June 2007

June 2007

Herewith Omega Investment Research’s monthly Mining Prospects e-publication, focusing on global mining developments and general information related to current and future mining investment opportunities.

Hong Kong’s SSC Mandarin Group Looks to New York

The SSC Mandarin Group of Hong Kong, with strong connections into the China mining industry, plans to set up an off-shore investment fund. Senior executives of the Group made an exploratory visit to New York late last month (May) and received a thumbs up from major institutions.

Headquartered in Hong Kong, with a subsidiary in Singapore and representative offices in Shanghai and Beijing , and an affiliated company in South Africa , the SSC Mandarin Group in 2004 set up Sino-foreign joint ventures in Beijing and one in Hangzhau. It provides a “one-stop” corporate finance advisory service in relation to corporate restructuring, pre-IPO financing, merger and acquisition and IPO’s primary for companies in China with a focus on SME enterprises with a significant growth potential. For details refer to:

Robin Lee
SSC Mandarin – Hong Kong
Tel: +852 (2504) 2333
Email: robinlee@sscmandarin.com uuuuuuuuuuuuuuuuuuuuuuuuuuuu

Omega’s Mining Consultancy

Omega, in partnership with a well-established mining consultancy, offers a comprehensive range of analytical services to the exploration and mining industry. Specifically, we offer:

§ due diligence and evaluations;

§ exploration and resource evaluations;

§ feasibility studies;

§ processing – mine to product;

§ project management;

§ health and safety management;

§ environmental management;

§ rock mechanics;

§ extraction and processing.

Omega, of course, has access to mining funding.

For more details contact:

Kamreya at kamreyac@omegainvest.co.za
or Daniel at danielb@omegainvest.co.za

Mining in Africa – What of the Future?

Omega's Third Annual International Mining in Africa conference, held in Johannesburg on 23 May, was from all accounts highly successful. Hosted by FNB, the conference presented a cross-section of mining companies looking for funding, landowners, and various advisers in the mining industry. Perhaps the most powerful message to emerge from the conference was China and its role in African mining in particular. (See next story)

But what of the future? There is universal acclaim for the next couple of decades. The price trend of commodities is expected to continue upwards for anywhere between 20 to 30 years; the shortage of exploration in the 1990s is now reversing itself; there is a pipeline of some five to ten years for new projects; and there are excellent fundamentals for a supply-demand balance. The paradigm for 2007 is that demand will continue to exceed supply. Hotting up demand are mainly:

§ China and India 's insatiable appetite

§ Russia and Brazil 's sizzling needs

§ Economic recovery from the West

§ Emerging markets economic growth

Supply, on the other hand, is restricted by a low mineral and metal inventories and a shortage of new mineral projects.

PricewaterhouseCoopers in its global mining review put across the same message. It predicts that the year 2007 be a spectacular year. According to PwC -- "Let the good times roll!" Factors listed by PwC include:

§ Industry market capitalisation up 72% to US$ 791 billion

§ Net profit of US$45 billion up by 59%

§ Capital expenditure up 31%

§ Revenue increased by 25% to US$ 222 billion

§ Net profit margin 20%

§ Exploration spending increased by 29%

§ Return on equity 25%

§ US$16 billion distributed to shareholders.

This highly optimistic view of commodities in the mining industry dominated most of the discussion at the conference. Clearly, mining in Africa stands to benefit enormously -- particularly as a result of the increased political stability in Africa over the past 18 months. The mining funders at the conference stressed that there is no shortage of capital. What several presenters highlighted, however, is the lack of skills -- most noticeably, and surprisingly, in the Republic of South Africa .

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Omega's Mining Prospects received by mining companies, mining investment companies and mining advisors in Australasia, Africa, South-East Asia, Europe and South and North America. The editors welcome contributions for inclusion in Mining Prospects, whether these be report on projects, new explorations, corporate developments, invitations to invest, or points of view on developments in the industry, etc. Contributions do not have to be in a final publishable form. We will do the necessary editing and polishing. There is no charge for the inclusion of news items, although we have a modest charge for advertisements. So let's hear from you!

The editors

Investment in Emerging Markets to Rise

Net direct investment in emerging markets will rise 16% US$194 billion during 2007, according to the Institute of International Finance (IIF). The IIF predicts that net direct investment in Asia would rise to US$86 billion this year from US$85 billion. Latin America would attract US$42 billion, compared with US$26.3 billion last year. But it is Africa that makes the really big gain which will see investment doubling from US$6.6 billion to US$17 billion. And the main beneficiary of this will be the mining sector – as the demand for commodities soars.

Mining to commence at Ikosis

Mining will start within weeks at the Ikosis mine near Steinkopf, which is situated in the northern region of Namaqualand . Launched several years ago by a consortium of business people from Cape Town, Ikosis Mining and Minerals (PTY) Ltd attracted funding from Anglo American's empowerment fund Anglo Khula, which now has a 20 per cent share-holding in the company.

The site itself is situated in the pegmatite field which runs for some 200 km in length and between 40 and 50km wide in northern Namaqualand . Although hosting various pegmatites, the Ikosis site itself is particularly rich in Mica, and also has good quantities of feldspar. Initially, production will be concentrated on the mica, for which there is a very good market both locally and internationally. In fact, Ikosis is receiving enquiries from Germany and China in respect to both mica and feldspar.

The mine will initially be operated by the Creo consultancy, with increasing involvement of a BEE women's empowerment company which has a five per cent share-holding in Ikosis. The Ikosis mining operation is expected to provide a marketing outlet for small miners in the region.

Ikosis Mining and Minerals (PTY) Ltd has other economically minable sources in the area. Trade and investment enquiries should be directed to Mr Cassiem Omar on +27 084 6446 886, or email him on ikosismco@yahoo.com u

Omega Mining Consultancy

OPPORTUNITIES.

Our client commands sensor-based technologies and equipment with a proven track record. Potential applications include the following:

Optical Sorting

§     Free Diamond recovery from DMS concentrates
§     Recovery of Gold and Platinum from mine waste rock dumps
§     Upfront sorting of ROM ores
§     Free Diamond recovery from tailings

Metal Sensor Sorting

§ The recovery of metals from slag’s.

XRT – X-Ray Transmission

§     Recovery of metals from slag’s
§     Pre-concentration of ores based upon atomic density. This complements the optical systems where visual discrimination is not possible.
§     Free Diamond Recovery (+5mm)

Combisense Sorting

This makes use of a combination of sensors where single sensor discrimination is insufficient for stable separation.
§ Pre-concentration of ROM ores
§ Recovery of metals from waste rock dumps

For further details please direct enquiries to:
Kamreya at kamreyac@omegainvest.co.za
or Daniel at danielb@omegainvest.co.za

After the Indaba 2007: Prospects for African Mining

Judging from the Indaba 2007 programme one cannot but conclude that mining in Africa is experiencing an unparalleled period of growth. While the global commodities boom certainly supports this development, many African governments, on balance, should receive credit for, over the past decade, having created the enabling environment conducive to investment in mining.

The increasing sophistication of the legislative and regulatory regimes for mining in African countries bode well for the future of our industry on this continent. While much remains to be done, mining is now playing a much more significant role in the socio-economic development of the continent. One only needs to look to South Africa to understand how mining can form the foundation of a modern, competitive economy.

The challenge for the future is to ensure that the benefits of mining are appropriately applied and disseminated to support sustainable development in its broadest sense. It is for this reason that Gold Fields supports the Extractive Industries Transparency Initiative to which many progressive African Governments and mining companies have committed themselves.

In a nutshell, Africa increasingly appears open for business and it’s a great place to find and develop a new deposit, with supportive governments. u

[A Goldfields Point of View.]

Omega’s Upcoming Mining Events 2007

§ Hong Kong & Singapore – 28 and 30 August

§ London – 10 and 11 September

§ Frankfurt – 25 and 26 September

§ Amsterdam & Brussels – 16 and 18 October

§ Toronto – 14 and 15 November

§ New York – 19 and 20 November

§ Dubai – 3 and 4 December