But the good news, the company's Asian-funds president, Jon Dugdale, told the Paydirt Asia Downunder conference in Perth yesterday, was that demand for metals would continue to outstrip supply.

''Copper has a little bit more of a retraction to go. When we reach the end of the cycle, it could get a bit ugly.

''But the China growth story is intact and we can see India following.''

Mr Dugdale said major market corrections in Asia, since the peak of the mining boom last November, had affected the appetite of investment banks, equity markets and Asian investors.

It had made these investors ''completely risk-averse'' and, as a result, mineral explorers were finding it very tough to raise capital.

Mr Dugdale said, ''Inflation has been breaking out in a number of countries, such as Vietnam, which has been running at greater than 25 per cent inflation, with energy costs rising, and this has tended to drive some countries to introduce fairly knee-jerk and nationalistic tariffs and tax increase.

''Being in Asia is enough to turn off equity markets at this stage.

''Consequently, the capitalisation of juniors operating in Asia has been decimated.

''There is a lot of quality in there but everybody has been lumped in it together. Margins have been further eroded this year, which is a reflection of costs.

''But we've started to see energy costs oil starting to go down.

''So, despite the fact that metals prices probably have further to go down, perhaps we'll start to see costs decreasing as well, which might be the light at the end of the tunnel.''

Mr Dugdale said the company expected at least 18 months of soft market conditions, was ''ready to pounce'' on cheap investment opportunities and had $27 million in committed cash to invest.

''The good news is for us is that we're only 20 per cent invested and existing 'investees' are presenting opportunities to gain more equity.