BRMS Initiating Cov 01FebJan12editedMS

8/2/2019 BRMS Initiating Cov 01FebJan12editedMS

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Initiating Coverage | 01 February 2012

Please see important disclosure at the back of this report Page 1 of 30

Monetizing assets and potential sizable tax saving

Monetizing assets is imminent, in our view. Bumi Resources Minerals (BRMS)

has abundant diversified highquality mineral assets, with most of the projects

being green field. It needs a lot of money to develop its assets. We estimate it is

very likely for BRMS to sell some of its ownership in its subsidiaries while keeping

its majority stakes in order to unlock their value and fund their development. We

expect such partial divestment will happen after the Gorontalo and Citra Palu have

received JORC certifications in 1H12 or after the Dairi asset gets exploitation

permit.

Potential sizable corporate tax saving ahead. The biggest contributor to the

consolidated net income and cash flow is NNT. MDB, a subsidiary of BRMS, has 24%

stake in NNT. According to the Indonesian tax regulation, contribution from

associate company is not taxable if the ownership is at least 25%, which means

MDB needs to increase its stake in NNT by at least 1% in order to make NNTs

contribution not taxable. There are several ways for MDB to increase its stake at

NNT. However, we think the most likely way is increasing its stake when NNT

launches an IPO, which may happen in 2012. Based on our scenario analysis, If

contribution from NNT is not taxable, consolidated FY13F net income would

increase by 19% and 18% from our base case scenario and consensus estimates,

respectively.

Catalysts: 1) Bumi Mauritania commences its production in 1H12. 2) Gorontalo

and Citra Palu get Joint Ore Reserve Committee (JORC) certification on their

reserves in 2012. 3) issuance of exploitation permit for Dairi project. 4) MDB

increases its stake at NNT to at least 25%.

Key Risks: 1) commodity price fluctuation. 2) project delay. 3) regulatory issues.

Initiate with a Buy recommendation, Target price at Rp830. We use a

conservative SOTP valuation method which resulted in a TP of Rp830. We apply

DCF method for valuing NNT Batu Hijau, Dairi and Bumi Mauritania, while we use

investment cost plus capex for valuing Gorontalo, Citra Palu and Konblo. We doesnot take into account Bumi Japan, NNT Elang and Rinti, Dairi Lae Jahe and Base

Camp to our valuation, which may generate significant upside when they are

realized.

FINANCIAL SUMMARY

YE Dec (Rp bn) 2009A 2010A 2011F 2012F 2013F

EBITDA 3 118 95 398 896Net Profit (0) 765 722 814 1,806EPS (Rp) (253) 60 28 32 71EPS growth (%) n/a n/m (52.6) 12.7 121.9P/E Ratio (x) (2.2) 9.4 19.8 17.6 7.9EV/EBITDA (x) 48.7 67.3 181.3 47.0 19.0

P/B Ratio (x) (0.0) 0.4 0.8 0.8 0.7Dividend Yield (%) 0 0 0 0 0ROAE (%) 0.1 9.3 4.2 4.6 9.4Source: Company, Mandiri Sekuritas

FOCUSInitiating Coverage | 01 February 2011

Bloomberg Code BRMS IJ

Market Cap (Rp bn/US$ mn) 13,808/1,530

Issued Shares (mn) 25,570

Avg. Daily T/O (Rp bn/US$ mn) 8.6/0.95

Verdi Budiman

+6221 5296 9542

verdi.budiman @mandirisek.co.id

Stock data

SECTOR: METAL MINING

Current Price Rp560

Price Target Rp830(+48.2%)

Fair value Rp830

52wk range Rp500Rp800

EPS consensus

11F 12F

Consensus (Rp) 34 50

MS est. vs Consensus (%) (16.1) (36.6)

Share price performance

3m 6m 12m

Absolute (%) 1.9 (31.6) (16.9)

Relative to JCI (%) (5.3) (25.8) (31.6)

Hariyanto Wijaya, CPA, CFA

+6221 5296 9553

hari anto.wija [email protected]

Major shareholder

Bumi Resources 87.0%

Others 12.9%

BUYBumi Resources Minerals


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Investment thesis

In progress to become one of the leading metal mining companies in Asia

BRMS through its subsidiaries has diversified mineral assets, i.e. gold, copper, zinc, lead, iron ore, molybdenum, and

diamond in several locations in three countries, i.e. Indonesia, Liberia, and Mauritania. From risk managementperspective, various locations reduce localrelated risks, such as local government regulation and natural disaster.

Currently, only gold and copper are in production at BRMS associate company, i.e. Newmont Nusa Tenggara (NNT).

Meanwhile, the other commodities are in development stage. BRMS has effective stake of 18% in NNT. The majority

stake in NNT is owned by Newmont Mining Corporation (NEM US), a listed company in New York Stock Exchange.

Newmont Mining Corporation also acts as the operator in NNT.

EXHIBIT 1. BRMS MINERAL ASSETS ARE SPREADED IN SEVERAL LOCATIONS

Source: Company

EXHIBIT 2. MINERAL ASSET PORTFOLIO AT VARIOUS LEVEL OF DEVELOPMENT CYCLE

Source: Company

NNT (batu hijau)

Mauritania

Dairi (Anjing Hitam)

GorontaloCitra Palu

Konblo Bumi (Liberia)

Asset

PRODUCTION

2010 2011 2012 2013 2014

DEVELOPMENT DSO PRODUCTION PRODUCTION

2015

EXPLORATION AND DEVELOPMENT ACTIVITIES

DEVELOPMENT PRODUCTION

FEASIBILITY STUDIESFEASIBILITY STUDIES

DEVELOPMENTDEVELOPMENT

PRODUCTIONPRODUCTION

FIRST PHASE SECOND PHASE

Ex

ploration

Pr

oduction


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Projects

Effective

stake Has got exploration permit? JORC certification Others

NNT (elang & rinti) 18% Yes. Valid from Sep'10-Feb'30 not yet

Mauritania 53% Yes. Expect in 1H12 Obtained exploitation permit in Jan'12

Dairi 80% Yes. Got in October 2010 Yes Obtained Principle Agreement for

Underground Mining in Nov'11

Gorontalo 80% Yes. Got in December 2010 Expect in 2H12

Citra Palu 97% Yes. Got in September 2011 Expect in 2H12

Konblo Bumi (Liberia) 94% Yes. Under seven exploration permits not yet

EXHIBIT 3. BRMS HAS VARIOUS MINERAL ASSETS AT ITS SUBSIDIARIES LEVEL

Source: Company

Monetizing its mineral assets is imminent, in our view. BRMS has abundant diversified highquality mineral assets

at its subsidiary levels, but most of the projects are still green field. It would take a lot of money to develop them until

they start production. We estimate it is very likely that BRMS will partly divest its ownership in its subsidiaries while

maintaining its majority stakes in order to unlock its subsidiaries value and develop their projects. We estimate

divestment may happen after Gorontalo and Citra Palu have got JORC certifications in 2012 or after Dairi gets

exploitation permit.

EXHIBIT 4. PROGRESS FOR EACH PROJECTS

Source: Company, Mandiri Sekuritas

13% 87%

. . .

100% 60%

. .

Investment Holding Companies

Operating/Developing companiesMarketing Service company

1 Subject to progressive divestment to 49.0 % beginning from the end of the fifth year after commencement of production at the Gorontalo project(2)

3 Subject to dilution to 80.0%

In January 2012, Bumi Holding SAS divest its ownership by 10% to Government of Mauritania to meet Mauritania regulation. Government of

Mauritania has an option to get additional 10% ownership.

PT Newmont

Nusa

Tenggara

Herald

Resources

Ltd.

Gain and Win

Pte. Ltd.

PT Dairi Prima

Mineral

PT Multi

Daerah

Bersaing

Bumi

Mauritania SA

Public

PT Bumi

Resources Tbk

(BUMI)

PT Bumi

Resources

Minerals Tbk

International

Minerals

Company LLC80%

53.39%

Calipso

Investment

Pte. Ltd.

PT Multi

Capital

Konblo Bumi

Inc. (Liberia

Project)

Lemington

Investments

Pte. Ltd.

Bumi Holding

S.A.S

Bumi

Resources

Japan

PT Sarkea

Prima

Minerals

PT Gorontalo

Minerals

PT Citra Palu

Minerals

96.97% 94.1%

Effective

ownership

Effective

ownership

Effective

ownership

Effective

ownership

Effective

ownership

Effective

ownership

Effective

ownership18.0% 100.0% 80.0%80.0%

Legend


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NNT would IPO in 2H12, which would unlock its value and open door for MDB for increasing its stake in NNT

NNT has got approval to launch IPO from its shareholders on 19 August 2010. NNT plans to offer 10% in new shares

after the divestment of 7% of foreign investors stake in NNT has been settled. NNT had planned to go public in 2011

but as the 7% divestment stalled, the IPO of NNT is being delayed. The 7% was purchased by the Government of

Indonesia, but the payment has yet to be paid pending endorsement from the Energy and Mineral Resources Ministerand clearance from the BKPM. The divestment process may be completed in 1H12. Therefore, the IPO of NNT may be

done in 2H12. The IPO will unlock the value of NNT itself. Soon after IPO, in our view MDB would buy NNTs share in

the secondary market in order to increase its stake in NNT to at least 25% in order to get corporate tax saving at MDB

level.

Potential sizable corporate income tax saving if MDB increases its stake at NNT to at least 25%

According to the Indonesian tax regulation, corporate income tax is calculated on company basis, not on

consolidated basis. Equity in net income of associated company is not taxable. Meanwhile, dividend receipt from

associated company is taxed at corporate income tax rate. However, dividend receipt is not taxable if all three

conditions are fulfilled. Currently, the only condition has not been fulfilled by MDB is its ownership in NNT, which is

still below 25%. There are several ways for MDB to increase it; 1) purchase the latest 7% divestment of NNT, 2)

purchase the stake from Pukuafu Indah or Indonesia Masbaga Investama, 3) purchase in the secondary market after

the NNTs IPO. Any of the ways will bring double benefits for MBD: 1) no more tax on equity in NNTs dividend. 2)

entitled for higher proportion from NNTs earnings and dividend. At the moment, we think the most possible is a

purchase in the secondary market. We have not factored in the corporate tax saving in our model, but based on our

scenario analysis there will be sizable corporate tax saving of around Rp424bn in FY13F (62.8% of FY13F consolidated

corporate income tax) which should increase FY13F consolidated net income by 333bn (19% and 18% from our base

case scenario and consensus estimates, respectively).

EXHIBIT 5. DIVIDEND RECEIPT FROM NNT IS NOT TAXABLE IF MDB INCREASES ITS STAKE AT NNT FROM CURRENT 24% TO

AT LEAST 25%

Source: Mandiri Sekuritas, Indonesian tax regulation

Revenue xxxx Revenue xxxx

Gross profit xxxx Gross profit xxxx

Operating profit xxxx Operating profit xxxx

Pretax income xxxx Equity in associated company's net income A X 24% Not taxable

Corporate tax (Tax rate= 35%) xxxx Pretax income xxxx

Net income A Corporate tax (Tax rate= 25%) xxxx

Net income xxxx

Cash Flow from Operating activities xxxx Cash Flow from Operation xxxxCash Flow from Investing activities: xxxx Cash Flow from Investing activities: xxxx

Cash Flow from Financing activities: xxxx Dividend received B X 24%

Dividend paid B Cash Flow from Financing activities xxxx

1 Dividends received from an Indonesian company by limited liability company incorporated in Indonesia

2 Dividends are paid out of retained earnings

3 Have at least 25% of the paid-in capital in the company distributing dividend

Meet the condition?

Yes

YesNot yet. We estimate MDB would

increase from 24% to at least 25% by

buying NNT shares after NNT IPO

PT NNT (an associate company) PT MDB (a subsidiary company)

Income Statement

Dividend received is not taxable if MDB meets all 3 conditions:

Taxable at

Corporate

income tax rate

Cash flow StatementCash flow Statement

Income Statement


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Rp bn 2009 2010 2011 2012 2013

% MDB ownership in NNT at end of year 17% 24% 24% 24% 24%INCOME STATEMENT

Equity in net income of NNT 488 2,132 1,231 1,462 2,615 Not taxable

Consolidated pre tax income 422 1,422 953 1,248 2,970

CASH FLOW STATEMENT

Dividend received from NNT - 1,583 439 522 2,037

% dividend received from NNT to consol pre tax incom 0% 111% 46% 42% 69%

Consolidated income tax

BRMS only - - - - -Subsidiaries:

Bumi Resources Japan - 31 48 52 62

MDB (parent company of NNT) - 268 29 41 424

Bumi Mauritania - - - 68 68

Dairi Prima - - - - 120

TOTAL Consolidated Income tax - 299 77 161 675

Consolidated net i ncome (net of Minority) (0) 765 722 814 1,806

Consolidated income tax

MDB (parent company of NNT) - 268 29 41 -TOTAL Consolidated Income tax - 299 77 161 251

Increase

in Net

Income

% Increase

Consolidated net i ncome (net of Minority) (0) 765 722 814 2,140 333 19%

Taxable at

Corporate

tax rate

Base case scenario: MDB's stake in NNT stay at 24%. Dividend received from NNT is taxable

Scenario analisis: If dividend received from MDB is n ot taxable si nce 2013

EXHIBIT 6. THE BIGGEST COMPONENT OF CORPORATE TAX EXPENSE COMES FROM CORPORATE INCOME TAX ON

DIVIDEND RECEIPT FROM NNT. THERE WOULD BE SIZABLE CORPORATE TAX SAVING IF MDB INCREASES ITS STAKE AT NNT

TO AT LEAST 25%.

Source: Mandiri Sekuritas


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(1,500)

(1,000)

(500)

0

500

1,000

1,500

2,000

2,500

3,000

2009 2010 2011F 2012F 2013F

Rp bn

Revenue Equity in NNT net income

Interest expenses Corporate tax

Net Income (net of minority)

Earnings grow by 2010-2013F CAGR of 33.2%

We forecast consolidated net income (net of minority) to grow by a CAGR of 33.2% from Rp765bn in FY10 to

Rp1,806bn in FY13F. The main contributors of the growth are: 1) higher equity income from investment in NNT. We

estimate NNT gold and coopers production will be back to its 2010 peak level in 2013 as the Phase 6 mine site willstart production in 2013, 2) higher earnings contribution from BUMI Mauritania because BUMI Mauritania is in the

process to ramp up its production after it starts production in 2012, 3) Dairi Prima will start to generate earnings in

2013, 4) higher sales of Bumi Japan.

EXHIBIT 7. EARNINGS GROW BY 2010-2013F CAGR OF 33.1% COMES FROM HIGHER REVENUE AND EQUITY INCOME



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SWOT Analysis

EXHIBIT 8. SWOT ANALYSIS

Strengths World class, highquality metal assets

Diversified metal exposures

Located in various locations

Weaknesses Most of projects are greenfield projects

Biggest contributor to net income comes from

NNT, meanwhile BRMS does not have control

over NNT

Opportunities

Potential significant tax saving if MDB able to

increase its stake in NNT to at least 25%

Substantial revenue streams from new mines

Significant upside in reserves and resources

from NNT Elang and Rinti

Threats

Regulation risk

Delay in projects

Increase in costs

Lower earnings and dividend received from

NNT



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EV (100%)

using DCF

Investments

(book value)

Capital

expenditure

BRMS'

Value

US$mn US$mn US$mn US$mn

NNT - Batu Hijau DCF with WACC = 12.0% and TV growth = 0% 9,643 18% 1,736

NNT - Elang and Rinti Not valued 18% -

Dairi Prima Minerals DCF with WACC = 12.0% and TV growth = 0% 606 80% 485

Gorontalo Minerals Investment Cost + Capex 39 105 80% 115

Citra Palu Minerals Investment Cost + Capex 17 80 97% 94

Bumi Mauritania DCF with WACC = 12.0% and TV growth = 0% 236 53% 126

Konblo Bumi Inc. (Liberia) Investment Cost + Capex 45 94% 42

Bumi Resources Japan Not valued 100% -

Total BRMS' value, US$mn 2,598

Forex 9,100

Total BRMS' value, Rp bn 23,642

Net Debt - 31 December 2011, Rp bn 2,309

Equity Value, Rp bn 21,333

No. of shares (mn) 25,570

Equity Value per share, Rp 830

Current Share price 560

Potential upside 48.2%

Projects Valuation MethodEffective

Stake

Valuation

Deriving TP: Rp830 per share using conservative SOTP valuation method

We initiate our coverage on BRMS with a Buy recommendation with TP: Rp830 per share, which implies PER FY12F,

FY13F of 26.1x and 11.8x, respectively. Our Target Price also implies PBV FY12F, FY13F of 1.2x and 1.1x, respectively.BRMS is one of few mineral companies, which are traded below its par value. We use conservative SOTP valuation

method to value BRMS share value. We use: 1) DCF method for valuing NNT Batu Hijau, Dairi Anjing Hitam and

Bumi Mauritania. 2) Investment cost plus capital expenditure for valuing Gorontalo, Citra Palu and Konblo Bumi. 3)

We do not value NNT Elang and Rinti, Dairi Lae Jahe and Base Camp and Bumi Japan.

Sizable upside to our valuation on NNT Elang and Rinti, Gorontalo, Citra Palu, Dairi Lae Jahe and Base Camp

Our valuation on BRMS is exposed to sizable upside when NNT Elang and Rinti, Gorontalo, Citra Palu, Dairi Lae Jahe

and Base Camp is realized. The biggest upside may come from NNT Elang whose reserve is significantly higher than

the Batu Hijau mine, according to a preliminary estimate by Newmont Mining Corporation.

EXHIBIT 9. DERIVING TARGET PRICE OF RP830 USING SOTP METHOD



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Unit 2009 2010 2011F 2012F 2013F

Macro

Average exchange rate(Rp/US$) Rp full 10,396 9,084 8,818 9,101 9,101

NNT Batu Hijau

Production volume

Gold ('000 oz) 560 737 380 400 730

Copper (mn lbs) 494 542 320 350 540

Sales volume

Gold ('000 oz) 550 656 380 400 730

Copper (mn lbs) 498 489 320 350 540

Average Selling Price

Gold (US$/oz) 1,000 1,183 1,570 1,650 1,650

Copper (US$/lbs) 2.59 3.45 3.50 3.55 3.55

Cost Applicable to sales

Gold (US$/oz) 214 237 440 440 430Copper (US$/lbs) 0.62 0.69 1.10 1.10 1.05

Amortization

Gold (US$/oz) 55 63 100 100 100

Copper (US$/lbs) 0.16 0.19 0.22 0.22 0.23

Reclamation and remediation

Gold (US$/oz) 4.00 5.00 8.00 8.00 8.00

Copper (US$/lbs) 0.01 0.01 0.02 0.02 0.02

Dividend payout ratio 0% 78% 36% 36% 78%

Bumi Mauritania

Production volumeIron ('000 tonnes) - - - 600 600

Sales volume

Iron ('000 tonnes) - - - 600 600


Iron (US$/ton) - - - 115 115

Cash Cost per unit

FOB (US$/ton) - - - 65 65

Dairi

Production volume

Ore ('000 tonnes) - - - - 130

Zinc ('000 tonnes) - - - - 19Lead ('000 tonnes) - - - - 10

Silver ('000 oz) - - - - 42

Sales volume

Zinc ('000 tonnes) - - - - 19

Lead ('000 tonnes) - - - - 10

Silver ('000 oz) - - - - 42


Zinc (US$/ton) - - - - 2,200

Lead (US$/ton) - - - - 2,200

Silver (US$/oz) - - - - 30

Cash Cost per unit

Mining opex (US$/ton) - - - - 46Processing cost (US$/ton) - - - - 36

Royalties (US$/ton) - - - - 21

EXHIBIT 10. KEY ASSUMPTIONS



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Gold price FY12F FY13F FY12F FY13F

Base case (US$/oz) 1,650 1,650

10.0% 879 1,915 8.0% 6.0%5.0% 846 1,861 4.0% 3.0%

Rpbn Base case 814 1,806 0.0% 0.0%-5.0% 782 1,752 -4.0% -3.0%

-10.0% 749 1,697 -8.0% -6.0%

Cooper price FY12F FY13F FY12F FY13F

Base case (US$/lbs) 3.55 3.55

10.0% 936 1,980 15.0% 9.6%5.0% 875 1,893 7.5% 4.8%

Rpbn Base case 814 1,806 0.0% 0.0%

-5.0% 753 1,719 -7.5% -4.8%-10.0% 692 1,632 -15.0% -9.6%

Sales Volume FY12F FY13F FY12F FY13F

Base caseGold ('000 oz) 400 730Copper (mn lbs) 350 540Iron ('000 tons) 600 600Zinc ('000 tons) 19Lead ('000 tons) 10Silver ('000 oz) 42

10.0% 949 2,048 16.6% 13.4%5.0% 882 1,927 8.3% 6.7%

Rpbn Base case 814 1,806 0.0% 0.0%-5.0% 746 1,685 -8.3% -6.7%-10.0% 679 1,564 -16.6% -13.4%

Operating expenses FY12F FY13F FY12F FY13F

Base caseNNT:

Gold (US$/oz) 440 430Copper (US$/lbs) 1.10 1.05

Mauritania:

Iron (US$/ton) 115 115Dairi:

Mining opex (US$/ton) 46Processing cost (US$/ton) 36

10.0% 742 1,701 -8.8% -5.8%5.0% 778 1,753 -4.4% -2.9%

Rpbn Base case 814 1,806 0.0% 0.0%-5.0% 850 1,859 4.4% 2.9%

-10.0% 886 1,911 8.8% 5.8%

Average Forex FY12F FY13F FY12F FY13F

Base case (Rp/US$) 9,101 9,101

10.0% 891 1,990 9.4% 10.2%5.0% 852 1,898 4.7% 5.1%

Rpbn Base case 814 1,806 0.0% 0.0%-5.0% 776 1,714 -4.7% -5.1%

-10.0% 737 1,623 -9.4% -10.2%

Net Income Change (%)


Dairi is still not

production


not in



Sensitivity analysis

EXHIBIT 11. SENSITIVITY ANALYSIS



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TICKER COMPANY NAME 2012F 2013F 2012F 2013F 2012F 2013F

NEM US NEWMONT MINING CORP 11.2 10.5 1.8 1.6 5.9 5.4

ASR CN ALACER GOLD CORP 12.1 10.3 1.8 1.5 7.4 5.0

ARZ CN AURIZON MINES LTD 12.1 10.3 2.3 1.8 4.6 3.4

CG CN CENTERRA GOLD INC 9.3 7.6 2.3 1.9 5.5 4.9

ELD CN ELDORADO GOLD CORP 16.0 13.3 2.2 2.0 8.6 7.5

IAG US IAMGOLD CORP 12.4 9.6 1.6 1.4 5.3 4.4POG LN PETROPAVLOVSK PLC 6.6 5.7 1.0 0.9 4.8 4.0

SMF CN SEMAFO INC 12.0 10.2 2.5 2.0 6.3 5.2

Simple average 11.5 9.7 2.0 1.6 6.1 5.0

ANTO LN ANTOFAGASTA PLC 11.8 10.9 2.5 2.2 4.8 4.6

AVM CN ANVIL MINING LTD 8.3 6.9 1.4 1.0 4.1 3.3

CS CN CAPSTONE MINING CORP 15.3 13.8 1.1 1.0 5.6 4.7

CUM CN COPPER MOUNTAIN MINING CORP 4.6 3.7 2.0 1.2 4.8 3.5

FCX US FREEPORT-MCMORAN COPPER 10.6 8.5 2.4 2.0 4.9 3.9

IMN CN INMET MINING CORPORATION 12.3 10.1 1.3 1.1 5.6 4.7

Simple average 10.5 9.0 1.8 1.4 5.0 4.1

BRMS IJ BUMI RESOURCES MINERALS 17.6 7.9 0.8 0.7 47.0 19.0

PER (x) PBV (x)

GOLD PEERS

COPPER PEERS

EV/EBITDA (x)

Relative valuations

It is not appropriate to compare BRMS with its peers as there are no peers with relatively similar asset size and

portfolio, earnings profile, and project development stages.

EXHIBIT 12. PEERS COMPARISON

Source: Bloomberg, Mandiri Sekuritas


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13% 87%

99.99% 99.99% 20% 100% 99.99% 100%

75% 100%

100% 60%

24% 80% 80% 96.97% 89% 94.1%(

Investment Holding CompaniesOperating/Developing companiesMarketing Service company

(1) Subject to progressive divestment to 49.0 % beginning from the end of the fifth year after commencement of production at the Gorontalo pro

(2)

(3) Subject to dilution to 80.0%

Public

PT Bumi

Resources Tbk

(BUMI)

PT Bumi

Resources

Minerals Tbk

International

Minerals

Company LLC

In January 2012, Bumi Holding SAS divest its ownership by 10% to Government of Mauritania to meet Mauritania regulation. Government ofMauritania has an option to get additional 10% ownership.

PT Newmont

Nusa Tenggara

Herald

Resources Ltd.

Gain and Win

Pte. Ltd.

PT Dairi Prima

Mineral

PT Multi

Daerah

Bersaing

Calipso

Investment Pte.

Ltd.

PT Multi

Capital

Lemington

Investments

Pte. Ltd.

Bumi Holding

S.A.S

96.97%

Effective

ownership

Effective

ownership

Effective

ownership

Bumi

Mauritania SA

Effective

ownership

Bumi Resources

Japan Company

Limited

PT Sarkea

Prima Minerals

PT Gorontalo

Minerals

PT Citra Palu

Minerals

80%

53.39%

Konblo Bumi Inc.

(Liberia Project)

94.1%

Legend

Effective

ownership

Effective

ownership

Effective

ownership18.0% 100.0% 80.0%80.0%

About the company

Company

Bumi Resources Minerals (BRMS) is a company in the metal sector holding a portfolio of subsidiaries having operations and

exploration prospects in Indonesia as well as in Mauritania and Liberia, Africa. Its core operations are the exploration anddevelopment of gold, copper, zinc, lead and molybdenum deposits in Indonesia, iron ore in Mauritania and minerals in

Liberia. BRMS has 75.0% stake in Multi Daerah Bersaing (MDB). Meanwhile, MDB owns 24.0% of the shares in NNT, a

company whose main asset is the Batu Hijau Mine, the second largest coppergold mine in Indonesia and Asia in terms of

estimated production, according to AMEs estimates. BRMS provide coal and other mineral sales, marketing and consulting

services through Bumi Japan, which accounted for all of its current consolidated revenues.

Corporate Structure. BRMS was established in 2003 as PT Panorama Timur Abadi, a company in the business of selling

lubricant oil. In July 2009, BUMI Resources (BUMI) purchased 99.8% of Panorama from an unrelated third party to hold

BUMIs noncoal mining assets, and subsequently changed the name of Panorama to PT Bumi Resources Minerals. After a

series of reorganization in the second half of 2009 and in 2010, the Company became the holding company for certain ofthe minerals and related business operations.

EXHIBIT 13. CORPORATE STRUCTURE

Source: Company


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2011F 2012F 2013F

Mauritania 40 50 50 140

For feasibility studies, drilling and other exploration costs, and

productions costs in relation to the 600,000 tonnes per annum ofdirect shipping ore

Dairi 100 100 11 211

For construction and equipment purchases and to bring the mine

to production

Gorontalo 35 70 0 105 For exploration, drilling and feasibility studies

Citra Palu 30 50 0 80 For feasibility studies and exploration program

Liberia 35 5 5 45 For exploration activities

TOTAL 240 275 66 581

Capex allocationTotal The usage of capex

US$ mn

100 100

11

40 50

50

35

7030

5035

5

5

2011F 2012F 2013F

Dairi Mauritania Gorontalo Citra P alu Liberia

Total= US$240mn

Total= US$275mn

Total= US$66mn

Mauritan ia commences DSO Dairi commences production

Capital Expenditure and source of fund

BRMS will spend a total of US$581mn for capital expenditure in FY11FFY13F for Dairi (US$211mn), Bumi

Mauritania(US$140mn), Gorontalo (US$105mn), Citra Palu (US$80mn) and Liberia projects(US$45mn). Meanwhile, capital

expenditure of NNT will be funded by NNT itself through various options, such as loans and/or an initial public offering tofund capital expenditures and operations of the Phases 6.

Total Capex of US$105mn for the Gorontalo project in FY11FFY12F is enough only up to exploration and get JORC

certification. We estimate total capex could reach around US$1bn for construction and to bring the mine to production.

EXHIBIT 14. CAPITAL EXPENDITURES IN FY11F-FY13F


EXHIBIT 15. THE USAGE OF CAPITAL EXPENDITURE



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BRMS' Cost of acquisition NNT % of Stake No of shares Completed inCost

(US$mn)

Implied cost per 1% stake

(US$mn)

Phase 1 10% 683,407 16-Nov-09 391.0 39.1

Phase 2 7% 478,385 11-Dec-09 246.8 35.3

Phase 3 7% 478,385 15-Mar-10 246.8 35.3

Total 24% 1,640,177 884.6

Operating companies

Newmont Nusa Tenggara

Ownership structure of Newmont Nusa Tenggara

Under the Contract of Work in 1986 between the Indonesian government and NNT, 51% of NNTs shares must be

divested, first, to the Indonesian government or, second, to Indonesian nationals by March 31, 2010. Currently, the

last divestment of 7% of the stake is still in the progress, which Pusat Investasi Pemerintah (PIP) is the buyer of the

divestment.

MDB, a 75% BRMS owned subsidiary, holds 24% stake in NNT after a series acquisitions.

EXHIBIT 16. OWNERSHIP STRUCTURE OF NEWMONT NUSA TENGGARA AS OF 31 DECEMBER 2010

Source: Company

EXHIBIT 17. BRMS COST OF ACQUISITION NEWMONT NUSA TENGGARA


Newmont Mining Corp Sumitomo Corp

Nusa TenggaraPartnership

PT Multi DaerahBersaing

PT Pukuafu Indah PT Indoneia MasbagaInvestama

PT NewmontNusa Tenggara

Batu HijauConcession

56.25% 43.75%

PT Multi Capital

PT Bumi ResourcesMinerals Tbk (BRMS)

24%17.8% 2.2%

56%

99.9%

75%

ElangConcession

RintiConcession


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Batu Hijau Gold Reserves Grade

2010 100% Equity Gold 100% Equity

(oz/ton)

Proved 348,500 62,640 0.014 4,872 877

Probable 609,000 109,620 0.004 2,436 438

Proved and Probable 957,000 172,260 0.008 7,656 1,378

Batu Hijau Copper Reserves Grade

2010 100% Equity Copper 100% Equity

(%)

Proved 348,500 62,640 0.50% 3,584 645

Probable 609,000 109,620 0.35% 4,125 743

Proved and Probable 957,000 172,260 0.40% 7,709 1,388

(mm lbs)(000 tons)

Tonnage (Ore)

(000 tons)

Contained Gold

Tonnage (Ore) Contained Copper

(000 oz)

Newmont Nusa Tenggara Batu Hijau copper and gold mine

Batu Hijau is a large scale open pit gold and copper mine located in Southwest Sumbawa, Indonesia. Batu Hijau

has a large copper/gold deposit, which Newmont Mining Corporation discovered in 1990. Development and

construction activities began in 1997 and startup occurred in late 1999.

Contract of Work (third generation) signed with Indonesian Government in 1986. Under the Contract of Work, NNThas the right to continue operating the project for 30 years from operational startup, or longer if approved by the

Indonesian government.

One of only three mines in the world with total ore tonnage in excess of 1 billion tonnes and gold grades higher

than 0.2g/t. One of the lowest cost gold or copper operations in the world ($ 0.7/ lb copper ; $ 237/ oz gold in

2010)

The mine is at an elevation of 450 meters (1,476 feet) above sea level and 25 kilometers (15 miles) from the

companybuilt port in Benete Bay. Ore is mined from the open pit by electric shovels and 240ton haul trucks. The

ore is crushed and conveyed 6.4 kilometers (4 miles) to the concentrator which is capable of processing 140,000

tonnes per day through two grinding mill circuits and five flotation lines. The final concentrate is then pumped to

the port, where it is filtered and then shipped to smelters in Asia and Europe.

At the end of 2010, Batu Hijau has reserve of 7.7bn lbs of copper and 7.6mn oz of gold. Newmont Mining

Corporation estimate there is potential increase in reserves up to ~30%50% of current gold and copper Reserves

over the next decade.

Batu Hijaus production is expected to decrease in FY11F and FY12F as it moves into Phase 6 stripping since 2H10,

whereas FY13F production volume is expected to be similar to its peak performance in 2010.

EXHIBIT 18. NNT BATU HIJAU GOLD AND COPPER RESERVES

Source: Company


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EXHIBIT 19. NNT BATU HIJAU

Source: Newmont 2010 factbook

EXHIBIT 20. LOCATION OF BATU HIJAU, ELANG AND RINTI

Source: Company


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Newmont Nusa Tenggara Elang and Rinti

Currently, Elang project is a green field project. Elang project represents an opportunity in earlystage

development that could eventually exceed the size of current operation at Batu Hijau. Newmont Mining

Corporation estimates Elangs potential to be approximately 25 million ounces of gold and 15 billion pounds of

copper on a 100% basis a worldclass deposit by any measure. NNT has received an exploration permit for Elang that is valid from September 27, 2010 to February 28, 2030.

Newmont Mining Corporation forecasts commercial production in Elang mine will start since 2020.

The Rinti exploration area is 80 kilometers east of the Batu Hijau Mine and 20 kilometers from the Elang prospect.

Further exploration is required to determine the economic potential and to generate a JORC compliant resource

statement.

EXHIBIT 21. NNT ELANG MINE PLAN

Source: Newmont Mining Corporation

Dairi

Dairi is a very high grade zinc resource located in North Sumatra and is proposed to be developed as an

underground mining operation. Its mining concession is located strategically with respect to smelters and

shipping routes.

Dairi signed Contract of Work with Indonesian Government in 1998. The Contract of Work has a 30 year term from

the commencement of production.

A series of permits has been get in order to start production: exploration borrow and use permit in October 2010,

Presidential Decree to allow underground mining within protected forest area in May 2011, obtained PrincipleAgreement for underground mining in Nov 2011.

Dairi is one of the highest grade zinc deposits in the world (Grades of 11.5% Zn, 6.8% Pb and 7.5 g/t Ag). Low

estimated net byproduct cash cost of US$0.21/lb.

The JORC standard Reserve and Resource was completed by CSA Global (Australia) in Oct 2010 and Mining Plus

Pty.Ltd in Feb 2011.


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Sites Combined Reserves

Proven 4.95 Mt at 14.8% Zn, 9.1% Pb, 11.5 Ag g/t

Probable 0.93 Mt at 11.3% Zn, 7.0% Pb, 10.1 Ag g/t

Lae Jahe Probable 5.17 Mt at 8.4% Zn, 4.5% Pb, 3.3 Ag g/t

TOTAL RESERVES 11.05 Mt at 11.5% Zn, 6.8% Pb, 7.5 Ag g/t

Sites Combined Minerals Resources

Anjing Hitam 8.11 Mt at 14.6% Zn, 9.1% Pb, and 12 Ag g/t

Lae Jahe 16.18 Mt at 8.2% Zn, 4.5% Pb

Base Camp (shale hosted) 0.49 Mt at 5.5% Zn, 5.7% Pb, and 10 Ag g/t

Base Camp (carbonate hosted) 0.34 Mt at 4.2% Zn, 4.0% Pb, and 20 Ag g/t

TOTAL RESOURCE 25.12 Mt at 10.1% Zn, 6.0% Pb

Anjing Hitam

EXHIBIT 22. DAIRI HAS SIGNIFICANT RESERVES AND RESOURCES

Source: Company

EXHIBIT 23. DAIRI PROJECT IS LOCATED IN NORTH SUMATRA

Source: Company


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Mineral Inventory 100% Mineral Grade Metal contain

100%

Mauritania Project 100,000 Iron 58% 58,000 MT

(000 tonnes)

Tonnage (Ore)

Mauritania

Currently, active in these two following areas: Tamagot region, south of the town of Akjoujt, and 250 km North

East of the capital Nouakchott. Sfariat region, 250 km north of the town of Zouerat in northern Mauritania

Two potential producing operations: 1) Direct shipping ore from Tamagot region. 2) Concentrate for pellet feed

from Sfariat region DSO production expected to commence in early 2012

Bumi Mauritania got exploitation permit in January 2012.

EXHIBIT 24. BUMI MAURITANIAS RESERVES AND RESOURCES

Source: Company

EXHIBIT 25. BRMS PERMITS IN MAURITANIA

Source: Company


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Mineral Inventory Mineral Grade

Gorontalo Project 125,000 100,000 Gold 0.55 g/tonne 2.4 mm oz 1.9 mm oz

Copper 0.75% 2,067 mm lbs 1,653 mm lbs

Tonnage (Ore)

Contained Metal(000 tonnes)

Gorontalo

BRMS has Contract of Work lincense of a 36,070 hectare mining concession located in the Bone Bolango Regency

(Province of Gorontalo). BRMS obtained Exploration Borrow & Use Permit in December 2010.

Based on explorations to date, the following have been identified in the concession:

Four copper and gold systemsThree gold, silver and copper systems

Four gold and silver systems

JORC Resource to be completed by end 2012 with commissioning expected in 2H 2014

Conceptual development model is to build a 25 million tonnes per annum (feed tonnes) copper concentration

plant that would be able to process 0.6% of copper and 0.6 grams per tonne of gold material

EXHIBIT 26. GORONTALOS RESERVES AND RESOURCES

Source: Company

EXHIBIT 27. BRMS HAS COW RIGHTS TO A 36,070 HECTARE MINING CONCESSION LOCATED IN PROVINCE OF GORONTALO

Source: Company


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Mineral Grade

100% Equity 100% Equity

2,500 2,400 Gold 7.5 g/tonne 0.7 mm oz 0.6 mm oz

Citra Palu Project

106,000 103,000 Molybdenum 0.14% 8 mm lbs 7 mm lbs

Tonnage (Ore)

(000 tonnes)

Contained Metal

Citra Palu

Citra Palu has rights to a 138,889 hectare mining concession in Central Sulawesi and South Sulawesi, Indonesia through a

COW Contract area consists of six separate blocks, of which the Poboya Gold Prospect is the most promising.

Initial mineral inventory of: Blok 1: 2.5 million tonnes with 7.5 g/t gold

Blok IV: 106 million tonnes at 0.14% molybdenum

Conducted a baseline study on economic, social, health and environment in preparation for a detailed infill drilling

program in 2011

JORC Resource to be completed by end 2012 with commissioning expected in 2H 2014

EXHIBIT 28. CITRA PALUS RESERVES AND RESOURCES

Source: Company

EXHIBIT 29. BRMS HAS COW TO A 138,889 HECTARE MINING CONCESSION LOCATED IN CENTRAL AND SOUTH SULAWESI

Source: Company


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Konblo Bumi (Liberia)

94.1% ownedbyBRM (Subject to dilution to 80.0%)

Significant potential to discover world class diamond and gold depositsKonblo Bumi has seven exploration licenses to explore for gold, diamond and base metals (Two were awarded in 2009,

remaining five were awarded in January of 2010)

Current focus is on two diamond license areas located northwest of capital Monrovia and east of the town of Kakata

Helicopterborne magnetic survey has been completed

Survey located a number of areas that display features strongly indicative of Kimberlite pipes as large as 5 hectares

Licenses located in southern Liberia have excellent potential for economic gold discoveries

EXHIBIT 30. KONBLO BUMI (LIBERIA)

Source: Company


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(1,500)

(1,000)

(500)

0

500

1,000

1,500

2,0002,500

3,000

2009 2010 2011F 2012F 2013F

Rp bn

Revenue Equity in NNT net income

Interest expenses Corporate tax

Net Income (net of minority)

3149 171 196 226-

- -

628628

-- -

-

595

4592%

15% 383%76%

(10.0)

-

10.0

20.0

30.0

40.0

50.0

0

200

400

600800

1,000

1,200

1,400

1,600

2009A 2010A 2011F 2012F 2013F

Rp bn

Dairi Prima (LHS) Bumi Mauritania(LHS)

BUMI Japan (LHS) Revenues growth (RHS)

Financial Analysis

Income statement analysis

Solid revenue growth at 114% CAGR10-13F

We forecast consolidated revenue to grow at 114% CAGR 1013F from Rp149bn in FY10 to Rp1,449bn in FY13F due to: 1)

Bumi Mauritania starts to generate revenue since FY12F. 2) Dairi Primas revenue stream kicks in since FY13F. 3) growth in

Bumi Japan revenue.

EXHIBIT 31. CONSOLIDATED REVENUE AND REVENUE COMPOSITION

Source: Company, Mandiri Sekuritas estimates

Equity income from NNT is the biggest contributor to consolidated net income up to FY13F. Since NNT was acquiredby MDB in 2009, equity income from NNT is the biggest contributor to consolidated net income. We estimate that even

after Dairi produces at its normal capacity since FY14F, NNT is still the biggest contributor to consolidated net income. We

expect equity income from NNT would decrease in FY11F and FY12F compare to FY10 due to NNT is in the process of

development Batu Hijau phase 6 until the end of 2012. We estimate phase 6 starts to produce since FY13F, therefore its

sales volume in FY13F would back to reach its peak volume in 2010.

EXHIBIT 32. MAJOR COMPONENTS OF INCOME STATEMENT: EQUITY INCOME FROM NNT IS THE BIGGEST COMPONENT



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Rp bn 2009 2010 2011 2012 2013

% MDB ownership in NNT at end of year 17% 24% 24% 24% 24%

INCOME STATEMENT

Equity in net income of NNT 488 2,132 1,231 1,462 2,615 Not taxable

Consolidated pre tax income 422 1,422 953 1,248 2,970

% contribution equity income to consol pre tax income 115% 150% 129% 117% 88%

Consolidated Income tax - 299 77 161 675

% effective corporate tax rate 0% 21.0% 8.1% 12.9% 22.7%

CASH FLOW STATEMENT

Dividend received from NNT - 1,583 439 522 2,037

% NNT dividend payout ratio 0% 78% 36% 36% 78%

% dividend received from NNT to consol pre tax income 0% 111% 46% 42% 69%

Taxable at

Corporate

tax rate

Effective Corporate Tax rate decrease from 21.0% in FY10 to 8.1% in FY11F and 12.9% in FY12F. Under Indonesian

Tax Regulation, corporate income tax is calculated on company basis, not on consolidated basis. Equity income from

associate company (in this case is equity income from NNT) is not taxable. Meanwhile, if ownership in associate company is

less than 25%, dividend receipt from associate company is taxable at corporate income tax rate. Therefore, if equity

income from associate is the biggest contributor to consolidated net income, effective corporate tax rate is determined bydividend payout ratio of the associate company. In BRMS case, the biggest contributor to consolidated pretax income is

contribution from NNT. We estimate NNT would reduce its dividend payout ratio from 78% in FY10 to 36% in FY11F and

FY12F due to NNT need cash to fund the development of phase 6 until the end of 2012. We estimate NNT would increase

its dividend payout ratio back to 78% in FY13F due to the phase 6 is expected to start production since FY13F.

EXHIBIT 33. EFFECTIVE CORPORATE TAX RATE DECREASE DUE TO DECREASE IN NNT DIVIDEND PAYOUT RATIO


Earnings grows by CAGR10-13F of 33.2%. We estimate consolidated net income (net of minority interest) grow by

CAGR1013F of 33.2% from Rp765bn in FY10 to Rp1,806bn in FY13F. The main drivers of growth are: 1) NNT production in

FY13 is back to FY10 level after the development of phase 6 finish at the end of 2012. We expect consolidated net income

in FY11F and FY12F lower than FY10 because we expect NNT production decrease during the period. 2) BUMI Mauritania

start to generate earning since FY12F 3) Dairis earning kick in since FY13F.


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-13%

2%

13%

19%

7%

-20%

-10%

0%

10%

20%

2009 2010 2011F 2012F 2013F

Net gearing

0.1%

9.3%

4.2% 4.6%

9.4%

0.0%

4.3%3.5% 3.5%

7.1%

-2%

0%

2%

4%

6%

8%

10%

2009 2010 2011F 2012F 2013F

ROAE

ROAA

Balance sheet analysis

Healthier balance sheet ahead. The biggest chunk of BRMS debt is loan from Credit Suisse. We estimate BRMS balance

sheet would be healthier ahead as BRMS pays its loan from dividend receipt from NNT. We expect net gearing decrease

significant in FY13F before becoming net cash in FY14F as we assume NNT increase its dividend payment in FY13F as NNT

production increase significant after phase 6 starts to produce since FY13F.

EXHIBIT 34. HEALTHIER BALANCE SHEET AHEAD


Increasing ROE and ROA would make trading at below par value become unjustified. Currently, BRMS is traded at far

below its book value. We think that increasing return on asset (ROA) and return on equity (ROE) would bring justification

for BRMS share to be traded above par value. Lower ROA and ROE in FY11F and FY12F compare to FY10 due to lower

equity income from NNT in FY11F and FY12F compare to FY10. Higher ROA and ROE in FY13F due to: 1) higher equityincome from NNT as its phase 6 start production. 2) Bumi Mauritania starts to generate earning since FY12F. 3) Dairi s

earnings kick in since FY13F.

EXHIBIT 35. ROAA AND ROAE

Source: Mandiri Sekuritas estimates


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Cash flow analysis (Rp bn) 2009 2010 2011F 2012F 2013F

Cash at beginning of the year 1 48 1,914 547 48

Cash flow from operation (151) (408) (457) 322 120

Cash flow from investing (14,696) (1,371) (1,739) (2,043) 1,374

Dividend from NNT - 1,583 439 522 2,037

Other Investing cash flows (14,696) (2,954) (2,179) (2,565) (663)

Cash flow from financing 14,894 3,644 830 1,222 (1,085)

Proceed from Dairi divestment - - - 2,166 -

Other financing cash flows 14,894 3,644 830 (945) (1,085)

Cash at end of the year 47 1,913 547 48 457

Cash flow analysis

Dividend from NNT is the major component of cash inflow. If we do not count oneoff cash inflows, such as: IPO

proceed and loan, dividend from NNT is the major component of cash inflow until FY13F. Cash flow from operation would

remain negative until FY12F and would start to be positive since FY13F.

EXHIBIT 36. DIVIDEND FROM NNT IS THE MAJOR COMPONENT OF CASH INFLOW

Source: Mandiri Sekuritas estimates

Risk Factors

We identify the flowing risk factors on BRMS:

1. The biggest contributor to consolidated net income and cash flow is NNT, meanwhile BRMS does not have

control on NNT. Although dividend from NNT is the main source of BRMS recurring cash inflow, BRMS does not

have ability to control NNTs dividend payout ratio. This may force BRMS to look for other source of fund for its

operating activities and required minimum dividend of US$4mn per annum to Daerah Maju Bersaing.

2. Commodity price fluctuation.Theprices of its commodities fluctuate from time to time. Significant fluctuation

from our forecast may generate different net income.

3. Regulation risk. Its exploration and development activities and future mining operations are regulated by the

Indonesian Government primarily through the Ministry of Energy and Mineral Resources, as well as the Ministry of

Forestry, the State Ministry for Environmental Affairs and the Investment Coordinating Board. Changes in

regulations may bring unfavorable impacts on BRMS.4. Fluctuations in the exchange rate would affect the forecasted net income and dividend received.

5. Increased operating costs could affect its profitability. A material increase in costs at any significant location

could have a significant effect on its profitability and operating cash flow.


27/30



Appendix 1. Board of commissioners and Board of Directors

Name and Position Past Experience and Education

Saptari HoedajaPresident Commissioner Director of PT Bakrie & Brothers Tbk (2008 Present)President Commissioner of PT Energi Mega Persada Tbk (2007 Present)

President Commissioner of PT Kaltim Prima Coal (2007 Present)President Commissioner of PT Arutmin Indonesia (2007 Present)President Director of BUMI (2001)Degree in Mechanical Engineering of Bandung Institute of Technology (1983)

Nalinkant A. Rathod

Commissioner President Director of PT Kaltim Prima Coal and PT Arutmin Indonesia (2007 Present)Commisioner of PT. Bumi Resources Tbk and several Bakrie Group companies (2005 Present)Managing Director of Great Asian Holding Pte. Ltd. and Capital Managers Asia LtdBachelors Degree in Commerce from Andhra University in India (1970)Institute of Chartered Accountants of India (CPA) (1976)

Kanaka PuradiredjaIndependent Commissioner Honorary Chairman of the Board of Indonesian Institute of AccountantsManaging Partner and Chairman of KPMG Indonesia

Senior Partner of Kanaka Puradiredja, Suhartono, Office of Public AccountantChairman of Indonesian Institute of Audit CommitteeMember of the Honorary Board of the Association of Professionals in Risk ManagementVice Chairman of the Indonesian Institute of Commissioners and DirectorsDegree in Economic (Accounting) at Padjadjaran University, Bandung


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Name and Position Past Experience and Education

Kenneth P. Farrell

President Director Director of Bumi Resources (2003 Present)Director of IndoCoal Resources and PTNNTCommissioner of Arutmin, KPC, Indocoal Kalsel and Indocoal Kaltim (2007)

Management and Executives in BHP Billiton (1980 2001)Graduate in University of Queensland in Engineering (1976) and Commerce degree (1986)Gained Graduate Dip of Company Directorship from the University of New England (1994)

Yuanita Rohali

Director Finance Director of Bakrie Energy International Pte. LtdFinance Director of PT Bakrie & Brothers Tbk (2004 2009)lecturer at the Masters Program in Accounting at the University of IndonesiaBachelor degree in Computer Science from University of IndonesiaMasters in Management from University of Indonesia (1992)Master of Commerce in Advanced Finance from University of New South Wales, Sydney,Australia (1994)

Endang RuchijatDirector Chief Executive Officer of PT Kaltim Prima CoalSeveral senior positions in PT Bumi Resources Mining

Degree in Mining Engineering from Bandung Institute of Technology

Febriansyah Marzuki

Independent Director Corporate Finance Director of PT Capitalinc Investment (July 2009June 2010)Assistant Vice President Corporate Finance of PT Recapital SecuritiesSenior Manager of Finance Restyle ConceptFinance and Business Development Manager of PT Nusacipta RealtindoBachelor of General Business from University of Houston

Evan Ball

CEO Dairi Prima Minerals President Director of PT. Dairi Prima Minerals (2010 Present)Chief Executive Officer of Herald Resources (2008 Present)Managing Director of Kaltim Prima Coal with PT Bumi Resources (2003 2006)Senior Vice President Project Development di PT Bumi Resources Tbk.Chief Operating Officer of PT Kaltim Prima CoalManager Mining of Rio Tinto Coal AustraliaChief Engineer in Western Engineering Services - Kalgoorlie Gold Operations and Windarra

Herwin Wahyu Hidayat

Head of Investor Relations7 years experience in finance and Investor Relations within upstream oil & gas industriesCorporate Banker in ABN Amro (Global Corporate Group) and Citibank (Financial Institutions& Public Sector) (1998 2003)

Mohammad Sulthon

Corporate Secretary / Chief

Legal OfficerDirector of PT Multi Daerah BersaingSenior Legal Officer of PT Arutmin Indonesia for 5 yearsExpert in Indonesian mining law


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Bumi Resources Minerals

Balance sheet

YE Dec (Rp bn) 2009A 2010A 2011F 2012F 2013F

48 1,914 547 48 457Acc receivable 1 0 0 0 0

Inventory 0 0 0 0 0

Others 3 68 68 68 68

Current assets 52 1,982 615 115 525

Investments 0 0 0 0 0

Fixed assets 887 909 952 994 1,035

Others 14,301 17,205 20,113 23,556 24,735

Total assets 15,239 20,096 21,681 24,666 26,295

Current liabilities 42 295 330 1,219 2,105

Acc. payable 26 20 23 110 194

ST borrowings 0 79 82 21 0

Others 16 196 225 1,087 1,911

Longterm liabilities 15,413 2,648 3,357 4,403 2,887

Longterm payable 75 2,182 2,774 3,617 1,943

Others 15,338 466 583 786 944

Total liabilities 15,455 2,943 3,687 5,622 4,992

Shareholder's equity (216) 17,153 17,993 19,044 21,303

Cash and ST Investment

(incl. cash equiv)

Profit and loss

YE Dec (Rp bn) 2009A 2010A 2011F 2012F 2013F

Revenue 18 149 171 824 1,449

Gross profit 4 149 171 824 1,449

Operating profit 0 108 76 377 874

EBITDA 3 118 95 398 896

Net Interest (100) (1,074) (392) (591) (519)

Interest expense (100) (1,082) (478) (612) (537)

Interest income 0 7 86 21 18

Forex losses/gains 35 171 38 0 0

Net other 487 2,217 1,231 1,462 2,615

Pre-tax profit 422 1,422 953 1,248 2,970

Income tax (0) (299) (77) (161) (675)

Others (313) (36) 0 0 0

Minority interests (110) (322) (154) (273) (489)

Net Profit (0) 765 722 814 1,806 Cashflow statement

YE Dec (Rp bn) 2009A 2010A 2011F 2012F 2013F

Operating Profit 0 108 76 377 874

(101) (990) (392) (591) (519)

Depr & Amort 3 10 19 20 22

Tax (0) (299) (77) (161) (675)

Change in working capit 38 110 32 950 908

Other operating cash flo (192) (1,292) (1,231) (1,462) (2,615)

Operating Cash Flow (362) (2,675) (1 ,727) (1,140) (2,495)

Capital expenditure (8,664) (388) (2,116) (2,503) (601)

( 9,0 26 ) (3 ,0 62 ) ( 3,8 43 ) (3 ,64 2) (3 ,0 96)

Other investing cash flo (6,032) (984) 377 459 1,975

Cash Flow From

Investing (14,696) (1,371) (1,739) (2,043) 1,374

Net change in debts 75 2,187 595 782 (1,695)

Equity funds raised 0 11,267 0 0 0

Other financing cash flo 14,820 (9,808) 235 440 610

Cash Flow From

Financing 14,895 3,645 830 1,222 (1,085)

523 2,303 1,269 1,462 2,615

Net change in cash 47 1,866 (1,367) (500) 409

Cash at beginning 1 48 1,914 547 48

Cash at End 48 1,914 547 48 457

Other recurring income

/ (expenses)

Nonrecurring income(expenses)

Free Cash Flow

Valuation

YE Dec 2009A 2010A 2011F 2012F 2013F

PER (x) (2.2) 9.4 19.8 17.6 7.9

EV/EBITDA (X) 48.7 67.3 181.3 47.0 19.0

P/BV (X) (0.0) 0.4 0.8 0.8 0.7

P/CF (X) 0.2 9.3 19.3 17.2 7.8

Dividend Yield (%)


Key ratios

YE Dec 2009A 2010A 2011F 2012F 2013F

Growth (% yoy)

Sales n/a 730.4 15.0 382.7 75.8

EBIT n/a 89,003.6 (30.0) 398.6 131.5

EBITDA n/a 4,270.7 (19.9) 319.8 125.1

Net Profit n/a N.A. (5.5) 12.7 121.9

Profitability (%) 0.0 0.0 0.0 0.0 0.0

Gross Profit Margin 24.4 100.0 100.0 100.0 100.0

Oper. Margin 0.7 72.9 44.3 45.8 60.3

EBITDA Margin 15.1 79.7 55.5 48.3 61.8

Net Margin (1.2) 514.9 423.0 98.7 124.6

ROAA (0.0) 4.3 3.5 3.5 7.1

ROAE 0.1 9.3 4.2 4.6 9.4

Leverage

Net debt/equity (%) (12.6) 2.0 12.8 18.9 7.0

EB ITDA/Gro ss Interest (X) 0.0 0.1 0.2 0.6 1.7

Per share data (Rp)

EPS (253) 60 28 32 71

CFPS 2,855 60 29 33 71

BVPS (384,555) 1,303 682 714 785

DPS


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Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk

Plaza Mandiri 28th Floor, Jl. Jend. Gatot Subroto Kav. 36 - 38, Jakarta 12190, IndonesiaGeneral: +62 21 526 3445, Fax : +62 21 527 5711 (Equity Research), +62 21 527 5374 (Equity Sales)

Verdi Budiman Head of Equity Research [email protected] +6221 5296 9542

Strategy, BankingAdrian Joezer Automotive, Consumer, Retail [email protected] +6221 5296 9549

Hariyanto Wijaya, CPA, CFA Conglomerate, Plantation, Heavy eq. [email protected] +6221 5296 9553

Herman Koeswanto Mining, Metals [email protected] +6221 5296 9543

Kresna Hutabarat Banking [email protected] +6221 5296 9548

Maria Renata Automotive, Construction, Toll road [email protected] +6221 5296 9546

Octavius Oky Prakarsa Building material, Consumer, Property [email protected] +6221 5296 9547

Raditya Christian Artono Oil & gas, Telecommunication [email protected] +6221 5296 9569

Villya Christin Purba Chemical [email protected] +6221 5296 9638

Aldian Taloputra Economist [email protected] +6221 5296 9572

Leo Putra Rinaldy Economist [email protected] +6221 5296 9406

Rafdi Prima Technical Analyst [email protected] +6221 5296 9551

Wisnu Trihatmojo Research Assistant [email protected] +6221 5296 9544

Lokman Lie Head of Sales, Trading & Dealing [email protected] +6221 527 5375

Silva Halim Head of Equity Sales [email protected] +6221 527 5375

Reinald Wangsanata Institutional Sales [email protected] +6221 527 5375

Oos Rosadi Institutional Sales [email protected] +6221 527 5375

Vera Ongyono Institutional Sales [email protected] +62 21 527 5375

Arvita Utami Ananda Institutional Sales [email protected] +62 21 527 5375

Andrew Handaya Institutional Sales [email protected] +62 21 527 5375Zahra Aldila Niode Institutional Sales [email protected] +62 21 527 5375

Kusnadi Widjaja Equity Dealing [email protected] +6221 527 5375

Edwin Setiadi Equity Dealing [email protected] +62 21 527 5375

Henry Sidarta Equity Dealing [email protected] +62 21 527 5375

Marhaendra Jakarta Branch [email protected] +6221 5296 9491

Yohanes Triyanto Kelapa Gading Branch [email protected] +6221 45845355

Hendra Riady Mangga Dua Branch [email protected] +6221 6230 2333

Meta Rama Prilyandari Pondok Indah Branch [email protected] +6221 75818837

Boy Triono Bandung Branch [email protected] +6222 2510738

Mochamad Jamil Banjarmasin Branch [email protected] +62511 442 4020

Irawan Endro Surono Malang & Surabaya Branch [email protected] +6231 535 7218

Ruwie Medan Branch [email protected] +6261 457 1116

INSTITUTIONAL SALES

RESEARCH

INVESTMENT RATINGS: Indicators of expected total return (price appreciation plus dividend yield) within the 12month period from the date of the the last

published report, are: Buy (10% or higher), Neutral (10% to10%) and Sell (10% or lower).

DISCLAIMER: This report is issued by PT. Mandiri Sekuritas, a member of the Indonesia Stock Exchanges (IDX). Although the contents of this document may

represent the opinion of PT. Mandiri Sekuritas, deriving its judgement from materials and sources believed to be reliable, PT. Mandiri Sekuritas or any other

company in the Mandiri Group cannot guarantee its accuracy and completeness. PT. Mandiri Sekuritas or any other company in the Mandiri Group may be

involved in transactions contrary to any opinion herein to make markets, or have positions in the securities recommended herein. PT. Mandiri Sekuritas orany other company in the Mandiri Group may seek or will seek investment banking or other business relationships with the companies in this report. For

further information please contact our number 62215263445 or fax 62215275711.

RETAIL SALES

Documents

BRMS Initiating Cov 01FebJan12editedMS