Monday, 11 February 2013
Snapshot � Company news highlights: Kirkland Lake quarterly production update, Rio benefits from rail decision however for Fortescue the decision is not positive, Goldfields to list spin out, Bougainville copper publishes major resource increase. � Commodity review highlights: Precious metals flat, Russia builds up gold reserves, Rio suspends some of Argyles development, US thermal coal producers may be subject to further royalties for coal exports � Other Economic News: China to allocate US$19.11bn on transport and infrastructure this year, China now the worlds largest trading nation � African Resources Update: Ghanaian gold may have been smuggled to Iran, Jonah Capital to expand into West Africa. � Australia market: Leads from Australia are for a weak start to mining stocks.

Todays session began slightly lower as the market ignored gains on overseas bourses.

The S&P/ASX 200 index index dipped 0.2% or 11.8 points to 4959.5 points, mainly due to energy and mining stocks, with basic materials dipping 0.4%.

Source: MiningNews
Company News � Kirkland Lake (KGI LN) reports moderately positive 3Q13 production update.

A better quarter, with 3Q gold production of 22,261oz, taking full year production thus far to 60,015oz.

This result is slightly ahead of plan in order to meet FY13 guidance of 90-110koz.

While this may not appear obvious, there is a large catch-up expected in the 4Q due to contribution from the newly operational service cage.

The head grade saw an improvement on previous quarters, as KGI was able to access higher grade zones.

The new service cage, and ability to remove additional waste from underground should assist in lifting the grade in future periods. Investec View.

KGIs expansion plans have been more arduous and therefore slower than the company had anticipated.

However, with the service shaft now coming into operation, this should be a major turning point for KGI.

The new shaft should enable significantly improved flexibility underground, as KGI will now have additional capacity to haul development waste to surface.

Efficient removal of waste rock has been a major issue hampering access to and development of high grade ore zones.

� Rio Tinto (RIO AU) welcomes Australian Competition Tribunal decision on third party access to its rail network.

RIO has received a decision that its Hamersley and Robe rail lines should not be opened up for other users.

The company indicated it was happy with the outcome, and suggested that the efficiency of its integrated operations would have been hindered if third parties were allowed on the network.

Source: Company. � In a blow for Fortescue (FMG AU) the Australian Competition Tribunal (ACT) has ruled that Rio Tintos Pilbara rail lines should stay closed to other users.

It came after the High Court of Australia decided in September to remit FMGs rail access application back to the ACT for fresh consideration, following the High Court upholding FMGs appeal against the decision of the Full Federal Court that third parties could not gain access to Pilbara rail lines operated by Rio.

FMG said it was disappointed with the decision, but it did not affect its operations or expansion plans.

Source: MiningNews � Goldfields (GFI US) to list Sibanye Gold this week with shareholders to receive their shares on 18th Feb as a part of a one for one share issue as the company unbundles its South African Mines, excluding the 700kozpa South Deep project.

Source: MiningMX � Bougainville Copper (BOC AU) has increased its targeted resource at the old Panguna copper-gold mine by 70% to 1.8bn tonnes, with contained metal estimates up 50% with over 19moz gold and 5mt copper.

This result will feed into a study to re-open the mine that was closed years ago and was once the worlds fourth largest copper mine that produced 9.3moz of gold and 3mt of copper from 1972-1989.

Source: MiningNewsPremium
Commodities News � Precious metal prices flat in morning trading.

It is the Lunar New Year celebration period which will dampen down activity from Asia.

Gold ETFs in India have been rising, reaching US$2.25bn in January, up slightly from Decembers level.

Assets have gained 22% since April last year.

Source: Bloomberg � Russias central bank has added 570t of gold in the past decade taking the total to 958t putting it in 8th position globally.

Gold accounts for 9.5% of Russias total reserves.

Source: Bloomberg � Rio Tinto has suspended some construction work at its Argyle underground mine as it is not necessary to bring the underground on stream.

First production is due in a few weeks time.

Source: Bloomberg � US thermal coal producers facing another threat, from the government.

The US Interior Department on Friday announced an investigation into whether miners and traders had skirted royalty payments on lucrative coal exports to Asia.

The department is following up on a Reuters investigation that had focused on the Powder River Basin, a region that supplies about 40% of US demand.

This coal has typically gone to domestic power plants and policymakers never considered Asian sales when they conceived royalty rules.

Coal policies meant to keep domestic power cheap and abundant were now benefitting the earnings of companies such as Arch Coal, Peabody Energy and Cloud Peak Energy at the expense of taxpayers, Reuters reported last year.

The Senate energy committee said it was concerned that coal interests may be selling to sister companies at artificially low prices in order to lower their royalty payments.

Source: MiningNews
Other economic news � Chinese government plans to allocate US$19.11bn to fund local transport and infrastructure this year, aimed mainly at improving highway networks and rural roads.

The spending is hoped to bolster the slowing economy.

Last year construction projects worth around Rmb1trillion were approved in H2 of last year.

Source: China Daily � China has become the worlds biggest trading nation by the sum of goods exported and imported in 2012.

US exports and imports totalled US$3.82trillion versus Chinas trade of US$9.87trillion.

When taking services into account total US trade came to US$4.93trillion.

There is some scepticism however, over Chinas published statistics.

Source: Bloomberg
African Resources update � Investigators trying to track Irans gold purchases say that the trade has rocketed since Tehran was expelled from the Swift electronic payment system last year.

That punishment made it almost impossible for the Government to pay for imports in foreign currency.

President Mahama of Ghana has ordered his countrys security services to investigate a multimillion-pound consignment of Ghanaian gold bullion that he fears has been smuggled to Iran.

Mr Mahama said that he had acted after Ghana was accused of helping Iran to evade the crippling economic sanctions imposed by the West.

The seizure in Istanbul last month of the planeload of gold, valued at more than �50 million, has lifted the lid on a multibillion-gold trade.

Source: The Times � Jonah Capital, a private investment company and exploration partner of miner Kumba Iron Ore (KIO SJ) in Liberia, expects further ventures with KIO to tap West Africas mining potential.

Jonah Capital, was set up by Ghanaian entrepreneur and former AngloGold Ashanti President Sam Jonah.

Jonah Capital owns the Buchanan project in Liberia, which is planned to produce 1.2mtpa of concentrate over 5-7yrs.

Jonah is reportedly also looking outside Liberia, to countries like Cameroon.

Source: Mining Weekly
Investec Global Natural Resources Research Team: UK Australia Hong Kong South Africa Hunter Hillcoat Tel: +44 (0) 20 7597 5182
Tim Gerrard Tel: +61 (0) 2 9293 2168
Matthew Whittall Tel: +852 3187 5075
Albert Minassian Tel: +27 (0) 21 416 1454
Marc Elliott Tel: +44 (0) 20 7597 5189
Colin McLelland Tel: +61 (0) 2 9293 2140
Leavitt Pope Tel: +852 3187 5074
Simon Haggarty Tel: +61 (0) 2 9293 2462
Investec Global Natural Resources Sales Team: UK Australia Hong Kong South Africa Jamie Campbell Tel: +44 (0) 20 7597 5038
Rod Clarkson Tel: +61 (0) 2 9293 2278
Will Robbins Tel: +852 3187 5098
Hayden Smith Tel: +27 (0) 21 416 1401
USA Thomas Lawrence Tel: +1 212 2595604
Matt Martin Tel: +61 (0) 2 9293 2168
Alistair Roberts Tel: +852 3187 5097
-------------------------------------------------------------------------------- CONFIDENTIALITY NOTICE AND LEGAL LIABILITY WAIVER: The content of this email and any attachments are CONFIDENTIAL and may contain privileged information.

If you are not the addressee it may be UNLAWFUL for you to read, copy, distribute, disclose or otherwise use the information contained herein.

The content of the message and or attachments may not reflect the view and opinions of the originating company or any party it is representing.

If you are NOT the intended recipient then please email back to ------------------------------------------------------------------------------------