State of the Market

Examining minings predicament

Presenter: Chris Hinde Research: Jeremy Thompson
marketing@intierraRMG.com

About IntierraRMG

Leadership: Over 30 years of providing mining information (through two databases, consultancy, maps, conferences/ seminars and published reports) Information: Lease locations and ownership, company intelligence, drilling data, project pipeline, due diligence reports, production statistics, finance and M&A activity Reports: Quarterly examination on trends in exploration, mine development and metals production, analysis of the market and financing, and expert comment on the industry
Disclaimer: IntierraRMG makes reasonable and diligent efforts to obtain accurate information for our clients and presentations. No warranty, expressed or implied is made regarding the accuracy, adequacy, completeness, reliability, or usefulness of any information contained herein. Neither IntierraRMG nor the contributors of data to this presentation shall be held liable for any improper or incorrect use of the information contained herein and assume no responsibility for the use of the information.

State of the Market: Mining

By the end of the March quarter, the mining industry had found itself between a rock and a hard place: Rock: Falling metals prices, with little prospect of an early recovery because of lacklustre demand. Hard Place: Pressure on operating costs and a heightened threat of resource nationalism. Problems compounded by the restricted supply of finance, especially for mineral exploration.
Disclaimer: IntierraRMG makes reasonable and diligent efforts to obtain accurate information for our clients and presentations. No warranty, expressed or implied is made regarding the accuracy, adequacy, completeness, reliability, or usefulness of any information contained herein. Neither IntierraRMG nor the contributors of data to this presentation shall be held liable for any improper or incorrect use of the information contained herein and assume no responsibility for the use of the information.

Base Metals Gloom (but Gold OK)

All-Time High For Gold

1000 900 800

1489: Royal Mint issues Sovereign (1 = 0.5oz) Gold floods into Europe from Spanish conquests in 16th century, causing inflation spiral

Gold at record real-price of over 1,000/oz

REAL (/oz)

700 600 500 400 300 200 100 0

1717: Isaac Newton fixes 1 at 0.235oz

USA discovered (1492) |----100 years---|

Prices Stall for Coal, Iron and Copper

Shape of an Industry
Mid-2012 Prices

Coal Iron Ore Gold Copper Bauxite Nickel Zinc PGMs Diamonds Lead Top Ten Total

MINED PRICE (000t) (US$/t) 7,700,000 90 1,980,000 120 2.57 51,440,000 16,300 7,500 203,000 350 1,400 16,400 12,000 1,900 0.38 38,560,000 ie 32 tonnes! 0.032 350,000,000 4,000 1,900 9,916,700 (134)

VALUE PA (US$ bn) 693 238 $1,600/oz 132 122 71 23 23 15 $70/ct 11 8 1,336

State of the Market Snapshot: Exploration Edition 2, 2013

DRILLERS LOG 355 drill reports in March FEASIBILITY STUDIES

Expert review on exploration activities and trends for the previous and upcoming quarters. Below are some highlights from this edition.
There has been a sharp reversal in fortunes during the three months to end March after the welcome improvement in financing for the exploration sector in the December quarter. After an 18-month decline in share prices from the end of 2010 to mid-2012, the second half of last year saw a gradual recovery in the mining industrys overall market capitalisation. This improvement was helped by a strengthening gold price, but metals prices, and the markets equity valuation of the mining industry, have gone into reverse this year. Drillers Log Exploration activity captured on the IntierraLive database dropped to a new low in March, extending the downward trend into a 17th month, with the drilling reports from only 355 prospects. (See graph below) Feasibility Studies Little overall change in new development announcements but there has been wide geographical variation. For the quarter to end-March IntierraRMG identified 27 new development projects. Capital Raising for Exploration USD470 million was raised for exploration in the quarter just ended, compared with (a restated) USD1.51 billion in the three months to end-December, and USD1.26 billion in the year-ago period.

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FULL REPORT CONTAINS: 16 pages 11 graphs 17 tables

17th month fall

CAPITAL RAISING FOR EXPLORATION

NPV Q1 USD13.1M Q4 USD12.7M

EXPLORATION HOT SPOTS

Q1 - USD470M Q4 - USD1.51B
EXPLORATION RESULTS

Prospects Q1, 2013 - 1,457 Q1, 2012 - 2,467

ASSAY SHAREPRICE ALERT

Exploration Hot Spots Cumulative reports from all exploration activity for the quarter to end-March amounted to 1,457 prospects, compared with 2,467 prospects in the first quarter of 2012 and 1,959 in the first quarter of 2011. Exploration Results Copper assays were led, for the second successive quarter, by a drill hole at OZ Minerals Carrapateena project near Woomera in Australia; this time 1.62% Cu over 1,094m at a depth of 821m. Gold assays were led by recent drilling on La Ronges Preview property in Saskatchewan, Canada, which returned 634g/t over 4.1m at 204m. Assay Share-Price Alert The report notes the top 35 share price increases following assay announcements, with Kidman Resources leading the list with a jump of 270% in its share price.

Copper assays led by Carrapateena project

Top 35 share price increases

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Global drilling activity continue to fall

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Drilling Trends

17 month decline

Drilling Reports

Drill Announcements Gold Prospects Copper Prospects Silver Prospects Zinc Prospects

Mar Q 2013 651 192 154 63

Dec Q 2012 702 238 174 72

Mar Q 2012 1,119 315 274 104

Reported Ore Reserves (contained metal)

Metal Deposits Gold (000oz) Copper (000t) Silver (Moz) Zinc (000t)

Mar Q 2013 23,752 1,110 574 2,264

Dec Q 2012 15,665 5,239 469 872

Mar Q 2012 50,059 8,537 309 1,901

Copper/Gold Open-Pit Developments

Copper and gold deposits that have received a capital expenditure forecast (during the past two years) for an open-pit development

State of the Market Snapshot: Mining and Finance Edition 2, 2013

MARKET FOR MINING
Precious and base metals sold down

EXPLORATION 355 drill reports in March

Expert review on all aspects of the industry, recent performance and quarterly outlook. Below are some highlights from Edition 2.
Hinde Sight Market Comment The value of mergers and acquisitions has fallen, and the global industry's market capitalisation is back to the levels last seen at the start of 2009 (see graph below). Market for Mining Not only have precious metals prices fallen but the index price for the six base metals on the London Metal Exchange fell during a March quarter for the first time since 2001. Exploration Exploration activity captured on the IntierraLive database dropped to a new low in March, extending the downward trend into a 17th month, with drilling reports from only 355 prospects. Assay Share-Price Alert The report notes the top 30 share price increases following assay announcements, with Kidman Resources leading the list with a jump of 270% in its share price. Metals Production Outlook Early production announcements for the three months to end-March indicate significantly lower gold output in the Americas. Copper and iron ore output also sharply down. Mergers and Acquisitions The Raw Materials Database captured a 28% fall in announced deals, and a 14% drop, to under USD12.0 billion, in the valuation. Mining Finance IntierraLive tracks almost 3,500 listed companies, and the funds raised by the mining sector in the quarter to end-March dropped to under USD5.2 billion from almost USD6.8 billion in the last three months of 2012.
MARKET CAPITALISATION ACROSS INTERNATIONAL MINING MARKET 4,000 3,000 2,000 1,000 0 4,000 3,000 2,000 1,000 0
USD billion

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Ed.2 SPECIAL REPORTS Operating Costs Open-Pit Ore Grades Regional Activity Latin America
COPPER MINE COSTS

17th month fall

ASSAY SHAREPRICE ALERT

METALS PRODUCTION OUTLOOK

Lower gold production in the Americas

Top 30 share price increases

2012 OUTPUT COSTS LABOUR (USD/t) (%) NUMBER ('000t) 77 54 16 2 149 7,889 2,181 1,496 84 11,650 2,757 3,841 3,354 4,466 3,049 20.4 32.0 24.1 20.2 23.6

MERGERS & ACQUISITIONS

FUNDS RAISED

TYPE Open Pit Underground OP / UG Tailings TOTAL

Value of metals deals drops 14%

Q1 - USD5.2B Q4 - USD6.8B

Full report contains: 36 pages 42 graphs 33 tables 3 special reports

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Copper mine costs in 2012 RESOURCES AND GRADES AT NEW MINES 40 Resource base (Moz) 35 30 25 20 15 10 5 0 2004 2006 2008 2010 Gold 2.50 2.00 1.50 1.00 0.50 0 2012 Grade (g/t Au)

Jan 2009

Jan 2010 Number of Companies

Jan 2011

Jan 2012 Aggregate Market Capitalisation

Jan 2013

Resource base at inception

Grade at inception

Offer expires 30 June 2013

Gold resources and grades at new mines

Market capitalisation back to the levels of early 2009

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Metals M&A Activity

Metals Deals: US$11.9 billion in March quarter (US$14 billion in Dec Q)

An Industry Devalued
20 month decline 6 month recovery

Copper Discovery Rates

(Open-Pit Mines Only)
Average Feasibility Study Grade

Gold Discovery Rates

(Open-Pit Mines Only)
Average Feasibility Study Grade

Funds Raised (US$m)

Company Size (US$m)

Q1 2013

Q4 2012

Q1 2012

<10 Market Cap

10 49 50 100

246
537 301

179
954 498

593
1,181 1,182

>100
Total Explorers

4,075
5,159 1,451

5,137
6,768 3,405

2,914
5,870 Falling total, and 3,418 smaller share

Producers

3,710

3,364

2,454

End-2012 corporate cash holdings of US$300 billion (under US$15 billion of this held by explorers)

Regional Spending

Operating Costs Held at Base Metals Mines

Up only 12% on 2008

But Costs Soar at Gold Mines

Up 62% on 2008

Thank You

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