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1 QUARTERLY INVESTMENT UPDATE (dec 2012) Commodity market review Commodity markets weakened during the final quarter of 2012, falling 6.3% in AUD terms as measured by the Dow Jones UBS Commodity Index. Even with global equity markets pushing higher in the final few months of the year and sustained expansionary monetary policies from the world s major central banks, markets remain wary of global growth prospects for This was reflected in the commodity markets performance in the fourth quarter of The worst performing sector in the December quarter was agricultural commodities, which reversed all of their third quarter gains and more, declining 10.2% in AUD terms. The exception was lumber; the best performing of all commodities, which rallied 30.1% due to improved demand from China and tightening supply out of the US. Lean hogs (+7.9%) and cotton (+5.5%) also moved higher. On a more negative note, five of the seven worst performing commodities were agricultural, with coffee (-19.5%) falling the furthest on the back of excess supply. Precious metals also had a disappointing quarter, selling off 7.3% in AUD terms as investors took profits after the substantial gains made in the third quarter, and the deflationary fears of the fiscal cliff plagued international headlines. Although the gold price declined 8.1% in the December quarter, it still managed to report an annual gain of 5.0% for 2012 as the fundamentals remain relatively favourable. Silver (-15.3%) fell more than gold due to its volatile nature, while platinum (-10.3%) also fell. The energy sector fell 5.2% in AUD terms in the last quarter of 2012 and finished the year down 10.5%. Energy commodities had a volatile year, and were unable to fully recover from the mid year sell off caused by the European debt crisis. Unleaded gasoline fell 18.3% in the December quarter, and was the second worst performing commodity over the period. Heating oil was down 6.7%, while Brent crude (-4.0%) and WTI crude (-3.3%) also declined. As a whole, industrial metals performed the best in the December quarter, falling 3.6% in AUD terms. Tin was the best performing industrial metal, rising 3.7% over the reporting period, and was also the best performing industrial metal for 2012, managing to gain 19.9%. After falling significantly during the Euro crisis in the middle of the year, tin prices recovered significantly as demand strengthened while output from leading tin producers continued to decline. Lead fell 1.2% over the quarter, while zinc (-3.7%), aluminium (-4.9%), copper (-5.6%), and nickel (-10.4%) all declined. THE PERFORMANCE OF THE SUB-SECTOR COMPONENTS OF THE DOW JONES UBS COMMODITIES INDEX IN AUD (ALL COMPONENTS REBASED TO 100 AT 28 SEPTEMBER FOR COMPARATIVE PURPOSES) INDUSTRIAL METALS ENERGY PRECIOUS METALS AGRICULTURE SEP 12 5 OCT OCT OCT OCT 12 2 NOV 12 9 NOV NOV NOV NOV 12 7 DEC DEC DEC DEC 12 For personal use only Source: Bloomberg GLOBAL RESOURCE MASTERS FUND LIMITED Quarterly Update december

2 Commodity equities review Most commodity equities had a positive quarter, managing to outperform physical commodities. With global equity markets finishing 2012 on a strong note, the strong equity investor sentiment helped boost commodity equities in the face of declining commodity prices. On a less positive note, gold and silver equities were the worst performing sector, declining by 13.3% in AUD terms over the December quarter. Precious metals are yet to break out of the trading range that has developed since this correction began in September of Consequently, precious metals equities sustained their decline over this period. Oil services also declined over the quarter (-4.2%), reversing some earlier gains to finish the year relatively flat. After performing poorly throughout the year, iron ore stocks were the best performing sector gaining 9.6% in AUD terms, as spot iron ore prices rallied over 30% in the final quarter of Coal stocks also managed to push higher (+4.3%), as well as alternative energy stocks (2.4%), agricultural stocks (2.5%), and water stocks (1.3%). THE PERFORMANCE OF THE MSCI WORLD ENERGY AND MATERIALS INDICES IN AUD (ALL COMPONENTS REBASED TO 100 AT 28 SEPTEMBER FOR COMPARATIVE PURPOSES). 110 MATERIALS ENERGY SEP 12 5 OCT OCT OCT OCT 12 2 NOV 12 9 NOV NOV NOV NOV 12 7 DEC DEC DEC DEC 12 For personal use only Source: Bloomberg Currency market review The Australian dollar went against the grain again this quarter, managing to post a small gain against the US dollar while other commodity currencies fell. The Australian dollar increased 0.2% to US dollars, while the Brazilian real (-1.1%), South African rand (-1.9%), and Canadian dollar (-0.9%) all depreciated against the US dollar. The Australian dollar had mixed returns against other major currencies, appreciating 11.4% against the Japanese yen and 1.0% against the Canadian dollar. However, the Australian dollar depreciated against the euro (-2.4%), the Swiss franc (-2.4%), and the British pound (-0.4%). Fund performance and investments The NTA for the Company at 31 December 2012 was $1.44 per share. The total return for the period was -3.2%. This compares to the Dow Jones UBS Commodity Index performance of -6.3%, the MSCI World Materials Index performance of +5.0%, and the MSCI World Energy Index performance of -2.2%. At 31 December, the Company was 96% invested. 2 GLOBAL RESOURCE MASTERS FUND LIMITED Quarterly Update december 2012

3 The investments held at 31 December were: FUND % INVESTED ASSET CLASS RESOURCES FOCUS Market Vectors Agribusiness ETF 15.9% Equity Agriculture ishares S&P Global Energy 15.2% Equity Energy RS Global Natural Resource 15.1% Equity Broad ETFS Physical Gold 14.8% Physical Precious Martin Currie Global Resources Fund 10.3% Equity Broad PIMCO Commodity Real Return Strategy 5.0% Physical Broad Schroders AS Commodity Fund 5.0% Physical Broad Credit Suisse Gains Fund 5.0% Physical Broad Invesco Energy Fund 4.9% Equity Energy Taurus Precious Metals Fund 4.8% Physical Precious Passport Capital Materials Fund 0.2% Equity Materials Total Investments 96.2% Cash 3.8% Total 100.0% The top 50 equity holdings and top 20 physical commodity holdings of the Company were: RANK NAME % TOTAL PORTFOLIO % EQUITY PORTFOLIO SECTOR 1 Exxon Mobil Corp 3.0% 4.8% Integrated Oil 2 Royal Dutch Shell PLC 1.9% 3.1% Integrated Oil 3 Chevron Corp 1.9% 3.1% Integrated Oil 4 Syngenta AG 1.5% 2.4% Agribusiness 5 Monsanto Co 1.4% 2.2% Agribusiness 6 Mosaic Co 1.2% 2.0% Agribusiness 7 Occidental Petroleum Corp 1.2% 1.9% Oil & Gas E&P 8 Total SA 1.2% 1.9% Integrated Oil 9 Potash Corp of Saskatchewan 1.1% 1.7% Agribusiness 10 Deere & Co 1.0% 1.7% Agribusiness 11 Southwestern Energy Co 1.0% 1.6% Oil & Gas E&P 12 Anadarko Petroleum Corp 0.9% 1.4% Oil & Gas E&P 13 Schlumberger Ltd 0.9% 1.4% Oil Services 14 Uralkali OJSC 0.8% 1.4% Oil & Gas E&P 15 BP PLC 0.8% 1.3% Integrated Oil 16 Peyto Exploration & Development 0.8% 1.3% Oil & Gas E&P 17 BRF - Brasil Foods SA 0.8% 1.2% Agribusiness 18 Wilmar International Ltd 0.8% 1.2% Agribusiness 19 Archer-Daniels-Midland Co 0.8% 1.2% Agribusiness 20 Suncor Energy Inc 0.7% 1.1% Oil & Gas E&P 21 Calpine Corp 0.7% 1.1% Utlilities 22 Range Resources Corp 0.7% 1.1% Oil & Gas E&P 23 Agrium Inc 0.6% 1.0% Agribusiness 24 National Oilwell Varco Inc 0.6% 1.0% Oil Services GLOBAL RESOURCE MASTERS FUND LIMITED Quarterly Update december

4 RANK NAME % TOTAL PORTFOLIO % EQUITY PORTFOLIO SECTOR 25 Denbury Resources Inc 0.6% 1.0% Oil & Gas E&P 26 Oil Search Ltd 0.6% 1.0% Oil & Gas E&P 27 Compass Minerals International 0.6% 1.0% Oil & Gas E&P 28 Yara International ASA 0.6% 1.0% Agribusiness 29 Kubota Corp 0.6% 1.0% Agribusiness 30 Antofagasta Plc 0.6% 0.9% Oil & Gas E&P 31 EOG Resources Inc 0.6% 0.9% Oil & Gas E&P 32 BG Group PLC 0.6% 0.9% Oil & Gas E&P 33 Praxair Inc 0.6% 0.9% Oil & Gas E&P 34 Cabot Oil & Gas Corp 0.6% 0.9% Oil & Gas E&P 35 CF Industries Holdings Inc 0.5% 0.9% Agribusiness 36 Martin Marietta Materials Inc 0.5% 0.9% Oil & Gas E&P 37 Tullow Oil PLC 0.5% 0.9% Oil & Gas E&P 38 EQT Corp 0.5% 0.8% Oil & Gas E&P 39 ARC Resources Ltd 0.5% 0.8% Oil & Gas E&P 40 Noble Energy Inc 0.5% 0.8% Oil & Gas E&P 41 Ensco PLC 0.5% 0.8% Oil Services 42 Rio Tinto 0.5% 0.8% Oil & Gas E&P 43 Goldcorp Inc 0.5% 0.8% Oil & Gas E&P 44 Iluka Resources Ltd 0.5% 0.7% Oil & Gas E&P 45 Conoco Phillips 0.5% 0.7% Integrated Oil 46 Bunge Ltd 0.4% 0.7% Agribusiness 47 Petroleo Brasileiro SA 0.4% 0.7% Oil & Gas E&P 48 Kinder Morgan Inc/Delaware 0.4% 0.7% Oil & Gas E&P 49 CNH Global NV 0.4% 0.7% Agribusiness 50 IOI Corp Bhd 0.4% 0.7% Agribusiness Total 39.5% 63.9% RANK NAME % TOTAL PORTFOLIO % Physical PORTFOLIO SECTOR 1 Gold 19.8% 58.5% Precious Metals 2 Crude Oil 2.7% 7.9% Energy 3 Aluminium 1.3% 3.9% Materials 4 Copper 1.1% 3.2% Materials 5 Wheat 1.0% 3.0% Agriculture 6 Soybeans 1.0% 3.0% Agriculture 7 Corn 1.0% 3.0% Agriculture 8 Natural Gas 0.9% 2.6% Energy 9 Gasoline 0.8% 2.2% Energy 10 Zinc 0.5% 1.5% Materials 11 Heating Oil 0.5% 1.5% Energy 12 Sugar 0.4% 1.3% Agriculture 13 Nickel 0.4% 1.2% Materials 14 Coal 0.4% 1.1% Materials 15 Live Cattle 0.3% 1.0% Agriculture 4 GLOBAL RESOURCE MASTERS FUND LIMITED Quarterly Update december 2012

5 RANK NAME % TOTAL PORTFOLIO % Physical PORTFOLIO SECTOR 16 Silver 0.3% 0.8% Precious Metals 17 Coffee 0.2% 0.7% Agriculture 18 Cotton 0.2% 0.6% Agriculture 19 Soybean Oil 0.2% 0.6% Agriculture 20 Lead 0.2% 0.6% Materials Total 33.3% 98.1% The aggregate sector allocation of the portfolio 12.0% 0.3% 21.6% 42.1% Energy Precious Metals Agriculture Industrial Metals Alternative / Other 24.0% Global Resource Masters Fund perspective The fear of the US economy falling into a state of severe deflation as a result of the fiscal cliff, and ultimately a recession in 2013, has subsided for the near term. Following the US election in November, the fiscal cliff was the key focus of the market and was causing major headwinds for commodities. Moving into 2013, the data flow continues to be strong out of China and the US, and it looks as though the economic environment is setting the stage for a positive year for the commodity markets. To offset the effects of the deleveraging that has been taking place since the global financial crisis (GFC) in 2008, central banks globally have been aggressively pursuing easy money, pro-growth policies. Although 2012 was a volatile year for markets, the relentless efforts of these central banks to spur inflation appear to be working and, ultimately, commodities should benefit from this. Fundamentally however, the ongoing European crisis and the need for further deleveraging in the developed world mean risks to economic growth are still very much alive. Energy markets, without a strong surge in global growth this year, could possibly remain oversupplied. The oil market in particular must contend with adequate inventories and rising non-opec supply. Geopolitical issues in the Middle East are counterbalancing these developments, as well as the central bank policy action discussed earlier. Industrial metals rely heavily on the Chinese economy, which, on average, consumes approximately 40% of global output. While the outlook for the Chinese economy has dominated recent focus with respect to industrial metals, increased supply expectations for 2013 are a critical component of projected softer prices. The same fundamental risks apply to industrial metals, where continued deleveraging in the global economy could weaken any short term demand created through the stimulus measures of global central banks. Tin has been the exception of late with output from leading tin producers declining. The majority of base metals, however, remain at risk to a more sustainable Chinese growth outlook in the future. Precious metals have been trading sideways since September of 2011, but the 12 year bull market is expected to persist as expansionary monetary policies remain in place and central banks continue to diversify their monetary reserves. In 2012, central banks added the most to gold reserves since 1964 and are likely to remain a significant player in the gold market in If recent history serves as a guide, the current environment should prove supportive for gold prices. It offers protection against systemic risk, banking crises, both deflation and hyperinflation, and most importantly, currency debasement. The start of 2013 has tended to be quite bearish for agricultural commodities, as Russian, Ukrainian, French, Brazilian and Chinese authorities have all released forecasts of large oilseeds and grains productions. However, this development was expected as record high prices during 2012 incentivised farmers worldwide to increase production, as well as favourable climatic conditions in Latin America, China and Europe adding to supply expectations. Despite this, there is still scope for higher prices in 2013 as fundamentals remain strong. GLOBAL RESOURCE MASTERS FUND LIMITED Quarterly Update december

6 Maximilian Walsh Chairman ALEX MACLACHLAN Managing Director NIRAV DESAI Director JEFFREY WHALAN Director MOIRA DAW Director 6 GLOBAL RESOURCE MASTERS FUND LIMITED Quarterly Update december 2012