Siddharth Rajeev, B.Tech, MBA, CFA Analyst

May 27, 2011

Investment Analysis for Intelligent Investors

Terra Ventures Inc. (TSXV: TAS) – Hathor to Acquire Terra; Roughrider Resource at 17.21 mm lbs Indicated + 40.73 mm lbs Inferred

Sector/Industry: Junior Exploration www.terrauranium.com

Market Data(as of May 26, 2011) Investment Highlights Current Price C$0.51 • On April 18, 2011, Hathor Exploration (TSX: HAT) and Terra Fair Value N/A announced the execution of a binding letter of agreement, Rating* N/A wherein HAT will acquire all the outstanding shares of TAS. Risk* N/A TAS shareholders will receive 0.20 HAT shares for each TAS 52 Week Range C$0.25 – C$0.70 share. Based on HAT's closing price as of April 15, 2011, this agreement valued TAS at $24 million, or $0.39 per share - Share O/S 61.94 mm reflecting a 16% premium over the closing price as of April 15, market Cap C$31.59 mm 2011. Current Yield NA • The companies signed a definitive agreement in May 2011. The P/E (forward) NA proposed transaction is expected to be completed by the end of P/B 3.40x June 2011. YoY Return 27.5% • In November 2010, Hathor announced an updated resource YoY TSXV 41.3% estimate of 17.21 mm lbs indicated and 10.60 mm lbs inferred on the Roughrider West zone. The updated indicated + inferred *see back of report for rating and risk definitions resource estimate reflected a 131% increase. 1,600,000 $0.80 • On May 17, 2011, Hathor announced the first resource estimate 1,400,000 $0.70 on the Roughrider East Zone of 30 mm lbs. 1,200,000 $0.60 • Combining the resource estimates on the West and East zones, 1,000,000 $0.50 the Roughrider Deposit is now estimated to hold 17.21 mm lbs 800,000 $0.40 indicated and 40.73 mm lbs inferred.

600,000 $0.30 • We continue to be bullish on the long-term outlook on .

400,000 $0.20 Despite the unfortunate events in Japan, we believe uranium

200,000 $0.10 fundamentals remain intact. Uranium continues to be one of the cheapest and cleanest sources of energy. - $0.00 26-May-10 24-Sep-10 23-Jan-11 24-May-11

Key Financial Data (FYE - February 28) (C $) 2010 2011 9 mo Cash & Cash Equivalents 1,008,742 88,435 Working Capital 7,747,205 1,303,566 Mineral Assets 7,793,610 7,981,336 Total Assets 17,195,299 9,342,867 Net Income (9,920,527) (1,604,510) EPS (0.19) (0.03) Terra Ventures is a pure Uranium exploration company. The company has a 10% Production Carried Interest in Hathor Exploration's Midwest Northeast Property. TAS also has an option to acquire a 95% interest in the Wheeler River area properties in , adjoining the Wheeler River property of (AMEX: DNN) and Corp. (NYSE: CCJ).

 2011 Fundamental Research Corp. www.researchfrc.com Siddharth Rajeev, B.Tech, MBA, CFA

PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT Terra Ventures Inc. (TSXV: TAS) - Update Page 2

Hathor to On April 18, 2011, Hathor Exploration and Terra announced the execution of a binding letter Acquire Terra of agreement, wherein HAT will acquire all the outstanding shares of TAS in exchange for HAT shares. According to the agreement, TAS shareholders will receive 0.20 HAT shares for each TAS share. Based on HAT's closing price as of April 15, 2011, this agreement valued TAS at $24 million, or $0.39 per share - reflecting a 16% premium over the closing price as of April 15, 2011.

In our previous reports, we had valued TAS's interest in Roughrider based on 10% of Hathor's enterprise value (market capitalization + debt - cash) plus the present value of the potential cost benefits from not having to contribute to any costs until a bankable feasibility study. Our revised valuation on TAS (as of April 15, 2011 - the day before the announcement of the proposed acquisition) was $38 million ($0.61 per share) versus our estimate of $37 million ($0.69 per share) at the time of our previous report in October 2010.

Valuation Summary Valuation of the company's interest in Hathor Properties $0.43 Valuation of the Lac Kachiwiss $0.08 Book value of other projects $0.03 Cash $0.07

Fair Value $0.61

Our revised valuation implies TAS shareholders should have received 0.31 HAT shares for each TAS share (our fair value of $0.61 on TAS share : HAT share price as of April 15, 2011 of $1.95) . Note that this rationale assumes HAT shares were fairly valued at $1.95 per share as of April 15, 2011.

Although the proposed transaction offers only 0.2 HAT shares for each TAS share, we do not believe the proposed transaction is unreasonable for TAS's shareholders due to the following reasons:

• In addition to its 90% interest in Roughrider, HAT has interests in several other uranium projects within the eastern corridor of the Athabasca Basin, including the large Russell Lake prospect. HAT's projects are shown in the map below.

 2011 Fundamental Research Corp. www.researchfrc.com Siddharth Rajeev, B.Tech, MBA, CFA

PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT Terra Ventures Inc. (TSXV: TAS) - Update Page 3

Source: Hathor Exploration

• HAT is in an extremely strong cash position with about $21.4 million in cash (zero debt)

as of January 2011.

• Hathor has an excellent management team . Subsequent to the transaction, the current

management team of Hathor will form the management team of the combined entity.

On May 9, 2011, both companies announced the execution of a definitive agreement to

complete the proposed transaction. Hathor's board has unanimously approved the

transaction. Except one director, all the directors of TAS approved the transaction. A special

meeting for TAS shareholders will be held in June 2011 to cast votes. The proposed

transaction is expected to be completed by the end of June 2011.

In November 2010, Hathor announced an updated resource estimate on the Roughrider West Update on Zone. Hathor is the owner and operator of this project; TAS has a 90% production carried Roughrider interest.

The updated resource estimate (as shown in the table below) was 0.39 Mt indicated grading

1.98% U3O8 for a total of 17.21 mm lbs, and 0.05 Mt inferred grading 11.03% U3O8

for a total of 10.60 mm lbs . The initial resource estimate, announced in November 2009,

was 0.116 Mt indicated grading 2.57% U3O8 for a total of 6.58 million lbs, and 0.083 Mt

inferred grading 3.00% U3O8 for a total of 5.47 million lbs. The updated indicated +

inferred resource estimate reflected a 131% increase.

 2011 Fundamental Research Corp. www.researchfrc.com Siddharth Rajeev, B.Tech, MBA, CFA

PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT Terra Ventures Inc. (TSXV: TAS) - Update Page 4

Source: Company

The updated resource was based on 149 drill holes and a cut-off of 0.05 % U3O8, while the initial resource was based on 120 holes and a cut-off of 0.06 % U3O8 .

On May 17, 2011, Hathor announced the first resource estimate on the Roughrider East Zone of 30.13 mm lbs at 11.58% U3O8 inferred . The following table shows the estimates at various cut-offs.

Cut-Off Quantity Grade Contained U3O8 [%] [tonnes] U3O8 [%] U3O8 [lb] 0.1 119,096 11.48 30,140,000 0.3 118,757 11.51 30,130,000 0.4 118,034 11.58 30,130,000 0.5 116,751 11.7 30,110,000 0.8 112,308 12.14 30,060,000 1 108,950 12.49 30,000,000 3 88,970 14.88 29,190,000

The resource was calculated based on data from 21 drill holes completed between September 2009 and September 2010.

Combining the resource estimates on the West and East zones, the Roughrider Deposit is now estimated to hold 17.21 mm lbs of indicated and 40.73 mm lbs inferred.

Quantity Grade Contained Mineral Footnotes Category U3O8 Zone Tonnes U3O8 [%] [million lb] Total East Zone 1,3,4 118,000 11.58 30.13 Inferred Total West Zone 2,3,5 394,200 1.98 17.207 Indicated Total West Zone 2,3,5 43,600 11.03 10.602 Inferred

 2011 Fundamental Research Corp. www.researchfrc.com Siddharth Rajeev, B.Tech, MBA, CFA

PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT Terra Ventures Inc. (TSXV: TAS) - Update Page 5

Note that this estimate does not include the recently discovered Far East zone (shown in the image below).

Source: Company

Converted mineral claims to mineral leases - On April 5, 2011, Hathor announced that its three mineral claims comprising the Roughrider deposit have been converted to mineral leases. This is a significant development for the company as mineral claims have to be first converted to mineral leases and then to mining leases in order to put a project into production.

In November 2010, the company entered into an agreement with Solitaire Minerals Corp. Option on (TSXV - SLT), wherein TAS received an option to acquire up to a 95% interest in SLT's Property three properties (covering 4,011 acres) in the Athabasca Basin of Northern . Adjoining Terra paid SLT $0.10 million and 0.10 million shares. In order to acquire the first 55% Denison's interest, TAS must pay $0.10 million and 0.05 mm shares, and incur at least $1 million in Wheeler River exploration expenditures. TAS can then increase its interest to 75% by paying an additional Property $0.15 million and 0.05 mm shares, and incurring an additional $1 million. TAS can then increase to 95% by paying $5 million to SLT.

The properties lie midway between the McArthur River mine and the former producing , and adjoins the northwest side of the Wheeler River property of Denison Mines Corp. The Wheeler River project has an indicated resource of 35.6 mm lbs (18.0% U 3O8) of U 3O8 for its Phoenix A Zone, and an inferred resource of 3.8 mm lbs (7.3% U 3O8) of U 3O8 for its Phoenix B Zone.

 2011 Fundamental Research Corp. www.researchfrc.com Siddharth Rajeev, B.Tech, MBA, CFA

PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT Terra Ventures Inc. (TSXV: TAS) - Update Page 6

Source: Company

In February 2011, TAS received permits for surface exploration and diamond drilling programs on these properties. The company intends to conduct line cutting, resistivity, gravity and 2-D seismic surveys to refine the target areas.

Financials At the end of Q3-2011 (end of November 2010), the company had $0.09 million in cash and cash equivalents. Working capital was $1.30 million. The company posted a net loss of $1.60 million (EPS: -$0.03) in the first nine months of FY2011. We estimate the company had a burn rate (spending on operating and investing activities) of C$0.11 million per month in the first nine months of FY2011, compared to C$0.40 million per month in FY2010 (12 month period). The table below shows a summary of the company’s cash and liquidity position. (in C$) 2010 2011 (9 mo) Working Capital 7,747,205 1,303,566 Current Ratio 20.8 32.3 LT Debts/ Assets - - Burn Rate (incl exploration costs) (395,873) (110,756) Cash from financing activities 540,000 76,500

Subsequent Financing: In December 2010, the company completed a $4 million financing by issuing:

• 4 million units at a unit price of $0.50, and  2011 Fundamental Research Corp. www.researchfrc.com Siddharth Rajeev, B.Tech, MBA, CFA

PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT Terra Ventures Inc. (TSXV: TAS) - Update Page 7

• 3.33 million flow-through units at a unit price of $0.60

Each unit consists of a share and one-half non flow through share purchase warrant (exercise price - $0.70; maturity date - June 2012). TAS currently has about $3 million in cash.

Declares dividend of 7.50 million Novus Gold Shares - On April 8, 2011, the company announced its decision to distribute its 7.50 mm shares of Novus Gold Corp (TSXV: NOV) as dividends to shareholders of record as at April 29, 2011. TAS received these shares when Novus exercised its option to repurchase TAS's 51% interest in the REN gold project in the NWT. Novus's focus is on the Dominican Republic and NWT.

Stock options and warrants: We estimate the company has 5.54 million outstanding options (weighted average exercise price of $0.46), and 11.18 million outstanding warrants (weighted average exercise price around $0.68). We estimate 5.21 million options and 0.51 million warrants are currently in the money.

Conclusion and We expect the proposed transaction to go through due to the following reasons – a) the Rating companies have already signed a definitive agreement, b) all of HAT’s directors and all, but one, of TAS’s directors approved the transaction, c) we do not believe the transaction price is unreasonable for TAS shareholders.

As we expect the transaction to go through, TAS’s shares will stay close to 0.20 times HAT’s shares until the transaction is completed. We do not assign a rating or recommendation on TAS at this time, as we are not in a position to speculate on HAT’s share price movement over the next month (until the transaction is completed). However, if the proposed transaction does not go through, our fair value on TAS (based on HAT’s current share price) is $0.72 per share. Our valuation increased from $0.61 (as of April 15, 2011 – mentioned in page 2) to $0.72 per share because HAT’s share price has increased from $1.95 to $2.64 since April 15 th .

Valuation Summary Valuation of the company's interest in Hathor Properties $0.57 Valuation of the Lac Kachiwiss $0.08 Book value of other projects $0.03 Cash $0.05 Fair Value $0.72

Risks The following risks, though not exhaustive, may cause our estimates to differ from actual results:

• The company currently has no operating mines. • The value of the company depends heavily on commodity prices. • Access to capital and share dilution. • The success of drilling, project development and resource identification and expansion are important long term success factors for these early projects.

 2011 Fundamental Research Corp. www.researchfrc.com Siddharth Rajeev, B.Tech, MBA, CFA

PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT Terra Ventures Inc. (TSXV: TAS) - Update Page 8

Fundamental Research Corp. Equity Rating Scale: Buy – Annual expected rate of return exceeds 12% or the expected return is commensurate with risk Hold – Annual expected rate of return is between 5% and 12% Sell – Annual expected rate of return is below 5% or the expected return is not commensurate with risk Suspended or Rating N/A— Coverage and ratings suspended until more information can be obtained from the company regarding recent events.

Fundamental Research Corp. Risk Rating Scale: 1 (Low Risk) - The company operates in an industry where it has a strong position (for example a monopoly, high market share etc.) or operates in a regulated industry. The future outlook is stable or positive for the industry. The company generates positive free cash flow and has a history of profitability. The capital structure is conservative with little or no debt.

2 (Below Average Risk) - The company operates in an industry where the fundamentals and outlook are positive. The industry and company are relatively less sensitive to systematic risk than companies with a Risk Rating of 3. The company has a history of profitability and has demonstrated its ability to generate positive free cash flows (though current free cash flow may be negative due to capital investment). The company’s capital structure is conservative with little to modest use of debt.

3 (Average Risk) - The company operates in an industry that has average sensitivity to systematic risk. The industry may be cyclical. Profits and cash flow are sensitive to economic factors although the company has demonstrated its ability to generate positive earnings and cash flow. Debt use is in line with industry averages, and coverage ratios are sufficient.

4 (Speculative) - The company has little or no history of generating earnings or cash flow. Debt use is higher. These companies may be in start-up mode or in a turnaround situation. These companies should be considered speculative.

5 (Highly Speculative) - The company has no history of generating earnings or cash flow. They may operate in a new industry with new, and unproven products. Products may be at the development stage, testing, or seeking regulatory approval. These companies may run into liquidity issues, and may rely on external funding. These stocks are considered highly speculative.

Disclaimers and Disclosure The opinions expressed in this report are the true opinions of the analyst about this company and industry. Any “forward looking statements” are our best estimates and opinions based upon information that is publicly available and that we believe to be correct, but we have not independently verified with respect to truth or correctness. There is no guarantee that our forecasts will materialize. Actual results will likely vary. The analyst and Fundamental Research Corp. “FRC” does not own any shares of the subject company, does not make a market or offer shares for sale of the subject company, and does not have any investment banking business with the subject company. Fees were paid by TAS to FRC. The purpose of the fee is to subsidize the high costs of research and monitoring. FRC takes steps to ensure independence including setting fees in advance and utilizing analysts who must abide by CFA Institute Code of Ethics and Standards of Professional Conduct. Additionally, analysts may not trade in any security under coverage. Our full editorial control of all research, timing of release of the reports, and release of liability for negative reports are protected contractually. To further ensure independence, TAS has agreed to a minimum coverage term including four updates. Coverage cannot be unilaterally terminated. Distribution procedure: our reports are distributed first to our web-based subscribers on the date shown on this report then made available to delayed access users through various other channels for a limited time. The performance of FRC’s research is ranked by Investars. Full rankings and are available at www.investars.com .

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 2011 Fundamental Research Corp. www.researchfrc.com Siddharth Rajeev, B.Tech, MBA, CFA

PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT