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SWISS ASIA CAPITAL

SAC GLOBAL ENERGY & MINING

FUNDFUNDAMENTALS

CAN’T GET ANY BETTER

SAC GLOBAL ENERGY & MINING

FUNDFUNDAMENTALS

CAN’T GET ANY BETTERSingapore, January 2011

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WHAT DRIVES RESOURCES

- DEMAND GROWTH Massive government spending creates growth

- SUPPLY CONSTRAINTSCredit crunch reduces project

funding

- MONETISATION = LOSS OF PURCHASING POWER

Currency wars and artificially low interest rates

- VALUATIONSstocks do not value minerals in the ground

- INTERNATIONAL MONEY FLOWSimproving profit

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Financial Market Consolidation

The Cycle Shift into Resources

Resources

Resources?

Financia

lsFin

ancials

Financials vs Resources Cycles

Resources

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STRATEGIC INVESTMENTS

- up to 10% - CONSTITUTIONAL PRECIOUS METALS

Real physical holding, no supply, premium expansion

- up to 10% - STRATEGIC MINERALSUranium, Lithium, Rhodium, PGM-

Group, Rare Earth

- up to 10% - UNDERVALUED BASE AND BULK MINES

High grade, strategic location including Port access

- up to 20% - SILVER EXPOSURETrade imbalances; highly leveraged derivatives

market

- up to 50% - JUNIOR MINING MARKETDevelopment companies with growth and

cheap valuations

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Infrastructure spending continues to support commodity demand

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Resources stocks remain cheap and supported by the

War Cycle!

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Structural debt issues will result in debasement of

paper currencies

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A recipe for disasterMore spending and less

taxes!

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Buy what China needs

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CRB has tested previous break out levels and is

moving up again

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CAPEX collapse in mining industry will restrain future

output

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What is driving Energy?

CauseCause

EmergingEconomies

EmergingEconomies

Low Oil Pricesin 90’s

Low Oil Pricesin 90’s

OPECOPEC

GeopoliticalGeopolitical

EffectEffect

Rising OilConsumption

Rising OilConsumption

Cuts inExploration

Cuts inExploration

Govt’s dependon Oil Income

Govt’s dependon Oil Income

Disruption/ThreatOf Disruption of

Production

Disruption/ThreatOf Disruption of

Production

Competition forOil Resources

Competition forOil Resources

Falling Production/Reserves

Falling Production/Reserves

Cartel RestrictsSupply

Cartel RestrictsSupply

Lower GlobalSpare Capacity

Lower GlobalSpare Capacity

HigherOIL Prices

HigherOIL Prices

HigherOIL Prices

HigherOIL Prices

HigherOIL Prices

HigherOIL Prices

HigherOIL Prices

HigherOIL Prices

Possible RamificationPossible Ramification

GreenMovement

GreenMovement

Limited DrillingAccess and New

Refineries

Limited DrillingAccess and New

RefineriesHigher Barriers to

Entry – More Costly

Higher Barriers toEntry – More Costly

HigherOIL Prices

HigherOIL Prices

Peak OilTheory

Peak OilTheory Less SupplyLess SupplyDeclining Oil

Production

Declining OilProduction

HigherOIL Prices

HigherOIL Prices

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Supply constraints and high replacement costs support

prices

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Spare capacity and inventories are at historic

low levels

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Critical Drivers moving GOLD The best environment for 20

years

GOLD Fundamentals & M&AGOLD Fundamentals & M&A

Falling US Financial AssetsFalling US Financial Assets

From anInvestment

Point of view

GOLD &REAL Assets

Protect and EnhanceInvestment Returns

From anInvestment

Point of view

GOLD &REAL Assets

Protect and EnhanceInvestment Returns

Possible RamificationPossible RamificationPresent EnvironmentPresent Environment

Geopolitical EnvironmentGeopolitical Environment

Portfolio OptimisationInsurance Policy

Portfolio OptimisationInsurance Policy

Int. Asset Allocation ShiftsInt. Asset Allocation Shifts

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PURCHASING SEASON WILL DRIVE PRICES INTO MARCH

2011

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GOLD production shortfall remains due to a lack of new

discoveries!

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Silver looks very cheap historically

Risk vs Return looks impressive!

Great opportunities in smaller metals due to supply

constrains!

Contractual defaults ?Rising prices will increase investment demand and deplete the future exchange inventories (LME/Commex)

Crazy Rare Earth: One of many rare earth minerals in demand South Africa controls 80 % of global supply

Low Silver Inventories Low Rhodium Prices

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MINING SHARES BREAK-OUT 80 to 100% returns for the Index

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Resources stocks are trading at large discounts to underlying

Assets!

B U Y

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Precious Metals Mining companiesare at bargain valuations

BUY BUY BUY

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Asian Bargains – NAV valuations at 30% discounted

Gold

Bargain Asian Assets *

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ACQUISITION IN FULL SWING AS PRICES ARE BELOW

REPLACEMENT VALUES

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Commodity exposure remains low whilst being the least unimpaired

asset class available

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Total Global Mining shares exposure as % of total Global

Assets will increase!

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CashCash BondsBonds

StocksStocks

AlternativeAssets

AlternativeAssets

Real AssetsProperty

Real AssetsProperty

CommoditiesCommodities

TOTAL GLOBAL FINANCE POOL OF 100 TRILLION DOLLARS

OR 150 TRILLION DOLLARS TOTAL WEALTH POOL

IS LOOKING FOR CAPITAL PROTECTION

WITH UPSIDE PARTICIPATION

Today’s Asset Allocation Asset Allocation 1970’s

15 % Cash 30 %

35 % Bonds 20 %

40 % Equities 10 %

10 % Alternatives and Real Return Funds 20 %

ZERO Resources 20 %

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REAL WEALTH is moving from West to East - SAC is one of the few Management companies covering the

resources sector in Asia!

- Team based stock selection and decision making process- Ideas have to compete on a real return basis for capital- Well established fundamental based research process- Private database covering over 200 companies world-wide with a focus on participating in the liberalisation and opening of the Resource sector in Asia- Proven track record covering Global and Asian Pacific Mandates

Our Dynamic Investment Process enhances Performance and reduces Risk

Database

3rd Party

Specialist

Research

Top-Down

Investment

Approach

Company

Meetings

Field

Trips

Portfolio

Modelling

Risk

Return

Profile

Technical

Research

Fundamental Investment Process

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Adding alpha: picking companies with high re-rating

potential

The fund accumulates emerging producers, companies with increasing reserves & resources: these Companies are key M&A targets in an environment of declining supply and long lead times from discoveryto production.

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THE KEY DECISION FOR BUYING RESOURCE STOCKS IN A BULL MARKET REMAIN

- buy companies with a high proven reserve base, with positive earnings development and cashflow sustainability- accumulate emerging producers, companies increasing reserve & resources, whilst increasing production numbers - accumulate companies moving from the Junior to Mid Cap status & select M&A candidates- little exposure to large caps and hedge books- increasing African and Asian investment focus, which remain extremely undervalued and undiscovered- in addition, silver investments are favoured as

fundamentals remain exceptional- exposure to alternative energy names

GEM’s Investment Themes

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THE KEY INVESTMENT FEATURES OF GEM

- more nimble in investing in deeply-undervalued companies

- large competitors are either too large to benefit from the trend or have a tight tracking error to benchmark e.g. XAU - flexibility to invest in physical bullion and precious

metal futures to enhance returns and preserve capital- Passive option writing strategy may be employed- Investment Parameters: Equities between 60 to

90%; can hold Physical bullion; Derivative exposure up to 10%

- Holdings: The Fund will normally hold up to 50 holdings with a maximum limit of 10% of NAV in any one equity.

The Investment Approach is to focus on deep value and

growth

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Mining-oriented + physical bullion: global diversification,

with Asia focus

Numbers as at 29th December 2010

25 % Americas30 % Africa & Europe40 % Asia-Pacific

By Reserves & by Production

Gradual shift as liquidity and listings increase

No exposure to any US Listings

Silver & PGMs24%

Gold59%

Base Metals/Bulks/

Specialty Metals

7%

Energy9%

Cash1%

Physical Bullion /

Commodities8%

North/South America

39%

Cash1%

Asia-Pacific33%

Europe / Africa19%

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SAC Global Energy & MiningTop 10 Holdings

Company Location of assets % of fund

Physical Bullion 8.00%

Newcrest Mining Asia-Pacific 3.30%

Kinross Gold Americas / Africa / Europe

3.20%

Eldorado Gold Corp Asia-Pacific 3.20%

First Majestic South America 3.00%

Randgold Resources Africa 2.90%

Agnico Eagle Mines Americas 2.80%

Goldcorp North America 2.80%

Silver Wheaton Global / Royalty 2.80%

Yamana Gold Americas 2.80%

Total 34.80%As at 29th December 2010

Performance Chart15.05.2002 – 29.12.2010

TrendlineCredit crunch –

Shares trade below cash levels

5-year annualized returns (%)

Annualized returns since fund inception – 15 May 2002 (%)

Commodity CRB Index +0.08 +5.75

MSCI World Equity Index +0.17 +3.11

SAC Global Energy & Mining Fund (net returns) +15.62 +14.85

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Structure: Cayman registeredAdministrator: PictetCustodian: PictetInvestment Advisor: Swiss Asia Capital (Singapore) Pte. Ltd.Min. Initial Investment: USD 50,000 per nomineeNAV Calculations: Weekly (one price only)Mgmt Fee: 1.50%Distribution Fee: Up to 5%Performance Fee: 15% over 10% high water markBase Currency: USDPricing availability also in GBP, EUR, CHF and AUD.Security number (ISIN): KYG667401049

A word about the Fund

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The information contained in this document has been compiled from, or has been based on publications, reports and other sources believed by the author to be accurate, sufficient and reliable. While reasonable efforts have been made to ensure the accuracy, sufficiency and reliability of such information, no representation and assurance can be given that all such information is accurate and complete in all material respects and not misleading and all sources of information are reliable. The delivery of this document shall not in any event create any implication or constitute a representation or warranty that the information contained in this document is true and correct and not misleading as at any time subsequent to the date of this document. No disclosure of any such information shall be made by the recipient to any other persons in any circumstances except as otherwise compelled by applicable laws.

If you have any doubt about the contents of this document, you should consult, and obtain independent advice from, your legal, financial and/or other professional advisors.

Important Note