GENEVA, Oct. 23rd •
by Bernard Loriol, Managing Partner and Fund Manager, BAC Mining Regions Managed Vol.- South Africa (CHF) Zug, Switzerland
“What has happened in the past four months”
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Best Asset Class AG, Company Structure
BUSINESS DEVELOPMENT
Cyrill Moity
Director Middle EastSouth America
MANAGEMENT
CONTROLLER
SandroBagnatoSwitzerland (TI)Italy
Irina Jung
Switzerland (German)MonacoGermany
Alfredo Muñoz
Director SpainSouth America
NatalieGasserEvents
Dr. AlbertJungLegal AdvisorPresident of theBushveld Foundation
Felix Würth
Accounting
JoakimBünzliControler & Risk managementNorth Europe / BanksHedge FundsFund of FundsDue Diligence
MichaelBuechlerAssistant
EVENTS
INVESTMENT COMMITTEE
Laurent Krull
LK Consult
Geology
ChristianPiquet
Risk Control
Urs Gmuer
Dolefin S.A.
TechnicalAnalysis
ChristopheAudergonCrossinvest S.A.
Bottom-upAnalysis
CONSULTANT
RenéHochreiterAllan & Hochreiter LtdGeologyMiningEngineeringFinance
BUSINESS PARTNERS
Structured ProductsBAC Africa Commodities
Bernard LoriolCEO, CIO
Csaba ViràgPARTNEREast EuropeCommunicationsIT / BAC Indicies
Patrick GallatiMarketingCommunications
MARKETING
PatrickSan JuanSpainSouth America
MiguelSan JuanSpainSouth America
Mark Bosman
Special Project Manager Consultant
BAC SolarBAC Hydrogen
ADVISORY BOARD
STAFF
90%
290%
490%
690%
890%
1090%
1290%
1490%
1690%
01.0
1.19
99
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7.19
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00
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08
Performances 01.01.1999-29.02.2008
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Performances: JSE Platinum Index versus Platinum bullion
u Q1 2008: more than 80% operating margin ?
x 17(HUI x 7)
x 6(Au x 4)
JSE Platinum Index (USD without divident) oz Platinum
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Global Indexu 2004 - 22.0 %u 2005 +101.3 %u 2006 +59.23 %u 2007 +31.60 %u YTD + 1.52 %
Performances: www.platexindex.com
BAC Platinum Group Metals Global Index BAC Platinum Group Metals Explorers Index
Explorers Index- 11.0 %+24.72 %+75.67 %+78.97 %- 11.17 %
Performances in CHF
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Corporatesu Huge improvement in Anglo Platinum / DME relationu Xstrata / Nkwe dealu Corporate tax reduced by 1% to 28%u Juniors and Explorers supported by Finance Minister
Supply / demandu Explosion of long-term deficit prospects (power, safety, strikes...)u ETF more than 350,000 ozu Car industry silent... but active in the market.
Priceu New record prices for PGMsu New high for the JSE Platinum Index and our Global PGMs Indexu Weak ZAR
What has happened since the 5th BAC Platinum Day(October 22-30, 2007)
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u Size: CHF 342 million 5 investors (3 independent asset managers, 2 pension funds) own 1/3 of the assets
u Performance (since move to platinum): 2006: +65.72 %2007: +67.74 %Last 12 months: +32.63 %Last 3 years: +194.58 %YTD: - 8.24 %
u The only fund in the world invested fully in PGMs. 80% of the Fund‘s investments will be presented at the 6th and 7 th BAC Platinum Days in March 2008 and July 2008.
u Swiss, Daily liquidityu Costs:
u TER: 1.92%u Performance fees: 20% after 15% performance (high-water mark)u Sales fees: up to 3% permitted
u Transparency, documented for clients, investment commitee, unique expertise.
u EXIT strategy
THE FUND
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What has happened since the 5th BAC Platinum Day(October 22-30, 2007)
0
25000
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BAC Mining Regions Managed Vol. South Africa Issued Units
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What has happened since the 5th BAC Platinum Day(October 22-30, 2007)
650
950
1250
1550
1850
2150
2450
2750
BAC Mining Regions Managed Vol. South AfricaSince Launch in CHF
-12.1 %
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u Easy access to management/transparencyu Core holdings very liquidu Own Research (LK Consult)
Platinum Producers Platinum Explorers Gold CompaniesNorilsk Nickel Platmin Anglo Gold AshantiAnglo American Platinum Wesizwe Platinum Gold FieldsImpala Platinum Sylvania Resources HarmonyLonmin Platinum Australia DRD GoldAquarius Platinum Platinum Group Metals MvelaphandaNortham Platinum Ridge Mining RandgoldEastern Platinum AIM Resources CenturionAnooraq Resources Jubilee Platinum African Rainbow
Nkwe Platinum JCIBraemore Resources Simmer & JackCaledonia Mining Great Basin GoldConsolidated Puma Minerals AfgoldBeartooth Platinum Witsgold
Investment Universe
In the TOP 10 of the portolio
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Investment case: Explorers
u Au producers:u 274 (202) $ |oz in situ
u Au explorers:u 90 (96) $ |oz in situ
u PGM producers:58 (50) $ |oz in situ
u Pt explorers:u 20 (31) $ | oz in situ
...and Pt price is 120% higher than Au
Pt Explorers are cheap Value Curve
Rock-solidfundamentals
managementproximity
follow-up ofprojects
Success with Explorers
1999 AQP IPO 50p
2008 x 40
20/30% Takeover premium ?
xAQP
In brackets, situation 5th BAC Platinum Day (October 22 – 30, 2007)
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Current portfolio
1. Anooraq Resources 20.9 %2. Platinum Australia 11.7 %3. Wesizwe 10.5 %4. Sylvania Resources 9.3 %5. Platmin 8.5 %6. Ridge Mining 6.8 %7. Platinum Group Metal 6.4 %8. Braemore Resources 5.6 %9. NkwePlatinum 4.8 %10. Jubilee Platinum 3.9 %
88.4 %
u Fully invested
u No leverage
u No currency hedge
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u Souh Africa
u Stock Market Crash Worldwideu 80% margin = shock absorberu Producers pay high dividendsu 60% of the demand forced by more legislative restrictions
u Chinau Olympics 2008u Stock-market correction is over?
u World recessionuThis time is different for PtuFollow Equity Markets
u SubstitutionuAutocatsuFuel cell
Risks
u Zuma?u Power shortageu Economy: but still 4% growthu Current-account deficit: need 3bn ZAR a weeku Poverty: crime – HIV – unemployment
u 1% budget surplus (2007)u Surpluses 2008 / 2009 / 2010u Debt ratio to GDP = 17% in 2010u Company tax rate down 1% to 28%u 2010u Weaker rand
+-
u Another Swiss Franc Surprise
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A stunning comparison…
JSE Platinum Index 2003 – to dateNASDAQ100 Index 1991 – January 1998
Performance for both: 400%
Chart prepared by DOLEFIN SA
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A stunning comparison…
NEXT ?
JSE Platinum Index 2003 – to dateNASDAQ100 Index 1991 – March 2000
Chart prepared by DOLEFIN SA
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Prospects for the coming 7 months (7th BAC Platinum Day)
uMore corporate activities
u Financing despite power shortages
u Explorers outperformingproducers
u High oil price
u Appetite for commodities
u Real rates at historical lows
+
PGMs equities should continue to outperform.
uDownside risks on globalstock markets
uEnd of cycle perception?
uRisk aversion
uDeleveraging and credit crunch
uNegative perception of South Africa
-
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Maximum bullish on precious metals sector for the coming 5 years!
u The USD will stay weak (IMF)
u Inflation may develop in five years (A. Greenspan)
u Real rates will stay low
u The public will create excesses by shifting from real estate to precious metals (and some commodities)
Source: ‚Irrational Exuberance‘ 2nd Edition2006 by Robert J. Shiller
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Conclusion
Platinum - A strategic metal for the Kings that are all of the three major investment themes for the coming decade:
CHINA ENERGY CLIMATE CHANGE
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Coming events
1th BAC Indaba Natural Resources Day March 31 / April 2
INVESTOR TOUR 2 May 24 / 27
7th BAC Platinum Day “Fuel Cells and Autocats” June 30 / July 4
8th BAC Platinum Day “Nanotechnology” October 5 / 11
2nd BAC Indaba Natural Resources Day Oct 20 / Oct 22
INVESTOR TOUR 3 Aug 28 / Sept 2
INVESTOR TOUR 4 Oct 30 / Nov 4
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Further Information / Contact
Information: www.bestassetclass.chwww.bacfund.chwww.platexindex.comwww.bushveldfoundation.org
[email protected]+41 (0) 79 473 19 08
Links: www.platinum.matthey.comwww.ballard.comwww.preciousplatinum.comwww.angloplatinum.comwww.implats.comwww.kitco.comwww.platinuminfo.net
“So many excellent properties united in a single metal”Antoine Baumé, Master Apothecary, 1773