop From
                        Steam Coal Prices                                                Record Levels
200                                                                 350
             US$ per tonne, spot                                               US$ per tonne

175
             FOB Newcastle, Australia                               300        FOB port
                                                                                          Western Canada
             Steam Coal Prices                                      250                      to Japan
150

                                                                    200            Premium-Grade
125                                                                               Hard Coking Coal
                                                                    150             Contract Price
100
                              China‘s Electricity
                                                                                                               *
                                                                    100
                              Shortage Boosts
 75                           Steam Coal Prices                      50
                              Last Summer
 50                                                                   0
      July     October January     April   July   October January         03      04      05   06   07   08   09   10

      China imposes export tax of 10% on steam coal                  Prices leapt to record US$300 in April 2008 from US$93.
      and raises export tax on coking coal from 5% to                *Forecast JFY 2009: US$125-150.
      10% on August 20, 2008 to conserve supplies for                Source: Scotiabank Commodity Price Index.
      domestic power generation.
      Contract price: Australia/Japan.
      FY2008 US$125:FY2009 US$75 forecast.
              Scotia Capital‘s Global Mining Group
Investment Banking – Global Mining
• Dedicated team of 14 professionals focused exclusively on mining
     • In-house technical expertise with a senior mining engineer and a geologist
     • Supported by Scotia Capital‘s 18-person M&A advisory group

Corporate Banking – Global Mining
• Among top 3 lenders to the North American mining sector (#1 in Canada)
• International presence with coverage from Toronto of Canada, the United States,
  Mexico, South America and Europe.

Major International Banking Presence
• In Mexico via ―Grupo Financiero Scotiabank Inverlat, S.A. de C.V.‖, in Chile via
  ―Scotiabank Sudamericano‖ and in Peru via ―Scotiabank Perú‖ – the third
  largest bank in Peru.

Precious Metals Trading
• ScotiaMocatta ranks second in global precious metals trading and first in
  physical trading and is a member of the Shanghai Gold Exchange.
• Scotia Capital offers tailor-made solutions for Base Metal risk management
  strategies in London and Toronto.
Scotia Capital Mining Investment Banking

                                                                               Recent Equity Leads




     US$163,000,000                       C$22,001,200                               C$34,256,035           C$50,025,000                                C$65,520,000
          Common Shares                TSX IPO - Common Shares                              Units              Common Shares                               Common Shares

          Co-Bookrunner                     Sole Bookrunner                          Sole Bookrunner         Sole Bookrunner                               Sole Bookrunner


             September 2008                      February 2008                           January 2008              November 2007                               November 2007




                                                          Recent Advisory Transactions



                                                   Is merging with                        has acquired        has consolidated its interest in     has acquired 100% of the Life of Mine Silver
                                                                                                          the Corani Silver Project by acquiring      Production from the Sabinas Mine of
    Evaluating an unsolicited tender                                                                         the remaining 30% interest from
     offer and identifying potential
        alternatives to enhance          to create a company with a combined
                                                market capitalization of                      for                                                                      for
           shareholder value                                                                                               for
                                         C$550,000,000                             US$1,200,000,000       US$75,000,000                              US$350,000,000
          Financial Advisor                  Financial Advisor                        Financial Advisor        Financial Advisor                           Financial Advisor


                Pending                              Pending                             October 2008                  July 2008                                   May 2008




                                                            Strong Commitment to the Sector
This Report is prepared by Scotia Economics as a resource for the clients of
Scotiabank and Scotia Capital. While the information is from sources believed
reliable, neither the information nor the forecast shall be taken as a
representation for which The Bank of Nova Scotia or Scotia Capital Inc. or any
of their employees incur responsibility.

				
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