announcement out, page-13

Zinc Copper Lead

http://www.theresourceinvestor.com/RI-archive/2010/0410-basemetals.html

? Copper. We expect the market's fundamentals will improve during 2010, with a rebound in mature economy demand being a key driver. Chinese growth should continue to support the bottom line, and we see global usage rising by 8.4%. Furthermore, the tightness on the supply side will remain a feature with continued potential for industrial action, low output due to a lack of investment earlier in the decade and lower ore grades. Consequently, after seeing an estimated surplus of 393,000 tonnes in 2009, we are forecasting that the global balance will move into deficit this year, albeit a relatively small one at 142,000 tonnes. As a result of the improving fundamentals, we expect prices to remain strong and average $7,885/tonne over 2010. The tightness will remain for the foreseeable future, and we forecast prices to continue this upward trend in 2011, averaging $8,476/tonne for the year.

? Lead. Lead's immediate fundamentals remain positive. Chinese demand should remain strong, and demand from the Western World is believed to have recovered in line with an improvement in battery demand. Chinese production is likely to be affected over the start of the year on tight concentrate availability and stoppages caused by cold weather and environmental upgrading. Our average price forecast for 2010 is for $2,565/tonne. Stocks have not been replenished to a great extent over the last two years, so we are entering another period when we could have a new run of multi-year deficits. Consequently, we expect prices to remain strong through 2011, averaging $3,075/tonne.

? Zinc. Robust growth in demand, albeit from a low base, will certainly be challenged by higher output, particularly as Peruvian output picks up on the back of the Cajamarquilla refinery and China continues to bring on new capacity. But thanks to a near 10% increase in global demand, Natixis Commodity Markets believe that the shift back to broad balance, with the prospect of rising deficits in years to come, should support an average annual price of $2,800/tonne, some 70% up on last year. By 2011, we believe that the demand-side of the market will have fully recovered from the economic downturn. As a result, the zinc market will face a deficit of over 200,000 tonnes. This should support an average annual price of $3,060/tonne next year