Gold

Gold: The Perfect Metal
Golden Era: Growing Potential in Gold Investment Forum Hong Kong

22 June 2009
Owen Hegarty
Chief Executive Officer G-Resources (1051 HK)

Table of Contents

SECTION 1

Gold- The perfect metal: The key characteristics of gold

SECTION 2

Success factors for gold mining: What to look for when investing in gold companies

SECTION 3

Gold companies as an investment

2

Table of Contents

SECTION 1

Gold- The perfect metal: The key characteristics of gold

SECTION 2

Success factors for gold mining: What to look for when investing in gold companies

SECTION 3

Gold companies as an investment

3

Gold - The perfect metal: The key characteristics of gold
► It’s a commodity ► It’s a currency ► It’s a store of value ► It’s a hedge against inflation, financial instability and geopolitical uncertainty

Gold outperforms during period of rising and high inflation

4

Gold is rare, hard to find & getting harder to find
► Over half of global exploration expenditure is on gold ► Yet few large gold discoveries have been made in the past 10 years ► Lack of focus on Asia represents an opportunity Major gold deposits discovered in the Western World between 1950 and 2003
World 4%

World Exploration Spend
Asia

Asia attracts only 4% of global exploration expenditure = great opportunity

Source: BHP Billiton 5

Gold demand steady but forecast to rise with increases in wealth in China and India

6 6

Primary gold supply from the world’s mines is declining and has been for the past six years
► This relates in part to the fact that quality economic gold deposits are few and far between. ► Confirmation of this claim: world gold production has been steadily declining since it peaked in 2001 in spite of a nearly US$600 rise in the gold price. This goes against basic economic theory i.e. rising prices should bring on more production

7 7

Strong Gold Price Outlook
► Strong physical demand outlook... [continues]

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