BMO Copper Miners - Strategies For An Active Copper Sector

Global Mining
Research
February 27, 2009

Copper Miners
Strategies for an Active Copper Sector
Market Cap Short-term funding and corporate activity are on the rise and equities
US$M
Stock Company Rating Target
are up from their lows. In addition to our preferred stocks, BMO
ANTO Antofagasta OP 5,999 £5.25
FM First Quantum OP 1,725 C$ 38.00 Research highlights some copper strategies for exposure to leverage
CCT Centenario Copper Mkt (S) 36 na and potential corporate activity.
EQN Equinox Mkt 620 C$ 1.65
FCC Frontera Copper Mkt (S) 40 na 1. BMO Research’s preferred sector exposure is through ANTO and FM,
FCX Freeport McMoRan Mkt 11,230 $30.00
IMN Inmet Mining Mkt 1,063 C$ 28.00
which both offer stronger balance sheets, scale and growth.
QUA Quadra Mining Mkt 160 C$ 4.00
KAT Katanga Und 74 na 2. Copper consumption remains subdued; however, the worst may be
Source: BMO Capital Markets over and prices may well improve into H2/09. While price risks remain,
Pricing date February 26, 2009 QUA, FM and larger-capitalized FCX offer higher price leverage.
3. QUA, FM, EQN and KAT offer relatively cheap growth with attractive
paybacks. We view them as potential corporate takeover targets.
Fig 1: NPV Leverage to US$0.25/lb Change in Copper Price Assumption

40%
30%
Increasing leverage
Change in NPV (%)
20%
10%
0%
IMN ANTO CCT EQN KAT FCX QUA FM FCC
Source: BMO Capital Markets
Fig 2: Potential Value From a Corporate Perspective

BHP FCX
20
2009E-2011E Price Earning Growth (PEG)
RIO
IMN AAL
15
ANTO
FM
TCK
10
Increasing corporate potential
David Radclyffe QUA EQN
BMO Capital Markets Ltd. 5
+44 (20) 7246 5433 XTA
KAT
david.radclyffe@bmo.com
CCT
FCC
David Cotterell 0
0 2 4 6 8 10
BMO Nesbitt Burns Inc.
Years for Net Cash to equal Market Cap
(416) 359-7723
david.cotterell@bmo.com Source: BMO Capital Markets
This report was prepared in part by an Analyst or Analysts employed by BMO Capital Markets Ltd, authorised and regulated by the
Financial Services Authority in the UK. The Analyst(s) is not registered as an Analyst under FINRA rules. For disclosure statements,
including the Analyst’s Certification, please refer to pages 23 to 25.
Global Mining Research
Copper Miners
February 27, 2009
1. FM & ANTO Current Preferred

Stocks
Outlook Clouded, but BMO Research Sees Upside for Copper in H2/09
Copper could turn in H2/09
as low inventories and A return to even moderate consumption in China, coupled with low stock
cutbacks impact. levels and production cutbacks and deferrals, could point to copper rising in
H2/09. Supply cutbacks now represent some 3% of supply in 2009. In total,
announced cutbacks and deferrals represent some 1.5 Mt of production or
10% of global mine supply.
Corporate Activity on the Rise

Logically, stocks
underpriced for growth and Corporate activity in the base metal sector is clearly on the rise with Frontera
with short paybacks could Centenario, and Oz Minerals under takeover, and Chinalco seeking to
attract corporate interest, purchase interests in Rio Tinto operations. Logically, stocks underpriced for
such as QUA, EQN, KAT and growth and with short paybacks could attract corporate interest. On this
FM. basis, it’s not surprising that FCC and CCT are takeover targets. Other stocks
that might attract attention on this basis are KAT, QUA, EQN and FM.
Raisings Focus on Balance Sheets

Raisings focusing on
repairing balance sheets. Over the last few weeks there has been an increase in capital raising activity
from the sector primarily focused on improving balance sheets. ANTO
continues to have the strongest balance sheet position; FCX has taken steps
to reduce pressures, while EQN needs to meet 2009 targets.
QUA, FM and FCX show QUA, FM and FCX Show Good Copper Price Leverage
good copper price leverage.
QUA and FM offer good leverage in mid-capitalization stocks, while FCX offers
large-capitalization leverage. Of note, a US$0.25/lb change in the BMO
Research copper price assumption increases NPV per share for FCX by $13,
FM by $15 and QUA by $3. ANTO and IMN show lower copper price leverage
than their peers.
Revised Target Prices: EQN - C$1.65 and IMN - C$28.00

EQN target price raised to
C$1.65. Following recent company guidance of ramp-up at Lumwana, BMO Research
has increased 2009 estimates and the EQN target price to C$1.65 (from
C$1.50). The IMN price target has also been increased to C$28 (from C$21)
on a relative basis to its peers.
Fig 3: BMO Research Copper Producer Coverage
Shares Share 2009E 2009E EPS Target

Company Rating Share Price Market Cap NPV/Share 2009E P/E
O/S Price/NPV EV/EBITDA Growth Price
(M) (US$M) (X) (X) %

First Quantum Outperform C$ 33.70 67 1725 C$ 70.15 48% 5.7 2.6 -30% C$ 38.00
Equinox Market Perform C$ 1.29 593 620 C$ 4.04 32% 3.1 3.0 +>100% C$ 1.65
Katanga Underperform C$ 0.45 206 74 C$ 7.51 6% NA 11.8 57% na
Centenario Copper Market Perform (S) C$ 0.91 51 36 C$ 8.48 11% 5.0 6.3 +>100.0 na
Frontera Copper Market Perform (S) C$ 0.76 65 40 C$ 1.50 51% 50 -8.1 ->100.0 na
Inmet Mining Market Perform C$ 27.19 48 1063 C$ 32.64 83% 6.8 3.5 -30% C$ 28.00
Quadra Mining Market Perform C$ 3.44 66 160 C$ 11.54 30% 4.6 1.2 -64% C$ 4.00
Antofagasta Outperform £4.27 986 5999 £6.32 68% 18.4 4.8 -62% £5.25
Freeport McMoRan Market Perform $29.32 483 11230 $49.04 60% 50 5.5 -94% $30.00
Total/Average 43% 7.3 3.4
Source: BMO Capital Markets. Pricing date February 26, 2009
Page 2 of 25
Copper Miners
February 27, 2009
2. BMO Copper Stocks

Antofagasta (ANTO-LSE) - ANTO’s premium rating to its copper peers
ANTO has strong growth and reflects an established business backed by a strong balance sheet making it
balance sheet position. more resilient to lower copper prices. Further, a strong cash balance supports
the ability to pursue additional growth opportunities. BMO Research maintains
its Outperform rating with a £5.25 target price.
Centenario (CCT-TSX) - Quadra Mining and Centenario Copper have

announced a friendly merger with Quadra to acquire all the outstanding
shares of Centenario. The exchange ratio is 0.28 Quadra shares for each
Centenario share. CCT is rated Market Perform.
Frontera (FCC-TSX) - Invecture announced an increased bid of

C$0.75/share in cash (from C$0.59/share) for all outstanding shares of
Frontera. The increased bid represents a 15.4% premium to Southern
Copper’s offer of C$0.65/share in cash, and values Frontera at C$49M. BMO
Research rates FCC Market Perform (Speculative).
Equinox (EQN-TSX) – Short-term issues are of market focus, but there

EQN target price raised to remains good potential for EQN to grow and diversify the business beyond the
C$1.65 and 2009 EPS to Lumwana ramp-up in 2009. Production for 2009 has been increased by 28%
US$0.34 on increased 2009 to 153 kt on recent company ramp-up guidance but remains below EQN’s
production outlook. target. 2009 EPS has increased 16% to US$0.34. BMO Research rates EQN
Market Perform with a revised C$1.65 target price (from C$1.50).
Freeport (FCX-US) – The recent US$750M capital injection provides FCX

Leveraged large- with greater financial flexibility in the current low copper price market, which
capitalization copper play; has constrained the business and increased the focus on Grasberg in 2009.
raising reduces balance BMO Research reiterates its Market Perform rating with a target price of
sheet pressure. US$30.
First Quantum (FM-TSX) – The company is well positioned to its peers,

Attractive on a number of offering leverage to copper, a solid balance sheet and long-term growth
measures. opportunities. BMO Research maintains its Outperform rating with a C$38
target price.
Inmet (IMN-TSX) - Inmet is rated Market Perform with a C$28 target price.
IMN target price increased to The start-up of Las Cruces in April 2009 is forecast to add copper production
C$28 (from C$21). of over 50% at operating cash costs of around US$0.80/lb. Inmet’s other
growth project is Petaquilla, which the company has indicated remains key to
the longer-term production profile.
Katanga (KAT-TSX) - Until details emerge from the business technical

Remains a high-risk review and funding initiative, the company remains in a high-risk position.
proposition. BMO Research rates KAT Underperform.
Quadra (QUA-TSX) – The acquisition of CCT fits with Quadra’s growth-

through-acquisition strategy. The key asset for CCT is the nearly complete
Franke project, an SX-EW operation in northern Chile. Assuming a successful
transaction, Quadra would have three operating mines and created an
operating base in Chile. BMO Research maintains a Market Perform rating and
C$4 target price. BMO calculates this deal to be NPV accretive by 7%.
Page 3 of 25
Copper Miners
February 27, 2009
3. Clouded Outlook but Worst Over?

The deepening global recession continues to subdue copper consumption. The
A return to even moderate prospect of reduced Chinese demand, especially in the next several months,
consumption in China would has prompted BMO Research to project a 300–400 kt surplus and a relatively
likely mean prices lift to poor price environment for much of 2009.
around US$2.00/lb in H2/09.
While it would not be a big surprise to see the metal price drop further in the
short run, there are signs from China that the worst of the correction may
already be over. A return to even moderate consumption in China would likely
mean that the LME is tapped for supply, lifting prices to around US$2/lb in
H2/09.
Rapid mine closures, declines in secondary supply and signs that

infrastructure spending is under way are factors that give some confidence
that higher prices are around the corner.
Fig 4: Supply Cutbacks and Deferrals in the Copper Market
300
Supply cutbacks represent
some 3% of supply in 2009. 250
Cutbacks and deferral 200

represent some 1.5 Mt of
production or 10% of global
(kt)
150
mine supply.
100
50
0
First Quantum
Straits Resources
J&W Investments
Central African M&E

Campbell Resources
Gearbulk
Kazakhmys
Arava Mines
Universal Resources
Inca Pacific
Tamaya Resources
FNX Mining
N. American Palladiu
Weatherly Internatio
Zaruma Resources
Breakwater
Oceanagold
African Copper
CopperCo
Frontera Copper
Gold Reserve
Anvil Mining
Vale
Anglo American
Nova Ventura
Katanga Mining
TVI Pacific
Newmont
Freeport McMoran
OzMinerals
Matrix Metals
New Gold Inc
Russian Copper Co.

Newcrest Mining
Misc.
Baja Mining
Source: BMO Capital Markets & Brook Hunt
Fig 5: LME Copper Inventories Days of Supply

30
At 10 days of supply 25
Days Supply at LME
inventories on LME, levels

have risen back toward the 20
historic mean. 15
During previous downturns 10
inventories have increased 5
toward 20 days’ supply.

0
04/01/1980
04/11/1983
04/09/1987
05/07/1991
19/05/1995
19/03/1999
17/01/2003
17/11/2006
Page 4 of 25
Copper Miners
February 27, 2009
4. FM, QUA and FCX for Leverage

The following charts highlight the EPS and NPV leverage of the nine BMO
QUA and FM offer good Research copper stocks. Shorter-term earnings leverage is based on 2010E
leverage in mid-capitalization EPS numbers and represents the percentage change in earnings for a
stocks, while FCX offers US$0.25/lb change in the copper price to the base US$2.50/lb assumption.
large-capitalization leverage.
Longer-term leverage is measured by NPV in similar US$0.25/lb increments
(BMO Research has the long-term copper price at US$2.20/lb).
Overall, this analysis highlights that QUA and FM offer good leverage in mid-
capitalization stocks, while FCX offers large-capitalization leverage.
Fig 6: 2010E EPS Leverage to US$0.25/lb Change in Copper Price Assumption

FCC is highly leveraged with
its high cost but is under 40%
takeover. KAT also is a
leveraged, high-cost
producer with current cash
30%
costs >US$2/lb.
Change in 2010 EPS (%)
Increasing leverage
QUA and FM show good
earnings leverage to 20%
changing copper prices, at

>20% per US$0.25/lb change
in copper. 10%
Low cash costs and hedging

limit EQN’s earnings
leverage. 0%
EQN IMN ANTO FCX CCT FM KAT QUA FCC
Fig 7: NPV Leverage to US$0.25/lb Change in Copper Price Assumption
40%
A US$0.25/lb change in the
copper price assumption
increases:
30%
Increasing leverage
• FCX’s NPV by $13/share
Change in NPV (%)
• FM’s NPV by $15/share 20%
• QUA’s NPV by $3/share

10%
ANTO and IMN, with their
lower-cost base, show the
lowest leverage of the group.
0%
IMN ANTO CCT EQN KAT FCX QUA FM FCC
Page 5 of 25
Copper Miners
February 27, 2009
5. Corporate Activity on the Rise

Corporate activity in the base metal sector is clearly on the rise with Frontera,
Base metal corporate activity Centenario, and Oz Minerals under takeover, and Chinalco seeking to
on the rise, driven by purchase interests in Rio Tinto operations.
Chinese and Latin
Americans.
This interest has come from the Chinese (Minmetals and Chinalco) and also
Latin America (Southern Copper and Invecture) rather than more preoccupied
North American corporates.
Significantly, these proposed transactions represent meaningful volumes of

Deals represent some 2–3% copper and zinc. BMO Research estimates the Chinese could acquire some 2–
of copper and 5% of zinc 3% of global copper mine supply and around 5% of mine zinc supply through
global mine supply. the acquisition of both Oz Minerals and selective positions in RIO assets.
Other Stocks May Attract Corporate Interest

The following chart plots a PEG (price to growth) ratio versus implied stock
payback and highlights recent corporate activity in the base metal sector and
stocks potentially of corporate interest. The PEG ratio is taken as the three-
year prospective average of BMO Research EPS growth forecasts. Implied
payback is calculated as the number of years taken for the net cash position
of a company to equal its current market capitalization.
Stocks that plot in the bottom left-hand quadrant on this chart are viewed as
those most potentially attractive to other corporates, with attractively priced
growth and short paybacks. Not surprisingly, FCC and CCT, both under
takeover, plot in this position. Other stocks that plot close to this position are
KAT, QUA, EQN and FM.
Fig 8: Potential Value From a Corporate Perspective – PEG vs. Payback

BHP FCX
20
Bottom left quartile is the
2009E-2011E Price Earning Growth (PEG)
optimum position. RIO

IMN AAL
Not surprisingly, recent 15
corporate activity has been
ANTO
focused here with CCT and
FM
FCC bids. 10 TCK

Other stocks attractively
QUA
placed are FM, EQN, KAT EQN
and QUA. 5
XTA
KAT
CCT
FCC
0
0 2 4 6 8 10
Years for Net Cash to equal Market Cap
Source: BMO Capital Markets – FCC and CCT under takeover offers
Page 6 of 25
Copper Miners
February 27, 2009
Same Group Highlighted, Looking at P/NPV and EV/EBITDA

The following chart plots the same group of stocks, looking at current price to
NPV and 2010E EV/EBITDA multiples. While there is some autocorrelation,
this measure highlights the same group of stocks as in the previous figure
and is still a relevant comparison. IMN also appears to offer value on a low
2010E EV/EBITDA, but it trades at a higher P/NPV than most of the group.
Fig 9: P/NPV Against 2010E EV/EBITDA
5
Same group of stocks is
highlighted on NPV and TCK
BHP
EBITDA basis. 4
2010E EV/EBITDA
INM also looking cheap on RIO
2010E EV/EBITDA, if at a 3 FCX
higher P/NPV. ANTO
XTA
2
FM
CCT EQN
FCC
1
IMN
KAT QUA
0
0% 20% 40% 60% 80% 100%
Price to NPV
Source: BMO Capital Markets – FCC and CCT under takeover offers
QUA, FM, EQN and KAT Are Potential Corporate Takeover Targets
A review of the BMO Research copper universe, looking at a number of

metrics including price to growth, price to NPV, cash payback and cash flow
multiples, therefore highlights a group of stocks that appear potentially more
attractive to their peers corporately. These stocks are QUA, FM, EQN and KAT.
KAT - has significant copper assets, but Glencore has a significant interest
(through KAT debt) and the business requires some US$250M of new
capital to achieve a sustainable footing.
EQN – with its scale and future growth potential might represent an
attractive bolt-on transaction to an existing base metal producer.
However, FM has a key equity block of EQN, which might represent a
large hurdle to any interested party other than itself.
FM – a strong balance sheet and scale to its African peers put FM in the
FM could play the role of position to be a regional consolidator. However, FM might also offer
regional consolidator or offer an attractive and established production base for a larger peer looking
an African footprint. to build an African base metal business.
QUA - a combined QUA-CCT might well be attractive to its peers given its
growth upside and that key projects are located in low-sovereign-risk
regions.
Page 7 of 25
Copper Miners
February 27, 2009
Corporates Paying EV/EBITDA ~6x, <US$0.10/lb

The following charts look at the recent market takeover offers for FCC, CCT and
OZL on an earnings and inventory basis. Key points are:
EV/EBITDA transaction multiples of around 6x 2009E earnings
appear to be somewhat opportunistic, considering 2010
prospective multiples of <4x.
Similarly, measuring the implied prices offered for copper-
equivalent resources, prices at an average price of US$0.07/lb
represent only some 5% of the spot copper price.
Fig 10: Recent Offer Prices – EV/EBITDA Fig 11: Current Sector Pricing – 2010E EV/EBITDA
10
4
8
2010E EV/EBITDA
6 3
4
2
2
1
0
FCC CCT OZL*
+1Yr EV/EBITDA +2Yr EV/EBITDA 0

QUA KAT IMN FCC CCT EQN FM ANTO FCX
Source: BMO Capital Markets, * First Call Estimates Source: BMO Capital Markets
Fig 12: Recent Offer Prices - EV/lb of Resource Fig 13: Current Sector Pricing – EV/lb of Resource
0.15 0.15
EV/lb of copper resource
0.10 0.10
US$/lb
US$/lb
0.05 0.05
0.00 0.00
FCC OZL CCT KAT QUA FCC CCT FM IMT ANTO EQN FCX
Source: BMO Capital Markets Source: BMO Capital Markets
Page 8 of 25
Copper Miners
February 27, 2009
Market Factoring US$1.90/lb

Current stock prices appear to be implying a copper price (i.e., the long-
term copper price required for NPV to equal the market capitalization) for
the BMO Research copper sector of around US$1.90/lb. This is about 20%
above current spot prices.
Fig 14: Implied Copper Price

Market continues to factor a
premium to spot prices. 2.50
$2.32
2.25 Spot Copper $2.11
$1.98
2.00 $1.87 $1.89 $1.96
$1.73
1.75
1.50 $1.39
$1.32
US$/lb
1.25
1.00
0.75
0.50
0.25
0.00
KAT CCT EQN FM QUA ANTO FCX IMN FCC
Page 9 of 25
Copper Miners
February 27, 2009
6. Raisings Focus on Balance Sheet

Over the last few weeks there has been an increase in capital raising activity
from the sector primarily focused on improving balance sheets. These include:
FCX raised US$750M through an at-market offering of stock at
FCX raised US$750M. $28. While slightly short of a US$1-2B estimated by BMO
Research, the new stock issue reduces short-term funding
pressure for the business.
KAT raised US$265.3M in a convertible loan underwritten by
KAT seeking additional Glencore, which represents US$100M of new funds allowing
US$250M. for the revised Glencore loan. This funds the company
through Q1/09, and KAT stated it is seeking an additional
US$250M in growth funding.
RIO recently announced a US$19.5B capital raising initiative

RIO asset sales relating to through a combination of asset sale and issue of convertible
copper total US$4.5B bonds. Significantly, proposed asset sales relating to copper
amount to US$4.5B.
ANTO Well Positioned, EQN Under Some Pressure

ANTO well positioned.
ANTO continues to have the best-placed balance sheet in the sector with net
cash of US$3B funding growth activity in 2009. Following the recent equity
issue FCX has decreased net debt to slightly more manageable levels with a
favourable repayment schedule.
EQN continues to have high debt levels, with the market focused on the
EQN needs to meet targets in company generating sufficient cash to meet a US$183M principal debt
2009 to generate sufficient repayment at the end of September. This matches BMO Research’s estimates
cash flow for September 2009 but remains dependent on volumes and copper prices. EQN has its US$243M
repayment. in-the-money copper hedge book and a US$45M overrun facility as a potential
backstop to meeting the payment.
Fig 15: 2009E Net Debt/(Cash) Fig 16: 2009E Net Debt / Equity Ratio
6000 100%
4000 75%
2009E Net Debt (US$M)
2009E Net Debt/Equity
Stronger balance sheet

2000 50%
0 25%
-2000 0%
ANTO IMN QUA FCC CCT KAT FM EQN FCX ANTO QUA IMN FM KAT FCC EQN FCX CCT
Source: BMO Capital Markets Source: BMO Capital Markets
Page 10 of 25
Copper Miners
February 27, 2009
The following charts highlight the balance sheet profiles of these copper
stocks.
Fig 17: ANTO Net Cash/(Debt) Fig 18: FCX Net Cash/(Debt) Fig 19: FM Net Cash/(Debt)
9,000 4,000
4,000
Net Cash/(Debt) (US$M)

7,500 2,000 3,000
6,000 0 2,000
-2,000 1,000
4,500
-4,000
3,000 0
-6,000
1,500 -1,000
8E
9E
0E
1E
2E
3E
4E
5E
8E
9E
0E
1E
2E
3E
4E
5E
8E
9E
0E
1E
2E
3E
4E
5E
200
200
201
201
201
201
201
201
200
200
201
201
201
201
201
201
200
200
201
201
201
201
201
201
Source: BMO Capital Markets Source: BMO Capital Markets Source: BMO Capital Markets
Fig 20: EQN Net Cash/(Debt) Fig 21: KAT Net Cash/(Debt) Fig 22: IMN Net Cash/(Debt)
2,000 1,000 2,000

1,500
1,000 500
1,000
0 0
500
-1,000 -500 0
9E
0E
1E
2E
4E
5E
8E
3E
8E
9E
0E
1E
2E
3E
4E
5E
8E
9E
0E
1E
2E
5E
3E
4E
200
201
201
201
201
200
201
201
200
201
201
201
200
201
201
201
200
200
201
201
201
201
201
201
Fig 23: QUA Net Cash/(Debt) Fig 24: CCT Net Cash/(Debt) Fig 25: FCC Net Cash/(Debt)
1,000 400 200

200 100
500
0 0
0 -200 -100
8E
9E
0E
1E
2E
3E
4E
5E
E
08
09
10
12
14
15
11
13
08
09
10
11
12
13
14
15
200
200
201
201
201
201
201
201
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Page 11 of 25
Copper Miners
February 27, 2009
7. Coppers Remain Priced Below NPV

On average, the copper sector continues to trade at approximately 50% of
Average 50% discount to NPV. estimated NPV, which continues to be a steep discount to BMO Research
valuations.
Fig 26: Price to NPV for BMO Research Copper Producer Universe (%)
140%
BMO Research uses a 120%
US$2.20/lb long-term copper Price to NPV 100% Cheaper
price.
80%
60%
40%
20%
0%
ANTO
ANG
GG
KAT
CCT
XTA
VALE
QUA
BHP
FCX
TCK
ABX
FCC
EQN
KGC
RIO
AVM
NCM
IMN
OGC
FM
NEM
Diversified stocks Gold stocks Copper stocks
Plotting capitalization to P/NPV offers a method to compare the sector on a size

basis. In addition, applying a line of best fit to the data points is a reasonable
proxy for fair value. Stocks that plot above this line are cheaper on a relative
basis than those that plot below the line.
Fig 27: Market Capitalization to P/NPV10 Using BMO Metal Forecasts

ANTO and FM are preferred
and trade above the line. 30000
Log of market capitalisation (US$M)
CHEAP
FCX looks attractive on a 10000 e
FCX alu
relative basis but it has higher XTA air v
ANTO F
debt levels and lower mid- 3000
term growth possibilities. FM
IMN TCK
1000
EQN
TALV
300
QUA
100 KAT
AVM FCC
30 CCT
EXPENSIVE
10
0% 20% 40% 60% 80% 100% 120% 140%
NPV premium to share price (%)
Page 12 of 25
Copper Miners
February 27, 2009
8. Growth Potential
The following charts highlight the production profiles of these copper stocks.
ANTO, EQN and IMN have ANTO, EQN and IMN have stronger mid-term growth profiles. In addition, the
stronger mid-term growth proposed friendly merger of Centenario by Quadra Mining is expected to add
profiles. 30 ktpa of copper to Quadra’s production profile from 2010.
Fig 28: ANTO Copper Production Fig 29: FCX Copper Production Fig 30: FM Copper Production
500 3,000 400

Annual Copper Production (000t)

400
300
2,000
300
200
200
1,000
100
100
0 0 0
E
E
E
E
E
E
08
09
10
11
12
13
14
15
08
10
11
12
13
15
09
14
08
09
10
11
12
14
13
15
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Fig 31: EQN Copper Production Fig 32: KAT Copper Production Fig 33:IMN Copper Production
200 80 140
120
150 60 100
80
100 40
60
40
50 20
20
0 0 0
E
E
E
E
E
E
09
10
11
12
14
08
13
15
08
09
10
11
12
13
14
15
08
09
10
11
12
13
14
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Fig 34: QUA Copper Production Fig 35: CCT Copper Production Fig 36: FCC Copper Production
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Page 13 of 25
Copper Miners
February 27, 2009
Antofagasta ANTO CASH FLOW ANALYSIS - US$M

LSE (Dec Year End) 2007A 2008E 2009E 2010E 2011E
As at 26-Feb-09
Recommendation Outperform Analysts: Cash Flows From Operating Activities
David Radclyffe Receipts From Customers 3832.9 4074.5 2025.0 2934.1 4451.5
Payments To Suppliers (1148.8) (1467.7) (1329.4) (1433.8) (1714.4)
Net Interest 91.1 62.8 106.6 18.9 37.4
Share Price (US$) $6.08 Share Price (£) £4.27 Tax and Other (621.9) (464.6) (213.0) (392.2) (720.3)
Model Derived Model Derived Cash Flows From Investing Activities

Target Value (US$) $7.48 Target Value (£) £5.25 Acq.of Property, Plant and Equip. (481.7) (1367.5) (2328.3) (665.6) (137.6)
NPV (US$) $9.01 NPV (£) £6.32 Exploration Expenditure (48.1) (42.4) (30.0) (30.0) (30.0)
Other 36.3 1401.2 0.0 0.0 0.0
Ordinary Shares (M) 985.9
Options + Notes (M) 0.0 Cash Flows From Financing Activities
Net Change in Borrowings (92.3) (107.1) (83.6) (75.3) 0.0
Market Cap (US$M) $5,999 Market Cap (£$M) £4,210 Dividends Paid (1166.4) (491.1) (59.2) (177.5) (315.5)
Other incl Share Issue or Buy Back (0.9) 0.0 0.0 0.0 0.0
Net Increase In Cash Held 400.2 1598.1 (1911.8) 178.6 1571.2

PRICE ASSUMPTIONS Cash At End of Year 2212.5 3810.5 1898.7 2077.3 3648.5
(Dec Year End) 2007A 2008E 2009E 2010E 2011E
Exchange Rate GBP/US$ 0.50 0.54 0.69 0.63 0.59

Exchange Rate A$/US$ 0.84 0.85 0.68 0.78 0.81 BALANCE SHEET ANALYSIS - US$M
Copper UScents/lb 323.0 315.7 185.0 250.0 290.0 (Dec Year End) 2007A 2008E 2009E 2010E 2011E
Gold US$/oz 696 873 888 925 925 Current Assets
Molybdenum UScents/lb 3072.4 3001.7 1350.0 1500.0 1500.0 Cash and Liquids 2212.5 3810.6 1898.7 2077.3 3648.5
Other 670.7 687.2 687.2 687.2 687.2
Non-Current Assets
Investments 6.0 6.0 6.0 6.0 6.0
Fixed Assets 2679.8 3883.6 6056.3 6562.7 6542.0
FINANCIAL SUMMARY Other 259.1 207.7 207.7 207.7 207.7
Current Liabilities
NPAT (pre-Abs) (US$M) 1382.1 849.4 326.7 644.0 1255.8 Borrowings 101.8 0.0 0.0 0.0 0.0
EPS (¢ps) 140.2 86.2 33.1 65.3 127.4 Creditors 246.5 246.5 246.5 246.5 246.5
PER (x) 4.3 7.1 18.4 9.3 4.8 Other 18.3 16.9 16.9 16.9 16.9
EPS Growth (%) 1.9 -38.5 -61.5 97.1 95.0
EBITDA (US$M) 2816.1 1896.1 878.0 1658.9 2901.3 Non-Current Liabilities
EBITDA per Share (¢ps) 285.7 192.3 89.1 168.3 294.3 Borrowings 164.2 158.9 75.3 0.0 0.0
EV/EBITDA (x) 1.4 1.2 4.8 2.4 0.8 Other 418.2 418.2 418.2 418.2 418.2
Dividend (¢ps) 49.6 8.4 11.0 23.0 45.0 Minority Interest 841.5 851.5 861.5 871.5 881.5
Yield (%) 8.2 1.4 1.8 3.8 7.4 SHAREHOLDERS FUNDS 4906.5 7754.5 8099.0 8859.3 10409.8
P/FCF (x) 3.7 7.5 NM 13.9 3.2 Net Debt(Cash) (1946.5) (3651.7) (1823.4) (2077.3) (3648.5)
FCF Yield (%) 27 13.3 NM 7.2 31.5 Net Debt(Cash)/Equity % -33.9% -42.4% -20.3% -21.3% -32.3%
PROFIT AND LOSS STATEMENT - US$M DIVISIONAL EARNINGS (EBIT) - US$M

(Dec Year End) 2007A 2008E 2009E 2010E 2011E (Dec Year End) 2007A 2008E 2009E 2010E 2011E
Sales Revenue 3832.9 4074.5 2025.0 2934.1 4451.5 El Tesoro 100% 380.3 326.7 89.3 173.4 216.0
Other Revenue 215.3 -618.8 237.1 236.5 254.4 Michilla 100% 154.0 118.7 -9.9 0.0 0.0
Operating Costs 1148.8 1467.7 1329.4 1433.8 1714.4 Los Pelambres 100% 2098.6 2110.8 581.2 1265.9 1647.2
Gross Operating Profit 2899.4 1988.0 932.7 1736.8 2991.5 Esperenza 100% 0.0 0.0 0.0 0.0 638.6
Depreciation 161.3 173.7 165.6 169.2 168.2 Railway and Water 100% 65.4 91.3 87.2 87.9 88.7
Exploration and Royalties 38.1 55.3 36.7 59.8 72.3
Corporate and Other 45.2 36.6 18.0 18.0 18.0 Exploration, R&D 38.1 32.4 20.0 20.0 20.0
EBIT 2654.8 1722.4 712.5 1489.7 2733.1 Corporate and Other Costs 45.2 36.6 18.0 18.0 18.0
Less Net Interest Expense -95.4 -62.8 -106.6 -18.9 -37.4 EBIT (before minorities) 2654.8 1722.4 712.5 1489.7 2733.1
Pre-Tax Profits 2750.2 1785.1 819.1 1508.7 2770.5
Less Tax 638.4 464.6 213.0 392.2 720.3 FINANCIAL MULTIPLES
Less Minorities 729.7 471.1 279.4 472.4 794.3 ROA (%) 45.6 20.0 8.0 15.6 24.6
Less Pref Dividends 0.0 0.0 0.0 0.0 0.0 ROE (%) 28.2 11.0 4.0 7.3 12.1
NPAT (pre-Abs) 1382.1 849.4 326.7 644.0 1255.8 ROIC (%) 51.3 21.8 8.7 16.8 26.3
Net Abnormals 0.0 0.0 0.0 0.0 0.0
Reported Profit 1382.1 849.4 326.7 644.0 1255.8
DIVISIONAL VALUATION RESERVES & RESOURCES PROJECT/DIVISION

NPV US$M Attributable Contained Mine Percent 2007A 2008E 2009E 2010E 2011E
Metal Life Copper Production Owned
El Tesoro 395 (Mt) (Years) El Tesoro 70% 93000 79450 66413 63394 57411
Michilla -5 Copper Reserves 15 18 Michilla 74% 33390 35393 28225 0 0
Los Pelambres 4,340 Copper Resources 25 31 Los Pelambres 60% 174000 190320 176306 233105 244570
Railway and Water 477 Cu Guesstimate 22 28 Esperenza 70% 0 0 0 0 91679
Esperenza 1785 Total Attrib Copper - Tonnes 300390 305163 270943 296499 393659
Corporate and Other -299
Hedge Book 0 Molybdenum Production
Net Cash & Other 2,189 Los Pelambres 60% 6060 4680 4860 4667 4896
TOTAL NPV (US$M) 8,881 6060 4680 4860 4667 4896
NPV per Share (US$) 9.01
Cu Cash Cost US$/lb 0.93 1.19 1.14 1.13 1.16
*Co-Product Basis
Page 14 of 25
Copper Miners
February 27, 2009
Centenario Copper CCT CASH FLOW ANALYSIS - US$M

TSX (Dec Year End) 2007A 2008E 2009E 2010E 2011E
As at 27-Feb-09 Analysts:
Recommendation Market Perform (S) David Cotterell Cash Flows From Operating Activities
Receipts From Customers (24.2) (0.0) 83.7 157.4 194.4
Payments To Suppliers 0.0 (4.2) (59.4) (84.2) (94.2)
Net Interest 0.0 0.9 (6.3) (4.2) (3.5)
Share Price (US$) $0.74 Share Price (C$) $0.91 Tax and Other 0.6 0.0 0.0 (8.2) (12.5)

Target Value (US$) $1.30 Target Value (C$) na Acq.of Property, Plant and Equip. (0.3) (187.0) (25.5) (3.8) (3.9)
NPV (US$) $6.87 NPV (C$) $8.48 Exploration Expenditure 0.0 0.0 0.0 0.0 0.0
Other (29.4) 0.0 0.0 0.0 0.0
Net Change in Borrowings 0.0 110.0 (11.0) (10.0) (45.0)
Market Cap (US$M) $36 Market Cap (C$M) $44 Dividends Paid 0.0 (0.0) (0.0) (0.0) (0.0)
Other 75.7 54.0 0.0 0.0 0.0
Net Increase In Cash Held 22.5 (26.3) (18.5) 47.0 35.2

PRICE ASSUMPTIONS Cash At End of Year 31.9 5.7 (12.8) 34.2 69.4
Exchange Rate C$/US$ (CAD) 0.88 0.94 0.83 0.88 0.92

Copper UScents/lb 323.0 315.7 185.0 250.0 290.0 BALANCE SHEET ANALYSIS - US$M
Gold US$/oz 696 873 888 925 925 (Dec Year End) 2007A 2008E 2009E 2010E 2011E
Silver US$/oz 13.4 15.0 12.8 14.0 14.0 Current Assets
Molybdenum US$/lb 30.7 30.0 13.5 15.0 15.0 Cash and Liquids 39.2 12.9 (5.6) 41.4 76.6
Other 10.0 10.0 10.0 10.0 10.0
Non-Current Assets
Investments 0.0 0.0 0.0 0.0 0.0
Fixed Assets 42.6 210.4 225.8 208.7 189.8
Current Liabilities
NPAT (pre-Abs) (US$M) -14.0 -22.4 7.9 40.0 61.3 Borrowings 10.3 10.3 10.3 10.3 10.3
EPS (US$ps) -0.4 -0.4 0.2 0.8 1.2 Creditors 0.0 0.0 0.0 0.0 0.0
PER (x) 50 50 5.0 1.0 0.7 Other 1.0 0.0 0.0 0.0 0.0
EPS Growth (%) 38.4 -7.7 +>100.0 +>100.0 53.2
EBITDA (US$M) -18.1 -34.4 22.6 70.8 97.5 Non-Current Liabilities
EBITDA per Share (US$ps) -0.5 -0.7 0.4 1.3 1.9 Borrowings 0.0 110.0 99.0 89.0 44.0
EV/EBITDA (x) 0.7 -4.0 6.3 1.2 0.1 Other 15.4 15.4 15.4 15.4 15.4
Dividend (US$ps) 0.0 0.0 0.0 0.0 0.0 Minority Interest 0.0 0.0 0.0 0.0 (0.0)
P/FCF (x) NM NM NM 0.6 0.4 Net Cash/(Net Debt) 28.9 (107.4) (114.9) (57.8) 22.3
FCF Yield (%) NM NM NM 158 223 Net Debt/Equity % -41.5% 110.0% 108.9% 39.8% -10.8%

Sales Revenue 0.0 0.0 83.7 157.4 194.4

Other Revenue 0.0 0.0 0.0 0.0 0.0 Franke -11 -19 19 57 82
Operating Costs 0.0 0.0 54.2 78.6 88.4
Gross Operating Profit 0.0 0.0 29.5 78.8 106.0 Capital spending 0.3 187.0 25.5 3.8 3.9
Depreciation 0.0 0.0 10.0 18.4 20.1 Corporate and Other Costs 4.9 4.2 5.0 5.0 5.0
Corporate and Other 4.9 4.2 5.0 5.0 5.0 Total EBIT -16 -23 14 52 77
EBIT (not incl associates) -15.9 -23.3 14.1 52.4 77.3
Less Net Interest Expense -1.2 -0.9 6.3 4.2 3.5
Pre-Tax Profits -14.8 -22.4 7.9 48.2 73.8
Less Tax -0.7 0.0 0.0 8.2 12.5
Plus Associates less Divds 0.0 0.0 0.0 0.0 0.0
Less Minorities 0.0 0.0 0.0 0.0 0.0
NPAT (pre-Abs) -14.0 -22.4 7.9 40.0 61.3
Net Abnormals -9.9 31.6 0.0 0.0 0.0
Reported Profit -23.9 9.2 7.9 40.0 61.3

Franke 385.1 (Mt) (Years) Franke 100% (000t) 0 0 15 28 30
Net Cash & Other -13.4 Copper Reserves 0.31 8.9
Corporate & Other -19.0 Copper Resources 0.37 10.5
Hedge Book 16 Cu Guesstimate 0.35 10.2 Cu Cash Cost US$/lb 0.00 0.00 1.62 1.28 1.32
*Co-Product Basis
TOTAL NPV (US$M) 369.1
Page 15 of 25
Copper Miners
February 27, 2009
Equinox Minerals EQN CASH FLOW ANALYSIS - US$M

As at 26-Feb-09
Recommendation Market Perform Analysts: Cash Flows From Operating Activities
David Radclyffe Receipts From Customers 0.0 9.7 683.7 918.0 1075.2
Payments To Suppliers (11.3) (9.7) (389.2) (385.3) (436.0)
Net Interest 1.8 (10.9) (32.4) (15.3) (1.9)
Share Price (US$) $1.04 Share Price (C$) $1.29 Tax and Other (33.0) (60.4) 5.6 (135.5) (171.0)

Target Value (US$) $1.34 Target Value (C$) $1.65 Acq.of Property, Plant and Equip. (420.3) (320.0) (28.1) (16.0) (18.4)
NPV (US$) $3.27 NPV (C$) $4.04 Exploration Expenditure 0.0 (11.3) (12.5) (8.8) (8.9)
Other (1.3) 27.0 27.2 0.0 0.0
Net Change in Borrowings 286.1 300.0 (160.0) (300.0) (116.6)
Market Cap (US$M) $620 Market Cap (C$M) $765 Dividends Paid (0.0) (0.0) (0.0) (30.7) (38.7)
Other 184.0 58.8 0.0 0.0 0.0
Net Increase In Cash Held 6.0 (16.9) 94.2 26.6 283.7


Copper UScents/lb 323 316 185 250 290 (Dec Year End) 2007A 2008E 2009E 2010E 2011E
Cobalt UScents/lb 3072 3877 1650 2000 1000 Current Assets
Uranium US$/lb 99.1 63.0 55.0 60.0 60.0 Cash and Liquids 99.0 82.1 176.3 202.9 486.6
Gold US$/oz 696.3 872.5 887.5 925.0 925.0 Other 31.9 31.9 31.9 31.9 31.9
Non-Current Assets
Investments 4.3 4.3 4.3 4.3 4.3
Fixed Assets 677.2 998.0 978.2 937.0 897.1
FINANCIAL SUMMARY Other 15.6 (11.4) (38.6) (38.6) (38.6)
Current Liabilities
NPAT (pre-Abs) (US$M) -17.1 -21.9 207.2 316.1 399.1 Borrowings 13.5 13.5 0.0 0.0 0.0
EPS (¢ps) -5.2 -3.1 34.0 51.7 65.3 Creditors 64.0 64.0 64.0 64.0 64.0
PER (x) 50 50 3.1 2.0 1.6 Other 4.3 4.3 4.3 4.3 4.3
EPS Growth (%) ->100.0 41.6 +>100.0 52.2 26.2
EBITDA (US$M) -6.4 0.8 284.3 526.4 632.8 Non-Current Liabilities
EBITDA per Share (¢ps) -1.0 0.1 46.3 85.8 103.1 Borrowings 263.1 563.1 416.6 116.6 0.0
EV/EBITDA (x) ->100.0 +>100.0 3.0 1.0 0.2 Other 64.8 64.8 64.8 64.8 64.8
Dividend (¢ps) 0.0 0.0 0.0 5.2 6.5 Minority Interest 0.0 0.0 0.0 0.0 0.0
P/FCF (x) NM NM 2.7 1.7 1.4 Net Cash/ (Net Debt) (177.6) (494.5) (240.2) 86.4 486.6
FCF Yield (%) NM NM 36.6 57.7 70.8 Net Debt/Equity % 42.5 125.1 39.9 -9.7 -39.0

Sales Revenue 0.0 0.0 573.4 909.2 1083.8

Other Revenue 0.0 9.7 110.3 8.9 -8.6 Lumwana -7 -10 132 466 588
Operating Costs 0.0 0.0 364.0 350.0 356.0
Gross Operating Profit 0.0 9.7 319.7 568.0 719.2 Total -7 -10 132 466 588
Depreciation 0.1 0.3 48.9 58.2 59.3
Corporate and Other 11.3 9.7 8.0 8.0 8.0 FINANCIAL MULTIPLES
EBIT (not incl associates) -18.5 -10.5 234.0 466.8 572.0
Less Net Interest Expense -1.8 10.9 32.4 15.3 1.9 ROA (%) NM NM 20.3 41.0 41.4
Pre-Tax Profits -16.8 -21.4 201.7 451.5 570.1 ROE (%) NM NM 34.4 35.6 32.0
Less Tax 0.3 0.4 -5.6 135.5 171.0 ROIC (%) NM NM 23.0 46.5 45.8
NPAT (pre-Abs) -17.1 -21.9 207.2 316.1 399.1
Net Abnormals -12.4 3.6 0.0 0.0 0.0
Reported Profit -29.4 -18.3 207.2 316.1 399.1

NPV US$M Attributable Contained Mine 2007A 2008E 2009E 2010E 2011E
Metal Life Production - Copper
Lumwana (Copper) 2,440 (Mt) (Years) Lumwana (000t) 100.0% 0 0 148 176 179
Lumwana (Uranium) 0 Copper Reserves 2.3 12
Hedge Book 80 Copper Resources 2.7 14 Committed Hedging
Corporate & Other -67 Cu Guesstimate 3.7 19 Copper (000 t) 54 57 8
Net Cash -447 Price (US$/lb) 2.78 2.57 2.43
Cobalt Reserves 0.0 12
TOTAL NPV (US$M) 2,006 Cobalt Resources 0.1 14 Production - Uranium
NPV per Share (US$) 3.27 Co Guesstimate 0.0 19 Lumwana (000t) 100.0% 0 0 0 0 0
Cu Cash Cost US$/lb 0.00 0.00 1.27 1.06 1.06

*Co-Product Basis
Page 16 of 25
Copper Miners
February 27, 2009
First Quantum FM CASH FLOW ANALYSIS - US$M

TSX (Dec Year End) 2007A 2008E 2009E 2010E 2011E 2011E
As at 26-Feb-09
Recommendation Outperform Analyst: Cash Flows From Operating Activities
David Radclyffe Receipts From Customers 1539.2 1912.9 1469.2 1790.7 2322.2 2322.2
Payments To Suppliers (574.2) (864.5) (721.8) (880.5) (1109.1) (1109.1)
Net Interest (28.9) (22.8) (13.3) (7.3) 7.5 7.5
Share Price (US$) $27.30 Share Price (C$) $33.70 Tax and Other (396.1) (242.2) (190.8) (229.7) (322.2) (322.2)

Target Value (US$) $30.78 Target Value (C$) $38.00 Acq.of Property, Plant and Equip. (319.6) (445.2) (189.0) (308.8) (82.8) (82.8)
NPV (US$) $56.82 NPV (C$) $70.15 Exploration Expenditure 0.0 (26.3) (21.2) (12.2) (23.8) (23.8)
Other (290.7) (307.3) 0.0 0.0 0.0 0.0
Net Change in Borrowings 69.3 25.0 50.0 (436.2) 0.0 0.0
Market Cap (US$M) $1,725 Market Cap (C$M) $2,130 Dividends Paid (51.7) (53.5) (29.6) (55.3) (79.4) (79.4)
Other 11.5 5.0 0.0 0.0 0.0 0.0
Net Increase In Cash Held (49.5) (19.0) 353.6 (139.2) 712.3 712.3
PRICE ASSUMPTIONS Cash At End of Year 200.0 181.0 534.6 395.4 1107.7 1107.7

Copper UScents/lb 323 316 185 250 290 (Dec Year End) 2007A 2008E 2009E 2010E 2011E 2011E
Cobalt UScents/lb 3072 3877 1650 2000 1000 Cash and Liquids 222.5 203.5 557.1 417.9 1130.2 1130.2
Nickel UScents/lb 1688 960 575 700 800 Other 564.1 564.1 564.1 564.1 564.1 564.1
Non-Current Assets
Investments 567.0 567.0 567.0 567.0 567.0 567.0
Fixed Assets 1320.5 1660.8 1714.9 1898.5 1858.6 1858.6
FINANCIAL SUMMARY Other 8.6 315.9 315.9 315.9 315.9 315.9
Current Liabilities
NPAT (pre-Abs) (US$M) 520.3 469.1 333.1 461.4 625.0 Borrowings 73.7 73.7 0.0 0.0 0.0 0.0
EPS (¢ps) 762.0 678.5 477.4 661.0 895.2 Creditors 104.9 104.9 104.9 104.9 104.9 104.9
PER (x) 3.6 4.0 5.7 4.1 3.0 Other 150.7 51.7 53.5 29.6 55.3 55.3
EPS Growth (%) 1.6 -10.7 -29.6 38.5 35.4
EBITDA per Share (¢ps) 1187.1 1274.5 965.3 1182.0 1523.9 Borrowings 287.5 312.5 436.2 0.0 0.0 0.0
EV/EBITDA (x) 2.4 2.3 2.6 1.8 0.7 Other 264.5 264.5 264.5 264.5 264.5 264.5
Dividend (¢ps) 74.5 50.8 48.0 99.8 135.2 Minority Interest 215.4 25.0 25.0 25.0 30.0 30.0
Yield (%) 2.7 1.9 1.8 3.7 5.0 SHAREHOLDERS FUNDS 1586.0 2479.0 2834.9 3339.4 3981.1 3981.1
P/FCF (x) 7.8 5.5 5 4.9 2.2 Net Cash/ (Net Debt) (138.7) (182.7) 120.9 417.9 1130.2 1130.2
FCF Yield (%) 13 18 19.3 20 46 Net Debt/Equity % 8.7% 7.4% -4.3% -12.5% -28.4% -28.4%

(Dec Year End) 2007A 2008E 2009E 2010E 2011E (Dec Year End) 2007A 2008E 2009E 2010E 2011E 2011E
Sales Revenue 1539.2 2147.6 1449.2 1790.7 2322.2 Bwana Mkubwa 5.0 -21.3 0.0 0.0 0.0 2.8
Other Revenue 0.0 -234.6 20.0 0.0 0.0 Kansanshi 711.7 745.2 264.6 350.9 482.4 10.0
Operating Costs 544.3 772.1 642.3 787.0 993.5 Guelb Moghrein 138.5 153.5 85.2 138.8 169.7 925.0
Gross Operating Profit 994.9 1140.8 826.9 1003.8 1328.6 Frontier 7.8 257.9 149.3 220.5 256.6 14.0
Depreciation 81.2 105.9 136.9 127.1 124.7 Kolwezi tailings 0.0 0.0 0.0 -7.0 108.4 0.0
Exploration and Royalties 25.1 209.0 55.1 55.8 83.1 Kevista 0.0 0.0 0.0 0.0 0.0 0.0
Corporate and Other 25.2 -91.2 43.5 47.9 54.3
EBIT 863.4 917.2 591.4 773.0 1066.6 Capital spending 319.6 445.2 189.0 308.8 82.8 54.3
Less Net Interest Expense 28.9 22.8 13.3 7.3 -7.5 Corporate and Other Costs 25.2 (91.2) 43.5 47.9 54.3 54.3
Pre-Tax Profits 834.5 894.3 578.1 765.6 1074.1 EBIT 863.4 917.2 591.4 773.0 1066.6 1066.6
Less Tax 182.8 292.2 190.8 229.7 322.2
Less Minorities 131.4 133.0 54.2 74.6 126.8 FINANCIAL MULTIPLES
Plus Associates 0.0 0.0 0.0 0.0 0.0 ROA (%) 32.2 27.7 15.9 20.5 24.0 24.0
NPAT (pre-Abs) 520.3 469.1 333.1 461.4 625.0 ROE (%) 32.8 7.0 11.8 13.8 15.7 15.7
Net Abnormals 0.0 -296.0 0.0 0.0 0.0 ROIC (%) 44.3 32.0 18.1 23.1 26.8 26.8
Reported Profit 520.3 173.1 333.1 461.4 625.0

NPV US$M Attributable Contained Mine 2007A 2008E 2009E 2010E 2011E 2011E
Bwana Mkubwa 0 Metal Life Attributable Copper Production (100%)
Kansanshi 1,689 (Mt) (Years) Bwana Mkubwa (000t) 25 6 0 0 0 0
Guelb Moghrein 449 Copper Reserves 3.8 10 Kansanshi (000t) 162 213 242 208 204 204
Frontier 1,223 Copper Resources 11.4 29 Guelb Moghrein (000t) 28 32 36 44 44 44
Mopani 10 Cu Guesstimate 8.3 21 Frontier (000t) 8 78 94 85 80 80
Kolwezi Tailings 402 Kolwezi tailings (000t) 0 0 0 0 29 29
Kevista 34 Attributable Contained Mine Kevista (000t) 0 0 0 0 0 0
Corporate and Other -209 Metal Life Total Attrib Copper 224 328 372 337 357 357
Investments (inc. EQN) 373 (Moz) (Years) Gold Production
Hedge Book -16 Gold Reserves 1.8 7 Kansanshi (000oz) 30 30 140 107 89 89
Net Cash -107 Gold Resources 4.9 18 Guelb Moghrein (000oz) 54 66 99 110 120 120
TOTAL NPV (US$M) 3,848 Au Guesstimate 3.3 12 Cu Cash Cost US$/lb 1.13 1.26 0.97 1.27 1.40 0.00
NPV per Share (US$) 56.8233 *Co-Product Basis
Page 17 of 25
Copper Miners
February 27, 2009
Freeport McMoRan FCX CASH FLOW ANALYSIS - US$M

NYSE (Dec Year End) 2008A 2009E 2010E 2011E
As at 26-Feb-09
Recommendation Market Perform Analysts: Cash Flows From Operating Activities
David Radclyffe Receipts From Customers 17796 11883 14682 16538
Tony Robson Payments To Suppliers (9533) (7668) (8164) (9253)
Share Price (US$) $29.32 Net Interest (584) (474) (472) (429)
JV Div,Tax and Other (4309) (2171) (2772) (2971)
Model Derived
Target Value (US$) $30.00 Cash Flows From Investing Activities
NPV (US$) $49.04 Acq.of Property, Plant and Equip. (2708) (1262) (1059) (2007)
Exploration Expenditure 0 0 0 0
Ordinary Shares (M) 411.0 Other 390 0 0 0
Options + Notes (M) 71.7
Cash Flows From Financing Activities
Market Cap (US$M) $11,230 Net Change in Borrowings 124 (67) (10) (135)
Dividends Paid (948) (270) (246) (281)
Other incl Share Issue or Buy Back (982) 693 (98) (117)
PRICE ASSUMPTIONS Net Increase In Cash Held (754) 664 1861 1345
(Dec Year End) 2008A 2009E 2010E 2011E Cash At End of Year 873 1537 3398 4743
Exchange Rate A$/US$ 0.852 0.682 0.781 0.810
Copper UScents/lb 315.7 185.0 250.0 290.0 BALANCE SHEET ANALYSIS - US$M
Cobalt UScents/lb 3877 1650 2000 1000 (Dec Year End) 2008A 2009E 2010E 2011E
Molybdenum US$/lb 30.0 13.5 15.0 15.0 Current Assets
Gold US$/oz 873 888 925 925 Cash and Liquids 872 1536 3397 4743
Silver US$/oz 15.01 12.75 14.00 14.00 Other 4279 4279 4279 4279
Non-Current Assets
Investments 0 0 0 0
Fixed Assets 16002 16336 16423 17425
FINANCIAL SUMMARY Other 2118 973 973 973
(Dec Year End) 2008A 2009E 2010E 2011E
Current Liabilities
NPAT (pre-Abs) (US$M) 2615 167 1729 2256 Borrowings 67 0 0 0
EPS (¢ps) 576 35 358 467 Creditors 2715 1813 2240 2523
PER (x) 5 50 8 6 Other 369 369 370 370
EPS Growth (%) -41 -94 +>100.0 30
EBITDA (US$M) 7058 3624 5507 5997 Non-Current Liabilities
EBITDA per Share (¢ps) 1556 751 1141 1242 Borrowings 7284 7284 7274 7139
EV/EBITDA (x) 3 5.5 3 3 Other 5718 5718 5718 5719
Dividend (¢ps) 138 0 0 100 Minority Interest 1328 1328 1328 1328
Yield (%) 4.7 0.0 0.0 3.4 SHAREHOLDERS FUNDS 5790 6612 8143 10341
P/FCF (x) 17 36 5 6 Net Cash(Debt) (6479) (5748) (3877) (2396)
FCF Yield (%) 5.9 3 20 17 Net Debt/Equity % 112% 87% 48% 23%

(Dec Year End) 2008A 2009E 2010E 2011E (Dec Year End) 2008A 2009E 2010E 2011E
Sales Revenue 17796 11883 14682 16538 Grasberg 1307 2237 2900 2192
Other Revenue 0 0 0 0 Bagdad/Sierrita 1091 367 735 1085
Operating Costs 9533 7668 8164 9253 Morenci 357 -38 125 323
Gross Operating Profit 8263 4215 6518 7285 Cerro Verde 987 397 710 1114
Depreciation 1782 1002 1068 1152 Candelaria 383 176 354 693
Exploration 292 75 97 147 El Abra 441 95 285 431
Corporate/Royalties/Other 302 180 231 278 Tenke Fungurume -12 98 564 606
EBIT 5887 2958 5122 5709 Primary and by-product molybdenum 748 -22 138 238
Less Net Interest Expense 584 474 472 429 Rod & Refining 22 13 16 18
Pre-Tax Profits 5303 2484 4649 5279 Atlantic Copper Refinery (100%) 10 16 22 29
Less Tax 1812 1739 2092 2112
Less Minorities and Smelter Losses 602 332 679 860 FINANCIAL MULTIPLES
Plus Associates less Divs -274 -246 -149 -52 ROA 25.3 12.8 20.4 20.8
NPAT (pre-Abs) 2615 167 1729 2256 ROE nm 2.5 21.2 21.8
Net Abnormals -13956 0 0 0 ROIC 44.8 21.3 33.2 32.7
Reported Profit -11341 167 1729 2256
DIVISIONAL VALUATION PROJECT/DIVISION

NPV US$M Contained Mine 2008A 2009E 2010E 2011E
Metal Life NORTH AMERICA DIVISION
Grasberg (90.6% of PT-FI) 14,370 (Mt) (Years) Copper (000t) 641 489 417 547
Bagdad/Sierrita 4,139 61.3 22 Molybdenum (t) 31752 26878 26947 29708
Morenci 3,218 113.6 40 SOUTH AMERICA DIVISION
Candelaria 1,437 79.2 28 Copper (000t) 690 628 597 692
Cerro Verde 2,271 Molybdenum (t) 998 726 710 847
El Abra 811 1.2 14 Gold (000oz) 114 117 106 120
Tenke Fungurume 2,676 2.8 34 INDONESIA DIVISION
Molybdenum 1,529 1.8 22 Copper (000t) 504 615 641 521
Rod & Refining 85 Gold (000oz) 1182 2100 2030 1541
Atlantic Copper Refinery (100 375 0.3 13 SOUTHERN AFRICA DIVISION
PT Smelting 75 0.7 29 Copper (000t) 0 27 98 112
Corporate & Other -1,575 0.9 36 Cobalt (000t) 0 2 8 8
Net Cash (Incl JV debt) -5,739 (Moz) (Years)
TOTAL NPV (US$M) 23,671 173.7 62 Copper Total (Bln lb) 4.0 3.9 3.9 4.1
NPV per Share (US$) 49.04 219.3 78 Molybdenum Total (Bln lb) 72 61 61 67
99.9 36
Co- Product Cash Cost US$/lb 1.45 1.05 1.13 1.33
Page 18 of 25
Copper Miners
February 27, 2009
Frontera Copper FCC CASH FLOW ANALYSIS - US$M

Recommendation Market Perform (S) David Cotterell Cash Flows From Operating Activities
Receipts From Customers 31.8 114.4 50.4 153.5 199.5
Net Interest 0.0 (8.9) (3.0) (2.6) (0.9)
Share Price (US$) $0.62 Share Price (C$) $0.76 Tax and Other 23.9 (2.1) 3.4 (6.9) (14.6)

Target Value (US$) $0.68 Target Value (C$) na Acq.of Property, Plant and Equip. (29.8) (8.0) (2.7) (5.5) (5.8)
Other 1.2 0.0 0.0 0.0 0.0
Net Change in Borrowings 0.0 0.0 0.0 (45.0) (11.6)
Other (6.3) 0.0 0.0 0.0 0.0
Net Increase In Cash Held 20.9 0.6 (5.0) (17.9) 36.8


Molybdenum US$/lb 30.7 30.0 13.5 15.0 15.0 Cash and Liquids 54.5 55.1 50.1 32.2 69.0
Other 39.1 39.1 39.1 39.1 39.1
Non-Current Assets
Investments 1.8 1.8 1.8 1.8 1.8
Fixed Assets 136.0 136.0 132.1 122.8 111.8
Current Liabilities
NPAT (pre-Abs) (US$M) 45.4 0.6 -8.8 17.7 37.5 Borrowings 17.5 17.5 17.5 17.5 17.5
EPS (US$ps) 0.7 0.0 -0.1 0.3 0.6 Creditors 0.0 0.0 0.0 0.0 0.0
PER (x) 1.1 50 50 2.8 1.3 Other 29.9 0.0 0.0 0.0 0.0
EPS Growth (%) +>100.0 -98.4 ->100.0 +>100.0 +>100.0
EBITDA (US$M) 115.7 29.4 -9.4 41.8 69.4 Non-Current Liabilities
EBITDA per Share (US$ps) 1.8 0.5 -0.1 0.6 1.1 Borrowings 76.6 76.6 76.6 31.6 20.0
EV/EBITDA (x) 0.6 2.4 -8.1 1.2 0.0 Other 16.2 16.2 16.2 16.2 16.2
Dividend (US$ps) 0.0 0.0 0.0 0.0 0.0 Minority Interest 0.0 0.0 0.0 0.0 0.0
P/FCF (x) 1.5 64.0 NM 1.5 0.8 Net Cash/(Net Debt) (39.7) (39.1) (44.1) (17.0) 31.4
FCF Yield (%) 65 2 NM 68 122 Net Debt/Equity % 34.8% 32.1% 39.1% 13.0% -18.7%

Sales Revenue 167.3 114.4 50.4 153.5 199.5

Other Revenue 0.0 0.0 0.0 0.0 0.0 Piedras Verdes 86 15 -5 31 57
Operating Costs 70.3 90.0 46.6 100.4 117.0
Gross Operating Profit 97.0 24.4 3.8 53.2 82.4 Capital spending 29.8 8.0 2.7 5.5 5.8
Depreciation 10.8 7.8 6.4 14.6 16.3 Corporate and Other Costs 7.0 3.8 4.0 4.0 4.0
Corporate and Other 7.0 3.8 4.0 4.0 4.0 Total EBIT 79 12 -9 27 53
EBIT (not incl associates) 78.6 11.6 -9.3 27.2 53.0
Less Net Interest Expense 10.3 8.9 3.0 2.6 0.9
Pre-Tax Profits 68.4 2.7 -12.3 24.6 52.1
Less Tax 22.9 2.1 -3.4 6.9 14.6
NPAT (pre-Abs) 45.4 0.6 -8.8 17.7 37.5
Net Abnormals -13.7 5.5 0.0 0.0 0.0
Reported Profit 31.7 6.1 -8.8 17.7 37.5

Piedras Verdes 172.5 (Mt) (Years) Piedras Verdes 100% (000t) 24 19 12 28 31
Net Cash & Other -74.2 Copper Reserves 0.70 14.3
Corporate & Other -19.0 Copper Resources 0.80 16.4
Hedge Book 0 Cu Guesstimate 0.70 14.4 Cu Cash Cost US$/lb 1.30 2.18 1.72 1.63 1.70
*Co-Product Basis
TOTAL NPV (US$M) 79.2
Page 19 of 25
Copper Miners
February 27, 2009
Inmet Mining IMN CASH FLOW ANALYSIS - C$M

Recommendation Market Perform David Cotterell Cash Flows From Operating Activities
Payments To Suppliers 0.0 0.0 (627.0) (568.1) (587.0)
Net Interest (1.3) 35.4 48.8 (17.6) (10.9)
Share Price (US$) $22.02 Share Price (C$) $27.19 Tax and Other 11.0 72.2 (100.2) (192.7) (168.0)

Other (14.8) 220.6 0.0 0.0 0.0
Net Change in Borrowings 88.9 114.6 0.0 (50.0) (50.0)
Market Cap (US$M) $1,063 Market Cap (C$M) $1,313 Dividends Paid (9.7) (9.7) (8.0) (6.4) (5.8)
Other (8.0) 166.9 0.0 0.0 0.0
Net Increase In Cash Held 137.9 14.6 (30.0) 245.5 246.8


Copper UScents/lb 323.0 315.7 185.0 250.0 290.0 BALANCE SHEET ANALYSIS - C$M
Zinc UScents/lb 147.5 85.5 66.3 85.0 100.0 (Dec Year End) 2007A 2008E 2009E 2010E 2011E
Silver US$/oz 13.4 15.0 12.8 14.0 14.0 Cash and Liquids 842.4 581.0 551.1 796.6 1043.4
Molybdenum US$/lb 30.7 30.0 13.5 15.0 15.0 Other 198.4 224.4 224.4 224.4 224.4
Pyrite US$/t
Non-Current Assets
Investments 32.3 17.5 17.5 17.5 17.5
Fixed Assets 871.0 1950.5 2167.0 2239.2 2262.6
Current Liabilities
NPAT (pre-Abs) (C$M) 419.6 278.5 194.4 374.1 326.0 Borrowings 13.0 109.7 109.7 109.7 109.7
EPS (C$ps) 8.7 5.8 4.0 7.7 6.8 Creditors 145.2 191.4 191.4 191.4 191.4
PER (x) 3.1 4.7 6.8 3.5 4.0 Other 27.6 29.9 9.7 8.0 6.4
EPS Growth (%) 3.7 -33.6 -30.2 92.4 -12.9
EBITDA (C$M) 770.0 642.9 361.7 666.9 593.0 Non-Current Liabilities
EBITDA per Share (C$ps) 15.9 13.3 9.1 13.8 12.3 Borrowings 234.3 384.8 384.8 334.8 284.8
EV/EBITDA (x) 0.9 1.9 3.5 1.4 1.1 Other 235.9 257.7 257.7 257.7 257.7
Dividend (C$ps) 0.2 0.2 0.2 0.2 0.1 Minority Interest 0.0 0.0 (0.0) 0.0 0.0
P/FCF (x) 13.1 NM NM 3.5 3.5 Net Cash/(Net Debt) 595.1 86.5 56.6 352.1 648.8
FCF Yield (%) 8 NM NM 28 28 Net Debt/Equity % -42.7% -4.6% -2.8% -14.8% -24.1%
PROFIT AND LOSS STATEMENT - C$M DIVISIONAL EARNINGS (EBIT) - C$M

Sales Revenue 1101.2 928.7 970.9 1236.4 1181.5

Other Revenue 13.0 20.3 -3.0 0.0 0.0 Cayeli 224 118 68 106 137
Operating Costs 519.2 521.2 614.6 545.6 562.0 Pyhasalmi 138 91 -9 40 53
Gross Operating Profit 595.0 427.9 353.3 690.8 619.5 Troilus 10 29 59 85 0
Depreciation 36.2 44.6 85.0 82.5 88.1 Ok Tedi 187 134 106 93 101
Exploration and Royalties 8.6 10.6 11.0 10.9 13.4 Las Cruces 0 0 37 124 166
Corporate and Other 21.2 14.4 11.5 13.0 13.0 Petaquilla 0 0 0 0 0
EBIT (not incl associates) 529.0 358.3 245.8 584.4 504.9
Less Net Interest Expense -31.3 -26.3 -48.8 17.6 10.9 Capital spending 345.9 802.5 311.5 156.1 113.1
Pre-Tax Profits 560.3 384.6 294.6 566.8 494.0 Corporate and Other Costs 21.2 14.4 11.5 13.0 13.0
Less Tax 140.7 106.1 100.2 192.7 168.0
Plus Associates less Divds 0.0 0.0 0.0 0.0 0.0 Total EBIT 529 358 246 584 505
NPAT (pre-Abs) 419.6 278.5 194.4 374.1 326.0
Net Abnormals -2.0 -61.6 0.0 0.0 0.0
Reported Profit 417.6 216.9 194.4 374.1 326.0

NPV US$M Attributable Contained Mine 2007A 2008E 2009E 2010E 2011E
Metal Life Attributable Production
Cayeli 380.9 (Mt) (Years)
Pyhasamli 133.8 Copper Reserves 1.66 5.1 Copper Production (000t) 83 81 111 128 125
Troilus 100.5 Copper Resources 6.22 19.2 Zinc Production (000t) 87 76 67 74 74
Ok Tedi 161.8 Cu Guesstimate 4.62 14.3 Gold Production (000oz) 234 242 241 238 106
Las Cruces 658.6 Zinc Reserves 0.91 9.3 Pyrite Production (000t) 509 558 400 550 550
Petaquila -174.7 Zinc Resources 1.04 10.6 Molybdenum Production (000t) 0 0 0 0 0
Net Cash & Other 70.1 Zn Guesstimate 0.89 9.0
Corporate & Other -55.2 (Moz) (Years)
Hedge Book 1 Gold Reserves 1.77 1.8
TOTAL NPV (US$M) 1276.4 Gold Resources 5.61 5.7
NPV per Share (US$) 26.44 Au Guesstimate 3.89 3.9 Cu Cash Cost US$/lb 2.29 2.15 1.96 1.78 1.92
*Co-Product Basis
Page 20 of 25
Copper Miners
February 27, 2009
Katanga Mining KAT CASH FLOW ANALYSIS - US$M

TSX (Dec Year End) 2007A 2008E 2009E 2010E 2011E 2011E
As at 26-Feb-09
Recommendation Underperform Analysts: Cash Flows From Operating Activities
David Radclyffe Receipts From Customers (0.0) 365.1 354.9 617.8 573.6 573.6
Payments To Suppliers (34.0) (444.5) (337.1) (409.9) (334.5) (334.5)
Net Interest 14.3 12.5 21.1 27.0 23.9 23.9
Share Price (US$) $0.36 Share Price (C$) $0.45 Tax and Other (4.1) 10.2 (10.0) (34.8) (43.6) (43.6)

Target Value (US$) na Target Value (C$) na Acq.of Property, Plant and Equip. (227.9) (308.3) (64.8) (38.4) (14.7) (14.7)
NPV (US$) $6.08 NPV (C$) $7.51 Exploration Expenditure (0.5) (2.5) (2.0) (2.4) (2.5) (2.5)
Other 0.0 429.7 0.0 0.0 0.0 0.0
Net Change in Borrowings 150.0 0.0 (72.0) 0.0 0.0 0.0
Market Cap (US$M) $74 Market Cap (C$M) $92 Dividends Paid (0.0) (0.0) (0.0) 0.0 0.0 0.0
Capital Stock 6.2 (21.6) 0.0 0.0 69.0 69.0
Net Increase In Cash Held (96.0) 40.5 (109.8) 159.4 271.4 271.4
PRICE ASSUMPTIONS Cash At End of Year 100.7 141.3 31.5 190.9 462.3 462.3

BALANCE SHEET ANALYSIS - US$M
Copper UScents/lb 323 316 185 250 290 (Dec Year End) 2007A 2008E 2009E 2010E 2011E 2011E
Cobalt UScents/lb 3072 3877 1650 2000 1000 Current Assets
Cash and Liquids 100.7 141.3 31.5 190.9 462.3 462.3
Other 27.8 27.8 27.8 27.8 27.8 27.8
Non-Current Assets
Investments 0.0 0.0 0.0 0.0 0.0 0.0
Fixed Assets 320.3 2710.1 2730.1 2705.8 2653.1 2653.1
FINANCIAL SUMMARY Other 0.0 0.0 0.0 0.0 0.0 0.0
Current Liabilities
NPAT (pre-Abs) (US$M) -47.8 -77.7 -35.1 81.2 101.7 Borrowings 0.0 0.0 0.0 0.0 0.0 0.0
EPS (¢ps) -53.9 -34.2 -14.7 39.2 48.0 Creditors 43.5 100.0 100.0 100.0 100.0 100.0
PER (x) 50 50 50 0.9 0.8 Other 23.7 6.0 6.0 6.0 6.0 6.0
EPS Growth (%) ->100.0 36.6 57.1 +>100.0 22.2
EBITDA (US$M) -13.6 -58.7 20.2 210.1 239.5 Non-Current Liabilities
EBITDA per Share (¢ps) -16.0 -27.2 9.3 97.3 110.9 Borrowings 267.5 267.5 195.5 195.5 195.5 195.5
EV/EBITDA (x) -14.4 -3.4 11.8 0.4 -0.8 Other 0.0 578.5 578.5 578.5 578.5 578.5
Dividend (¢ps) 0.0 0.0 0.0 0.0 0.0 Minority Interest 0.0 0.0 0.0 0.0 0.0 0.0
Yield (%) 0.0 0.0 0.0 0.0 0.0 SHAREHOLDERS FUNDS 114.1 1927.1 1909.3 2044.5 2263.2 2263.2
P/FCF (X) NM NM NM 0.5 0.4 Net Cash/ (Net Debt) (166.8) (126.3) (164.0) (4.6) 266.7 266.7
FCF Yield (%) NM NM NM 214 272 Net Debt/Equity % 146.1% 6.6% 8.6% 0.2% -11.8% -11.8%

(Dec Year End) 2007A 2008E 2009E 2010E 2011E (Dec Year End) 2007A 2008E 2009E 2010E 2011E 2011E
Sales Revenue 0.0 365.1 354.9 617.8 573.6

Other Revenue 0.0 0.0 0.0 0.0 0.0 KAMOTO 0 -83 6 173 199 199
Operating Costs 0.0 344.8 295.0 367.5 293.0 NIKANOR 0 80 0 0 0 0
Gross Operating Profit 0.0 20.3 59.9 250.3 280.6
Depreciation 0.0 19.6 45.8 63.6 68.4
Exploration and Royalties 0.0 4.8 8.1 13.7 13.0 Total 0 -4 6 173 199 199
Corporate and Other 34.0 96.5 35.0 30.0 30.0
EBIT (not incl associates) -34.0 -100.5 -29.0 143.0 169.3 Financial Multiples
Less Net Interest Expense 14.3 12.5 21.1 27.0 23.9
Pre-Tax Profits -48.3 -113.0 -50.1 116.0 145.3 ROA (%) NM NM NM 4.9 5.4 5.4
Less Tax -0.4 -35.2 -15.0 34.8 43.6 ROE (%) NM NM NM 4.0 4.5 4.5
Plus Associates less Divds 0.0 0.0 0.0 0.0 0.0 ROIC (%) NM NM NM 6 7 7
Less Minorities 0.0 0.0 0.0 0.0 0.0 0.4
NPAT (pre-Abs) -47.8 -77.7 -35.1 81.2 101.7 272
Net Abnormals 0.0 0.0 0.0 0.0 0.0
Reported Profit -47.8 -77.7 -35.1 81.2 101.7

NPV US$M Attributable Contained Mine 2007A 2008E 2009E 2010E 2011E 2011E
Metal Life Production - Copper
KAMOTO 1585 (Mt) (Years) KAMOTO (000t) 100% 0 21 45 63 67 67
NIKANOR 0 Copper Reserves 2.3 29 NIKANOR (000t) 100% 0 3 0 0 0 0
Corporate & Others -177 Copper Resources 10.6 132 Total Copper 0 24 45 63 67 67
Net Cash -94 Cu Guesstimate 3.5 44
Production - Cobalt
Cobalt Reserves 0.3 29 KAMOTO (000t) 100.0% 0 1 5 6 6 6
TOTAL NPV (US$M) 1,313 Cobalt Resources 1.1 132 NIKANOR (000t) 100.0% 0 2 0 0 0 0
NPV per Share (US$) 6.08 Co Guesstimate 0.4 44
Cu Cash Cost US$/lb NM 2.69 1.57 1.49 1.48 1.97

*Co-Product Basis
Page 21 of 25
Copper Miners
February 27, 2009
Quadra Mining QUA CASH FLOW ANALYSIS - US$M

Recommendation Market Perform David Cotterell Cash Flows From Operating Activities
Net Interest (39.1) 8.9 0.8 (0.1) 2.7
Share Price (US$) $2.79 Share Price (C$) $3.44 Tax and Other 21.3 (36.0) (13.9) (37.1) (33.2)

Other (14.4) 0.0 0.0 0.0 0.0
Net Change in Borrowings 116.7 (145.2) 0.0 0.0 0.0
Other 139.0 0.0 0.0 0.0 0.0
Net Increase In Cash Held 215.8 (147.0) 33.3 120.3 112.0


Molybdenum US$/lb 30.7 30.0 13.5 15.0 15.0 Cash and Liquids 263.6 116.6 149.9 270.1 382.1
Other 98.0 98.0 98.0 98.0 98.0
Non-Current Assets
Investments 0.0 0.0 0.0 0.0 0.0
Fixed Assets 366.1 559.6 575.7 586.9 592.5
Current Liabilities
NPAT (pre-Abs) (US$M) 157.0 143.3 49.4 131.4 117.7 Borrowings 0.0 0.0 0.0 0.0 0.0
EPS (US$ps) 2.7 2.1 0.7 1.9 1.6 Creditors 45.0 45.0 45.0 45.0 45.0
PER (x) 1.3 1.7 4.6 1.8 2.1 Other 29.4 0.0 0.0 0.0 0.0
EPS Growth (%) -23.2 -22.7 -63.6 +>100.0 -15.5
EBITDA per Share (US$ps) 6.4 5.3 1.3 2.6 2.2 Borrowings 145.2 0.0 0.0 0.0 0.0
EV/EBITDA (x) 0.3 0.4 1.2 0.1 -0.5 Other 68.6 68.6 68.6 68.6 68.6
Dividend (US$ps) 0.00 0.00 0.00 0.00 0.00 Minority Interest 0.0 0.0 0.0 0.0 0.0
P/FCF (x) NM NM 5 1.3 1.4 Net Cash/(Net Debt) 118.4 116.6 149.9 270.1 382.1
FCF Yield (%) NM NM 20.9 75 70 Net Debt/Equity % -23.8% -17.6% -21.1% -32.1% -39.8%

Sales Revenue 491.0 571.0 435.7 590.1 546.6

Other Revenue 2.9 -48.4 0.0 0.0 0.0 Robinson 177 261 46 129 80
Operating Costs 233.0 275.7 314.2 352.3 339.8 Carlotta 0 -2 7 43 72
Gross Operating Profit 261.0 246.9 121.5 237.8 206.7 Sierra Gorda 0 0 0 0 0
Depreciation 13.8 20.7 27.9 29.7 23.8 Malmbjerg 0 0 0 0 0
Corporate and Other 17.6 23.9 13.6 12.0 12.0 Capital spending 144.1 214.4 44.9 42.9 31.0
EBIT (not incl associates) 201.8 170.3 62.5 168.6 148.1 Corporate and Other Costs 17.6 23.9 13.6 12.0 12.0
Less Net Interest Expense -3.9 -8.9 -0.8 0.1 -2.7
Pre-Tax Profits 205.7 179.2 63.3 168.5 150.9 Total EBIT 202 170 63 169 148
Less Tax 48.8 36.0 13.9 37.1 33.2
NPAT (pre-Abs) 157.0 143.3 49.4 131.4 117.7
Net Abnormals -19.9 -30.2 0.0 0.0 0.0
Reported Profit 137.1 113.0 49.4 131.4 117.7

Robinson 149.8 (Mt) (Years) Robinson 100% (000t) 60 72 64 66 57
Carlotta 187.7 Copper Reserves 1.05 8.3 Carlotta 100% (000t) 0 3 23 31 28
Sierra Gorda 0.0 Copper Resources 3.10 30.8 Sierra Gorda 100% (000t) 0 0 0 0 0
Malmbjerg 0.0 Cu Guesstimate 1.23 9.7 Total copper 60 76 87 97 85
Net Cash & Other 434.0 Moly Reserves 0.00 0.0
Corporate & Other -63.6 Moly Resources 0.65 0.0 Gold Production
Hedge Book 21 Mo Guesstimate 0.51 0.0 Robinson 100% (000oz) 108 126 103 108 47
(Moz) (Years) Molybdenum Production
Gold Reserves 0.77 6.7 Malmbjerg 99% (000t) 0 0 0 0 0
TOTAL NPV (US$M) 728.9 Gold Resources 3.14 27.4
NPV per Share (US$) 9.35 Au Guesstimate 1.11 9.7 Cu Cash Cost US$/lb 1.67 1.55 1.45 1.58 1.89
*Co-Product Basis
Page 22 of 25
Copper Miners
February 27, 2009
Disclosures
Analyst’s Certification
I, David Radclyffe, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or
issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or
views expressed in this report.
I, David Cotterell, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or
I, Tony Robson, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or
General Disclosure
The information and opinions in this report were prepared by both BMO Nesbitt Burns Inc. and BMO Nesbitt Burns Ltée./Ltd., collectively
(“BMO NB”) and BMO Capital Markets Limited (U.K.), (“BMO CM Ltd”).
BMO NB and BMO CM Ltd. are not subject to U.S. rules with regard to the preparation of research reports and the independence of analysts.
“BMO Capital Markets” is a trade name used by the BMO Investment Banking Group, which includes the wholesale arm of Bank of Montreal
and its subsidiaries BMO NB in Canada, BMO Capital Markets Ltd. in the U.K. and BMO Capital Markets Corp. in the U.S. BMO Capital
Markets Ltd. and BMO Capital Markets Corp. are affiliates of BMO NB. Bank of Montreal or its subsidiaries (“BMO Financial Group”) has
lending arrangements with, or provide other remunerated services to, many issuers covered by BMO NB research. A significant lending
relationship may exist between BMO Financial Group and certain of the issuers mentioned herein. The opinions, estimates and projections
contained in this report are those of BMO NB and BMO CM Ltd. as of the date of this report and are subject to change without notice. BMO
NB and BMO CM Ltd. endeavour to ensure that the contents have been compiled or derived from sources that we believe are reliable and
contain information and opinions that are accurate and complete. However, BMO NB and BMO CM Ltd. make no representation or warranty,
express or implied, in respect thereof, takes no responsibility for any errors and omissions contained herein and accepts no liability
whatsoever for any loss arising from any use of, or reliance on, this report or its contents. Information may be available to BMO NB, BMO
CM Ltd or its affiliates that is not reflected in this report. The information in this report is not intended to be used as the primary basis of
investment decisions, and because of individual client objectives, should not be construed as advice designed to meet the particular
investment needs of any investor. This material is for information purposes only and is not an offer to sell or the solicitation of an offer to
buy any security. The research analyst and/or associates who prepared this report are compensated based upon (among other factors) the
overall profitability of BMO NB, BMO CM Ltd. and its affiliates, which includes the overall profitability of investment banking services. BMO
NB, BMO CM Ltd., or its affiliates expect to receive or will seek compensation for investment banking services within the next 3 months
from all issuers covered by BMO NB. BMO NB, BMO CM Ltd. or its affiliates will buy from or sell to customers the securities of issuers
mentioned in this report on a principal basis. BMO NB, BMO CM Ltd. or its affiliates, officers, directors or employees may have a long or
short position in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon. The
reader should assume that BMO NB, BMO Capital Markets Ltd., BMO Capital Markets Corp., Bank of Montreal or their affiliates may have a
conflict of interest and should not rely solely on this report in evaluating whether or not to buy or sell securities of issuers discussed herein.
Company Specific Disclosures
Alcoa Inc. (AA-NYSE) 6, 7, 9, 10AC Frontera Copper Corp. (FCC-TSX)

Alumina Limited (AWC-ASX) Global Alumina Corp. (GLA.U-TSX)
Anglo American PLC (AAL-LSE; AAUK-NASDAQ) 5 HudBay Minerals Inc. (HBM-TSX) 5
1, 3, 7,
Antofagasta Plc (ANTO-LSE) 5 Inmet Mining Corp. (IMN-TSX) 10A, 12
Anvil Mining Ltd. (AVM-TSX) 1, 3, 7, 10A International Ferro Metals (IFL-LSE) 5
Baffinland Iron Mines Corp. (BIM-TSX) 2, 3, 7, 10A Ivernia Inc. (IVW-TSX)
BHP Billiton Ltd. (BHP-ASX; BHP-NYSE) 5 Katanga Mining Ltd. (KAT-TSX)
Capstone Mining Corp. (CS-TSX) Kumba Iron Ore Ltd. (KIO-JSE)
Centenario Copper Corp. (CCT-TSX) 2, 3, 7, 10A MMX Mineracao e Metalicos, SA (MMXM3-BRZL) 5, 11
2, 3, 7, 9,
Century Aluminum Co. (CENX-NASDAQ) 5 Quadra Mining Ltd. (QUA-TSX) 10AC
Cliffs Natural Resources (CLF-NYSE) Rio Tinto Plc (RIO-LSE; RTP-NYSE) 5, 9, 10C
Eurasian Natural Resources (ENRC-LSE) 5 Talvivaara Mining Company Plc (TALV-LSE) 5
1, 3, 4, 5,
European Nickel Plc (ENK-AIM) Teck Cominco Ltd. (TCK.B-TSX; TCK-NYSE) 7, 9, 10AC
First Quantum Minerals Ltd. (FM-TSX) 4, 5 Vale (RIO-NYSE)
1, 3, 7, 9,
FNX Mining Company Inc. (FNX-TSX) 10AC Xstrata Plc (XTA-LSE) 5
Freeport-McMoRan Copper & Gold (FCX-NYSE)
Page 23 of 25
Copper Miners
February 27, 2009
Disclosure Key:
1 - BMO NB has provided advice for a fee with respect to this issuer within the past 12 months.
2 - BMO NB has undertaken an underwriting liability with respect to this issuer within the past 12 months.
3 - BMO NB has provided investment banking services with respect to this issuer within the past 12 months.
4 - BMO NB, BMO Capital Markets Corp., BMO CM Ltd. or an affiliate beneficially owns 1% or more of any class of the equity securities of
this issuer.
5 - BMO NB, BMO Capital Markets Corp., BMO CM Ltd. or an affiliate makes a market in this security.
6 - BMO Capital Markets Corp. or an affiliate has managed or co-managed a public offering of securities with respect to this issuer within
the past 12 months.
7 - BMO Capital Markets Corp. or an affiliate has received compensation for investment banking services from this issuer within the past
12 months.
8 - BMO Capital Markets Corp. or an affiliate or its officers or partners own options, rights, or warrants to purchase any securities of this
issuer.
9 - BMO Capital Markets Corp. or an affiliate received compensation for products or services other than investment banking services
within the past 12 months.
10A - This issuer is a client (or was a client) of BMO NB, BMO Capital Markets Corp., BMO CM Ltd. or an affiliate within the past 12
months: Investment Banking Services.
10B - This issuer is a client (or was a client) of BMO NB, BMO Capital Markets Corp., BMO CM Ltd. or an affiliate within the past 12
months: Non-Investment Banking Securities Related Services.
10C - This issuer is a client (or was a client) of BMO NB, BMO Capital Markets Corp., BMO CM Ltd. or an affiliate within the past 12
months: Non-Securities Related Services.
11 - An employee, officer, or director of BMO NB is a member of the Board of Directors or an advisor or officer of this issuer.
12 - A member of the Board of Directors of Bank of Montreal is also a member of the Board of Directors or is an officer of this issuer.
13 - A household member of the research analyst and/or associates who prepared this research report is a member of the Board of
Directors or is an advisor or officer of this issuer.
14 - The research analysts and/or associates (or their household members) who prepared this research report directly or beneficially own
securities of this issuer: None
Distribution of Ratings (Dec. 5, 2008)
Rating BMO BMO BMO Starmine

Category Rating Universe I.B. Clients* Universe**
Buy Outperform 37% 40% 50%
Hold Market Perform 54% 55% 43%
Sell Underperform 9% 5% 7%
* Reflects rating distribution of all companies where BMO Capital Markets has received compensation for Investment Banking services.
** Reflects rating distribution of all North American equity research analysts.
Ratings Key
We use the following ratings system definitions:

OP = Outperform - Forecast to outperform the market;
Mkt = Market Perform - Forecast to perform roughly in line with the market;
Und = Underperform - Forecast to underperform the market;
(S) = speculative investment;
NR = No rating at this time;
R = Restricted – Dissemination of research is currently restricted.
Market performance is measured by a benchmark index such as the S&P/TSX Composite Index, S&P 500, Nasdaq Composite, as appropriate
for each company. Prior to September 1, 2003, a fourth rating tier—Top Pick—was used to designate those stocks we felt would be the best
performers relative to the market. Our six Top 15 lists which guide investors to our best ideas according to six different objectives (large,
small, growth, value, income and quantitative) have replaced the Top Pick rating.
Dissemination of Research
Our research publications are available via our web site http://bmocapitalmarkets.com. Institutional clients may also receive our research via
FIRST CALL Research Direct and Reuters. All of our research is made widely available at the same time to all BMO NB, BMO Capital Markets
Ltd., BMO Capital Markets Corp. and BMO Nesbitt Burns Securities Ltd. client groups entitled to our research. Please contact your investment
advisor or institutional salesperson for more information.
Page 24 of 25
Copper Miners
February 27, 2009
Conflict Statement
A general description of how BMO Financial Group identifies and manages conflicts of interest is contained in our public facing policy for
managing conflicts of interest in connection with investment research which is available at
http://equityresearch.bmogc.net/conflict_statement.asp
Additional Matters
TO U.S. RESIDENTS: BMO Capital Markets Corp. and/or BMO Nesbitt Burns Securities Ltd., affiliates of BMO NB, furnish this report to U.S.
residents and accept responsibility for the contents herein, except to the extent that it refers to securities of Bank of Montreal. Any U.S.
person wishing to effect transactions in any security discussed herein should do so through BMO Capital Markets Corp. and/or BMO Nesbitt
Burns Securities Ltd.
TO U.K. RESIDENTS: In the UK this document is published by BMO Capital Markets Limited which is authorised and regulated by the
Financial Services Authority. The contents hereof are intended solely for the use of, and may only be issued or passed on to, (I) persons who
have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the “Order”) or (II) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such
persons together referred to as “relevant persons”). The contents hereof are not intended for the use of and may not be issued or passed on
to, retail clients.
BMO Nesbitt Burns Inc. and BMO Nesbitt Burns Ltée/Ltd. are Members of CIPF. BMO Capital Markets Corp. and BMO Nesbitt Burns Securities
Ltd. are Members of SIPC.
“BMO Capital Markets” is a trade-mark of Bank of Montreal, used under licence.
“BMO (M-Bar roundel symbol)” is a registered trade-mark of Bank of Montreal, used under licence.
R37850
Page 25 of 25

BMO Copper Miners - Strategies For An Active Copper Sector

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BMO Copper Miners - Strategies For An Active Copper Sector

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Global Mining

February 27, 2009

Fig 1: NPV Leverage to US$0.25/lb Change in Copper Price Assumption

Source: BMO Capital Markets

Fig 2: Potential Value From a Corporate Perspective

1. FM & ANTO Current Preferred

Corporate Activity on the Rise

Raisings Focus on Balance Sheets

Revised Target Prices: EQN - C$1.65 and IMN - C$28.00

Fig 3: BMO Research Copper Producer Coverage

Shares Share 2009E 2009E EPS Target

(M) (US$M) (X) (X) %

Source: BMO Capital Markets. Pricing date February 26, 2009

2. BMO Copper Stocks

Centenario (CCT-TSX) - Quadra Mining and Centenario Copper have

Frontera (FCC-TSX) - Invecture announced an increased bid of

Equinox (EQN-TSX) – Short-term issues are of market focus, but there

Freeport (FCX-US) – The recent US$750M capital injection provides FCX

First Quantum (FM-TSX) – The company is well positioned to its peers,

Katanga (KAT-TSX) - Until details emerge from the business technical

Quadra (QUA-TSX) – The acquisition of CCT fits with Quadra’s growth-

3. Clouded Outlook but Worst Over?

Rapid mine closures, declines in secondary supply and signs that

Fig 4: Supply Cutbacks and Deferrals in the Copper Market

Cutbacks and deferral 200

Central African M&E

New Gold Inc

Russian Copper Co.

Source: BMO Capital Markets & Brook Hunt

Fig 5: LME Copper Inventories Days of Supply

inventories on LME, levels

During previous downturns 10

inventories have increased 5

toward 20 days’ supply.

Source: BMO Capital Markets

4. FM, QUA and FCX for Leverage

Fig 6: 2010E EPS Leverage to US$0.25/lb Change in Copper Price Assumption

changing copper prices, at

Low cash costs and hedging

Source: BMO Capital Markets

Fig 7: NPV Leverage to US$0.25/lb Change in Copper Price Assumption

• FM’s NPV by $15/share 20%

• QUA’s NPV by $3/share

Source: BMO Capital Markets

5. Corporate Activity on the Rise

Significantly, these proposed transactions represent meaningful volumes of

Other Stocks May Attract Corporate Interest

Fig 8: Potential Value From a Corporate Perspective – PEG vs. Payback

optimum position. RIO

Increasing corporate potential

Same Group Highlighted, Looking at P/NPV and EV/EBITDA

Fig 9: P/NPV Against 2010E EV/EBITDA

A review of the BMO Research copper universe, looking at a number of

Corporates Paying EV/EBITDA ~6x, <US$0.10/lb

+1Yr EV/EBITDA +2Yr EV/EBITDA 0

Source: BMO Capital Markets Source: BMO Capital Markets

Market Factoring US$1.90/lb

Fig 14: Implied Copper Price

Source: BMO Capital Markets

6. Raisings Focus on Balance Sheet

RIO recently announced a US$19.5B capital raising initiative

ANTO Well Positioned, EQN Under Some Pressure