GLOBAL MININGINVESTMENT CONFERENCE 2010

STATIONERS’ HALL ● CITY OF LONDON ● TUESDAY-WEDNESDAY, 28-29 SEP 2010

www.ObjectiveCapitalConferences.com

Investment Conferences

Outlook for commodity prices Christoph Eibl – Managing Partner, Tiberius Asset Management

DAY 1 - SESSION 2: SPECIALITY METALS

Other sponsors & participating organisations:

GLOBAL MININGINVESTMENT CONFERENCE 2010

Lead sponsors:

Media partners:

Global Mining Investment Conference 2010

CommoditiesMarket Outlook

A Swiss firm specialized in commodity management, with its headquarters in Zug as well asoffices in Geneva and Stuttgart.

Expertise in fixed-income management on the basis of institutional funds.

33 employees with wide-ranging experience in commodity trading, portfolio management and research.

A model-supported, quantitative investment philosophy with a structured and transparent investment process.

The firm’s core competence lies in the active management of long- only and long/shortportfolios.

Total assets currently under management by the Tiberius Group: 2.2 billion USD

Tiberius is regulated by FINMA (Swiss Banking Supervisory Authority)

Tiberius Group

IntroductionI. Tiberius Group

4

Tiberius Leading Indicator Index - despite slight decline at a very high level

5

Market OutlookCyclical trend

Region Sharpe Weight

Tiberius Leading Indicators 0,7 100,0%1. North America 0,3 46,5%2. Europe 0,4 10,0%3. Asia 0,3 33,5%4. Rest Of World 0,3 10,0%ISM Manufacturing (New Orders) 1. North Am. 0,6 11,1%US Initial Jobless Claims (4W Avg) 1. North Am. 0,6 5,0%Johnson Redbook Sales Weekly YoY1. North Am. 0,2 5,3%Conference Board Consumer Confid.1. North Am. 0,6 9,8%Conference Board Ratio Coincidental1. North Am. 0,3 4,9%ISM Manufacturing Report 1. North Am. 0,5 10,4%IFO Pan Germany Business Exp. 2. Europe 0,4 4,7%France Business Confidence 2. Europe 0,2 0,5%Italy Business Confidence 2. Europe 0,4 3,0%European Business Climate 2. Europe 0,2 1,7%Japan Economy Watchers Survey 3. Asia 0,7 13,0%Japan Small Business Confidence 3. Asia 0,5 8,4%Japan Tankan Business Conditions 3. Asia 0,1 0,4%OECD India Composite Leading Ind. 3. Asia 0,6 11,7%OECD Total Composite Leading I. 4. Rest 0,4 2,8%OECD Russia Composite L. Ind. 4. Rest 0,5 4,2%MSCI World (Local Currency) 4. Rest 0,2 2,9%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Tiberius Leading Indicators signal (long/short)

S H O R T

L O N G

Forward curves have improved steadily since Q2 2009

Market OutlookEvaluation of forward curves

6

50

100

200

-40,0%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Model signal avg. term structure (combined)

Backtesting performance avg. term structure (combined)

Speculative sentiment has improved again

7

Market OutlookShort term capital flows

-$20.000

-$10.000

$0

$10.000

$20.000

$30.000

$40.000

$50.000

$60.000

$70.000

$80.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Net Long Position Non Commercials in Mio. USD (nom.)

Net Long Position Non Commercials, 52-week Average

Net Long Position Non Commercials in Mio. USD 2001 prices (real)

Net Long Position Non Commercials 2001 prices, 52-week Average

Continued buying interest of institutional market participants

8

Market OutlookLong term capital flows

Market OutlookConclusion

9

The Lights for commodity investments mainly give positive signals

2. Forward Curves- Gradual improvement

3. Spot Price Level- After correction many markets at attractive entry level

4. Short Term Speculative Capital Flows- Sentiment has turned especially in the agricultural sector

5. Long Term Insitutional Capital Flows- Sustained Interest in Commodities

1. Ecomomic Cycle- Uptrend in industrial production is intact

6. Market Technicals- Lately first technical buy signals

Conclusion: Outlook has recently improved significantly

Our yearend forecast is still the same

10

Market OutlookLong term market analysis

100

150

200

250

300

350

400

450

500

Dow Jones UBS Commodity Index Total ReturnPrognose

2010

Cruide Oil globally attractive; in the US, especially in Cushing, still high excess inventories

Market OutlookCrude oil

11

-50000

-40000

-30000

-20000

-10000

0

10000

20000

30000

40000

50000 -40,00%

-30,00%

-20,00%

-10,00%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

1989

1990

1991

1992

1993

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1995

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1997

1998

1999

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2001

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2003

2004

2005

2006

2007

2008

2009

2010

Convenience Yield 1 Year and Excess Stocks Crude Oil

Convenience Yield Nearby to 1 Year contract in% (left scale)

Spread US-crude-stocks to 5 year average (right scale, inverted)

Dez. 2004

Despite constant demand high increasing excess inventories

Market OutlookCrude Oil

12

0,00

5,00

10,00

15,00

20,00

25,00

30,00

35,00

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

Crack Spread 3:2:1 in USD per Barrel

US Gasoline consumption is now at the level of 2008

Market OutlookGasoline

13

8400

8600

8800

9000

9200

9400

9600

9800

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53

1000

b/d

Calendar Week

US Gasoline - Seasonal Demand (Product Supplied)

2007

2008

2009

2010

Enhanced storage capacity and high short-exposure argue against a price decline; like in 2009 sudden price reversal is expected in 2010

Market OutlookNatural Gas

14

0

2

4

6

8

10

12

14

16

-100000

-50000

0

50000

100000

150000

200000

250000

US Natural Gas: Non-Commercial Net Position in Contracts (incl. Swap adjusted to NYMEX Contract Size) (left scale)

NYMEX Natural Gas: Nearby Futures Price in USD per mmBtu (right scale)

US distillate consumption is disappointing given the economic upswing

Market OutlookDistillates

15

3000

3200

3400

3600

3800

4000

4200

4400

4600

4800

5000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53

1000

b/d

Calendar Week

Seasonal US Distillates Demand (Product Supplied)

2008

2009

2010

High correlation of industrial metals based on a constant demand;average of the six at the LME trated metals approximantely +0.69 in 2010

Market OutlookIndustrial Metals

16

Copper Alum. Nickel Lead Zinc Tin S&P 500 USD IndexCopper 1,00 0,81 0,67 0,80 0,84 0,59 0,40 -0,37Aluminium 1,00 0,66 0,70 0,78 0,56 0,44 -0,42Nickel 1,00 0,70 0,68 0,52 0,30 -0,31Lead 1,00 0,81 0,58 0,41 -0,45Zinc 1,00 0,58 0,35 -0,34Tin 1,00 0,37 -0,37S&P 500 1,00 -0,42USD Index 1,00

Correlation Table (based on daily returns, 31.12.2009 - 31.08.2010)

Rolling correlation of base metals and stock market currently near top

Market OutlookBase Metals

17

-0,6

-0,4

-0,2

0,0

0,2

0,4

0,6

0,8

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Rolling Correlation (26W) between Base Metals and Stock Market (S&P 500)

DJUBS Industrial Metals

Tin and copper - the only base metals showing market deficit in 2011

Market OutlookBase Metals

18

-6,00%

-4,00%

-2,00%

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

Zinc Nickel Aluminium Lead Copper Tin

in %

of Y

early

Dem

and

Market Balance 2007

Market Balance 2009

Market Balance 2010 (estimate)

Market Balance 2011 (estimate)

Surplus

Deficit

Structural deficit of copper since turn of the millennium

Market OutlookCopper

19

0

2000

4000

6000

8000

10000

2003 2004 2005 2006 2007 2008 2009 2010

Copper, 3-Months-Forward (USD / Tonne)

Copper, 63-Months-Forward (USD / Tonne)

Price ratio between platinum and palladium again on a long-term average

Market OutlookPrecious metal

20

0

1

2

3

4

5

6

30

40

50

60

70

80

90

100

1994

1996

1998

2000

2002

2004

2006

2008

2010

Gold/Silver Ratio (left scale)

Platinum/Palladium Ratio (right scale)

Gold benefited by the end of Q2 2010 from excessive risk aversion

Market OutlookGold

21

98

100

102

104

106

108

110

112

114

116

95

100

105

110

115

120

125

130

135

140

Performance of Various Risk Aversion Indicators (01.01.2010 = 100)

Gold in Euro / Ounce (left scale)

Yen / Euro - Exchange Rate (left scale)

German Bund Future (generic, right scale)

The original selling points for gold have disappeared

Market OutlookGold

In the year of 2000 In the year of 2010

1. Physical market balance High surplus

2. Strategic positions 30% of production hedged

Mines are unhedged

3. Spekulative positions Net-short Extreme net-long

4. Sentiment/Market penetration Extremely negative Excessively positive

5. Relative Value (CPI, Commod.) Too low Too high

6. Macro-environment

Low/middle Low/middle- Inflation risks

- Deflation/systemic-risk Middle High

Gold market in comparison

22

Market deficit

Seasonal tendence of gold purchase at the futures market and ETFs in the last years

Market OutlookGold

23

-15.000

-10.000

-5.000

0

5.000

10.000

15.000

Jan

07

Apr 0

7

Jul 0

7

Oct

07

Jan

08

Apr 0

8

Jul 0

8

Oct

08

Jan

09

Apr 0

9

Jul 0

9

Oct

09

Jan

10

Apr 1

0

Jul 1

0

Oct

10

in m

oz

Gold - ETF Flows and Futures Positions

Change CFTC Net Long Position (Non-Commercials + Non-Reportables)

Change in ETF Volumes

Rolling 4-Week Flow

Increasing Net-Long volume of the Non-Commercials in grain sector

Market OutlookSofts

24

0

20

40

60

80

100

120

140

160

180

200

-5.000.000.000

0

5.000.000.000

10.000.000.000

15.000.000.000

20.000.000.000

25.000.000.000

Aggregate Net Long Position Non Commercials CBOT Wheat, Corn, Soybeans, Soybean Oil in USD (left scale)

DJ UBS Subindex Grains Excess Return (indexed to 100, right scale)

Significant production losses compared to previous year caused by extreme weather events

Market OutlookWheat

25

-20 -15 -10 -5 0 5

Russland

Kasachstan

Ukraine

EU 27

Kanada

USDA: Erwartete Rückgänge bei Weizenproduktion und -exporten in Mio. Tonnen

Exporte

Produktion

USDA: expected declines in wheat production and exportsin million tonnes

Production

Exports

Wheat stocks are still well above critically low level of 2007/08

Market OutlookWheat

26

0

10

20

30

40

50

60

70

80

2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11

USDA: Wheat Ending Stocks of the Major Export Nations in Million Tons

USA

Australia

Canada

EU 27

Ukraine

Kazakhstan

Russia

Expected decline in the spread soybean vs. corn

Market OutlookSoybeans/ Corn

27

• Substitution of wheat by corn as animal feed

• Expected acreage shift in the U.S.: Growth of double-cropping (wheat

followed by soybeans)

• Potential for higher U.S. corn exports

• Global corn market tighter than soybeans100

200

300

400

500

600

700

800

900

1.000

1973

1975

1977

1979

1981

1983

1985

1987

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1995

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1999

2001

2003

2005

2007

2009

Sojabohnen vs. MaisDifferenz Nearby-Kontrakte in US-Cents per Bushel

Soybeans vs. CornDifference nearby-contracts in US cents per bushel

Continuous improvement of the fundamental data due to rising demand

Market OutlookCotton

28

10

11

12

13

14

15

16

17

18

19

20

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

USDA Cotton Estimates for USA: Stocks to Use Ratio vs. Domestic Demand and Exports

(in the respective current marketing year)

US Stocks to Use Ratio (left scale)

Demand for US-Cotton in mn 480 lbs bales (right scale)

29

Metals will stay in contango in the course of the next 12 months

Market OutlookConclusion

Backwardation

Contango

Market surplusHigh inventories

Market deficitLow inventories

Tiberius Asset Management AG

Baarerstr. 53

CH-6300 Zug

Schweiz

+41 41 560 00 81 (Phone)

+41 41 560 00 82 (Fax)

info@tiberiusgroup.com

www.tiberiusgroup.com

Contact

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Other sponsors & participating organisations:

GLOBAL MININGINVESTMENT CONFERENCE 2010

Lead sponsors:

Media partners: