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February 27, 2012 08:00 ET

BMO Report: Metals & Mining Research Team Provides Outlook for Sector and Top Commodity Picks

Tony Robson and David Haughton hosting BMO Capital Markets' 21st Global Metals & Mining Conference this week

- Outlook for copper factors in strong demand from China

- Gold consumption in India and China has been a key driver of the market

- Major outflows in burgeoning ETF industry carry potential risk to impact silver prices

TORONTO, ONTARIO and HOLLYWOOD, FLORIDA--(Marketwire - Feb. 27, 2012) - Lacklustre prices will characterize commodity markets in 2012, according to Tony Robson and David Haughton, Co-Heads of BMO Capital Markets' Metals & Mining Equity Research, who will be hosting the firm's 21st Global Metals & Mining Conference this week in Hollywood, Florida.

The European sovereign debt crisis, slow growth in China and uncertainty about the U.S. economy will continue to cause tremors in the market, resulting in a downgrade in commodity price forecasts for this year.

With these headwinds at play, BMO's Research team has released a report that points to thermal coal, copper and platinum as the preferred commodities for the first quarter of the year. Copper is set to shine this year with an average price of $3.80/lb and a long term forecast of $2.75/lb, upgraded from $2.50/lb. Prices for base metals, uranium and silver have recently been downgraded, while gold, iron ore and coal remain unchanged.

"The outlook for copper, along with BMO's other top commodity picks, strongly takes into consideration where Chinese demand is headed," said Mr. Robson. "Investors should continue to avoid most commodities which are adequately produced in China, and hence not imported into that country."

Chinese consumption is also the driving force behind zinc, nickel and thermal coal demand. Similarly, the market in China - and India - for gold has generated increased consumption of the precious metal and has been a key driver in price. Demand for physical gold spiked in Europe in 2011.

"Continued demand from investors seeking wealth preservation in an environment of uncertain global economic growth, pessimism about fiat currencies, increasing social unrest and negative real interest rates are expected to fuel investment demand for gold," said Mr. Haughton.

"The burgeoning ETF market in recent years has supported gold and silver prices, but there is also the potential for risk as seen with a net outflow for silver in 2011 - one factor in the metal's price decline. In addition, the planned launch of copper ETFs this year will likely affect supply," said Mr. Haughton. "Overall, BMO is forecasting a rebound in ETFs for 2012, fuelling demand for these metals."

For a copy of the full report, please contact Alexis Brown, BMO Media Relations, at alexis.brown@bmo.com or call 416-867-3996.

Members of the media interested in viewing a webcast of the 21st Global Metals & Mining Conference are required to register directly with BMO Media Relations prior to the conference to gain access to the live webcast.

About BMO Capital Markets Global Metals and Mining

BMO Financial Group has been supporting the Metals & Mining industry for nearly 100 years. With more than 65 professionals in locations around the world, including Australia, Europe and China, BMO Capital Markets Global Metals and Mining group is a one-stop provider of financial solutions to an industry where vision, speed and the ability to transcend borders have become the benchmarks for success.

About BMO Capital Markets

BMO Capital Markets is a leading, full-service North American financial services provider, with 2,300 employees operating in 17 North American offices and 30 worldwide, offering corporate, institutional and government clients access to a complete range of investment and corporate banking products and services. BMO Capital Markets is part of BMO Financial Group (NYSE:BMO)(TSX:BMO), one of the largest diversified financial services providers in North America with US$479 billion total assets and more than 47,000 employees as at October 31, 2011.

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