UK Tel.: 0044 (0) 1886 832215,, UK Mobile: 0044 (0) 7809 146880, Spain Mobile: 0034 630 166 777

London Phuket Puerto Banus Hong Kong

Buzz Inc Resources

just part of the buzz…

Strong buying by China has helped lift commodity prices around the world this spring, but growing evidence suggests that a siz-able portion of this buying has been to build stockpiles in China, and may not be sustainable. At least 90 large freighters full of iron ore are idling off Chinese ports, where they face waits of up to two weeks to unload be-cause port storage operations are overflowing, chief executives of shipping companies said in interviews this week. Yet actual steel production from that iron ore is recovering much more slowly in China, and Chinese steel exports remain weak. Commodities and shipping executives describe Chinese stock-piling in recent months of a range of other commodities as well, including aluminum, copper, nickel, tin, zinc, canola and soy-beans. Starting in April, China began stockpiling significant quantities of crude oil. China’s goals vary by commodity. Chinese companies have bought iron ore heavily on the spot market in anticipation of higher prices in annual contract talks now nearing completion. The Chinese government has been stockpiling oil and some met-als for strategic reasons, and bought huge quantities of alumi-num and canola to insulate domestic producers of these goods from falling global prices over the winter. “There has been enormous stockpiling of all commodities” by China, and this cannot continue indefinitely, said Tim Huxley, the chief executive of Wah Kwong Maritime Transport Hold-ings, a big shipping line based here. Those extra purchases beyond China’s daily needs have helped reverse the price collapse in commodities that followed the eco-nomic downturn, but could also limit the scale of the rebound.

China’s Commodity Buying Spree

Moody’s Investors Service announced on Wednesday that it was putting a negative outlook on the base metals, mining and steel industries in Asia and the Pacific, having previously done so for these sectors elsewhere. “China’s strategic stockpiling and replacement of lower-qual-ity domestic production with higher-quality imports have sup-ported the recent rally in prices for many base metals, but we will not see a sustainable turnaround in demand until the ma-jor economies of the U.S., Europe, and Japan recover,” said Terry Fanous, a senior vice president in Sydney for Moody’s, adding that the leading economies were not likely to recover until next year.

In the latest sign of weak overseas demand, the Chinese gov-ernment announced on Thursday morning that the country’s exports fell 26.4 percent in May from a year earlier. Imports were down 25.2 percent from a fairly weak level a year ago, as China’s overall trade surplus continued to narrow, to $13.39 billion. The Standard & Poor’s GSCI, an index of global commodity prices, has risen 42 percent from its low on Feb. 18, but is still less than half its record, set on July 3. One of the best leading indicators of international trade in commodities is the Baltic Exchange Dry Index, which mea-sures the daily cost of chartering a large freighter. While the GSCI has continued to rise in the last week, the freight index has fallen by a fifth in that period. Richard S. Elman, the chief executive of the Noble Group, Asia’s largest diversified commodities trading company, bounced up from the conference table in his office here when asked about freight rates during an interview on Tuesday morning. He walked over to his desk, dominated by three computer screens that partly obscure a perfect view of Hong

Kong’s harbor, and quickly punched up on one screen a list of daily charter rates for large bulk carrier freighters. The list showed ship owners charging $58,000 a day now but just $24,000 a day for charters next year or in 2011 — an indication that there will be more ships than cargoes in the years ahead, particularly with shipyards still finishing vessels ordered during the recent boom. Pointing to the rates for the next two years, he said, “That’s the real market” for ships. From an immense new sugar mill in Brazil to an extensive coking coal operation in Australia, Noble is active in com-modities around the globe, and its stock has nearly quadru-pled since its low on Oct. 24. Mr. Elman voiced optimism about the future of the Chinese economy and of worldwide demand for commodities, but cautioned that for some com-modities, “the futures prices have gone ahead” of the prices for physical delivery. According to J.P. Morgan, China’s iron ore imports were 33 percent higher in April than a year ear-lier. Crude oil imports were up nearly 14 percent, aluminum oxide imports climbed 16 percent and refined copper imports jumped 148 percent. Imports of coal soared 168 percent as Chinese utilities bought more foreign coal while trying to negotiate better prices with domestic producers. Determining the percentage of each commodity being stock-piled is difficult, especially in China, where scant data are released. Assessing steel demand, in particular, has become a subject of almost obsessive interest among many shipping executives and economists as a barometer of emerging mar-kets’ health and as an indicator of demand for things like iron ore and cars. Sanjay Mehta, one of the four managing directors of Essar Global, the big Indian multinational in steel, shipping and other heavy industries, estimated that North American steel mills were operating at 50 to 60 percent of capacity, Chinese steel mills at 70 percent of capacity and Indian steel mills at 100 percent of capacity. The resilience of the Indian economy is helping to sustain de-mand for commodities, he said. But he was cautious about the global economy. He suggested that part of China’s pur-chasing over the last several months represented an effort to rebuild inventories that were drawn down during the autumn and winter. “It is not all related to consumption,” he said, predicting that prices would stay roughly at current levels through the middle of 2011. Prices of many commodities have jumped sharply in recent months — spot oil prices, in particular, have doubled since late December. That is driving up the price of gasoline and diesel in many countries.

Steel demand in China is already recovering for types of steel

Steel demand in China is already recovering for types of steel used in construction,

used in construction, Mr. Elman said. Local, provincial and national government agencies are ramping up investments quickly as part of economic stimulus programs. But demand has been slower to rebound for higher grades of steel used in consumer products, despite $1 billion in Chinese government incentives for the purchase of cars and household appliances. Some economists say they are bullish on commodities because they believe that the United States and European economies are on their way to recovery. “The commodity price rally is for real,” said Ajay Kapur, the chief global strategist at Mirae Asset, a big Korean fi-nancial firm. “I’m not expecting any huge correction from here.” Other executives, particularly in shipping, are less optimis-tic, and see signs of a bubble in freight rates, and possibly commodities, that may repeat the sudden rise and fall of prices last year. “The past two weeks have been nuts and, rather than cheer-ing this sudden comeback of the dry bulk market, I do have a considerable amount of concern that we are seeing the same bubble again,” Kenneth Koo, the chairman and chief executive of the Tai Chong Cheang Steamship Company, another big Hong Kong shipping line, wrote in an e-mail message. “And like that past bubble, it’s not going to sus-tain.

Frustrated by political interference in Australia as it tries to buy natural resources there, China is changing tack and will use homegrown private equity firms as a more subtle weapon

to seek out overseas deals.

China eyes public and private equity for

overseas M&AResources-focused private equity firms are raising billions of dollars and, in terms of deal making, will be far more nimble than China's massive state conglomerates, said two sources fa-miliar with the matter.The funds will also be able to cut smaller deals under the ra-dar and avoid the type of scrutiny that has slowed Chinalco's $19.5 billion tie-up with Rio Tinto (RIO.L)(RIO.AX).A group of around 300 mine entrepreneurs recently raised 500 million Yuan ($73.25 million) for the China Mining United Fund, its chairman Zheng Zhi told Reuters, and the fund aims to raise up to 10 billion yuan to target Western Europe, Africa and Australia for resources such as gold, copper and iron ore.

It is already investigating about 30 projects, Zheng said.Despite the fund's small size compared to state-owned giants such as Chinalco, Minmetals, and Hunan Valin Iron & Steel, its cozy relationship with Beijing and alignment with official economic policy, is clear."We private entrepreneurs think it's important to secure valu-able overseas resources, partly for the sake of our country," Zheng said. "We're getting a lot of support from the govern-ment for overseas asset acquisitions."HUNGER GROWINGChina's hunger for overseas resources shows little sign of fa-tigue, and is not dampened by the political sensitivities of big deals such as the Chinalco-Rio tie-up, or Minmetals' $850 mil-lion deal with OZ Minerals (OZL.AX) regional dealmakers say.Firms such as Felix Resources (FLX.AX), Teck Resourc-es (TCKb.TO), Freeport McMoran Copper & Gold Inc

Several other resource-focused private equity firms are cropping

up across China, in addition to the China Mining United Fund.

(FCX.N), Equinox Minerals (EQN.TO) and Cliffs Natural Re-sources (CLF.N) have been named in recent months by bankers and analysts as potential deal targets for Chinese firms."They won't be Rio sized deals," a Hong Kong-based invest-ment banker with a bulge bracket firm told Reuters."I think when people get $19 billion in their heads, they think, aw c'mon, but when you step back there's a number of deals happening that are relatively significant," the source added.Case in point: In early May, Chinese state-owned China Non-ferrous Metal Mining Group (CNMC) agreed to take a majority stake in Australian rare earths miner Lynas Corp Ltd (LYC.AX) for roughly $186 million.MORE FUNDSSeveral other resource-focused private equity firms are crop-ping up across China, in addition to the China Mining United Fund.China's Shanxi province, home to roughly one third of the coun-try's coal deposits, teamed up with local coal miners and asset managers to set up the 10 billion yuan Shanxi Energy Industry Investment Fund, which began investing earlier this year, the two China-based sources told Reuters.All sources declined to be named because they were not autho-rized to speak publicly about the matter.Beijing is also reviewing a proposal to set up China's first Avia-tion Industry Investment Fund, which aims to raise 5 billion Yuan in its first stage, local media reported.One of the fund's investment focuses will be energy assets, for example, aviation fuel and related support services, at home and abroad to support the development of China's aviation in-dustry.In April, state media reported China Guangdong Nuclear Pow-er Group launched a 10 billion yuan fund, the China Nuclear Power and New Energy Industry Investment Fund -- the first such specialist fund backed by the Chinese government.

A recent nuclear deal fell under the media radar due to its small size.In March, Western Prospector Group Ltd (WNP.V), a Mongo-lia-focused uranium miner, said it agreed to be bought by a unit of CNNC International Ltd (2302.HK) for about $25 million.CNNC Overseas Uranium Holding Ltd, a unit of uranium de-veloper and nuclear fuel company China National Nuclear Co-operation, holds 74 percent in CNNC International."Don't underestimate these small companies," said one of the China-based sources, referring to Chinese fund-backed deals. "One day, if you combine them all, they can also become a market leader in a specific sector."($1=6.826 Yuan)(Additional reporting by Samuel Shen in SHANGHAI, Editing by Ian Geoghegan)

In April, China announced that it purchased 454 metric tons of gold over the past six years. However, gold isn’t the only metal the Chinese have been buying. According to Michael Gaylard of Freight Investor Services, “They are building up some stockpiles right across the commodity spectrum, from base metals to coal.”

China is taking advantage of the low commodity prices to scoop up bargains. The nation has been buying so much cop-per that the market slipped into a deficit in February, draw-ing down stockpiles, as average mine utilization fell 9%. Iron ore imports were up 33% in April, to a record 57 mil-lion metric tons. Chinese purchasers visited Mozambique in May to lock in deals for base metals like aluminum. The nation just finalized a $9 billion deal with the Democratic Republic of Congo to develop copper and cobalt mines in exchange for infrastructure projects like roads, schools and hospitals. Recently thwarted in its attempts to invest in Rio Tinto, China has reached an agreement to acquire an Aus-tralian miner, Oz Minerals.

China’s Move to Real Assets

In addition to coal, China is assuring its access to adequate energy supplies. The nation increased its oil imports 13.6% in April. The government also awarded a US$25 billion loan to two Russian energy companies to lock in 300,000 barrels of crude per day for 20 years. This is part of the Chinese strategy to increase its crude stockpiles from about 30 days of use to 90-100 days supply.

China’s public acknowledgement that it had secretly built gold reserves has opened eyes.

China is not neglecting its need to secure food stores, either. The official Xinhua news agency is citing experts who recommend the nation accumulate 50 million metric tons of soybeans. The Chinese are purchasing tons of soybeans now, to try to avoid end of crop year rationing. Stockpiles are expected to run very low before the new crop is harvested in the fall, as Argentina’s harvest was much smaller than expected. Much higher prices are anticipated this summer.

Although soybeans have gained more than 46% since March, there is still room for appreciation. As of two weeks ago, Chi-nese soybeans cost more than $2 per bushel more than U.S. beans, so the backhaul and arbitrage makes it worthwhile to import this essential foodstuff.

I predicted tight supplies and Chinese purchases in my essay A Growing Problem, which was published on several financial websites in December. That week, we saw a bottom in the grain complex, and the beginning of a robust rally in the CRB.

The Move to Real AssetsReaders of lemetropolecafe.com are already aware that back in April 2006 I formulated and publicized a theory that China was quietly shifting from dollar-denominated Treasury assets into commodity stockpiles. Their targets included especially copper and other metals, but also agricultural commodities. Peter Rhalter on the Café christened it the “China Hoard The-ory.”

Through the years I have uncovered additional data to sup-port my theory. I detailed the rotational model the Chinese use to purchase metals on the London Metal Exchange, allowing inventories to build and the price to fall. Once the commodity was cheap again and inventory was plentiful, China would ro-tate back to purchasing that metal. I articulated the backhaul shipping mechanism they used to cheaply ship heavy com-modities back to China on the return voyages of ships loaded with consumer goods.

China’s public acknowledgement that it had secretly built gold reserves has opened eyes. This has now spurred im-portant voices in the financial world to align with the China Hoard Theory, acknowledging a broader Chinese strategy to get out of the dollar and into real assets. The Royal Bank of Canada stated that “China is stockpiling commodities such as copper and iron ore as part of a reallocation of its sovereign wealth amid concern that the value of its dollar assets may de-cline.” In April, Ambrose Evans-Pritchard realized the folly of China’s vendor financing with its customer America in a severe economic downturn. Also that month, Jim Puplava and Puru Saxena analyzed the Chinese desire to exchange paper promises for shrinking supplies of depleting minerals. Having correctly called China’s commodity strategy years ago is a great triumph for me as an analyst.

Other pundits have deprecated the commodity rebound, claiming that China is just spending stimulus money that will soon run out. However, I think this uptrend is more than an aberration. Instead of “green shoots” in the U.S. we are seeing bamboo shoots in Asia. Even with China having its worst year since 1992, its first quarter GDP grew 6.1% year-over-year, a strength other countries envy.

Industrial production was strong last month as well. Zapata George Blake notes that tire plants in China are running full shifts - a leading indicator of a rebound in auto manufactur-ing. This will continue to boost the price of related commodi-ties like palladium, which made a recent high of $262, up 45% for the year.

Other measures corroborate a recovery in China. The CRB Index is up nearly 32% since its lows in December. The Baltic Dry Index, a measure of global shipping demand, reached 4,291 this week, more than six times its December low of 663, but still less than half its 2008 high. It smashed its 200 day moving average to the upside, and went nearly parabolic before correcting. This indicates higher demand as well as some loosening in the credit markets.

The resurgence in these indices and the rise of U.S. stock markets on poor fundamentals is also sig-naling a resurgence of price inflation. The world’s central banks can’t flood the globe with liquidity in a move they euphemistically call qualitative easing without pushing the cost of goods much higher. The Federal Reserve is the globe’s worst offender in this area, swapping banks’ toxic assets for Treasuries which these financial institutions can use as collateral for other risky deals. With banks deemed “too big to fail,” the taxpayer is on the hook for any further losses, and the regulators do little to rein in excesses.

I believe that hyperinflation is sadly inevitable, so it’s wise to copy the Chinese. Make sure you have a heavy weighting in the precious metals, the saf-est assets of all. Then swap your excess dollars for real assets like nonperishable food and other necessities. Avoid leverage in all commodity in-vestments, as the volatility can cause big losses if you are on margin.

by Jennifer Barry

Global Asset Strategist

Contact Us:7@12buzz.com

I share more than nationality with Mr. Gutnick, both of us have very clearly annoyed the ASX and ASIC with our takeover tactics, and both of us have had our problems with Australia’s Andrew Forrest . Forrest's reputation in the corporate world was in tatters by the end of the episode at Anaconda, which included the Victorian Supreme Court finding Anaconda had breached the Trade Practices Act in a case of "misleading and deceptive conduct" in a deal with Joseph Gutnick's Centaur Mining.

Having waited many years for Forrest to come good on promises I have been left with little option but to pursue debts in relation to services performed for Forrest at Anaconda, and a personal loan made at the 11th hour to stop the bank seizing his family home, Like the Gutnick-Forrest case Forrest had made himself a family friend, visited my family in Hong Kong, Manila (on September 11, 2001) and London, and even brought his wife to private family dinners with us. I remember well a tearful Forrest sitting in my office with his lawyer Simon Clarke asking for me to provide a buffer zone so he could rebuild his business, and so I did the next morning $3.3m USD was dispatched to Forrest. The deal provided an interest in Forrests’ next venture, which turned out to be Fortescue Metals.

So it is easy to imagine my shock when my last call to him was handed to some pretentious secretary who dismissed me quickly and suggested perhaps court was the best remedy. And so it shall be.

Gutnicks Come Back

Joseph Isaac Gutnick (sometimes referred to as “Diamond Joe”) is an Australian businessman. He is well known for his leadership of Great Central Mines and other resource and mining businesses. He is also an ordained Rabbi. He is the President and CEO of Legend International Holdings (OTCBB: LGDI) a mining company focused on phosphate exploration in the North East of Australia.

He is an Orthodox Jew and a member of the Chabad-Lubavitch Hasidic movement. According to Gutnick, it was Rabbi Menachem Mendel Schneerson who pointed out to him the precise geological points on a map of Australia to commence mining for gold. He is also closely linked to Benjamin Netanyahu and was instrumental in his election as prime minister of Israel in 1996.

In 1999, he, along with partner Robert Champion de Crespigny, were found to have illegally structured a takeover of a min-ing company and Gutnick was ordered to return $28.5 million to investors. The court found that their behavior in jointly bidding $450 million earlier that year, for a company called Great Central Mines, was unlawful and deceptive.

Gutnicks Legend International Holdings

Legend International Holdings, Inc. (Legend) is an exploration stage company. The Company is engaged in mineral explo-ration and development activities. Legend primarily focuses in the development of its phosphate interests in the Georgina Basin in Queensland. The Legend landholdings, prospective for phosphate, diamonds and base metals, cover 40,525 acres in Queensland, Australia, and 4.7 million acres in the Northern Territory, Australia. In Queensland, Legend’s holdings are historical phosphate deposits located in the Mt. Isa district. Legend’s mining tenements are divided into three project areas: Phosphate Projects, which include The Queensland Phosphates; Diamond Projects, which includes Glyde River, Foelsche, Abner Range and Cox in the Northern Territory, and Base Metals, which includes McArthur River and Selby Project in the Northern Territory.

My Buzz Inc

I have worked with major mining companies like Anaconda and Ivanhoe, in excess of 10 listed mining companies in Aus-tralia as well as listed technology companies like Estar and financial services companies like Bartons, all at the finance/mar-ket end of the business. I have also extensively worked with Governments and “would be“ Governments, A more complete bio will be on the Buzz Inc site in the near future. Bottom Line is I have been directly involved in the funding or planning of a number of multi-billion dollar companies and an abundance of $100m plus companies.

Buzz Inc has grown from a Technology company into an Investment Company unlike any other, investments are made from profits, and growth is funded internally without equity or debt issues. Over the past few years it has grown substantially. We own and operate many of our own businesses, mining, technology, real estate, financial services, shipping and more. We also have invested in a number of other Asian Ventures including Solar Energy and Oil Services.

GeoGlobal Resources Inc., headquartered in Calgary, Alberta, Canada, is a US publicly traded oil and gas company, which through its subsidiaries is engaged primarily in the pursuit of petroleum and natural gas through exploration and develop-ment in India. Since inception, the Company’s efforts have been devoted to the pursuit of Production Sharing Contracts with the Government of India. Currently, the Company is fo-cused on the development of high potential exploration targets in the Krishna Godavari, Cambay, Deccan Syneclise and Rajas-than basin areas. The stock is quoted on the Amex in the United States under the symbol GGR.India is continuing to move forward with market-oriented eco-nomic reforms that began in 1991. Recent reforms include lib-eralized foreign investment and exchange regimes, industrial decontrol, significant reductions in tariffs and other trade bar-riers, reform and modernization of the financial sector, signifi-cant adjustments in government monetary and fiscal policies, and safeguarding intellectual property rights. Energy demand including oil & gas has increased in tandem with economic growth. India's petroleum product consumption has doubled in last fifteen years. Current consumption of petro-leum products in the country is about 120 MMTPA. Production of oil in the country is around 33 MMTPA for last few years. India currently imports over 70% of its crude oil requirements. Economic growth is linked to the growth of energy sector and it is expected that oil demand in India would grow three fold by 2020. The demand for gas is expected to grow at a faster rate than oil. The large finds in the east coast of India are expected to ease the situation. The search for and development of India's petroleum resources have now acquired an added urgency. This urgency stems from widening gap between the demands of the nation on the pat of vibrant industrial growth and the availability of oil and natural gas to fuel this growth. One of the great success stories in

the six decades since independence has been the growth and development of the Indian petroleum industry. In the past 60 years, the country witnessed growth of oil production from a mere 0.25 MMT of oil and 3 billion cubic feet of gas in 1947-48 to around 33 MMT today. What started off as a minuscule production from one small oil field in the rain forests of up-per Assam has today blossomed into major activity in several areas of onland and offshore of India. The Government of India, with Directorate General of Hy-drocarbons as a nodal agency, formulated the New Explora-tion Licensing Policy (NELP) in 1997-98 to provide a level playing field to all the parties to compete on equal terms for award of exploration acreage. Government of India's commit-ment to the liberalization process is reflected in NELP, which has been formulated keeping in mind the immediate need for increasing domestic production. This has been a landmark event in the growth of the upstream oil sector in India. The terms and conditions of this open and transparent policy rank amongst the most attractive in the world. To attract more in-vestment in oil exploration and production, NELP has steered steadily towards a level playing field resulting in a healthy spirit of competition between National Oil Companies and private companies.

"The oil and gas sector in India is fast emerging as the new destination for world business. Opportunity and initiative make a perfect meeting ground for world technologies in petroleum and natural gas exploration, production, refining, distribution and marketing. The growing demand for energy has effected changes in the market environment and in poli-cies, culminating in total decontrol of the petroleum sector since April 1, 2002. This has opened up the hydrocarbon sec-tor of a country of one billion people where the demand has been growing at the rate of 5-6% per annum, well above the world average."

Investor Information from around the world with exclusive insights into Asia’s emerging markets.

www.livetradingnews.cominfo@livetradingnews.com

$mart Rich secures funding for Indonesian mine purchase

fering to institutional investors before the end of June to achieve the full targeted amount of HK$4.55 billion ($587 million). Morgan Stanley is acting as the place-ment agent for the entire fund-raising package.

The greenfield mining project, which is located on the western side of the island of Sumatera in the province of North Sumatra, will result in a significant change in the company's business focus from its current ac-tivities, which mainly comprise trading of electronic goods and accessories and the provision of financial information through the internet and mobile phones. However, people familiar with Smart Rich describe it

The Hong Kong-listed company raises $507 million from private and cornerstone investors as part of a transforma-tional deal that will make gold and silver mining its core business.Hong Kong-listed Smart Rich Energy Finance (currently changing it’s name to G-Resources) (HKG:1051) has se-cured a large portion of the funding needed to cover its earlier announced acquisition of a gold and silver mining project in Indonesia, following an upsized $257 million share placement to a group of cornerstone investors and the sale of a further $250 million worth of shares to inves-tors linked to the company.Smart Rich will raise a further $80 million through an of-

primarily as a shell company. According to a company state-ment issued last Thursday, the new shares that are being is-sued will account for about 95% of the company's enlarged and fully diluted share capital, which means the new share-holders will essentially take over the company, making the fund-raising exercise akin to a re-IPO. The pre-acquisition public shareholders will see their combined stake fall from 49.3% to 1.6%. Smart Rich has had its sights set on the mining sector for a few years already though, and in January 2006 it invested in Madagascar Petroleum International, making it a major asset of the company. While the intention was to remain

involved in this company through the initial project stages, Smart Rich ended up selling the holding in August last year as it saw a good opportunity to realize a reasonable return on its investment. As part payment for Madagascar Petroleum it received shares in Sino Union Petroleum, which gives it indirect exposure to the further development of Madagascar Petroleum's rights in oil field block 2104.

Smart Rich also tried to acquire certain exploration and min-ing rights in Mongolia last year, but that deal was terminated due to "various uncertainties surrounding the acquisition". Since then, the company has, according to its own admission, been actively searching for and assessing investment oppor-tunities in the natural resources sector, particularly in Ghana, Indonesia and Mongolia.

The Martabe project in Indonesia was put up for sale earlier this year by its Australian owner OZ Minerals, which holds 95%. Smart Rich didn't have the funding to bid for it straight away, but introduced the project to Hong Kong-listed China Sci-Tech Holdings which was able to buy it for cash. China

Sci-Tech is considered a third party, but three of Smart Rich's directors also serve as independent directors on its board, which suggests pretty close connections between the two. A series of option agreements will ensure that the asset will eventually end up in the hands of Smart Rich, which will pay a 10% premium (in the form of new shares) to China Sci-Tech as a thanks for its assistance.

Smart Rich has said that between $221 million and $232.4 million of the gross proceeds from its share sale will be used to pay for the acquisition; $284.5 million will be used to bring the Martabe project into the production stage; and the rest will be used to fund the development of the project after its com-

pletion, as well as for acquisition-related expenses, working capital and general corporate purposes with regard to said project.

A source close to the deal said the fundraising completed last week includes a private tranche of $250 million and a cornerstone tranche that was upsized to $257 million from $180 million after a five-day roadshow resulted in strong demand. The latter tranche was placed with 10-12 investors, which according to the company statement included Black-Rock, China Construction Bank's asset management arm, Franklin Advisers and J.P. Morgan's asset management arm.

The private tranche, meanwhile, was divided into three parts: $30 million was bought by Smart Rich's new CEO, Owen Hegarty, who was a director of OZ Minerals until De-cember 2008 following the merger between Oxiana (which he founded) and Zinifex in June last year; $30 million was bought by a company owned by the Soeryadjaya family, which has extensive experience in Indonesia's mining sector and will act as Smart Rich's Indonesian partner with respect to the Martabe project; and the remaining $190 million was taken up by various private equity funds as well as friends and family-type investors.

The shares were sold at a price of HK$0.35 apiece, which represented a discount of 79% to the closing price on June 2, before the shares were suspended pending the announcement of the placement. However, the share price only reached those levels at the end of May after Australia's Foreign In-vestment Review Board cleared the acquisition. Before that, Smart Rich's shares were trading below HK$0.20 apiece.

Because the cornerstone portion of the deal was upsized, the remaining placement to other institutional investors has been reduced by the same amount to $80 million from $150 mil-lion. The source said that placement is likely to be preceded by another three-day roadshow to ensure investors under-stand the company's strategy following the acquisition.

According to an independent technical report, the Martabe project has "proved" and "probable" reserves of approxi-mately 35.7 million tonnes of ore, averaging 1.9 grams per tonne of gold and 26 grams per tonne of silver. This im-plies 2.2 million ounces of gold and 29.7 million ounces of silver respectively. It also has "measured", "indicated" and "inferred" resources of 138.1 million tonnes, averaging 1.3 grams per tonne of gold and 14 grams per tonne of silver, implying 5.9 million ounces of gold and 61.5 million ounces of silver. Its existing approvals refer to the construction stage only and are valid for three years from April 24, 2008.

A feasibility study completed in November 2007 also noted that among the key attributes of the mine are the significant potential for additional ore resources in nearby deposits; a large-scale ore processing plant treating nominally 4.5 mil-lion tonnes of ore and a good level of existing social licence with local community and the Indonesian government. The project is also situated close to existing infrastructure, including ports, power facilities and the Trans-Sumatera highway.

In recognition of the company's changed business focus, Smart Rich will change its name to G-Resources.

Coal’s only alternative:

nuclearWe hear a lot about renewable energy. However, the focus on renewable energy is leading us to a false expectation that we are effectively combating global warming.The problem with renewable energy sources, hydropower ex-cepted, is that the energy sources are intermittent and diffuse and have their own environmental impacts. Wind turbines are touted as a source of electric power, but the wind doesn’t always blow. Solar panels are still very expensive, and the sun doesn’t always shine. Massive energy storage systems would be required for dependable power. Biomass is very diffuse, so it requires devo-tion of large land areas, and the collection and processing of biomass into fuel is also energy intensive. Geothermal energy is available in some locales, but in limited amounts. Hydropower is almost fully utilized in the Lower 48 but represents a good alternative for the Railbelt in Interior Alaska.I have heard few reliable estimates that more than 20 percent of current U.S. energy demand can be met by renewable energy sources. Even that is unlikely to be available before mid-century. Energy conservation will help, but keep in mind that we have an increasing worldwide demand from the growing economies of India and China. Keeping humanity’s carbon dioxide emissions at present levels will be a struggle. A recent study has concluded that stabilization of our climate will require a 50 percent reduc-tion in global carbon dioxide emissions.Clearly, civilization requires a reliable base-load source of en-ergy. At present, this is largely met by the burning of coal. In 2002, coal accounted for 52 percent of our electrical energy, and electric power accounted for 40.3 percent of our total energy us-age. Coal, being almost pure carbon, produces the most carbon dioxide per unit of energy released. An enormous saving in our carbon footprint could be realized by phasing out the use of coal. This can be done by substituting the use of nuclear energy.Nuclear energy has an undeservedly bad rap. Nuclear waste’s problems are overblown. The waste generated so far would cov-er a football field sixteen feet deep, a very small volume when you consider that 21 percent of U.S. electricity comes from nuclear energy. We can continue on-site dry-cask storage for a number of years into the future.Nuclear waste consists of two components. One is the intensely radioactive fission products. These have a half-life on the order

of 30 years. The other component is the much longer-lived trans-uranic elements such as plutonium. These elements can be burned in the new generation of sodium-cooled re-actors, such as the reactor planned for Galena. Using these elements would allow us to, in effect, get 100 times the en-ergy out of our uranium resources.Another fear is the possible diversion of nuclear material into the hands of terrorists. Uranium used in the current generation of reactors is enriched to only 4 percent, far be-low the nearly 100 percent enrichment needed for a weapon. Iran is expending enormous resources to enrich uranium. Plutonium as it comes out of a power reactor cannot be con-verted to weapons use.

Another fear is the possibility of a run-away nuclear reac-tion that would melt the core and release radiation into the neighborhood, like at Chernobyl. (The accident at Three-Mile Island was effectively contained.) The new reactor de-signs have passive safety features that automatically shut the reactor down in case of an event such as loss of power.Coal used for electric power generation accounts for 19 per-cent of our total energy use. Transportation accounts for 26 percent of our energy use. Rails can be completely electri-fied. With the advent of plug-in electric hybrids, electric-ity can displace a significant percentage of fossil fuel use, particularly if these fuels are adequately taxed. A high-tem-perature, gas-cooled nuclear reactor can generate hydrogen directly by catalytic cracking of water. The hydrogen can be used in fuel cells for powering of vehicles. Natural gas accounts for 24 percent of our energy use. The carbon foot-print from natural gas use can be further reduced by diluting natural gas with hydrogen.Nuclear generation is a safe and proven technology. It is the only politically realistic option to available to stabi-lize our climate, and it can be widely adopted by emerging economies. Renewable energy technologies can help lower our carbon emissions, and in some contexts they are unique-ly useful. However, we are fooling ourselves if we believe they can stabilize our climate. As for energy policy, priority should go to the commercialization of the high-temperature and sodium-cooled nuclear reactor designs.

By Dan Swift professor of physics emeritus at the Univer-sity of Alaska Fairbanks and the Geophysical Institute.

MeetSully & Russ ‘T’ Nailz, two San Diego Radio personalities who are heard Week-days on the Business Talk Radio Net-work! From current business events to internet-related issues to the movers and shakers in the business world-along with the occasional drink recipe. If it relates to the business, Russ and Sully are talking about it on the air. With their topical, laid back, and comic commentary of goings on in the business world,

Sully and Russ ‘T’ aren’t only thinking outside the box-they didn’t even know there was a box!

Especially with visits from the likes of the Red Roadmaster, Ball Boy Kyle, Becky Carroll – the Marketing Maven, Tony the Banker, The Loan Chic and

National movie Critic Fred Saxon!!

www.bigbizshow.com

2very funny guys

The markets Hottest picks

www.livetradingnews.com

The MACThe MAC Services Group Limited (The MAC), an Aus-tralian-owned public company was established in 1988 to supply accommodation services to the coal mining, con-struction, resource and tourism industries. Over the years The MAC has experienced significant growth and expan-sion, attaining a leading position in its chosen market. As the mining sector in Australia starts to pick up The Mac is set to grow even more, the company has hardly suffered though, during the downturn The Mac actually lifted profits 39%. Business has continued to grow since then and invest-ing in The Mac is a good way to gain exposure to Austra-lia’s mining sector.

They now operate under the following divisions:

THE MAC Accommodation

The MAC Accommodation has 4,500 permanent rooms under ownership and management in the townships of Nebo, Coppabella, Moranbah, Middlemount and Dysart in the Central Bowen Basin region of North Queensland and Kambalda in WA. There are plans to increase the number of

rooms in our villages during 2008.Over the past few years, The MAC Accommodation has ob-tained a leading market position and a strong client base. Our clients include some of Australia’s largest corporations who work closely with the company’s senior management and plan-ners to ensure our accommodation facilities and operations continue to meet the requirements of our clients and guests.

THE MAC CONSTRUCTION

The MAC Construction specializes in 3 main areas:1. Development & DesignOur Construction business has a Development & Design divi-sion that carries out all work associated with the development approval process for the provision of our new accommodation facilities. 2. Manufacturing of Re-locatable BuildingsOur Manufacturing division carries out the design and con-struction of our re-locatable buildings. The design works are undertaken in our head office, while all buildings are constructed in our production yards at Nebo and Edinburgh

Parks in Adelaide. 3. Construction & InstallationThe Construction division carries out new installations on site at MAC-owned locations. The construction manage-ment of each job is performed from our head office with a construction supervisor, site manager, foreman and a con-struction team working on site. THE MAC PROPERTY MAINTENANCEThe MAC Property Maintenance provides a total integrat-ed maintenance solution for buildings and facilities. We are a multi-trades organization offering a comprehensive building management service, freeing up facility owners to concentrate on the delivery of their core business.

The MAC Property Maintenance provides the following services:1. Call centre, customer services enquiries; 2. Call out service - 24 hours a day / 7 days a week / 365 days of the year; 3. Quality trade services; 4. Breakdown maintenance; and 5. Management of preventative maintenance. THE MAC TRAVELThe Mac Travel, with locations in QLD and Sydney spe-cializes in both individual and corporate travel. Services include:• air, rail & bus travel • car hire • accommodation • holidays & short breaks • freight • functions, events & catering • sports & special interest-related tours • corporate conferences & travel. The MAC Travel provides our clients with specialised, well organized & memorable travel experiences at com-petitive prices.THE MAC LINEN SERVICESThe MAC Linen Services Pty Ltd, is a well established commercial laundry and dry cleaning business, servicing Mackay, the North Bowen Basin, Airlie Beach and the Whitsunday Islands.

Red Roadmaster

Market Anaylsis can be read on:www.stockpreacher.com

www.livetradingnews.comor listen on

www.bigbizshow.com