RARE EARTHS, SPECIALITY & MINOR METALS INVESTMENT SUMMIT

THE LONDON CHAMBER OF COMMERCE AND INDUSTRY ● THURSDAY, 18 MARCH 2010www.ObjectiveCapitalConferences.com

Investment Conferences

9.30 – 9.55 The Strategic Importance of Minor Metals as a Diversified InvestmentChris Eibl – Managing Partner, Tiberius Asset Management

March 2010

Tiberius Asset Management AG

Strategic Metals

Tiberius Group

I. Tiberius Group

II. Executive Summary

III. Investment Case

IV. Investment Universe

V. Challenge and Solutions

Agenda

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

Expertise in physical metals trading through subsidiaries

30 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 billion USD, of which1.5 billion is invested in commodity futures.

Tiberius is regulated by FINMA, the Swiss Banking Commission

Tiberius Group

Introduction

I. Tiberius Group

4

I. Tiberius Group

II. Executive Summary

III. Investment Case

IV. Investment Universe

V. Challenge and Solutions

Agenda

Strategic Metals is a collective term for raw materials that already have or will have animportant impact in various fields of high technology development. This will includecommunications technology, IT hardware technology, battery technology, defense technologyand various others. Strategic Metals include minor metals, rare earth, platinum group metalsand other raw materials.

These metals all share similar characteristics:

1. Deposits are found in geopolitical instable countries and access to them is difficult

2. None of these materials are being mined through primary sources

3. Importance in the end product is more important than price

4. Scarcity and low stock levels globally

Executive Summary

Executive Summary

II. Tiberius Group

6

Core Message to our Investors

Core Message

7

The race for strategic metals has begun –China, the US and Europe are trying to secureaccess to these strategic raw materials throughphysical stock pile purchases or securingdeposits. The goal of an innovativecommodity investment manager should be tofind suitable solutions for investors within thefinancial industry.

II. Tiberius Group

I. Tiberius Group

II. Executive Summary

III. Investment Case

IV. Investment Universe

V. Challenge and Solutions

Agenda

Geopolitical Aspect

Civil warfare and internal instability has hinderedinfrastructure development, limiting materialextraction in deposit rich countries.

As finite supply markets, strategic metal prices havebeen skewed to upside because of lack of investmentinput and resource accessibility in areas of highpolitically instability.

Geological studies suggest that the exponentialpopulation growth may still outpace new supply asunderdeveloped nations become more sophisticated.

China has already gained a competitive advantagethrough its Chinese Africa Development (CAD) fund;the CAD mandate invests in African infrastructure inexchange for resource supply chain control.

III. Tiberius GroupInvestment Case

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III. Tiberius GroupInvestment Case

10

DRC While the Congo is known for a plethora of deposits and natural resources,the two strategic metals of particular interest shown by China through itsloan and investment mechanisms have been Copper and Coltan. Civil warand unrest make it difficult to sustain stable supply.

ZIMBABWE As another country that has been the recipient of financial assistance fromChina, Zimbabwe is also rich in natural resources such as, but not limitedto, chromium ore , nickel, copper, iron ore, vanadium, lithium and tin. Thegovernment of Mugabe however makes it difficult for European investorsto get active there.

TURKMENISTAN Although the country is slowly moving towards democracy , itsauthoritarian government, post Soviet Union collapse, haslimited any foreign direct investments and, thus for, overall trade. As acountry rich with natural and energy resources, the lack of politicaltransparency and conformity to international standards have limited theaccessibility to Turkmenistan’s deposits.

Geopolitical Aspect

III. Tiberius GroupInvestment Case

11

• Export rates are already expensive as adeterrent from producers to sell theirraw materials abroad

• As the major global producer of manyminor metals, China itself has becomethe biggest consumer of their ownmaterial

• There is further speculation that Chinawill increase tarriffs even higher asmaterials are becoming more scarce

• If this comes into realization, theInternational consumer market will haveto rely more on supplies outside China.

• China‘s conformity to WTO andinternational trade standards is heavilydependent on its future relations withthe US

Duties & Taxes - Chinese export tariffs 2009

Commodity Export tariff

Aluminum ores and concentrates 15.00%Chrome ores and concentrates 15.00%

Cobalt ores and concentrates 15.00%

Ferro-Alloys 20.00%

Magnesium scraps 10.00%

Manganese ores and concentrates 15.00%

Molybdenum 15.00%

Silico-chrome 20.00%

Silico-manganese 20.00%

Silico-tungsten 20.00%

Tantalum scrap 10.00%Titanium ores and concentrates 10.00%

Tungsten 5.00%

Geopolitical Aspect

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The below grid shows global demand measured through economicoutput relative to global production. If economic output continuesto increase at 3.8% annually, as in the past 20 years, then this ratiowill substantially increase for certain materials.

Supply and Demand

III. Tiberius GroupInvestment Case

Source: Rohstoffe fuer Zukunftstechnolgien, 2009

Investment Case

III. Tiberius Group

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Price Performance - RoR Since 2000

Investment Case

III. Tiberius Group

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Tiberius MM Index is simply a performance tracker relative to major commodity futureindexes; it has clearly outperformed the others. However, this index is for indicativepurposes only as it does not take into consideration liquidity factors for sourcing materialalong with rebalancing methodologies of the futures indexes.

• Tiberius MM Index Components:

Bismuth Cadmium Chromium Cobalt Indium Iridium Magnesium Molybdenum Ruthenium Titanium

• Equally weighted• No Rebalancing

-50%

50%

150%

250%

350%

450%

550%

650%

Tiberius MM

S&P GSCI INDEX

DJUBS INDEX

Tiberius MM Performance Index vs GSCI/DJUBS (MoM)

CASE STUDY

III. Tiberius Group

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Cadmium is a market which has muchsmaller capacity output from the supplyside than most metals. Therefore it issubject to extreme price movements tothe upside and downside

When compared to Copper, thebest performing base metal, it’seasily seen how Cadmium hasoutperformed copper since 2000.

-100%

400%

900%

1400%

1900%

2400%

COPPER

CADMIUM

CASE STUDY

III. Tiberius Group

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• The Rhodium market will be fairlybalanced in the next 2 to 3 years.

• Any pick up in auto demand canquickly put the market back into deficitand, thus for, higher prices.

• As of November 2009, Chinasurpassed all other countries tobecome the world’s largest autoproducer

• As a huge producer of gasolinevehicles, China will need moreRhodium to make catalytic converters

CASE STUDY

III. Tiberius Group

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Super Alloys

Water Resistant Coatings

High Speed Steels

Prostethics

Magnetics CeramicsChemicals

• Alnico

• Rare Earths• Soft Magnetic

Materials

• Batteries• Catalysts• Adhesive• Pigments, Colors• Medicine

• Glass Colors• Enamels• Pottery• Chinaware

Metallurgical

Cobalt Consumption Applications:

48%• Nickel Industry

37%• Copper Industry

& Others

15%• Primary/Direct

Operations

Production Sources• U.S. imports up to 78% of domesticCobalt as environmental efforts havecurbed domestic production

• Leading global producer, DemocraticRepublic of Congo (DRC) at around 40%,has been unable to meet marketexpectations because of infrastructureunderinvestment

• Political tension within DRC andfrequent labor strikes result in lessCobalt exports

• Struggle for available Cobalt betweenU.S. and China has caused supplysqueeze in the past

• Copper supply scarcity can diminishnewly refined Cobalt introduced into themarket

• Cobalt consumption is mainly generatedfrom aerospace, rechargeable battery,hybrid-electric and gas-to-liquidsindustries

I. Tiberius Group

II. Executive Summary

III. Investment Case

IV. Investment Universe

V. Challenge and Solutions

Agenda

Characteristics and Categorization

Investment Universe

IV. Investment Universe

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• Strategic Metals are the elemental cousins of Base and Precious Metals, but with a usage level equal to or greater than the latter within the industrial process.

• Minimal Global Production, usually less than 150,000 Metric Tons per annum

• Central in the production of many industrial goods because of their chemical properties(ex: Cellular Phones, LED TV‘s, Cars)

• No primary production sources as Minor Metals are largely produced as by-products ofother minerals

• No exchange traded or listed products; trades via physical market only with no forwardcurve - this can change as the LME is looking to introduce futures contracts on selectedmetals. It has already launched Cobalt and Molybdenum contracts.

• Commonly applied as alloys, chemical mixtures to lower purity, influence color and/or adddurablitiy

Investment Universe

Investment Universe

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Minor Metals Rare Earth Elements Platinum Group Metals Other

Antimony Lanthanum Ruthenium LithiumBismuth Cerium Rhodium NiobiumCadmium Praseodymium Palladium UraniumChrome Neodymium Platinum ZirconiumCobalt Promethium Osmium TantalumGallium Samarium IridiumGermanium EuropiumIndium GadoliniumMagnesium TerbiumManganese DysprosiumMercury Holmium Bold: strategic metals that are Molybdenum Erbium Considered core investmentsRhenium ThuliumSelenium YtterbiumSilicon LutetiumTitaniumTungstenVanadium

IV. Investment Universe

Investment Universe – investment limitations

Investment Universe

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• Portfolio holdings will include accessible material with a forecasted short supply bias orsignficant demand increase

• Prospective investments will be on radar until liquidity allows for market entry/exit

• Dynamic market conditions can change a metal from investable to non-investable orvice versa

• Liquidity and counterparty trading risk is essential for an investment decision, thereforeadjustments of portfolio construction will be based upon these

IV. Investment Universe

I. Tiberius Group

II. Executive Summary

III. Investment Case

IV. Investment Universe

V. Challenge and Solutions

Agenda

Challenge and Solutions

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• Strategic Metals have an investment case which should be made accesible to strategic longterm investors

• It is the role of the investment managers to act with respect to the market characteristics

• Investment solutions need to be hybrid between physical and paper structures

• Investment strategies shall be determined for long term market participants

• Tiberius has found an investment solution via hybrid fund structure

V. Challenge and Solutions

Disclaimer

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