Aliquot Platinum Group Metals Aliquot Precious Metals Share Classes
Aliquot Platinum Group Metals* Overview Aims to provide 100% exposure to physical gold, silver, platinum, palladium and rhodium Real assets are a hedge against inflation and the devaluation of money Gold cost of production is $1,300; silver break-even is estimated to be $26.40; platinum cost of production is $1,800 / 2,000 Economic sensitivity (silver, platinum, palladium and rhodium) PGM’s are essential components in catalytic converters which reduce pollution from vehicles Geopolitical instability from South Africa may have a major impact on fundamentals The Fund is long only, unleveraged, liquid and 100% transparent
* Aliquot Precious Metals Inc. Share Classes.
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Exposure to Physical Metals Why buy platinum group metals?
Gold 20% Silver 20%
Platinum 20% Palladium 20% Rhodium 20%
Note: The allocations are indicative and for illustrative purposes only. Allocations illustrated above are subject to change at the Fund Manager’s discretion and are dependent on fund outflows and management outlook.
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Production Cost of Gold is $1,300 Why buy platinum group metals?
2100
Gold Spot ($/oz.) Marginal Cost of Gold ($/oz.)
1900
USD/oz.
1700
1500
1300
1100
900
700
500 2007
2008
2009
2010
Source: Barclays Research & Castlestone Management. Data range 1 January 2007 – 23 May 2014. Note: Past performance cannot be relied on as a guide to future performance.
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2011
2012
2013
2014
Estimated Silver Break-Even per oz. for Q1 2013 Why buy platinum group metals?
Top 12 Silver Miners Financials & Break-Even Top 12 Silver Miners
Q1 2013
Total Revenue
$804,932,000
Production Costs
$415,933,000
Adjusted Income
$94,479,737
Net Income
$90,728,737
Silver Production
21,552,439
Silver Sold
20,366,789
By-Product Credit
$255,883,229
Estimated Silver Income
$69,325,990
ADJ-Silver Income per oz.
$3.40
Realized Silver Price oz.
$29.85
Estimated Silver Break-Even per oz.
$26.45
Source: Company quarterly reports, http://srsroccoreport.com/the-primary-silver-mining-industry-is-unsustainable/the-primary-silver-mining-industry-is-unsustainable/ Data as at 8 August 2013.
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Silver Miners Break-Even Cost Why buy platinum group metals?
$40
Top 12 Silver Miners’ Average Net Income Break-Even Cost Q1 2013 $35.26
$36.02
$35 $31.63
USD/oz.
$30 $25.96
$26.86
$28.05 $25.40
$23.97
$25 $21.60 $20
$26.31
$18.73
$21.90
$19.90
$15
Average net income break-even $25.40
$10
$5
$0
Source: Company quarterly reports, http://srsroccoreport.com/the-primary-silver-mining-industry-is-unsustainable/the-primary-silver-mining-industry-is-unsustainable/ Data as at 8 August 2013.
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Silver Prices Driven by Modern Industries Why buy platinum group metals?
260
South Korea
Germany
China
Japan
United States
Other
Million oz.
195
130
65
0 1990
2000
2010
The increasing use of silver in electrical and electronics fabrication
Source: GFMS Ltd & The Silver Institute, ‘The Future of Silver Industrial Demand’, March 2011.
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Industrial Uses for Silver Are on the Rise Why buy platinum group metals?
350
Biocide
Solar Panels
Electronics
300
Million oz.
250
200
150
100
50
0 1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: Casey Research & CPM group, “2011 Silver Investing Guide,“ Jeff Clark, “Are we Running Out of Silver?”, Caseyresearch.com, 16 June, 2012.
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2008
2009
2010
2011
Production Cost of Platinum is $1,800
Cash Operating Cost $/oz.
Why buy platinum group metals?
H1 13 Platinum Operating Cost 2012 Platinum Operating Cost H1 13 Average Platinum Price
Production %
Source: Barclays Research, 20 September 2013. Note: Past performance cannot be relied on as a guide to future performance.
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Mine Supply is Likely to Remain Tight Why buy platinum group metals?
South Africa 75%
13%
5%
Russia
North America
5%
Zimbabwe 2%
Others
South Africa accounts for 75% of platinum mine supply
Source: Johnson Matthey, Castlestone Management.
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South Africa’s Platinum Supply Falls to a 12-Year Low Why buy platinum group metals?
6,000
‘000 oz.
5,000
4,000
3,000
2,000
1,000
0 2000
2002
2004
Source: Johnson Matthey, Barclays Research. Data range 1 January 2000 – 31 December 2012.
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2006
2008
2010
2012
Platinum ETP Holdings vs. Platinum Price Why buy platinum group metals?
2.8
$2,000
Platinum ETP Holdings Million oz (LHS)
Platinum Price (RHS) 2.6
$1,900
2.4
$1,800
2.2
$1,700
2
$1,600
1.8
$1,500
1.6
$1,400
1.4
$1,300
1.2 2011
$1,200 2012
Source: Bloomberg, Castlestone Management. Data range 3 January 2011 – 23 May 2014.
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2013
2014
Global Palladium Autocatalyst Demand Why buy platinum group metals?
7000
6000
‘000 oz.
5000
4000
3000
2000
1000
0 1980
1984
1988
1992
Source: Johnson Matthey, Castlestone Management. Data range 1 January 1980 – 1 January 2012.
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1996
2000
2004
2008
2012
China Palladium Autocatalyst Demand Why buy platinum group metals?
45 40
Metric tonnes
35 30 25 20 15 10 5 0 2000
2001
2002
2003
2004
2005
Source: Bloomberg & Castlestone Management. Data range 1 January 2000 – 1 January 2012.
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2006
2007
2008
2009
2010
2011
2012
Rhodium Supply and Demand Why buy platinum group metals?
1400
Supply Total Gross Demand
1200
Total Net Demand
‘000 oz.
1000
800
600
400
200
0 2003
2004
2005
2006
2007
Source: Johnson Matthey, Castlestone Management. Data range 31 December 2003 – 31 December 2012.
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2008
2009
2010
2011
2012
Global Rhodium Supply by Country Why buy platinum group metals?
900
Russia North America
800
South Africa Others
‘000 oz.
700 600 500 400 300 200 100 0 2001
2002
2003
2004
2005
2006
Source: Johnson Matthey, Castlestone Management. Data range 31 December 2001 – 31 December 2012.
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2007
2008
2009
2010
2011
2012
Unrest in South Africa’s Mines Why buy platinum group metals?
Sources: http://edition.cnn.com/2013/02/19/business/mining-south-africa/, http://www.afripol.org/afripol/item/767-photonews-41200-miners-strike-in-south-africa.html, http://www.dailymail.co.uk/news/article2189367/Marikana-strike-Police-gun-striking-South-African-miners-killing-30-leaving-scores-wounded.html
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Outperforming the S&P 500 Index Why buy platinum group metals?
400%
Gold, Silver, Platinum, Palladium, Rhodium S&P 500 Index
300%
200%
100%
0%
-100% 2000
2002
2004
Source: Bloomberg, Castlestone Management. Data range 1 September 2000 – 23 May 2014. Note: Past performance cannot be relied on as a guide to future performance.
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2006
2008
2010
2012
2014
Aliquot Platinum Group Metals* Why buy platinum group metals? Aims to provide 100% direct exposure to the physical commodity (gold, silver, platinum, palladium, rhodium) Precious metals have historically shown to be an ‘insurance’ when added to a diversified portfolio, acting as a safe-haven asset in times of economic and geopolitical turmoil Silver, platinum, palladium and rhodium can be economically sensitive thus providing potential upside as the economic recovery continues Real assets are an excellent hedge against inflation and the devaluation of money The Fund is long only, unleveraged, liquid and 100% transparent
* Aliquot Precious Metals Inc. Share Classes.
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Client Services: Global Distribution Team About Us
EUROPE CHRIS GREEN
MIDDLE EAST CHRIS GREEN
AFRICA SAM WOOD
LATIN AMERICA CHRIS GREEN
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ASIA RICHARD WOOD TOBY FENN SAM WOOD
Castlestone Fund Range About Us
QUALITY INCOME (EQUITIES)
REAL ASSETS (PRECIOUS METALS & COMMODITIES)
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SPECIALIST EMERGING MARKETS
Fund Facts About Us
Aliquot Platinum Group † Metals Launch Date: January 2014 Minimum Investment: $/€/£10,000 Fees: Tiered Fee Structure Dealing Frequency: Weekly*
Broker dealers: Barclays Capital, Johnson Matthey PLC, Morgan Stanley Smith Barney LLC Custodian: Barclays Capital, Johnson Matthey PLC Administrator: Circle Investment Support Services B.V.
Domicile: British Virgin Islands
Auditor: Deloitte Accountants B.V. Regulator: British Virgin Islands Financial Services Commission
Source: Castlestone Management. † Aliquot Precious Metals Inc. Share Classes.* Weekly, subscriptions by 12:00 noon (GMT) on the Business Day prior to the Trading Day. For further details please refer to the Fund OM.
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Important Information Appendix This document is intended for and directed at investment professionals and is not intended for retail customer use. Persons who do not have professional experience in matters relating to investments should not rely on it. This document is not offering to sell any product. Any transaction requires our subsequent formal agreement which will be subject to internal approvals and binding transaction documents. Castlestone Management Inc. (“We”) will not be liable for any use you make of any information in this document. We are not your advisor or fiduciary. We are not recommending or making any representations as to suitability of any product or the tax, legal or accounting treatment of any product. We are not responsible for information stated to be obtained or derived from third party sources. All opinions are given as of the date hereof and are subject to change. We are not obliged to inform you of any such changes. Any projections and opinions expressed herein are expressed solely as general market commentary and do not constitute investment advice or guaranteed return. They represent the views of Castlestone Management Inc. at the time of publication and are subject to change without notice. Any simulated performance data and/or past performance data contained herein is not a reliable indicator of future performance. Income from investments may fluctuate and investors may not recoup the amount originally invested. Any forward-looking statements concerning the financial condition, results of operations and businesses of Castlestone Management expressed or implied, are based on management's current expectations and assumptions, which may change without notice, and are no guarantee of future results, performance or events. Nothing in this document constitutes a representation that any investment strategy or recommendation is suitable or appropriate to an investor’s individual circumstances or otherwise constitutes a personal recommendation. Investments involve risks, and investors should exercise prudence and their own judgement in making their investment decisions. This document is confidential. No part of it may be reproduced, distributed or transmitted without Castlestone Management’s written permission. Neither this document nor any copy of it may be distributed, directly or indirectly, in the United States of America or its territories or possessions (the “United States” or to any US Person as defined in Regulations under the United States Securities Act of 1933 (as amended)). Any failure to comply with these restrictions may constitute a violation of United States securities law. This is not exhaustive; other regional-specific wording may apply. If in doubt, please consult with Castlestone Management’s Compliance department. Castlestone Management Inc. is regulated by the British Virgin Islands Financial Services Commission. This scheme has been entered into the List of Restricted Schemes by the Monetary Authority of Singapore under paragraph 2(3) of the Sixth Schedule to the Securities and Futures (Offers of Investments)(Collective Investment Schemes) Regulations 2009 for distribution to institutional and accredited investors. No invitation to the public in Hong Kong to buy or subscribe for any product is permitted to be made. You should consult your own attorney, business adviser and tax adviser as to legal, business, tax and related matters concerning any of the contents of this document. This document has not been delivered for registration to the Registrar of Companies in Hong Kong, its contents have not been reviewed by any regulatory authority in Hong Kong, nor has the product been authorised by the Securities and Futures Commission. Accordingly, this document must not be issued, circulated or distributed in Hong Kong other than (1) in circumstances which do not constitute it as a “prospectus” as defined in the Companies Ordinance (Cap.32) or which do not constitute an offer to the public within the meaning of that ordinance, or (2) to professional investors as defined in the Securities and Futures Ordinance (Cap.571) and the Securities and Futures (Professional Investor) Rules made thereunder. Unless permitted by the securities laws of Hong Kong, no person may issue in Hong Kong, or have in its possession for issue in Hong Kong, this document or any other advertisement, invitation or document relating to any products other than to a professional investor as defined in the Securities and Futures Ordinance (Cap.571) and the Securities and Futures (Professional Investor) Rules made thereunder.
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