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An Investors Guide To The Minerals Industry

An Investors Guide To The Minerals Industry

This guide seeks to aid retail investors by providing an introduction into the minerals industry and will focus on some of the key issues to consider from an investment perspective. In the next few pages, we have described some issues and considerations in seven different sections to help investors better understand the mineral industry: Mineral industry snapshot from exploration to production Mineral Resources, Ore Reserves and project studies Legal and regulatory requirements associated with the minerals industry Risks and rewards Reporting obligations Industry Codes of Practice and relevance to retail investors Glossary of selected terms and definitions (denoted with an * when used for the first time in the guide)

Section 1 A snapshot of the minerals industry

Topic
Overview

Description
The minerals industry operates globally and every country has some form of minerals industry activity. Some countries are endowed with a diverse range of mineral commodities e.g. China, USA, Canada, Russia, South Africa, India, Brazil, and Australia. Other countries have an endowment of a limited range of mineral commodities e.g. Chile, Philippines, Papua New Guinea, and New Caledonia. Some countries have a very limited endowment of mineral commodities and are dependent on other countries e.g. Japan, Singapore, and Hong Kong. Mineral commodities comprise: Precious metals e.g. gold, silver, platinum Base metals e.g. copper, lead, zinc Other metals e.g. iron, manganese, aluminium Energy minerals e.g. coal, uranium, oil shale Gemstones e.g. diamonds, sapphires, opal Industrial minerals e.g. limestone, sand, aggregate, building stone.

Organisations of all sizes are involved in the minerals industry, from very large multinational public companies and state owned corporations that are involved in mining many commodities, through to small public and private companies exploiting a single deposit, as well as companies purely involved in exploration. Some companies restrict operations to mining only and produce a product for sale that requires further processing. Others are involved in down-stream processing and produce either a semirefined or refined product for the market. Many mining projects are owned and operated by a single entity, however sometimes an individual mining project will be operated as a joint venture involving two or more partners. Exploration The aim of exploration is to discover a new mineral deposit and quantify the amount and quality of the mineral in order to assess if it can be profitably extracted. Some mineral commodities are located on or very near the surface and are not difficult to explore for. Examples include construction minerals such as sand, gravel, aggregate, and limestone deposits. Some minerals can be buried deep below the surface and are very difficult to explore for, because there is no indication on the surface that they exist. Examples include some types of gold, silver, copper, lead, zinc, and nickel deposits. Mineral exploration generally follows a similar approach, but may use quite different tools and methods depending on the commodity being explored for. 1. Develop a concept or idea for where a new mineral deposit may be located. 2. Complete a desktop analysis of all geological information that already exists in the target area and refine the concept or model. 3. Obtain a licence over the target area and all government approvals required to undertake exploration. 4. Complete preliminary or reconnaissance exploration looking for indications of mineralisation. 5. If successful, complete more detailed exploration on those areas that appear to be attractive. For most minerals this will require drilling holes to assess what lies below the earths surface. 6. If mineralisation is located by these techniques, the next step is to extensively drill the target area to quantify the size, shape, quality, and quantity of mineralisation. If exploration drilling is successful, the next step (completion of detailed drilling to define the size, shape, quality, and quantity of the mineral deposit) can be very expensive. For some companies, particularly junior exploration companies, additional fundraising may be required to finance this stage of exploration.

Topic
Mining

Description
There are three broad categories of mining i.e. surface mining, underground mining, and solution mining. The most common mining methods are surface and underground mining. The main factors to be considered when selecting a mining method are: How close to the earths surface the deposit is located, the size, and shape of the deposit The physical properties of the mineralisation and the waste rock surrounding the deposit e.g. hardness and stability The economic value of the material to be mined

There are a number of surface mining methods: Open pit mining (also called open cut or open cast mining). This method is used to mine mineral commodities where the deposit is located near to the surface Dredging. This method is often used to mine unconsolidated or soft deposits such as certain mineral sands, tin, and gold deposits Sluicing and hydraulic mining. This method is used where the rocks are highly weathered, or soft and friable. Large quantities of water are required

Underground mining methods can be used to selectively mine narrow deposits of moderate to high value or bulk mining of large deposits that are deeply buried. There are many underground mining methods and the method chosen for a particular deposit is influenced by the size and shape of the deposit, as well as the physical properties of the mineral deposit and the waste rocks that surround it. Some examples of underground mining methods include cut and fill, open stoping, room and pillar, shrinkage stoping, sub-level caving, and block caving. Processing For many mineral deposits, the valuable component is processed to some degree at the mine site prior to transport and sale. The processed material may be transported directly to a customer (e.g. coal or iron ore), or may require further processing before it is ready for use (e.g. smelting and/or refining). At a mine site the general steps involved in processing the ore involves: 1. Rock size reduction to allow liberation of the valuable mineral from the waste material. The process of reducing material size using mechanical means is called comminution and is achieved primarily by crushing and grinding methods including gyratory crushers, cone crushers, jaw crushers, autogenous and semi-autogenous grinding mills, ball mills, and rod mills. 2. Liberation, separation, and concentration of the valuable mineral components. Methods used to liberate mineral particles of value from the rest include flotation, leaching, gravity separation, magnetic separation, and electrical or electrostatic separation. Some ores can be difficult to treat and are referred to as refractory ores. In these cases, the ore is pre-treated using specialised chemical methods to alter the mineralogy of the valuable materials to allow low cost processing methods to be used. 3. Storage and/or disposal of the waste material, called tailings. Many mining operations process large amounts of rock to recover the valuable component. The waste material must be stored at the mine site or disposed of safely.

Section 2 Mineral Resources, Ore Reserves and levels of project studies

Topic
Introduction

Description
Retail investors should be aware that the minerals industry uses a number of terms, such as Exploration Results, Mineral Resources* and Ore Reserves* (or Mineral Reserves), that have been carefully defined and are subject to a range of international Codes and Standards for public reporting of relevance to the Singapore Exchange e.g.: JORC Code*, in Australia CIM Definition Standards (NI43-101*), in Canada PERC Code*, in Europe

Exploration results

Exploration Results include data and information generated by exploration programs that may be of use to investors. Such information is common in the early stages of exploration when the quantity of data available is generally insufficient to allow for an estimate of Mineral Resources. Examples of Exploration Results include results of outcrop sampling, assays of drill hole intercepts, geochemical results, and geophysical survey results. A Mineral Resource is a concentration or occurrence of material of intrinsic economic interest in or on the Earths crust in such form, quality, and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated, or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred*, Indicated* and Measured* categories. The term Mineral Resource covers mineralisation, including waste dumps and tailings, which has been identified and estimated through exploration and sampling. The estimation of a Mineral Resource is a complex process and involves many stages of study to complete: Data collection, testing, and analysis Geological interpretation Statistical analysis of data Determining the technical parameters to guide the estimate Estimating the Mineral Resource Choosing the resource classification and appropriateness of resource categories Comparisons with previous resource estimates, if appropriate Completing documentation and a Compliance Statement in accordance with the appropriate Code

Mineral Resources

Topic
Ore Reserves or Mineral Reserves

Description
An Ore Reserve (or Mineral Reserve) is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social, and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. Ore Reserves are sub-divided in order of increasing confidence into Probable Ore Reserves* and Proved Ore Reserves*(or Probable Mineral Reserves and Proven Mineral Reserves). Retail investors should note that the term economically mineable implies that extraction of the Ore Reserve has been demonstrated to be viable under reasonable financial assumptions. What constitutes the term realistically assumed will vary with the type of deposit, the level of study that has been carried out and the financial criteria of the individual company. For this reason, there can be no fixed definition for the term economically mineable. In order to achieve the required level of confidence in the Modifying Factors, appropriate studies will have been carried out prior to determination of the Ore Reserves. The studies will have determined a mine plan that is technically achievable and economically viable and from which the Ore Reserves can be derived.

Levels of project study

If exploration is successful, companies will undertake project assessments and studies to assess if the new discovery can support a viable mining operation. Such studies become progressively more detailed and costly as the project advances. Various terminology is used to describe these studies, but fundamentally they can be grouped into three levels: Scoping Study* This assessment is completed at an early stage and is aimed at determining if a project can deliver an economically attractive outcome, but without being able to conclude what the preferred scenario is. The typical range of accuracy is +/- 30% to 50%. Normally exploration has defined some level of Mineral Resources for this study, but not necessarily any Ore Reserves. However, it is acceptable for scoping studies to be based on very limited information or speculative assumptions in the absence of hard data. Prefeasibility Study* This assessment tests various scenarios to work out the best one and whether the project should go to full feasibility study. The typical range of accuracy is +/20% to 25%. Normally exploration has defined Mineral Resources and the project may have some level of Ore Reserves for this study. Feasibility Study* This assessment (based on the best case from the Prefeasibility Study) is to provide a sound basis for decisions on project approval by the company, funding by the banks (if relevant), and a basis for detailed engineering. The typical range of accuracy is +/- 10% to 15%. Normally exploration has defined Mineral Resources and substantial Ore Reserves may have already been reported.

Section 3 Legal and regulatory requirements

Topic
Introduction

Description
In all countries, there are laws and regulations that control the operation of exploration, mining, and processing activities. These include: Access to land Permits and requirements for mining and processing Most countries operate on a licensing system, not concessions Distinction between exploration and extraction (licence). Is there a right to move from exploration (if successful) to extraction? Community and social obligations Environmental regulations Taxation and royalty payments Export requirements Restrictions on foreign ownership

Some specific issues are presented below. Mining legislation issues In many countries, there are regulations that control or may affect the activities of public companies operating in the minerals industry. These include: Foreign investment and company structures Security of tenure Geopolitical stability and risk Foreign investment approvals and incentives Changes in mining laws Interaction between exploration and mining and other land uses, for instance farming and forestry The manner in which the State exercises its mineral ownership rights

Most countries have restrictions and/or controls on foreign ownership, in part due to the ownership of the resources being vested with the state. In some countries, foreign companies may invest directly but approval may be required for substantial acquisitions or where the national interest is involved. In other countries, particular ownership structures are necessary and sometimes an offshore holding company is required. There may be limits on exploring and mining of certain mineral commodities. Investors need to understand the legal system and be assured the company is operating within the system. Licensing for exploration and mining will include application and granting of appropriate tenure from the recognised authorising bodies. In all regimes, environmental and/or forestry and/or landowner approvals will also be required. Other ancillary approvals are commonly necessary, such as import and export licences, foreign exchange approvals, and explosive permits.

Approvals for exploration and mining

Public reporting standards recognised by SGX

The SGX Listing Rules require adherence to one of a group of Standards when mineral companies release a public report to comply with the continuous and periodic disclosure obligations. These Standards are some of the internationally recognised Reporting Codes and Guidelines (see Section 6 for more details)

Section 4 Risks and rewards

Topic
Introduction

Description
The minerals industry offers retail investors opportunities for substantial investment returns, but also the possibility of investment losses. The key sources of risk and reward are exploration, technical, financial, environmental, social, political, and sovereign issues. Exploration, by its very nature is a risky investment because there are no guarantees that a company exploring for minerals will find anything of value. For most minerals, exploration is expensive and the consequence of a failed exploration program is a financial loss. Exploration success discovering a new mineral deposit or finding additional mineralisation at an existing mine generates an asset that adds value to a company. Small companies with limited financial resources are relatively high risk/reward investment options because they cannot survive many failed exploration programs. However, they may generate large investment rewards if they are successful in exploration.

Exploration

Technical

Mining and processing of mineral deposits often requires a large capital investment, commonly more than US$100 million and often more than US$1 billion. There are a range of technical risks associated with mining and processing. For example: Mining difficulties can be due to the tonnage, grade, or quality of the mineralisation being worse than expected; problems excavating the open pit or underground mine, and/or maintaining stable rock surfaces Processing difficulties can be associated with achieving less recovery of the mineral than expected or the presence of contaminants in the product

However, there is also potential that mining and processing will perform better than expected and deliver unbudgeted rewards. For example: Improved mining conditions can be associated with the tonnage, grade, or quality of the mineralisation being better than expected, or mining conditions may be better than expected, reducing the cost of mining Better processing performance can be associated with more recovery of the mineral than expected or higher purity of the product commanding a better price in the market than expected

Financial

The profitability of the mining industry is a function of the difference between revenue and costs. The price of many mineral commodities is volatile and can be subject to large variations. If revenue is tied to short term market pricing, there is a risk associated with a fall in commodity prices and a reward associated with a rise in prices. Some companies can establish long term contracts with guaranteed minimum pricing to alleviate uncertainty associated with commodity prices. Such contracts generally restrict the opportunity for substantial extra profitability if commodity prices rise sharply. Consequently, many mining companies have little control over the revenue they receive they are price takers. Currency exchange rates can also significantly influence both revenue and costs depending on how contracts have been negotiated. This is because many contracts are set using US dollar terms. Mining companies must maintain a strong control over costs because this is the main mechanism available to them to influence profitability.

Topic
Environmental

Description
All mining activity will have some impact on the local environment and typically this involves the construction of surface facilities to support the operation. For example, open pits, waste dumps, tailings dams, buildings, and roads. Some mining activity will also have an environmental impact away from the actual site as a result of requiring road or rail access to a regional centre. The main environmental impacts of mining and processing operations are visual pollution, sound and vibration, atmospheric emission, as well as potential surface and groundwater contamination. In most countries, there is legislation in place that regulates the obligations of mining operations with respect to environmental impacts. There are generally strict limits on the allowable emissions associated with mining and processing and typically the company, local community, and government groups are involved in monitoring the environmental impact.

Social

Many mining operations are sited close to communities that will be affected by the operation. There are both risks and rewards for a mining company in the way it interacts with the local community. The key risk is if the community is opposed to the development of a mining operation and takes action to hinder or stop the development. The key reward is if the community is supportive of the mining operation because it sees opportunities for local employment and development of new local services, facilities, and infrastructure.

Political and sovereign

In all countries, exploration and mining is subject to government regulation the degree of regulation and control varies. Some countries are actively supportive of exploration and mining and have established regulations that provide security of tenure and stability covering issues such as royalties, taxation, and provision of services and infrastructure. Some countries are less supportive of exploration and mining and pose a political risk to investment because of uncertainties associated with security of tenure, changeable regulations, or taxation and royalty rates.

Section 5 Reporting obligations

Topic
SGX Listing Rules requirements for mining companies

Description
The SGX Listing Rules include additional reporting requirements for mining companies under the following circumstances: Prior to listing, an offer document is required and must establish the existence of adequate mineral resources. These resources must be at least categorised as an Indicated Resource. The report must not be more than six months old Under continuing reporting obligations, a company must announce any material changes to ore reserves or mineral resources, including: The basis upon which new material reserves or resources not previously disclosed are reported; Any change in the reporting Standard adopted, including the reasons for the change and the impact, if any, on the companys existing stated level of reserves and resources; Appointment or resignation of any qualified person. In the periodic financial announcements required under the rules a company must also include: Details of exploration (including geophysical surveys), mining development and/ or production activities undertaken by the issuer and a summary of the expenditure incurred on those activities, including explanations for any material variances with previous projections, for the period under review. If there has been no exploration, development and/or production activity respectively, that fact must be stated; and An update on its reserves and resources, where applicable.

Qualified Person and Independent Qualified Person reports

Some of the reporting requirements for mining companies require the input of a Qualified Person (QP) or an Independent Qualified Person (IQP) as presented in the table below. Reporting Event Initial Listing Material changes in reserves or resources Reporting of new material reserves or resources for the first time Announcement of a 100% change or more in existing reserves or resources Major Acquisition or Disposal under Chapter 10 Annual Report P P P P P Type of report required (IQP/QP) IQP P

A QP must have the appropriate experience in the type of activity undertaken or to be undertaken by a mineral, oil and gas company, meeting the following minimum requirements: Is professionally qualified and a member or licensee in good standing of a relevant Recognised Professional Association*; Has at least five years relevant professional experience in the estimation, assessment and evaluation of: The mineral or minerals, oil or gas that is under consideration; and The activity which the issuer is undertaking; and Has not been found to be in breach of any relevant rule or law by any relevant regulatory authority or professional association and is not: Denied or disqualified from membership of; Subject of any sanction imposed; The subject of any disciplinary proceedings; or The subject of any investigation which might lead to disciplinary action.

Topic

Description
An IQP must have the same requirements as a QP, but in addition: The IQP must not be a sole practitioner; If the IQP producing the report is not a partner or director of his/her firm, the production of the report must be directly supervised by a partner or director on behalf of the firm; The IQP and his firms partners, directors, substantial shareholders and their associates must be independent of the listing applicant, its directors, and substantial shareholders; The IQP and his firms partners, directors, substantial shareholders and their associates must not have any interest, direct or indirect, in the listing applicant, its subsidiaries or associated companies and will not receive benefits other than remuneration paid to the IQP in connection with the report; and Remuneration paid to the IQP or the IQPs firm in connection with the report must not be dependent on the findings of the report

Section 6 Industry Codes of Practice

Topic
Reporting Codes

Description
The SGX Listing Rules recognise a number of National industry reporting standards that contain specific information which must be included in a public report and guidance to both the company and investors on what is expected. Typically these reports will include the technical basis on which statements of reserves, resources or exploration results are made. The three industry codes recognised by the SGX Listing Rules are: Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code) National Instrument NI 43-101 Standards of Disclosure for Mineral Projects (NI 43-101*) from Canada Pan European Reserves and Resources Reporting Committee Code for the Reporting of Exploration Results, Mineral Resources and Pre Reserves (The PERC Code)

VALMIN Code

Reports that deal with technical assessments and valuations of mineral properties are required by the SGX Listing Rules to be prepared in accordance with the VALMIN Code*. These reports must be prepared by an IQP and the same principles based approach applicable to the reporting Codes applies, but the principle of Independence is an additional requirement of the VALMIN Code. The IQP must also visit the property being valued. Valuation of mineral properties is not a straightforward matter, and for properties not yet in production, readers should expect to see several alternative methods of valuation adopted. The VALMIN Code imposes obligations on the company commissioning the independent report to provide all the relevant information (whether confidential or not) to the IQP.

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Glossary of common Acronyms and Terms

Term
Feasibility Study

Explanation
The feasibility study is usually based on the most attractive alternative for the project as previously determined. The aim of the study is to remove all significant uncertainties and to present the relevant information with backup material in a concise and accessible way. The feasibility study has several objectives: To demonstrate with reasonable confidence that the project can be constructed and operated in a technically sound and economically viable manner To provide a basis for detailed design and construction To enable finance for the project to be raised from banks or other sources To provide the basis for permitting and regulatory approvals

The feasibility study has an estimation accuracy of +/- 10% to +/- 15%. JORC Code The Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves. A Mineral Resource represents a concentration or occurrence of material of intrinsic economic interest in or on the earths crust in such form, quality, and quantity that there are reasonable prospects for eventual economic extraction. Three categories of mineral resource are defined: An Inferred Mineral Resource is that part of a Mineral Resource for which tonnage, grade, and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes which may be limited or of uncertain quality and reliability (JORC Code). An Indicated Mineral Resource is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade, and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling, and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed (JORC Code1). A Measured Mineral Resource is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade, and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes. The locations are spaced closely enough to confirm geological and grade continuity (JORC Code).

Mineral Resource

Inferred Mineral Resource

Indicated Mineral Resource

Measured Mineral Resource

Mineral, Oil, and Gas Company A company whose principal activities consist of exploration for or extraction of minerals, oil, or gas. This excludes companies that purely provide services or equipment to other companies engaged in such activities (SGX Listing Rules definition). NI 43-101 The Canadian National Instrument NI 43-101 Standards of Disclosure for Mineral Projects.

Definitions are those contained in the JORC Code. Other reporting Codes will have different definitions.

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Term
Ore Reserve (also called Mineral Reserve in some countries)

Explanation
An Ore Reserve is the economically mineable part of a resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social, and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. Two categories of ore reserve are defined: The economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social, and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified (JORC Code).

Probable Ore Reserve

Proved (or Proven) Ore Reserve The economically mineable part of a Measured Mineral Resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social, and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified (JORC Code). PERC Code Pan European Reserves and Resources Reporting Committee Code for the Reporting of Exploration Results, Mineral Resources and Pre Reserves. Alternative names used in the industry are Preliminary Feasibility Study and Class 2 Study. Prefeasibility Studies may be used for the following: As a basis for committing to a major exploration program following a successful preliminary program To attract a buyer to the project or to attract a joint venture partner or as a basis for a major underwriting to raise the required risk capital. A prefeasibility study may also be prepared in full or in part by potential purchasers as part of the due diligence process To provide a justification for proceeding to a final feasibility study

Prefeasibility Study

Features of the Prefeasibility Study are: Mine design based on a resource model Most suitable scale of operation investigated Best mining and processing method selected from a range of alternative methods Preliminary studies completed on geotechnical, environmental, and infrastructure requirements Bench scale metallurgical tests and preliminary process design completed Cost estimates based on factored or comparative prices Estimation accuracy +/-20% to +/- 25% Ready to proceed to final feasibility study

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Term
Recognised Professional Association

Explanation
A self-regulatory organisation of professionals in the mineral, oil, or gas industries which is recognised by the Exchange. The criteria for a Recognised Professional Association are provided in the SGX Listing Rules Definition and Interpretation section and include the requirement that it must: (i) admit members on the basis of academic qualifications and experience; (ii) require compliance with organisations professional standards of competence and ethics established; and (iii) have disciplinary powers to suspend or expel a member.

Reporting Standards

The SGX Listing Rules require a mineral company adheres to one of a group of Standards to comply with continuous and periodic disclosure obligations. International Codes and Guidelines for disclosure recognised by SGX are the JORC Code, the Canadian National Instrument 43-101, the PERC Code and the VALMIN Code. Alternative names used in the industry are Conceptual Study, Order of Magnitude Study, Class 1 study. A scoping study may be carried out very early in the project life. For example, it may be used as a basis for acquiring exploration areas or making a commitment for exploration funding. At this stage, the investment risk may be relatively small but it is obviously undesirable to expend further funds on a project with no chance of being economic. It is acceptable for scoping studies to be based on very limited information or speculative assumptions in the absence of hard data. Scoping studies have estimation accuracy not better than +/- 30% to +/- 50%.

Scoping Study

VALMIN Code

Code for Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Experts Reports.

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Notes:

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This document is in regards to companies whose principal activities consist of exploration for mineral, oil or gas. A company whose principal activities consist of exploration for mineral, oil or gas may not progress to the next stage of development or to a stage where it is able to generate revenue. Other industry specific risks must also be considered. This presentation is not intended for distribution to, or for use by or to be acted on by any person or entity located in any jurisdiction where such distribution, use or action would be contrary to applicable laws or regulations or would subject SGX to any registration or licensing requirement. This presentation is not an offer or solicitation to buy or sell, nor financial advice or recommendation for any investment product. This presentation has been is for general circulation only. It does not address the specific investment objectives, financial situation or particular needs of any person. Advice should be sought from a financial adviser regarding the suitability of any investment product before investing or adopting any investment strategies. Further information on this investment product may be obtained from www.sgx.com. Investment products are subject to significant investment risks, including the possible loss of the principal amount invested. Past performance of investment products is not indicative of their future performance. Examples provided are for illustrative purposes only. While SGX and its affiliates have taken reasonable care to ensure the accuracy and completeness of the information provided, they will not be liable for any loss or damage of any kind (whether direct, indirect or consequential losses or other economic loss of any kind) suffered due to any omission, error, inaccuracy, incompleteness, or otherwise, any reliance on such information. Neither SGX nor any of its affiliates shall be liable for the content of information provided by third parties. AMC Consultants had been engaged to produce the materials contained herein SGX is an exempt financial adviser under the Financial Advisers Act (Cap. 110) of Singapore. The information in this presentation is subject to change without notice.

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