buy recommendation deutsche bank

Australasia Australia
M&M - Diversified Resources
23 July 2008
Mincor
Reuters: MCR.AX Bloomberg: MCR AU Exchange: ASX Ticker: MCR
Growing Production and
Fighting Costs
Paul Young
Research Analyst
(+61) 2 8258-2587
[email protected]
Brendan Fitzpatrick
Research Analyst
(+61) 2 8258-1519
[email protected]
Upgrading to BUY on compelling valuation
Mincor reported record production of 16.6kt of nickel for F2008 (12.9kt in F2007)
at a cash cost of US$5.8/lb. Mincor is now trading at a deep discount to our NAV
of A$2.81/share, therefore we upgrade MCR to a BUY. We note that the market is
pricing in a further 5% decline in the nickel price to US$8.5/lb (spot currently
US$9.2/lb) for the next five years, whereby our MCR NAV would decrease to
~A$2.20. However we believe the nickel price is likely to increase in 4Q on
increasing stainless steel demand.
Forecasts and ratios
Year End Jun 30 2007A 2008E 2009E 2010E
Sales (AUDm) 330 342 392 383
EBITDA (AUDm) 176 156 187 184
Net Profit (AUDm) 101 64 78 70
EPS (AUD) 0.52 0.33 0.40 0.36
OLD EPS (AUD) 0.52 0.32 0.42 0.37
% Change 0.0% 1.6% -6.4% -3.4%
PER (x) 4.8 6.8 5.6 6.1
Source: Deutsche Bank estimates, company data
Deutsche Bank AG/Sydney
All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from
local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies.
Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should
be aware that the firm may have a conflict of interest that could affect the objectivity of this report.
Investors should consider this report as only a single factor in making their investment decision.
Independent, third-party research (IR) on certain companies covered by DBSI's research is available to customers of
DBSI in the United States at no cost. Customers can access this IR at http://gm.db.com, or call 1-877-208-6300 to
request that a copy of the IR be sent to them.
DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1
Rating Upgrade
Buy
Price at 23 Jul 2008 2.21
Price target - 12mth 3.20
52 week range (AUD) 5.10 - 2.03
ALL ORDINARIES 5,076
Key changes
Rating Hold to Buy ��
Price target 3.50 to 3.20 �� -8.6%
Sales (FYE) 336 to 342 �� 1.7%
EBIT margin (FYE) 26.1 to 26.1 �� -0.1%
Net profit (FYE) 62.6 to 63.6 �� 1.6%
Price/price relative
1.0
2.0
3.0
4.0
5.0
6.0
7/06
10/06
1/07
4/07
7/07
10/07
1/08
4/08
Mincor
ALL ORDINARIES (Rebased)
Performance (%) 1m 3m 12m
Absolute -35.7 -37.1 -49.6
ALL ORDINARIES -6.2 -9.8 -21.4
Stock data
Market cap (AUDm) 432
Market cap (USDm) 421
Shares outstanding (m) 195.6
Daily volume (USDm) 4.55
Free float 0.00
Key indicators (FY1)
ROE (%) 34.0
ROA (%) –
Net debt/equity (%) -44.8
Book value/share (AUD) 1.15
Price/book (x) 1.9
Net interest cover (x) -33.9
EBIT margin (%) 26.1
Company Global Markets Research
Production beats forecasts by 8%, however costs increase 7%
Mincor produced 4.2kt of nickel during June Q ahead of our forecast 3.9kt.
However as a result of higher mining dilution at the Southern operations, and
higher diesel and labour costs, C1 cash costs increased 7% on March Q to
A$6.5/lb (~US$6/lb), 5% above our forecasts. We see a 10% cost increase over
the next 12 months to A$6.05/lb, slightly ahead of company forecasts (A$6.00/lb).
We expect strong production growth and exploration news flow in F2009
We expect the McMahon and Canilya Hill projects to ramp-up to full production
during F2009 and we expect the Durkin North project (potential 2.6kt of nickel per
annum) to be approved in Sep Q. In addition, we believe that exploration at
Otter/Juan during 1H F2009 could result in the discovery of a major nickel deposit
(50kt+) in the parallel channel next to Juan. Such a discovery could add additional
long life low cost (~A$4.5/lb) nickel production. We expect first drilling results
during Sep Q.
Trading at a deep discount to NAV (A$2.81/share)
Our MCR NAV has declined by ~3% to A$2.81 after increasing our cost forecasts
slightly. Our A$3.20 price target is formulated at ~50% between our A$2.81 and
A$3.60 (upside case) NAV range. Risks to our forecasts include movements in the
nickel price, and AUDUSD. Other risks include capital cost overruns and higher
operating costs due to escalating diesel and labour costs. (See page 6 for detail.)
23 July 2008 M&M - Diversified Resources Mincor
Page 2 Deutsche Bank AG/Sydney
Production Growth vs. Cost
Control
Operational Review – Production beats forecasts, Costs 5%
higher
• June Q Production 8% above forecast – Mincor produced 4.2kt of nickel in
concentrate during June Q, in-line with March Q, but ahead of our forecast 3.9kt.
The Otter Juan operation performed as expected however the Southern Operations
(Miitel, Mariners, Wannaway and Redross) disappointed with mined head grade of
2.17% well below 2.28% reported in the March Q. This was due to higher dilution
at Miitel resulting from the presence of a fault zone at North Miitel. As a result we
have reduced our head grade and therefore production forecasts at North Miitel
going forward. We have also assumed the high cost Wannaway mine closes in June
2009. We note that the McMahon mine development is ahead of schedule, which
is an impressive result in this tough operating environment. The A$23m McMahon
development should produce ~3kt of nickel in concentrate per annum from Sep Q
2008.
• Durkin North approval imminent – We expect the Durkin North project to be
approved during Sep Q 2008. We have assumed a 9 month development schedule
with first production late in June Q 2009, and have modeled a project producing
~2.6kt of nickel in concentrate per annum over a minimum three year mine life.
Average C1 cash costs are forecast at ~US$6.3/lb of payable nickel.
• Costs increase 7% – As a result of the higher dilution at Miitel, and higher diesel and
labour costs, C1 cash costs increased 7% on March Q to A$6.5/lb (~US$6/lb), and
were 5% above our forecasts. In particular, mining costs increased by ~15%. The
company is implementing a cost control program at its Southern Operations, and
will begin using smaller equipment in an effort to reduce dilution and hence increase
grade.
Figure 1: Production performance and forecasts (kt of nickel in concentrate)
Division March Q 2008 June Q 2008
(Actual)
June Q 2008 (DB
Forecast)
2008E 2009E 2010E
Southern Operations 3.2 3.0 2.7 11.8 10.5 7.4
Northern Operations 1.0 1.2 1.2 4.8 8.5 12.5
Total 4.2 4.2 3.9 16.6 19.0 20.0
Source: Deutsche Bank, Company data
Figure 2: C1 cash cost performance and forecasts (A$/lb payable nickel)
Division March Q 2008 June Q 2008
(Actual)
June Q 2008 (DB
Forecast)
2008E 2009E 2010E
Southern Operations 6.6 7.3 6.9 7.1 7.4 7.6
Northern Operations 4.7 5.0 4.5 4.8 6.3 6.3
Total 6.1 6.5 6.2 6.4 6.9 6.8
Source: Deutsche Bank, Company data
23 July 2008 M&M - Diversified Resources Mincor
Deutsche Bank AG/Sydney Page 3
Figure 3: Nickel production (kt in concentrate) and costs Figure 4: Nickel production (kt in conc) by deposit
16.6
19.0 20.0 19.1
14.8
12.9
5.60
5.75
5.15
5.91
6.08
6.45
0
5
10
15
20
25
30
35
40
2007 2008E 2009E 2010E 2011E 2012E
4.0
4.5
5.0
5.5
6.0
6.5
7.0
Production (LHS) Cash Costs (RHS)
Kt US$/lb
0.0
5.0
10.0
15.0
20.0
25.0
2007 2008E 2009E 2010E 2011E 2012E
Miitel Wannaway Redross Mariners
Carnilya Hill Otter Juan McMahon Durkin North
Kt
Source: Deutsche Bank Source: Deutsche Bank
Figure 5: Earnings sensitivity to the nickel price
F2009 F2010
Nickel (US$/lb) Ac/share % change PER (x) Ac/share % change PER (x)
9.00 14.4 -64% 15.3x 19.4 -46% 11.4x
8.50 5.4 -87% 40.9x 8.5 -76% 26.0x
Source: Deutsche Bank estimates
Figure 6: DB nickel, copper and AUDUSD forecasts (2007-2013E)
1691
900
200
1000
1139
1025 1000 1204
250 275
310
376
323 366
0.84
0.94
0.81 0.83
0.85
0.88
0.91
150
550
950
1350
1750
2007 2008E 2009E 2010E 2011E 2012E 2013E
0.50
0.60
0.70
0.80
0.90
1.00
Nickel Price (LHS) Copper Price (LHS) AUD USD Rate (RHS)
US ¢/lb
Source: Deutsche Bank, IRESS
Figure 7: DB nickel supply/demand model
Kt 2005 2006 2007 2008 2009 2010
World refined production 1288 1361 1429 1542 1674 1809
World refined
consumption
1272 1388 1383 1527 1657 1765
Market balance 15.9 -27.3 46.3 14.3 16.4 43.5
Stk-to-Consptn ratio
(wks)
5.7 3.9 5.7 5.6 5.7 6.6
Average cash price
(USD/t)
14,751 24,237 37,060 26,539 25,105 22,597
Average cash price
(USD/lb)
6.69 10.99 16.81 12.04 11.39 10.25
Source: INSG, Brook Hunt, DB Global Markets Research
23 July 2008 M&M - Diversified Resources Mincor
Page 4 Deutsche Bank AG/Sydney
2005A 2006A 2007A 2008F 2009F 2010F 2011F
OPERATING PROFIT BY DIVISION (A$m) NET PRESENT VALUE (Dec-08)
Mittel 42.2 37.8 71.0 37.3 26.5 17.5 15.0 A$m A$ps (%)
Wannaway 2.0 1.9 5.8 3.7 2.5 - - Mittel 100 0.51 23%
Redross 0.6 22.6 66.5 35.4 23.0 - - Wannaway 1 0.00 0%
Mariners 1.4 4.3 47.1 39.1 26.2 19.7 17.6 Redross 10 0.05 2%
Carnilya Hill - - - 1.6 26.0 36.3 27.8 Mariners 53 0.27 12%
Otter Juan - - - 65.3 53.5 48.9 44.1 Carnilya Hill 73 0.37 16%
McMahon - - - - 15.7 18.5 12.7 Otter Juan 105 0.54 24%
Durkin North - - - - 1.9 18.5 16.8 McMahon 47 0.24 11%
Other (17.0) (26.0) (49.7) (93.2) (68.0) (65.0) (56.0) Durkin North 47 0.24 11%
Total Consolidated Operating Profit 29.2 40.6 140.7 89.2 107.3 94.4 78.0 Hedging - - 0%
Exploration 50 0.26 11%
Corporate (44) (0.22) -10%
PRODUCTION (pre-payable) Gross Asset Value 442 2.26 100%
Miitel Nickel in Conc (t) (100%) 6,884 6,102 4,901 4,084 4,027 3,914 3,914 3,914 Net debt (107) (0.55)
Wannaway Nickel in Conc (t) (100%) 924 641 519 512 464 - - - Valuation 549 2.81
Redross Nickel in Conc (t) (100%) 1,537 3,999 3,891 2,959 2,488 - - -
Mariners Nickel in Conc (t) (100%) 701 2,754 3,616 3,899 3,529 3,529 3,529 1,765 *NPV discounting rate: 8.0%
Carnilya Hill Nickel in Conc (t) (70%) - - - 382 1,492 2,617 2,699 2,208
Otter Juan Nickel in Conc (t) (100%) - - - 4,726 4,499 4,499 4,284 4,284 FX/COMMODITY ASSUMPTIONS
McMahon Nickel in Conc (t) (100%) - - - - 2,270 2,802 2,102 - 2008F 2009F 2010F
Durkin North Nickel in Conc (t) (100%) - - - - 262 2,615 2,615 2,615 USD/AUD 0.90 0.93 0.90
Total 10,046 13,496 12,927 16,562 19,030 19,976 19,144 14,787 Nickel 1294 1180 1050
Copper 353 378 336
SALES REVENUE - Consolidated (A$m)
Miitel Nickel in Conc 84 77 119 83 75 67 66
Wannaway Nickel in Conc 11 8 13 10 9 - - SENSITIVITY ANALYSIS
Redross Nickel in Conc 19 50 97 61 46 - - (EPS Change (%) for a 10% change in)
Mariners Nickel in Conc 8 35 88 79 66 60 59 USD/AUD - (29.1) (35.4)
Carnilya Hill Nickel in Conc - - - 7 28 45 45 Nickel 0.00 26.29 30.56
Otter Juan Nickel in Conc - - - 96 84 77 72
McMahon Nickel in Conc - - - - 43 48 35
Durkin North Nickel in Conc - - - - 5 45 44
Operating Profit by Division (2008F)
CASH COST (US$/lb)
Mittel 2.78 3.18 5.30 6.92 7.03 6.80 6.65 6.49
Wannaway 5.28 5.10 7.56 8.70 9.48 - - -
Redross 4.24 3.50 4.09 5.10 6.08 - - -
Mariners 4.59 5.40 5.75 6.43 7.01 6.78 6.61 6.44
Carnilya Hill - - - 7.30 5.78 5.31 5.13 5.04
Otter Juan - - - 4.15 4.09 3.97 3.89 3.81
McMahon - - - - 8.98 6.95 6.74 -
Durkin North - - - - 10.22 7.57 7.34 7.14
Average 3.36 3.82 5.15 5.75 6.45 6.08 5.91 5.60
NPV by Division (2009F-2011F) Debt, Equity & ROCE (%) Free Cashflows, Capex & Dividend
Mittel
20%
Wannaway
2%
Redross
19% Mariners
21%
Carnilya Hill
1%
Otter Juan
37%
0%
20%
40%
60%
80%
100%
2009F 2010F 2011F
Mittel Wannaway Mariners
Carnilya Hill Otter Juan McMahon
Durkin North
0
100
200
300
400
500
2007A 2008F 2009F 2010F 2011F
0%
20%
40%
60%
80%
100%
Debt (LHS) Equity (LHS) ROCE (RHS)
-150
-100
-50
0
50
100
150
2007A 2008F 2009F 2010F 2011F
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
FCF (LHS) Capex (LHS) DPS (RHS)
23 July 2008 M&M - Diversified Resources Mincor
Deutsche Bank AG/Sydney Page 5
Model updated: 23 July 2008 Y/E 30 June 06/07 07/08E 08/09E 09/10E 10/11E 11/12E
PROFIT & LOSS (A$m)
Sales revenue 330 342 392 383 355 277
EBITDA 176 156 187 184 168 131
Depreciation/amortistation 35 67 80 90 90 63
EBIT 141 89 107 94 78 68
Net interest income (expense) 4 3 5 8 11 15
Income tax expense 44 28 35 32 28 26
Associates/affiliates 0 0 0 0 0 0
Minorities/preference dividends 0 0 0 0 0 0
Net profit 101 64 78 70 61 58
Significant items 0 0 0 0 0 0
Net profit excluding significant item 101 64 78 70 61 58
Net abnormals and extraordinaries 0 0 0 0 0 0
CASH FLOW (A$m)
Cash flow from operations 192 103 158 160 152 121
Movement in net working capital -2 15 0 0 0 0
Capex -29 -86 -93 -77 -46 -23
Free cash flow 163 17 65 83 106 98
+61 2 8258 2587 [email protected] Other investing activities -24 -66 -20 -20 -8 -8
Equity raised/(bought back) 2 1 0 0 0 0
Dividends paid -18 -18 -12 -12 -12 -12
+61 2 8258 1519 [email protected] Net inc/(dec) in borrowings 0 0 0 0 0 0
Other financing cash flows 0 0 0 0 0 0
Total cash flows from financing -15 -18 -12 -12 -12 -12
Net cash flow 124 -66 33 52 86 78
Movement in net debt/(cash) -124 65 -33 -52 -86 -78
BALANCE SHEET (A$m)
Cash and other liquid assets 170 104 137 188 274 352
Tangible fixed assets 50 118 191 208 163 123
Goodwill 0 0 0 0 0 0
Other intangible assets 0 0 0 0 0 0
Associates/investments 0 0 0 0 0 0
Other assets 91 101 106 111 113 115
Total assets 311 322 433 507 550 590
Interest bearing debt 3 3 3 3 3 3
Other liabilities 157 95 95 95 95 95
Total liabilities 161 97 97 97 97 97
Shareholders' equity 150 225 336 409 453 493
Minorities/other 0 0 0 0 0 0
Total shareholders' equity 150 225 336 409 453 493
Net working capital 57 43 43 43 43 43
Net debt/(cash) -166 -101 -134 -185 -271 -349
RATIO ANALYSIS
52-week High/Low: A$5.10 - 2.03 Sales growth - pcp (%) na 3.7 14.8 -2.3 -7.5 -22.0
Market Cap (m) A$ 440 EBITDA/sales (%) 53.3 45.8 47.7 48.1 47.5 47.5
US$ 427 EBIT/sales (%) 42.7 26.1 27.3 24.6 22.0 24.7
Payout ratio (%) 11.5 18.4 15.1 16.7 19.2 20.4
DCF VALUATION (A$) ROA (%) 206.0 41.9 44.5 33.5 30.7 31.3
ROE (%) 91.5 34.0 27.7 18.9 14.2 12.2
Operating Return on Capital (%) nm 69.2 49.2 34.1 32.9 37.0
Tax rate (%) 30.1 30.7 31.0 31.0 31.0 31.0
Capex/sales (%) 8.7 25.2 23.7 20.1 13.0 8.2
Net value per share ($) Capex/depreciation (x) 0.8 1.3 1.2 0.9 0.5 0.4
Price/NPV (x) 0.79 Net debt/equity (%) -110.6 -44.8 -39.8 -45.3 -59.9 -70.9
Net interest cover (x) -32.4 -33.9 -19.8 -12.4 -7.2 -4.5
6.8
0.516 0.325
78 68
94 78 68 107 Total Company description 141 89
141 89 107 94
0.360 0.516 0.325
-36.9 na
4.8
Equity Research SUMMARY
0.397
7.5
0.313 0.295
7.1 5.6 6.1
Other Metals
Australia Normalised EPS growth (%)
P/E ratio normalised (x) Asia Pacific
Normalised EPS (A$)
EPS FD (A$)
-5.9 22.2
6.8 5.6
0.397
-9.5 -12.9
0.295 0.360 0.313
Operating CFPS (A$)
4.8 P/E ratio FD (x)
0.978
P/CFPS (x) Mincor Resources Nl DPS (A$)
Reuters: MCR.AX Bloomberg: MCR AU Sedol: 6000521 Price/BV (x)
Dividend yield (%)
Enterprise Value (A$m)
2.81
Target price
Mincor operates six mines clustered around
Kambalda in Western Australia. Mincor acquired
of the Otter/Juan mine in July 2007 for A$68m,
allowing Mincor to target a production rate of
20kt of nickel in concentrate per annum by 2010.
Most importantly the Otter/Juan operation
provides Mincor with exploration upside that
could result in additional deposits being
discovered.
Price as at 23-Jul A$2.21
Paul Young
Source: Company data, DB estimates
EV/EBITDA
EV/EBIT
A$3.20 DIVISIONAL EBIT (A$m)
Buy
Other
http://www.mincor.com.au
Company website
7.5
2.7 2.7
0.060 0.060
0.820 0.775
2.7 2.9
0.060
6.1 7.1
2.7
0.806 0.528
2.5 4.2
0.95
2.7
0.060 0.060 0.060
2.4
1.06
2.7
0.9
0.617
3.6
0.88
315 373 204
1.8 2.9 2.6
1.2 1.5
273 122
2.9
2.1 1.9 1.7
2.7 3.3
2.7
1.92 3.22
Research Team
299
1.29
Brendan Fitzpatrick
Absolute Price Return (%)
-35%
-36%
-46%
-50% -40% -30% -20% -10% 0%
1m
3m
12m
0
10
20
30
40
50
60
07 08E 09E 10E 11E 12E
EBITDA/sales (%)
EBIT/sales (%)
Trends
0
50
100
150
200
250
07 08E 09E 10E 11E 12E
ROE (%) ROA (%)
op ROC (%)
Return Ratios (%)
-400
-350
-300
-250
-200
-150
-100
-50
0
07 08E 09E 10E 11E 12E
-120
-100
-80
-60
-40
-20
0
Net debt / (cash) (AUD m)
Net debt/equity (%)
Net Debt (Cash) / Equity (%)
23 July 2008 M&M - Diversified Resources Mincor
Page 6 Deutsche Bank AG/Sydney
Investment Thesis
Outlook
In our opinion, Mincor is an undervalued nickel producer trading at a ~20% discount to our
base case NAV of A$2.81/share and at a 60% discount to our upside NAV of A$3.60/share. It
appears that the market applies a low premium on the stock due to the short life and high
cost nature of its operations. However we believe this is about to change. The company’s
acquisition of the Otter/Juan mine in July 2007 for A$68m, in our opinion, was a company
changing acquisition allowing Mincor to reach the production target of 20kt of nickel in
concentrate per annum by 2010 and reduce the company’s average C1 cash cost by ~5% to
US$6/lb, although we note costs are likely to remain above Mincor’s peer group. Most
importantly the Otter/Juan operation provides Mincor with exploration upside that could
result in the discovery of multiple and major nickel deposits (50kt+) within the next 18
months. We rate Mincor as a BUY as the stock is trading at a deep discount to our base case
NAV.
Valuation
We value MCR at A$2.81/share. Our price target of A$3.20 is formulated at ~50% between
our MCR base case and upside case valuation of A$3.60/share. After a review of Mincor’s
assets we believe there is a 50% chance Mincor could discover additional resources that
would underpin our upside case valuation.
Risks
Macro risks include movements in the nickel, copper, and AUDUSD. Project execution risk,
capital cost overruns and potential project delays exist at the Durkin North, Canilya Hill and
McMahon projects. Additional downside risk could result from higher than excepted costs at
Mincor’s existing operations due to higher diesel, labour and explosive costs.
23 July 2008 M&M - Diversified Resources Mincor
Deutsche Bank AG/Sydney Page 7
Appendix 1
Important Disclosures
Additional information available upon request
Disclosure checklist
Company Ticker Recent price* Disclosure
Mincor MCR.AX 2.14 (AUD) 22 Jul 08 8
*Prices are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies.
Important Disclosures Required by U.S. Regulators
Disclosures marked with an asterisk may also be required by at least one jurisdiction in addition to the United States. See
“Important Disclosures Required by Non-US Regulators” and Explanatory Notes.
8. Deutsche Bank and/or its affiliate(s) expects to receive, or intends to seek, compensation for investment banking services
from this company in the next three months.
For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this
research, please see the most recently published company report or visit our global disclosure look-up page on our
website at http://gm.db.com.
Analyst Certification
The views expressed in this report accurately reflect the personal views of the undersigned lead analyst(s) about the subject
issuer and the securities of the issuer. In addition, the undersigned lead analyst(s) has not and will not receive any
compensation for providing a specific recommendation or view in this report. Paul Young
Historical recommendations and target price: Mincor (MCR.AX)
(as of 22/07/2008)
1
0.00
1.00
2.00
3.00
4.00
5.00
6.00
Jul 06 Oct 06 Jan 07 Apr 07 Jul 07 Oct 07 Jan 08 Apr 08
Date
Secur ity P r ice
Previous Recommendations
Strong Buy
Buy
Market Perform
Underperform
Not Rated
Suspended Rating
Current Recommendations
Buy
Hold
Sell
Not Rated
Suspended Rating
*New Recommendation Structure
as of September 9, 2002
1. 3/7/2008: Hold, Target Price Change AUD3.50
23 July 2008 M&M - Diversified Resources Mincor
Page 8 Deutsche Bank AG/Sydney
Equity rating key Equity rating dispersion and banking relationships
Buy: Based on a current 12- month view of total shareholder
return (TSR = percentage change in share price
from current price to projected target price plus projected
dividend yield ) , we recommend that investors
buy the stock.
Sell: Based on a current 12-month view of total shareholder
return, we recommend that investors sell the
stock
Hold: We take a neutral view on the stock 12-months
out and, based on this time horizon, do not recommend
either a Buy or Sell.
Notes:
1. Newly issued research recommendations and target
prices always supersede previously published research.
2. Ratings definitions prior to 27 January, 2007 were:
Buy: Expected total return (including dividends) of
10% or more over a 12-month period
Hold: Expected total return (including dividends)
between -10% and 10% over a 12-month period
Sell: Expected total return (including dividends) of -
10% or worse over a 12-month period
6%
45% 49%
22%
25% 22%
0
20
40
60
80
Buy Hold Sell
Australia Universe
Companies Covered Cos. w/ Banking Relationship
23 July 2008 M&M - Diversified Resources Mincor
Deutsche Bank AG/Sydney Page 9
Regulatory Disclosures
SOLAR Disclosure
For select companies, Deutsche Bank equity research analysts may identify shorter-term trade opportunities that are
consistent or inconsistent with Deutsche Bank's existing longer term ratings. This information is made available only to
Deutsche Bank clients, who may access it through the SOLAR stock list, which can be found at http://gm.db.com
Disclosures required by United States laws and regulations
See company-specific disclosures above for any of the following disclosures required for covered companies referred to in
this report: acting as a financial advisor, manager or co-manager in a pending transaction; 1% or other ownership;
compensation for certain services; types of client relationships; managed/comanaged public offerings in prior periods;
directorships; market making and/or specialist role.
The following are additional required disclosures:
Ownership and Material Conflicts of Interest: DBSI prohibits its analysts, persons reporting to analysts and members of their
households from owning securities of any company in the analyst's area of coverage.
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