Update on metals market and mining companies listed on the Australian Securities Exchange

1. Oz Metals
55th
Edition –15th
May 2016
DISCLAIMER
This report is provided in good faith from sources believed to be accurate and reliable. Terra Studio Pty Ltd directors and employees do not accept
liability for the results of any action taken on the basis of the information provided or for any errors or omissions contained therein. Readers should
seek investment advice from their professional advisors before acting upon information contained herein.
Page 1 / 6
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HOW MUCH ZINC DID GLENCORE HIDE AWAY?
Base Metals & Precious Metals Charts
Source: COMEX, LME, Metal Prices, RBA, SHFE, Terra Studio
$1.5
$2.2
$2.9
$3.6
0
250
500
750
Jul-15 Oct-15 Jan-16 Apr-16
$/lb
kt
Copper
SHFE COMEX LME
US$/lb A$/lb
$2.0
$2.3
$2.6
$2.9
$3.2
$3.5
$3.8
0
100
200
300
400
500
600
Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16
kt
China Copper Imports
Imports Price
$4
$5
$6
$7
$8
300
350
400
450
500
Jul-15 Oct-15 Jan-16 Apr-16
$/lb
kt
Nickel
LME
US$/lb
A$/lb
$0.5
$0.7
$0.9
$1.1
$1.3
$1.5
0
200
400
600
800
1,000
Jul-15 Oct-15 Jan-16 Apr-16
$/lb
kt
Zinc
SHFE (kt) LME (kt) US$/lb A$/lb
$1,000
$1,100
$1,200
$1,300
$1,400
$1,500
$1,600
$1,700
$1,800
Jul-15 Oct-15 Jan-16 Apr-16
Gold
A$/oz
US$/oz
0$10.0
$12.5
$15.0
$17.5
$20.0
$22.5
$25.0
Jul-15 Oct-15 Jan-16 Apr-16
Silver
A$
US$

2. Oz Metals
55th
Edition –15th
May 2016
DISCLAIMER
This report is provided in good faith from sources believed to be accurate and reliable. Terra Studio Pty Ltd directors and employees do not accept
liability for the results of any action taken on the basis of the information provided or for any errors or omissions contained therein. Readers should
seek investment advice from their professional advisors before acting upon information contained herein.
Page 2 / 6
TerraStudio
Markets & Majors
Thomson Reuters - The zinc market has for years
been a story of shattered bullish dreams. Time after
time investors have been lured into the market by
promises of supply shortfall and higher prices only to
realise they were chasing a mirage. Mines that were
supposed to close always seemed able to eke out a
few more years of production. LME stocks would
spend months declining only for massive tonnages
miraculously to reappear, as often as not at the U.S.
port of New Orleans.
The best way to get a grip on what is happening in
the upstream part of the zinc market is to look at
treatment charges, which are paid by miners to
smelters for transforming their material into refined
metal. The benchmark treatment charge for
deliveries this year has slid by 17% to $203/t from
$245/t in 2015, according to the first-quarter report
from Nyrstar, one of the largest smelting entities in
the world. Spot treatment charges have also been
falling. Those for imported material into China are
currently assessed by Shanghai Metals Market at
$120/t, down from $150 at the start of the year and
from $200 this time last year. Sliding charges are
one reason why China's zinc concentrates imports
fell by 10% over the first three months of this year.
The other reason is that there is less concentrate
around.
The International Lead and Zinc Study Group
(ILZSG) is forecasting mine supply outside of China
to contract by 9.4% this year due to a combination of
mine closures and price-related cutbacks.
The giant Century mine in Australia, for example,
milled its very last ore in the first quarter of this year
and has moved onto care and maintenance. The
fact that Century was still generating concentrates
several months after it had supposedly closed is
symptomatic of the elastic timeline of the much
anticipated zinc supply crunch. But closed it finally
has after producing 6.5 million tonnes of zinc over its
16-year life. Also now closed is the Lisheen mine in
Ireland.
Accentuating such natural atrophy of mine
production are the temporary suspensions initiated
in reaction to low prices such as Nyrstar's
mothballing of its Middle Tennessee mines. The
single biggest suspension has been the removal by
Glencore of 500,000 tonnes of annualised capacity
at its Australian, Kazakh and Peruvian operations.
There is a broad analysts’ consensus that the zinc
concentrates market is going to move into significant
supply-demand deficit this year. The scale of that
deficit will depend on the extent that China's small-
scale zinc mine sector can lift production. ILZSG, for
example, is forecasting a 12.4% lift in Chinese
production. But even if that proves accurate and
there are many analysts who would question
whether there is that much flex in China, the Group
is still looking at a 1.4% fall in global output this year.
The key question is when raw material tightness
transitions to refined metal tightness. Much, of
course, is going to depend on Glencore, which has
cut more production than any other zinc producer.
That suspended mine capacity will at some stage be
reactivated but it seems unlikely that a company with
such a big stake in the global zinc game is going to
snuff out early any rally in the price. But Glencore
itself will be no doubt be sensitive to that other
"known unknown" in this market, namely the amount
of refined metal that is available to cushion the
impact of raw materials shortfall.
There is little doubt that there are substantial
tonnages of zinc being stored outside of the LME
warehousing system, particularly in New Orleans.
It's been movement of this material onto LME
warrant at the U.S port that has killed off premature
price rallies in the past. The last major warranting at
New Orleans was in January when 40,000 tonnes hit
the LME system. But even with that inflow LME
stocks have fallen below the 400,000-tonne level for
the first time since 2009. That may yet prove to be
an unreliable indicator. Only time will tell whether the
New Orleans carousel has a few more turns to make.
What is not in doubt, however, is that zinc's slow-
fuse narrative of pending raw materials crunch is
burning a lot quicker now than it has at any time in
the last decade.

3. Oz Metals
55th
Edition –15th
May 2016
DISCLAIMER
This report is provided in good faith from sources believed to be accurate and reliable. Terra Studio Pty Ltd directors and employees do not accept
liability for the results of any action taken on the basis of the information provided or for any errors or omissions contained therein. Readers should
seek investment advice from their professional advisors before acting upon information contained herein.
Page 3 / 6
TerraStudio
Thomson Reuters - Copper production at Chile's
large mines dropped 3.0% in annual terms in the
first quarter of 2016, held back by the temporary
closure of a plant at BHP Billiton's Escondida mine,
according to government statistics. Production at
Escondida plummeted 23.5% to 265,600t, as the
company shut a concentrator there in February. The
plant is scheduled to be shut for a year, as the
company undergoes an ambitious investment plan
to boost efficiency. Production at world number one
copper producer Codelco, meanwhile, rose 8.4% to
469,800t, helped by an ongoing ramp-up at the
Ministro Hales deposit and high production figures at
the Salvador mine, according to Chile's Cochilco
copper commission. Copper prices, meanwhile, are
expected to average $2.15/lb in 2016, according to
the government body.
Thomson Reuters - BHP Billiton joins Rio in shifting
focus to growth. BHP Billiton has talked up its future
growth options, joining fellow mining giant Rio Tinto
in marking a shift in focus after four years of
aggressive cost cutting. While big miners are still
looking to sell assets to help cut debt or to exit
businesses like nickel and coal, they are also
preparing for a pick-up in demand as looming supply
gaps in at least some commodities sow the seeds
for higher prices. After Rio hit the go button last
week on the long stalled $5.3 billion expansion of
the Oyu Tolgoi copper mine in Mongolia, BHP said
on Tuesday it expects to sign off on copper and oil
projects next year.
BHP Billiton CEO Andrew Mackenzie outlined a plan
to potentially increase the value of the company by
70% via cost cutting, boosting efficiencies and
betting on a handful of oil, copper and potash growth
assets. In an investor conference, he indicated that
he would not wait for a bounce in metal prices to
expand the company; he also dampened
speculation that BHP Billiton would seek to take
advantage of record-low mining valuations and a
swell of distressed asset sales by buying new mines.
Codelco's El Teniente copper unit in Chile is
developing three projects to maintain annual
production at around 450,000 tonnes of copper,
requiring a total investment of US$1 billion.
Meanwhile, the mine is also considering new
initiatives to counteract delays in the US$5.1 billion
Nuevo Nivel Mina expansion project, deterred until
2022 due to security issues, general manager
Mauricio Larraín told Diario Financiero.
Codelco is mulling over the construction of a
US$370 million facility near the Calama mining
center in northern Chile that would use new
technology to remove arsenic from copper
concentrate, Reuters reported, citing a company
executive. The plant would be capable of processing
about 200,000 tonnes of concentrate per year,
resulting in 60,000 tonnes of refined copper.
Glencore said record-low sector margins are setting
the scene for the next price upswing as current
margins cannot sustain present production levels
over the medium term and structural deficits are
returning, led by zinc. Meanwhile, supply challenges
for copper and zinc remain due to resource quality
and scarcity at current prices.
DRC state miner Gécamines plans to investigate
Freeport-McMoRan's sale of its majority interest in
the Tenke Fungurume copper project in the country
to China Molybdenum, Reuters reported.
Gécamines, which holds a 20% stake in the project,
said it "will assert its rights."
Separately, Freeport CEO Richard Adkerson
recognized the company's "current need" to resolve
the extension of its mining contract over the
Grasberg copper mine in Indonesia, the Financial
Times reported, noting the mine's importance to
Freeport, contributing US$3 billion, or 20% of the
company's 2015 revenues.
Thomson Reuters - Brazilian miner Vale said it will
stick to a plan to sell $10 billion of core assets by
next year in order to reduce debt, despite a recent
rise in commodity prices. The miner did, however,
reduce forecasted sales of non-core assets to a
range of $4 billion to $5 billion for 2016, down from
$4 billion to $5.5 billion.
Thomson Reuters - Goldman Sachs raised its gold
price forecasts for the coming months, citing
stronger net speculative positioning and a recently

4. Oz Metals
55th
Edition –15th
May 2016
DISCLAIMER
This report is provided in good faith from sources believed to be accurate and reliable. Terra Studio Pty Ltd directors and employees do not accept
liability for the results of any action taken on the basis of the information provided or for any errors or omissions contained therein. Readers should
seek investment advice from their professional advisors before acting upon information contained herein.
Page 4 / 6
TerraStudio
weaker U.S. dollar. The influential bank said it has
revised its three-, six and 12-month price outlooks
for gold, raising them respectively to $1,200 per
ounce, $1,180 per ounce and $1,150 per ounce,
from $1,100/oz, $1,050/oz and $1,000/oz in an
earlier forecast.
The global gold hedge book grew by 18 tonnes in
the fourth quarter, an industry report showed, and
producers continued to hedge in 2016 to lock in a
sharp price rise in the first quarter. Miners use
hedging, usually by selling future production forward,
to guarantee returns for their output. Société
Générale and GFMS analysts at Thomson Reuters
said in their quarterly Global Hedge Book Analysis
that miners were continuing to hedge, after gold
posted its biggest quarterly rise in nearly 30 years in
the first three months of this year. "Since the
beginning of 2016, we have seen renewed interest
in hedging within the gold producer community...in
some cases for reasons of basic price risk
management, in addition to more customary
mandates for project financing," GFMS analyst
William Tankard said.
Surging inflows into gold-backed exchange-traded
funds drove global gold demand to its highest first-
quarter total on record this year, despite a near 20
percent drop in jewellery buying, the World Gold
Council said. Demand hit 1,290 tonnes in the period,
the WGC said in its latest Gold Demand Trends
report, the best first quarter and second strongest
quarter overall since its data series began.
Argentine mining minister Daniel Meilán said that the
elimination of export taxes on mining companies, a
measure adopted in February, has already attracted
Chilean, Australian and French investors. He
claimed that there are 30 potential investment
projects in the country for the next decade, Los
Andes reported.
Base Metals
The board of Eramet agreed to financing and cost-
saving measures to help its SLN nickel business in
New Caledonia survive a severe market downturn,
supported by a loan from the French government.
The deal follows months of wrangling between
Eramet and local authorities in New Caledonia,
which is a minority shareholder in SLN, about how to
salvage the nickel producer that lost around 250
million euros ($284.48 million) last year.
After the Solomon Islands' Ministry of Mines, Energy
and Rural Electrification pledged to run an inclusive
and transparent process in the awarding of license
on the Isabel nickel deposit in the country, Axiom
Mining said it has submitted an application for a
prospecting license over the deposit. Earlier in
March, the Solomon Islands Court of Appeal ruled
that neither Sumitomo Metal Mining nor Axiom
Mining were entitled to the Isabel nickel deposit.
OZ Minerals has decided to accelerate the pre-
feasibility study on its Carrapateena copper project
in South Australia, using a larger scope of 4 million
tonnes throughput per annum from the previous
2.8mtpa operation, with a view to achieving first
copper concentrate production in 2019.
Precious Metals
The government of Thailand has ordered Kingsgate
Consolidated operating subsidiary Akara Resources
to shut down operations at the Chatree gold mine
and metallurgical plant by the end of 2016 and start
the rehabilitation process. The government claims
that the environmental and health problems caused
by Chatree outweigh its economic benefit.
Saracen Mineral Holdings declared commercial
production at the Thunderbox gold project in
Western Australia, effective April 1. The mine
produced 7,026 ounces of gold at all-in sustaining
cost of A$1,107 per ounce in April.
Havilah Resources poured first gold from its Portia
gold mine in South Australia on May 9, just over 13
months after the start of mining.
A scoping study into Kin Mining’s Leonora gold
project in Western Australia showed the project can
produce 315,600 ounces of gold over a seven-year
mine life and will need A$55 million to build based
on a gold price of A$1,500 per ounce with payback
in 45 months. The project is estimated to generate

5. Oz Metals
55th
Edition –15th
May 2016
DISCLAIMER
This report is provided in good faith from sources believed to be accurate and reliable. Terra Studio Pty Ltd directors and employees do not accept
liability for the results of any action taken on the basis of the information provided or for any errors or omissions contained therein. Readers should
seek investment advice from their professional advisors before acting upon information contained herein.
Page 5 / 6
TerraStudio
net present value of A$56.3 million, an internal rate
of return of 30% and revenue of A$461.6 million.
The operation is expected to deliver 30,500 ounces
of gold in the first year, peaking at 65,800 ounces in
the fifth year and then declining to 10,500 ounces
during its final year.
Specialty Metals & Minerals
Altech Chemicals has agreed to sell exploration
license E70/3923 at Meckering, Western Australia,
to Dana Shipping and Trading SA for A$2.0 million.
The license is surplus to the company's feedstock
requirements for its high purity alumina facility in
Malaysia.
The maiden ore reserve for IMX Resources Chilalo
graphite project in Tanzania, based only on
indicated resources, was estimated at 5.1 million
tonnes grading 11.9% total graphitic carbon for
613,800 tonnes of contained graphite.
IMX Resources said that the initial public offer of
Graphex Mining has been cleared to proceed, with
the company having addressed all concerns raised
by ASIC. The priority offer to IMX shareholders has
closed, while the general offer is expected to close
on May 11 due to demand exceeding the maximum
A$7 million raising.
Lithium Australia has decided to divest five
significant graphite projects in Western Australia as
part of its strategy to build an initial portfolio of raw
materials for emerging battery technologies. The
returns are intended to be distributed directly to the
company shareholders.
Argosy Minerals has signed a binding heads of
agreement with private Argentinian company Ekeko
SA to acquire 4,279 hectares of mining titles
comprising the Salar de Pocitos and Mina Teresa
lithium projects in Argentina.
Capital Mining executed a binding agreement to
purchase Shaw River Lithium Pty Ltd., which holds
13 prospecting license applications in Western
Australia's Pilbara region. The licenses hold 14
targets and cover 2,534 hectares. Other than lithium,
the licenses are also prospective for tin and tantalum.
Kingston Resources will acquire 20 lithium-
prospective tenement applications in Western
Australia and the Northern Territory, and raise up to
A$6.9 million. The tenement applications, which
cover four project areas including Mount Cattlin,
Greenbushes, Bynoe/Wingate and North Arunta.
Latin Resources intends to form a joint venture with
Lepidico Ltd, which will acquire and advance lithium
projects in Argentina and Peru. Two joint venture
companies, one in Argentina and the other in Peru,
will be formed under the agreement.
The nuclear royal commission forecasts that
uranium prices will remain flat, with a recovery
expected at the soonest in 2018, The Australian
Financial Review reported.
Funding, JV, Mergers & Acquisitions
Buying and selling activity in the global mining sector
fell by 45% in value in the first quarter versus a year
ago as a five-year downward trend continued,
according to British accountancy firm EY. Miners
have been forced to sell assets after a prolonged
commodities rout left them facing piles of debt.
Buyers held back as they waited to see whether the
market had reached the bottom and deal value fell to
$3.3 billion in the first quarter of this year versus just
over $6 billion in 2015, EY said. The number of
deals fell to 72 from 87 in the first quarter of 2015,
with gold making up nearly half of them.
Goldcorp is acquiring Kaminak Gold Corp in an all-
share deal worth C$520 million. Both companies'
boards backed the transaction, which is expected to
close by Aug. 15. Kaminak Gold will not consider
any alternative transactions and will pay a deal
termination fee equal to C$20.3 million should the
deal not complete.
Caravel Minerals completed the sale of the Wynberg
copper project in Queensland, to CopperChem Ltd
for A$400,000.
China Hanking Holdings has acquired two mining
tenements in Western Australia from Cazaly
Resources' Sammy Resources Pty Ltd unit for
A$220,000.

6. Oz Metals
55th
Edition –15th
May 2016
DISCLAIMER
This report is provided in good faith from sources believed to be accurate and reliable. Terra Studio Pty Ltd directors and employees do not accept
liability for the results of any action taken on the basis of the information provided or for any errors or omissions contained therein. Readers should
seek investment advice from their professional advisors before acting upon information contained herein.
Page 6 / 6
TerraStudio
The tenements span about 19.1km2 and host the
Zeus gold deposit, which contains 29,634 oz of gold
resources.
Mantle Mining Corp. completed the acquisition of a
95% stake in Morning Star Gold. The company now
plans to restart work at the Norton gold project in
Queensland and the Morning Star gold project in
Victoria.
Golden Rim Resources Ltd is proposing to acquire
Herencia Resources Plc subsidiary Paguanta
Resources (Chile) SA, which holds a 70% interest in
the Paguanta project in northern Chile, for US$2.3m.
Hancock Prospecting Pty Ltd unit Gold Exploration
Victoria Pty Ltd has elected to take its interest up to
50% in Catalyst Metals’ Four Eagles gold project in
Victoria. Gold Exploration previously earned a 25%
interest by spending A$2.1 million on the project
since March 2015, and will now spend a further
A$2.1 million on exploration to earn an additional 25%
equity interest.
GWR Group Ltd is acquiring a 100% stake in the
Hatches Creek tungsten project in Australia's
Northern Territory from joint venture partner
Davenport Resources Ltd.
To discuss any benchmarking or other engagement, please contact: J-F Bertincourt, +61 406 998 779, jf@terrastudio.biz
First quartile
Second Quartile
Third Quartile
DugaldRiver
McArthurRiver
GeorgeFisher
Cannington
Century
Skorpion
Mehdiabad
Antamina
0
0
ZincEquivalentGrade(%)
Zinc Equivalent Metal Content (million tonnes)
Polymetallic Mines and Projects: Grade vs. Size
Epithermal, CRD/Mantos, MVT, SEDEX, VMS
Mines
Projects