Gold Company Review Exploration, Development & Production

GoldUranium Company Sector Rev Reviewiew Exploration, DevelopmentDevelopment & & Production Production JuneMarch Quarter Quarter 2011 2009 Resource Capital Research

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27 June 2011

Gold Company Review June Quarter 2011

Resource Analyst (Gold): Dr Tony Parry

Resource Analyst: John Wilson Resource Analyst: Murray Brooker Resource Analyst: Khaled Sultan (Toronto)

Resource Capital Research

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Contents

Contents ...... 2 Overview and Investment Comment ...... 3 RCR June Quarter 2011 Featured Company Summary ...... 4 Comparative Charts ...... 6 Financial Data ...... 7 Company Statistics ...... 7 Reserves, Resources and Historic Mineralisation ...... 8 Valuation and Performance Data ...... 8

Exploration, Development and Production Companies

Aphrodite Gold Limited ...... 9 Bright Star Resources Limited ...... 11 Castle Minerals Limited ...... 133 [Cobar Consolidated Resources Limited ...... ] [Echo Resources Limited ...... ] Gold Road Resources Limited ...... 155 Gowest Gold Limited ...... 17 Kingsgate Consolidated Limited * ...... 19 [Kingsrose Mining Limited...... ] [Morning Star Gold NL * ...... ] [Mt Isa Metals Limited ...... ] Norseman Gold Plc * ...... 21 PepinNini Minerals Limited ...... 23 Sumatra Copper & Gold plc ...... 25 [West Wits Mining Limited ...... ]

[Gold Market Fundamentals ...... ] Industry Trends ...... 27 Selected Charts and Gold Sector Statistics ...... 33 Report Contributors ...... 35 Disclosure and Disclaimer ...... 36

[This is the Abridged Version of the June 2011 Quarter RCR Gold Company Review. The Subscriber version of the Gold Company Review which includes all company reports and a review of gold market fundamentals (60 pages) can be purchased for A$110.00. The Subscriber versions of the RCR June quarter uranium report can also be purchased for the same price. Contents and purchase details can be found at www.rcresearch.com.au ]

* Indicates companies with detailed financial projections and valuation available.

Overview and Investment Comment

Gold Price Outlook

Gold has continued to set new records during the June 2011 quarter. In April gold set a Currently (June 27) it is trading at US$1,502/ounce, after an all time new record of high of US$1,563.70/ounce (April 29). It started the quarter at US$1,563.70/ounce, and is up 21% in the US$1429/oz. Overall, the US dollar gold price is up 21% in the past past twelve months. twelve months.

We think that the US dollar could arrest its long term decline, which is The US dollar’s trend negative for gold. However, it is the Eurozone sovereign debt crisis that and the Eurozone could be the key to ignite further investment demand for gold. At the debt crisis are the key very least, it will keep the focus on gold as a source of some ‘insurance’ factors currently during a very uncertain period for the global financial system. influencing investment demand For this reason we maintain the position we have held in our past for gold. Reviews: although we have some concerns regarding the fundamentals for gold, it would be foolish to bet against the gold price in the short to medium term. The risk seems to be more on the upside than the Because of the downside for the next six months. In our last Review (March Quarter Eurozone debt crisis, 2011) we forecast a gold price averaging US$1,450/ounce over the rather than a weaker ensuing six months. We raise our forecast to US$1,550/ounce for the US$, RCR is six months ahead. forecasting higher prices (US$1,550/oz) Longer term (beyond 2011), we are cautious on the outlook for gold. for the balance of We are concerned about the recent outflows of gold onto the market 2011... from Exchange Traded Funds. We do not expect the US dollar to collapse (it, in itself, is a safe haven), and we consider inflation fears …but we could be are over-stated. Eventually gold’s unique safe haven appeal could start seeing the peak in the to dissipate. Our guess (and it is only a guess!) is in the first half of gold market in the 2012, particularly if we see signs of a recovery in equity and property next six months. markets and positive real interest rates in the US.

Gold Equities

Gold equities (as measured by the major gold share indices) have performed poorly in the past year, as is indicated in the table below. The five share indices detailed below have all significantly underperformed the US dollar gold price (and overall equity markets) in Gold shares have the twelve months since June 24 2010. Only the Australian share index significantly is in positive territory (up 8%) despite the US dollar gold price rising by underperformed 21% in that period. Gold may have been a safe haven in uncertain relative to physical times, but gold shares in the past year definitely have not been. gold over the past twelve months, failing Current * 1 month 3 month 6 month 1 year to provide a similar safe haven. Gold Price Comex US$/oz na -1% 5% 9% 21% USA S&P 500 Gold Index na -5% -4% -13% -11% Canada S&P/TSX Gold Index na -5% -10% -13% -3% Australia S&P/ASX200 Gold Index na -4% -8% -11% 8% South Africa FTSE/JSE Gold Index na -12% -16% -14% -10% FTSE Gold Index FTSE Gold Index na -1% -10% -11% 0%

World Markets (all sectors) Morgan Stanley World Index na -3% -4% 0% 18%

*Table data as at June 24 2011 Source: Bloomberg, RCR

Resource Capital Research

RCR June Quarter 2011 Featured Company Summary

Company Summary

AUSTRALIA Company Code Comment Aphrodite Gold Limited AQQ Advanced Exploration, Scoping Study AQQ has recently outlined a resource of over 1Moz at the Aphrodite Gold Project near Kalgoorlie. With a current EV/resource ratio of only A$9.20/ounce we see potential for a significant re-rating of the stock to levels of around 2-3 times the current share price. Bright Star Resources Limited BUT Mid-Advanced Exploration Tanzanian-focused BUT has already got its foot on 680koz of resource equity in this gold-rich country. Exploration is planned which could increase resources rapidly, and drive a re-rating based on an enterprise value well below that of some African exploration peers. Castle Minerals Limited CDT Early to Advanced Exploration Another virgin discovery (Castle's third) of a potentially major mineralised zone at Baayiri, NW Ghana, highlights the huge potential of its 12,000km2 Ghana tenement position. This potential is not lost on neighbour Azumah Resources, which has built a 13% stake in CDT. Cobar Consolidated Resources Limited (4)CCU Feasibilty Study, Advanced Exploration With silver currently consolidating at around the US$36/ounce level and CCU's Wonawinta silver project in NSW (51moz Ag resource) likely to be in production by 1Q12, our six month share price target as a silver producer is A$1.00/share. Echo Resources Limited EAR Advanced Exploration Step out drilling at the flagship Julius deposit intersected quartz-muscovite-pyrite alteration in the shear zone. Results expected July 2011. Potential for >1moz gold if continuity is confirmed. 2010 drill grades suggest open pit and underground potential. Gold Road Resources Limited GOR Advanced Exploration GOR's discovery momentum and increasing focus on potential production should continue to drive share price out-performance in 2H11, as the resource inventory builds from additional high grade zones in its dominant position in the under-explored Yamarna Belt. Kingsgate Consolidated Limited KCN Production, Advanced Exploration KCN is vying for the number two spot for Australian-based gold producers with production growing to over 300kozpa in FY13 and further potential growth to come from South America. The company's eventual aim is >500kozpa to become a globally significant gold producer. Kingsrose Mining Limited KRM Production, Adv. Exploration Ramp up of production from KRM's 85%-owned Way Linggo Au-Ag Indonesian operation (~60kozpa Auequiv) is confirming strong cashflow with 1Q11 cash costs ~US$25/oz after Ag credits. Now the focus will turn to regional exploration, where there is excellent potential. Morning Star Gold NL MCO Production MCO has experienced on-going teething problems with ore hoisting and processing equipment at the recomissioned Morning Star Mine. As the company gets on top of this issues, we should see a lift in production in 3Q11. An inaugural profit in FY12 is forecast. Mt Isa Metals Limited MET Early to Advanced Exploration MET has a strategic land holding (4,000km2) in Burkina Faso and has delineated multiple prospects for follow up in 2011. Nabanga Prospect discovered 1Q11 is defined over a 3.6km strike, shallow, and high grade (avg. lode intersection 4.6m @ 5.66g/t). Drilling 2H11. Norseman Gold plc NGX Production, Advanced Exploration NGX's 2011 production expansion plans have gone into reverse, resulting in falling gold output and losses in FY11. We expect to see a significant improvement in 2H11 as underground mine productivity improves and the North Royal Open Pit hits higher grade ore. PepinNini Minerals Limited PNN BFS, Advanced Exploration With the Crocker Well Uranium BFS (60% SinoSteel, 40% PNN, 11.7mlb resource) on hold, PNN is targeting high grade gold in QLD, Au-Cu potential in Argentina, a DSO iron ore resource in WA and large scale magnetite deposits in the Curnamona Province (SA). Sumatra Copper & Gold plc SUM Advanced Exploration, Exploration PFS 3Q11 on the flagship Tembang deposit (>1moz Au, 13moz Ag). Potential to become a mid-tier producer (60-70koz) 4Q13. Newcrest JV on Tandai project (former mine - production 1.4moz @ 15.5g/t Au). Drilling on several projects (>2,000 m) planned in 3Q11. West Wits Mining Limited WWI Advanced Exploration WWI is acquiring a 50% interest in a high grade alluvial gold project in West Papua, with near term production potential and intriguing exploration challenges to find a hard rock source. That, plus continued focus on S African projects, should boost a drifting share price.

CANADA Company Code Comment Gowest Gold Limited GWA Early-Mid Exploration GWA offers good exploration potential. Resource upgrade (June 2011) to 1.2moz of gold (+140% from 0.5moz). With grades of +6g/t, the Frankfield East project (100% GWA) in Timmins, Ontario could be developed as early as 4Q12. PEA expected 3Q11.

Resource Capital Research

Explorers’ Development Cycle: Conceptual market capitalisation versus development stage; June Q 2011

High risk/ Declining Project High return exploration risk Resource expansion; approvals; Exploration Discovery Economic assessment Funding Construction Commis'g Production

AUS AUS AUS CAN AUS AUS AUS AUS CAN ATN AVQ AGD GWA KGL BTR NMG AAM FIU EAR BCN ALK SAC RED CCU TMX ADU IAU CHZ BUT AMX XRC PRU ALD NSU CNS CDT AQQ FRG AVO UME PNN MET AZM CAN BCD SAU WWI CHN CAH SGZ CRC CAN CTO CVY ATW KCN GDR KRM CAN GOR HEG CAN GRY MLI KAL MUN KOR MCO IGR NAV MAT NGX SUM NQM YTC RRL VGO

Share Price

Resource Capital Research

Comparative Charts

Gold and Silver Companies, Gold and Silver Companies, 6-month % off 12-month High Share Price Performance (as at June 27 2011) (as at June 27 2011)

Gold Road Resources Ltd Gold Road Resources Ltd

Gowest Gold Ltd Cobar Consolidated Resources Ltd

Kingsgate Consolidated Ltd Echo Resources Ltd

Cobar Consolidated Resources Ltd Kingsrose Mining Ltd

Echo Resources Ltd Castle Minerals Ltd

Bright Star Resources Ltd Aphrodite Gold Ltd

Aphrodite Gold Ltd Mt Isa Metals Ltd

Castle Minerals Ltd West Wits Mining Ltd

West Wits Mining Ltd Sumatra Copper & Gold plc

Sumatra Copper & Gold plc Gowest Gold Ltd

Morning Star Gold NL Bright Star Resources Ltd

Kingsrose Mining Ltd Kingsgate Consolidated Ltd

Mt Isa Metals Ltd Morning Star Gold NL

PepinNini Minerals Ltd PepinNini Minerals Ltd

Norseman Gold plc Norseman Gold plc 0 0 20 40 60 80 20 40 60 80 -80 -60 -40 -20 100 -100 Percent Percent

Most exploration companie s’ share Not a good six months for emerging juniors. prices have retreated strongly from Only two of the exploration and their twelve month highs as equity development companies in this Review are market gloom has pervaded the gold in positive territory over the past six sector, notwithstanding record US$ gold months, while eleven companies have prices. Only six of our sixteen featured underperformed the Australian Gold Index, companies are within 40% of their representing the shares of major producers, twelve month highs. which is down by 11% in that period.

Resource Capital Research

Financial Data

a e s d d 2 p n a r e Fully Market t o t o A e i s n r s t 3 a S h i u u t p Share Price (LC$/share) Diluted Cap COMPANY L Book Enterprise A C U E o o

Code Status 1 Yr End Exchanges 52 week Current Shares Opt+W 2 Other 2 Shares (undiluted) Cash Debt Value Value 27 June 2011 Hi Low (m) (m) (m) (m) (LC$m) 3 (LC$m) 3 (LC$m) 3 (LC$m) 3 (LC$m) 3 AUSTRALIA (A$)

Aphrodite Gold Limited AQQ E June ASX No 0.18 0.09 0.10 134 67 0 200 13 2.5 0.0 17 13 Bright Star Resources Limited BUT E June ASX BUTO 0.21 0.08 0.13 182 52 0 234 23 2.6 0.0 6 23 Castle Minerals Limited CDT E June ASX No 0.64 0.24 0.36 114 5 0 118 41 8.4 0.0 11 41 Cobar Consolidated Resources Limited (4) CCU I June ASX No 1.18 0.13 0.72 180 8 0 187 129 32.7 0.0 44 129 Echo Resources Limited EAR E June ASX No 0.30 0.04 0.18 72 2 0 74 13 1.8 0.0 3 13 Gold Road Resources Limited GOR E June ASX GORO 0.84 0.08 0.56 317 18 0 335 178 10.4 0.0 23 178 Kingsgate Consolidated Limited KCN P June ASX No 12.30 6.91 7.73 135 2 0 137 1046 30.7 47.5 353 1093 Kingsrose Mining Limited KRM P June ASX KRMO 1.97 0.88 1.32 264 33 0 297 349 19.3 9.8 49 359 Morning Star Gold NL MCO P June ASX No 0.51 0.24 0.26 284 0 0 284 73 8.0 0.0 20 73 Mt Isa Metals Limited MET E June ASX No 0.90 0.14 0.32 158 20 0 178 51 14.2 0.0 22 51 Norseman Gold plc NGX P June ASX AIM No 1.50 0.24 0.30 220 11 0 231 66 15.9 13.0 101 79 PepinNini Minerals Limited PNN E June ASX No 0.37 0.10 0.10 90 0 0 90 9 4.5 0.0 26 9 Sumatra Copper & Gold plc SUM I Dec ASX No 0.40 0.19 0.22 160 32 0 192 35 1.6 0.0 16 35 West Wits Mining Limited WWI E June ASX No 0.08 0.04 0.04 168 18 0 186 7 0.6 0.0 24 7

Total: Australia 153.2 70.2 716 2102 CANADA (C$)

Gowest Gold limited GWA E Oct TSX.V OTC FSE No 0.43 0.17 0.27 99 27 0 126 27 1.6 0.0 10 27

Total: Canada 1.6 0.0 10 27

Total: Global (US$) 4 163 74 762 2235

(1) P: Producer; E: Explorer; I: Imminent - includes companies with bankable feasibility studies and likely to be in production within 3 years; IHC: Investment Holding Company (2) Fully Diluted (shares, options + warrants (opt. + w), convertible notes (Conv. N), other obligations) (3) L.C. - Local Currency unit. Note: Cash & debt values for SUM are in GBP (4) AUD/USD: 1.04; CAN/USD: 1.03

Company Statistics

COMPANY

Code Land Drilling ('000 m) (A) Exploration (L.C.$m) 3 (B) Corporate (L.C.$m) 3 (A)/(A+B) % 27 June 2011 ('000 ha) 6 Mar-11 Jun-11 2010 2011 Mar-11 Jun-11 2010 2011 Mar-11 Jun-11 2010 2011 Jun-11 2010 2011 AUSTRALIA (A$)

Aphrodite Gold Limited AQQ 3 7.0 6.0 0.0 28.2 0.7 2.1 5.5 5.5 0.1 0.3 0.5 0.9 88.2 91.0 86.0 Bright Star Resources Limited BUT 63 0.0 3.0 4.0 3.0 0.1 0.3 0.2 0.4 0.3 0.3 0.8 1.4 45.5 21.5 24.1 Castle Minerals Limited CDT 1,200 15.0 18.0 18.0 58.0 1.4 1.0 1.8 4.0 0.2 0.2 0.3 1.0 87.0 84.5 80.9 Cobar Consolidated Resources Limited (4) CCU 127 3.0 8.0 13.0 11.0 1.2 0.9 2.5 3.5 0.6 0.6 0.5 2.2 62.1 82.0 61.5 Echo Resources limited EAR 50 0.0 3.5 2.0 5.5 0.2 0.2 0.7 0.8 0.0 0.1 0.3 0.3 66.7 72.9 76.5 Gold Road Resources Limited GOR 500 20.0 45.0 29.4 96.0 1.0 2.9 2.1 6.6 0.6 0.4 0.9 1.7 89.2 69.4 79.7 Kingsgate Consolidated Limited KCN 130 57.0 57.0 223.0 228.0 4.0 6.0 18.0 18.0 2.0 2.0 9.7 13.8 75.0 65.1 56.6 Kingsrose Mining Limited KRM 0 0.0 0.0 8.0 0.0 2.3 2.5 8.0 9.4 0.8 0.8 4.5 4.1 75.8 64.1 69.7 Morning Star Gold NL MCO 24 1.3 1.3 2.0 4.5 2.0 2.6 1.5 7.8 0.6 0.5 1.1 2.6 83.9 58.9 75.4 Mt Isa Metals Limited MET 800 7.5 7.5 0.0 15.0 0.9 1.3 2.7 4.1 0.5 0.2 2.1 1.5 86.0 56.4 73.6 Norseman Gold plc NGX 161 20.0 20.0 40.0 80.0 1.5 1.5 5.7 6.0 1.5 1.0 5.5 5.9 60.0 51.0 50.5 PepinNini Minerals Limited PNN 1,607 4.8 8.5 17.1 23.5 0.7 0.8 4.9 3.5 0.5 0.2 1.0 1.4 80.0 82.8 71.3 Sumatra Copper & Gold plc SUM 322 3.5 3.5 4.0 14.0 1.1 1.1 3.0 4.8 0.2 0.2 1.6 0.8 85.9 64.9 85.6 West Wits Mining Limited WWI 10 0.0 1.5 6.7 4.5 0.1 0.2 1.4 0.6 0.3 0.3 1.7 1.3 41.7 45.3 30.6

Total: Australia 139.0 182.8 367.2 571.2 17.0 23.4 57.9 75.2 CANADA (C$)

Gowest Gold Limited GWA 60 4.5 4.5 0.0 0.0 2.3 1.2 1.6 1.6 0.3 0.3 0.6 0.6 80.0 73.8 73.8

Total: Canada 4.5 4.5 0.0 0.0 2.3 1.2 1.6 1.6

Total: Global (US$) 4 18 25 61 79

(6) To convert hectares to acres, multiply by 2.47; eg 100 thousand hectares ('000 ha) = 247 thousand acres ('000 ac)

Resource Capital Research

Reserves, Resources and Historic Mineralisation

COMPANY Reserves (Equity) 2 Resources (Equity) 2 Historical/Mineralised Material (Equity) 2 Total Gold (Au) Code Status 1 Gold (Au)Silver Other Gold (Au) Silver Other Gold (Au) Silver Other (All Au Mineralisation) 27 June 2011 koz t moz koz t moz koz t moz moz t AUSTRALIA

Aphrodite Gold Limited AQQ E 0 0.0 1,033 32.1 0 0.0 1,033 32.1 Bright Star Resources Limited BUT E 0 0.0 680 21.2 0 0.0 680 21.2 Castle Minerals Limited CDT E 0 0.0 158 4.9 136mt Fe 0 0.0 158 4.9 Cobar Consolidated Resources Limited (4) CCU I 0 0.0 14.0 64kt Pb 0 0.0 51.0212kt Pb 0 0.0 0 0.0 Echo Resources Limited EAR E 0 0.0 99 3.1 99mlb Cu 0 0.0 99 3.1 Gold Road Resources Limited GOR E 0 0.0 1,067 33.2 6.2mlb U 3O8 0 0.0 1,067 33.2 Kingsgate Consolidated Limited KCN P 2,350 73.1 5,270 163.9 29.9 0 0.0 5,270 163.9 Kingsrose Mining Limited KRM P 0 0.0 141 4.4 0 0.0 Zn/Pb tailings 141 4.4 Morning Star Gold NL MCO P 0 0.0 910 28.3 0 0.0 910 28.3 Mt Isa Metals Limited MET E 0 0.0 4 0.1 24kt Cu 0 0.0 4 0.1 Norseman Gold plc NGX P 420 13.1 3,800 118.2 0 0.0 3,800 118.2 PepinNini Minerals Limited PNN E 0 0.0 0 0.0 5mlb U 3O8 0 0.0 0 0.0 Sumatra Copper & Gold plc SUM I 0 0.0 1,000 31.1 13.1 0 0.0 1,000 31.1 West Wits Mining Limited WWI E 59 1.8 427 13.3 0 0.0 427 13.3

Average: Australia CANADA

Gowest Gold Limited GWA E 0 0.0 1,187 36.9 0 0.0 1,187 36.9

Total/Total Average 2,829 88 15,775 491 94 0 0 15,775 490.7

(1) P: Producer; E: Explorer; I: Imminent - includes companies with bankable feasibility studies and likely to be in production within 2 years; IHC: Investment Holding Company (2) Reserves, resources and mineralised material published by the relevant company. Mineral resource estimates are inclusive of the mineral reserve. The applicable mineral resource codes are by country: Australian: JORC, Canadian: NI 43-101, South Africa: SAMREC (3) RCR Assesed NAV is based on nominal NPV at 5% discount rate except for EKM and WWI. See individual reports for key assumptions. "L.C." - Local Currency Unit. "nc" - Not Calculated. Assumed long tem gold price for NPV calculations is current RCR long term forecast (US$900/oz) and current spot (~US$1,540/oz). See company reports for specific assumptions.

Valuation and Performance Data

NAV (L.C. $m) 3 P/NAV (%) Discounting USD Discounting USD COMPANY Long Term Long Term Gold EV-Cash EV-Cash EV-Cash Share Price Performance Current Share Price Code P/Net Cash Gold Price Price /Reserves /Res'v+resources /Total Au (%) % off 12 month 27 June 2011 (x) 1540 900 1540 900 US$/unit US$/unit US$/unit 1 month 3 month 6 month 12 month Hi Lo AUSTRALIA

Aphrodite Gold Limited AQQ 5.4 nc nc nc nc na 11.1 11.1 -9 -20 -13 na 43 16 Bright Star Resources Limited BUT 8.8 nc nc nc nc na 31.1 31.1 -11 -26 -22 56 40 64 Castle Minerals Limited CDT 4.8 nc nc nc nc na 215.2 215.2 20 -3 -11 -14 44 50 Cobar Consolidated Resources Limited (4) CCU 4.0 1.13 0.58 64% 124% 315.0 87.0 87.0 -18 -24 47 407 39 466 Echo Resources Limited EAR 7.2 nc nc nc nc na 118.3 118.3 -31 -3 -3 283 40 350 Gold Road Resources Limited GOR 17.1 nc nc nc nc na 164.6 164.6 -7 18 65 433 33 575 Kingsgate Consolidated Limited KCN -62.2 12.97 9.47 60% 82% 474.7 211.7 211.7 -3 -14 -26 -24 37 12 Kingsrose Mining Limited KRM 9.1 nc nc nc nc na 481.7 481.7 -5 -19 -6 26 50 6 Morning Star Gold NL MCO 9.1 0.69 0.44 37% 58% na 74.5 74.5 -15 -34 -45 -33 50 6 Mt Isa Metals Limited MET 3.6 nc nc nc nc na na na -16 -46 -14 123 64 123 Norseman Gold plc NGX 22.1 0.99 0.17 30% 176% 157.5 17.4 17.4 20 -59 -71 -67 80 28 PepinNini Minerals Limited PNN 2.0 nc 0.24 nc 42% na na na -26 -46 -55 -33 73 5 Sumatra Copper & Gold plc SUM 21.4 nc nc nc nc na 35.2 35.2 -17 -18 -17 10 45 16 West Wits Mining Limited WWI 12.1 nc nc nc nc 115.0 15.9 15.9 -22 -28 -14 -24 44 2

Average: Australia 265.6 122.0 122.0

CANADA

Gowest Gold Limited GWA 16.7 nc nc nc nc na 22.2 22.2 -13 -33 -21 50 36 59

Average: Canada na 22.2 22.2

Total/Total Average 265.6 114.3 114.3 -10 -24 -14 85 48 119

(4) CCU EV/reserve and EV/resource ratios based on gold equivalent reserves/resources at a gold;silver price ratio Au:Ag = 44

Resource Capital Research Aphrodite Gold Limited A$ 0.095 AphroditeAQQ.AU Gold Limited

27 June 2011 AQQ has recently outlined a resource of over 1Moz at the Aphrodite Gold Gold Project near Kalgoorlie. With a current EV/resource ratio of only Australia (WA) Advanced Exploration, Scoping Study A$9.20/ounce we see potential for a significant re-rating of the stock to Exchanges: ASX:AQQ levels of around 2-3 times the current share price.

Capital Profile Production and Financial Forecasts

Share price (A$) 0.095 YEAR END: June Mar-11a Jun-11F 2010a 2011F 2012F 52 week range (A$/share) 0.18 to 0.09 Number of shares (m) 133.6 Exploration and evaluation (A$m) 0.65 2.10 5.47 5.53 6.00 Options and warrants (m) 66.8 Corporate (A$m) 0.14 0.28 0.54 0.90 1.12 Convertible notes (m) 0.0 Exploration/(Expl.+ Corporate) (%) 82 8891 95 101 Fully diluted (m) 200.4 Funding duration at current burn (years) 1.5 0.4 0.2 Market capitalisation (undiluted) (A$m) 12.7 Shares on issue (pr end) (m shares) 133.6 133.6 133.6 133.6 208.6 Debt (A$m) - Jun 11F 0.0 Drilling - RAB (m) 0 0 0 0 0 Enterprise value (A$m) 12.7 Drilling - RC/Diamond (m) 7,000 6,000 0 28,233 28,000 Major shareholders: Mousse Partners (13.2%), Land holding ('000 ha)* 3 3 0 3 3 Eagle Eye Metals Ltd (9.0%), Directors (5.0%). Tenement costs ($k per year) - - - - - Avg monthly volume (m) 7.2 Capital Raisings (A$m) ** 0.0 0.0 15.8 0.0 6.0 Cash (A$m) - Jun 11F * 2.5 Funding from JV partners (A$m) 0 0 0 0 0 Price/Cash (x) 5.1 Cash (A$m) 4.8 2.5 8.8 2.5 1.6 Price/Book (x) 0.7 Cash backing (Ac/share) 3.61.9 6.6 2.0 0.9 Company options: No Net asset backing (Ac/share) 13.0 12.9 12.8 14.2 12.8 *Tenements applied for or granted. ** Nominal capital raising FY12, A$6m @ A$0.08/share assumed. Investment Points Company Comment

The 1Moz gold resource at the Aphrodite Gold Project (ave Overview: AQQ was listed on the ASX in July 2010, as a single project company, focused on the advanced Aphrodite Gold Project (“AGP”) 65km north of Kalgoorlie. 3.19g/t) is predominantly a refractory ore body. Resource Status: Total resources at the AGP now stand at 1.03Moz contained in two steep plungin g lodes – Alpha and Phi. Of this 420koz (ave.1.85g/t) is classified as potential open pit ore (<150m depth) Scoping Study planned in 2H11 to address metallurgical and 613koz (ave. 6.35g/t) is classified as a potential underground deposit . Most of the ore is refractory treatment issues and the planned initial open pit mining. primary sulphide ore – see charts on the o pposite page. The resource remains open at depth. Recent drilling of northern extensions of the Phi lode indicates it could extend for a further ~500m along strike. Project Status: AQQ has recently commenced a metallurgical program to better define the mo st Defining ore treatment options to achieve profitable appropriate treatment route – including possible heap leaching of oxide and transition ore, and flotation of production is the key to achieving a re-rating. the primary (sulphide ore) to produce a gold concentrate. Infill drilling (30,000m campaign) is underway to upgrade the resource status. Recent intercepts from infill drilling of the Alpha lode exhibited excellent The Aphrodite Gold Project (65km NNE of Kalgoorlie) has widths and grades (e.g. 15m @ 5.62g/t from 57m) which suggests the resource tonnage and grade could be lifted in the next resource upgrade. After this round of drilling and the completio n of metallurgical potential regional toll treatment options. testwork, a Scoping Study aimed at defining the optimum path to production will commence in 2H11 Ore Treatment Options: AQQ is unlikely to build a stand-alone plant for either treatment of the The toll treatment option suggests a low-capex start to oxide/transition ore, or the deeper primary sulphide ore. The optimum path seems to be with toll open pit mining could be achieved in 2H13, . treatment, with some potentially ore-hungry operations in the region which may provide options for both the treatment of free milling ore and the more refractory ore. Sale of sulphide concentrates to an offshore smelter may also be an option. Our preliminary analysis suggests that if the cut off grade for open pit ore Further on-going exploration focusing on strike extensions is raised to 1g/t, open pit resource grades of ~2.3g/t could provide good returns in toll treatment. The is expected to increase the total resource. healthy grades of the underground primary ore - 6.35g/t (3g/t cut off) or 7.61g/t (4g/t cut off) should support good margins in a toll treatment or concentrate sale arrangement. Projected Gold Output: Initial open pit mining could see production levels between 30-50kozpa, which Scotia JV could open up potential new ore sources to the we would e xpect to increase to ~70kozpa as the higher grade primary ore is accessed. NE, continuity of mineralised structures likely. Timeline to Production: Subject to the results of the Scoping Study in 2H11, we expect that a full Feasibility Study could be undertaken though to 3Q12, followed by a decision to proceed. A start-up toll Based on an expected re-rating as an emerging producer, treatment or heap leach operation would have a short lead time – we could see production in 1H13. our six month share price target range is A$0.18- Scotia Project JV: AQQ has recently announced a Farm-In JV proposal with Breakaway Resources Limited (ASX:BRW) whereby AQQ can earn up to an 80% interest in BRW’s Scotia Project which adjoins A$0.23/share, with further upside as the project gets closer the AGP immediately to the NE of AQQ’s tenements. Of particular interest is the Chameleon trend where to production.. some excellent intercepts have been reported (e.g. 22m @ 5.43g/t from 150m). This looks like a co ntinuation of the AGP mineralised structures, potentially an additional ore source. AQQ to commence 3,000-5,000m RC campaign here shortly. AQQ - Aphrodite Gold Limited Investment Comment: Over the next six months AQQ will be conducting a Scoping Study on the 0.16 metallurgy and treatment options for the Aphrodite Gold Project . Although near term focus will be on open cut mining and toll treatment of transition ore, which may well be free milling, this stage is only a ‘stepping 0.14 stone’ to the bigger picture. The key to unlocking the potential of the Aphrodite Gold project will be in establishing an effective treatment path for the much more substantial and h igher grade primary ore. If toll 0.12 treatment options or a concentrate sale agreement with a Chinese smelter, can be defined then we see AQQ potentially being re-rated as a future 50-70kozpa producer. 0.10 Reserves and Resources/Mineralised Material 0.08 Code for reporting mineral resources - Australian: (JORC) Gold Classification Project Ore Au Cut Off Au Au Au Eqty 0.06 EquityMt g/t g/t t koz koz Reserves 0.0 0.0 0.0 Share Price (A$/Share) Price Share 0.04 Resources Aphrodite - Oxide - O. Pit Indicated & Inferred 100% 0.18 1.34 0.5 0.2 8.0 8.0 0.02 Aphrodite - Trans - O. Pit Indicated & Inferred 100% 3.40 1.40 0.5 4.8 153.0 153.0 Aphrodite - Primary - O. Pit Indicated & Inferred 100% 3.48 2.31 0.5 8.0 259.0 259.0 0.00 Aphrodite - Primary - U.G. Indicated & Inferred100% 3.00 6.35 3.0 19.1 613.0 613.0 Total 10.06 3.19 32.1 1,033 1,033 Jul-10 Apr-11 Jun-11 Jan-11 Feb-11 Nov-10 Aug-10 Sep-10 Dec-10 May-11

Source: Bloomberg Mineralised Material (est., non compliant with JORC) 0.0 0.0 0.0

Contacts Directors Key Projects

Mr Leon Reisgys W Staude (Non Exec Ch) Project Ownership/ JV Target Process Project Director, Exploration & Development W Ryder (Exec Finance) Option Metal PartnerType Route Status Location Tel: 61 (0) 8 9389 4421 L Reisgys (Exec - Expl'n) Aphrodite Gold Project 100% Au na Porphyry toll treat? Sc. Study Aus (WA) W Perth, WA, Australia H Sandercock (Non Exec) Scotia Project * 0/51/80% Au ASX:BRW Porphyry na Mid Expl Aus (WA) www.aphroditegold.com.au K Jackson (Non Exec Dir) * Scotia JV is currently at Heads of Agreement stage Analyst: Dr Tony Parry [email protected]

Resource Capital Research

Our valuation for AQQ is based on a medium term (6 months) target share price range (A$0.18 – A$0.24/share) using peer group exploration company EV/resource multiples. The target valuation could then progressively increase towards a producer’s multiple as AQQ get closer to production.

APHRODITE GOLD LIMITED VALUATION RANGES

Exploration Production Valuation Valuation

Medium Term - Valued as an Exploration Company Low High Valuation Sensitivity Valuation Sensitivity Gold Resource Resource (Low) (High) (Low) (High) Equity Resource Valuation Valuation A$m A$m A$m A$m (moz) A$/oz A$/oz + Aphrodite Gold Project * 100% 1.03 15 25 15.5 25.8 + Exploration Potential 100% 0.50 10 15 5.0 7.5 20.5 33.3

Longer Term - Valued as a Potential Production Company Production Range * (Valuation: EV = A$1.00 per kozpa) ^ kozpa Low High + Aphrodite Gold Project * 100% 30 50 30.0 50.0 + Exploration Potential 100% 5.0 7.5 35.0 57.5

+ Cash (Est Jun '11) 2.5 2.5 2.5 2.5 - Debt (Est. Jun '11) 0.0 0.0 0.0 0.0 Sub Total 2.5 2.5 2.5 2.5

AQQ NET ASSET VALUE 22.9 35.7 37.5 60.0

Capital Structure Shares (m) 133.6 133.6 133.6 133.6 Fully Diluted Shares (m) 200.4 200.4 200.4 200.4

AQQ NET ASSET VALUE PER SHARE :A$/share 0.17 0.27 0.28 0.45 AQQ NET ASSET VALUE DILUTED :A$/share fully diluted 0.18 0.24 0.25 0.37

* Production range is for possible initial open pit production commencing in FY13 * If underground mining of primary ore is established, 0.5mtpa mining and ore treatment would yield ~70kozpa Au in concentrates. ^ Future production valuation based on conservative A$1m/kozpa - see text

Contained Gold - Total Resources Contained Gold - Open Pit (<150m Depth) (ounces, % of total) (ounces, % of total) Of the total 1,033koz gold 8, 1% 8, 2% resource, (l.h. chart) 153, 15% 872koz (84%) is primary

ore, 15% is transition ore 153, 36% and 1% oxide.

259koz (62%) of the 259, 25% 259, 62% 420koz resource (r.h. 613, 59% chart) that is currently classified as open pit is also primary ore. Oxide Transition Oxide Transition Primary Primary - Open Pit Primary - Underground

400 350

300 Based on current resource grades, the primary ore classified as an underground 250

component has a significantly higher 200 contained gold value (>A$350/t based on current gold price of US$15,540/oz, A$/US$ = 150 1.05) than the oxide, transition and shallower 100

(A$/t) Value Gold Contained Gross primary ore. 50

0 Oxide Trans Primary - o/p Primary - u/g Resource Classification

Resource Capital Research

Bright Star Resources Limited BUT.AU A$ 0.13 Bright Star Resources Limited

27 June 2011 Tanzanian-focused BUT has already got its foot on 680koz of resource Gold equity in this gold-rich country. Exploration is planned which could Tanzania, Australia (Qld) Mid-Advanced Exploration increase resources rapidly, and drive a re-rating based on an enterprise ASX: BUT value well below that of some African exploration peers.

Capital Profile Production and Financial Forecasts

Share price (A$) 0.13 YEAR END: June Mar-11a Jun-11F 2010a 2011F 2012F 52 week range (A$/share) 0.08 to 0.21 Number of shares (m) 182 Exploration and evaluation (A$m) 0.08 0.25 0.21 0.44 1.85 Options and warrants (m) 50 Corporate (A$m) 0.27 0.30 0.75 1.39 1.20 Convertible notes (m) 0 Exploration/(Expl.+ Corporate) (%) 22 45 22 24 73 Fully diluted (m) 232 Funding duration at current burn (years) 0.4 1.4 0.2 Market capitalisation (undiluted) (A$m) 22.8 Shares on issue (pr end) (m shares) 182.1 182.1 122.6 182.1 182.1 Debt (A$m) - Jun 11F 0.0 Drilling - RAB (m) 0 3,000 2,000 3,000 22,000 Enterprise value (A$m) 22.8 Drilling - RC/Diamond (m) 0 0 2,000 0 12,000 Major shareholders: Golden Cross Resources Ltd (12.2%) Land holding ('000 ha) 63 63 50 63 63 Directors (15.0%). Tenement costs ($k per year) - - - - - Avg monthly volume (m) 4 Capital raisings (A$m) * 0.00 0.00 2.05 3.60 0.00 Cash (A$m) - Jun 11F 2.6 Funding from JV partners (A$m) 0 0 0 0 0 Price/Cash (x) 8.8 Cash (A$m) 3.1 2.6 0.4 2.6 0.6 Price/Book (x) 3.9 Cash backing (Ac/share) 1.7 1.4 0.3 1.4 0.4 ASX-listed company options: BUTO Net asset backing (Ac/share) 3.4 3.2 2.6 3.2 3.8 * Investment Points Company Comment Overview: Listed on ASX in Dec ’07 (as Tasman Goldfields Ltd) with gold exploration properties in Gold explorer in Tanzania - rich Lake Victoria Goldfields. Australia, NZ, PNG. New board (4Q09) has changed focus to Tanzania, divested most other assets. Tanzania: Tanzania has been relatively overlooked amongst all the hype regarding West African Gold Tanzania - third largest gold producing country in Africa exploration, but it is a major gold producing country (Africa’s no. three), a stable mining-friendly after South Africa and Ghana. democracy. Barrick is a major player, dominating Tanzanian production. Also Anglogold and Resolute. Kitongo Project, Tanzania (100%) : BUT sees Kitongo, the flagship project, as a near-term production opportunity with excellent exploration potential. The 128km 2 project area is located in the Lake Victoria Flagship Kitongo Project (100%) - advanced Tanzanian Goldfields region of Tanzania. Looks like a pretty good address with several multi-million ounce gold gold project with existing 290koz JORC resource. projects on the rich Senza-geita greenstone belt within ~50km radius, including Bulyanhulu (>15Moz), Nyanzaga (4.2Moz), and Golden Ridge (2.2Moz). Previous owner estimated a 290koz JOR C resource Recent JV formed for BUT to earn up to 75% interest in (2.0g/t grade) in a 800m long zone, to 135m depth. The majority of current resource is oxide. The exploration potential of this project looks excellent. MIyabi Project - 520koz resource. Kitongo Exploration Program: The first RC drilling program (3,000m) should be underway during 3Q11, aimed at extending the Main Zone oxide resource with step-out drilling (what BUT describes as BUT resource equity now 680koz assuming 75% JV ‘easy ounces’), plus looking for additional deeper sulphide ore, and addressing high priority prospective interest, deposits are shallow, broad mineralised zones. regional exploration targets where limited scout drilling has produced some very promising intercepts. A Scoping Study for fast track Main Zone development could well follow from the 3Q11 program. Miyabi Project, Tanzania (earning up to 75%): Miyabi (252km 2) is ~150km SW of Kitongo and ~30km Excellent address with strong regional exploration potential from Resolute’s Nyakafuru project (1.1Moz). In Apr ’11 BUT entered into a JV to earn an initial 50% - major regional projects include Bulyanhulu (Barrick, from nickel-focused African Eagle Resources plc (AIM:AFE) by spending US$3m over 30 months, and 17Moz), Geita (Anglo, 11Moz). a further 25% by completing a feasibility study. Miyabi has a current JORC resource of 520koz at average grade of 1.3g/t, in five deposits, all relatively shallow broad mineralised zones. Miyabi Exploration Program: BUT has recently commenced a 10,000m RAB campaign. The priority Kitongo and Miyabi resource expansion drilling programs target is the full length of a 5km long granite/greenstone contact zone which host s two resources planned, potential for rapid resource increase. (totaling 225koz). The drilling will be on 200m spaced lines along the 5km length. Most of the contact zone, which exhibits numerous gold and magnetic anomalies, is untested. BUT enterprise value only ~A$26m (~A$38/oz) - looks Challenger (NSW): ‘Brownfields’ Au project, recently sold for A$1.75m cash, staged payments. Miclere (Qld) : Paleochannel alluvial gold system in historic Clermont goldfields. Being reviewed. undervalued compared to other similar African explorers. Investment Comment: This is a new era for BUT shareholders with some of the team who brought you Andean Resources now on board. A revitalised African exploration focus is now getting up to BUT - Bright Star Resources Limited speed with two frontline exploration projects leveraging on established resources at Kitongo and 0.25 Miyabi. A strong 2H11 newsflow expected. Based on the current very modest resource valuation of only ~A$38/ounce (see next page) and a resource increase at Kitongo likely within 6 months, we see potential for the stock to double in the next six months if we look at EV/resource ratings of comparable 0.20 West African explorers.

0.15 Reserves and Resources/Mineralised Material Code for reporting mineral resources - Australian: (JORC) Gold Classification Project Ore Au Cut Off Au Au Au Eqty * 0.10 Equity* Mt g/tg/t t koz koz Reserves Share Price ($/Share) 0.05 0.0 0.0 0.0 Resources 0.00 Kitongo Project Inferred 100% 4.40 2.00 1.0 8.8 290 290 Miyabi Project Indicated & Inferred 75% 12.40 1.30 0.5 16.1 520 390 Jun-10 Jan-11 Jun-11 Sub Total 16.80 1.48 24.9 810 680 Feb-11 Mar-11 Nov-10 Aug-10 Sep-10 Dec-10 May-11 * Miyabi project equity assumes 75% is earned as per JV agreement Source: Bloomberg Mineralised Material (est., non compliant with JORC) 0.0 0.0 0.0

Contacts Directors Key Projects

Mr Geoff Gilmour W Gilmour (Exec Chair) Ownership/ JV Target Process Project Managing Director G Gilmour (MD) Project Option Metal Partner Type Route Status Location Tel: +61 (8) 9430 9966 P Payne (Ex Dir) Kitongo Project 100% Au none g'stone na Adv. Expl. Tanzania Fremantle, WA, Aust G Clatworthy (Non-Exec) Maji Moto/Nyamgombie 100% Au none qtz vein na Early Expl. Tanzania www.brightstarresources.com.au Barry Bolitho (Non Exec Dir) Miyabi JV 0/50/75% Au African Eagle g'stone na Mid Expl. Tanzania Miclere 100% Au none Placer Gravity Mid Expl. Aus (QLD) Analyst: Dr Tony Parry [email protected]

Resource Capital Research

Bright Star’s projects in Tanzania are in a The priority target at Miyabi is a largely untested greenstone belt that hosts numerous major 5km granite/greenstone contact zone (top picture). deposits (e.g. Barrick’s 17moz Bulyanhulu mine - The mineralised zones are characterised by very 260koz production in 2010), and have excellent broad mineralised zones (e.g. Faida – lower picture). exploration upside. Tanzania is the third biggest African gold producing country, with Barrick, Anglo and Resolute as lead players

We have revisited our comparison of EV/resource ratios of three West African junior explorers (PIR – Mali, WAF – Burkina Faso and MET – Burkina Faso) with BUT. This still shows that the Tanzanian explorer looks significantly undervalued, even more so if exploration success drives the Kitongo/Miyabi resource base beyond the modest additional 0.5moz medium term target we have assumed.

Enterprise Values (as at June 15 2011) Current Med. term resource target

200.0 160.0 180.0 140.0 160.0 WAF & MET have no 120.0 140.0 current resources

100.0 120.0 100.0 80.0 (A$/oz) 80.0 60.0 60.0 40.0 40.0 Enterprise Value (A$m) Value Enterprise 20.0 20.0

0.0 0.0 Enterprise Value (EV) per resource ounce ounce resource per (EV) Value Enterprise PIR WAF MET BUT PIR WAF MET BUT

Equity Gold Resources (Moz) Notes COMPANY ASX CODE PRICE (A$) * EV (A$m) ^ Current Med. term target Papillon Resources Ltd PIR 0.57 147.0 0.827 1.4 Med term target is RCR estimate West African Resources Ltd WAF 0.39 95.0 0.0 0.75 RCR estimate - assumes 0.75Moz potential in 12-18 months Mt Isa Metals Ltd MET 0.3 39.0 0.0 0.75 RCR estimate - assumes 0.75Moz potential in 12-18 months Bright Star Resources Ltd BUT 0.13 25.9 0.68 1.18 Med. term target assumes Kitongo/Miyabi equity resources inc. by 0.5Moz * Share price data as at June 16 2011 ^ EV is based on ful;y diluted share capital, cash as at March quarter 2011 report.

Resource Capital Research Castle Minerals Limited CDT.AU A$ 0.36 Castle Minerals Limited

27 June 2011 Another virgin discovery (Castle's third) of a potentially major mineralised Gold, Iron Ore 2 Ghana zone at Baayiri, NW Ghana, highlights the huge potential of its 12,000km Early to Advanced Exploration Ghana tenement position. This potential is not lost on neighbour Azumah Exchanges: ASX:CDT Resources, which has built a 13% stake in CDT.

Capital Profile Production and Financial Forecasts

Share price (A$) 0.36 YEAR END: June Mar-11a Jun-11F 2010a 2011F 2012F 52 week range (A$/share)0.24 to 0.64 Number of shares (m) * 114 Exploration and evaluation (A$m) 1.36 1.00 1.772.50 4.00 Options and warrants (m) 5 Corporate (A$m) 0.16 0.15 0.330.95 0.80 Convertible notes (m) 0 Exploration/(Expl.+ Corporate) (%) 90 87 84 72 83 Fully diluted (m) 118 Funding duration at current burn (years) 3.7 2.4 1.1 Market capitalisation (undiluted) (A$m) 40.9 Shares on issue (pr end) (m shares) 99.6 113.5 96.0 113.5 117.0 Debt (A$m) - Jun 11F 0.0 Drilling - RAB (m) 5,000 5,000 0 15,000 20,000 Enterprise value (A$m) 40.9 Drilling - RC/Diamond (m) 10,000 13,000 18,000 43,000 60,000 Major shareholders: Azumah Resources (13.3%), D Harper (7.6%), Land holding ('000 ha)* 1,200 1,200 1,200 1,200 1,200 Bluestar Res (6.1%), Seamans Cap Mgt (5.7%), M Ivey (5.6%) Tenement costs ($k per year) - - - - - Avg monthly volume (m) 7 Capital raisings (A$m) 0.51 4.80 9.35 5.64 1.23 Cash (A$m) - Jun 11F * 8.4 Funding from JV partners (A$m) 0.0 0.00.0 na na Price/Cash (x) 4.8 Cash (A$m) 5.0 8.4 7.8 8.4 5.2 Price/Book (x) 3.8 Cash backing (Ac/share) 5.0 7.4 8.1 7.4 4.5 Listed company options: No Net asset backing (Ac/share) 6.4 9.5 7.2 9.5 9.9 * Shares and forecast cash includes Jun '11 A$4.8m proposed capital raising. *Gold prospective tenements only, both held and under application. Quarters stated on calendar year basis. Investment Points Company Comment Overview : Castle Minerals listed on the ASX in 2006. It is focused on exploration in Ghana, West Africa, 100% focus on gold in Ghana, which has +110moz Au where it has six main projects and is the largest landh older among mineral explorers (+12,000km 2). It made resources and produces +3moz Au/yr. two greenfields gold discoveries in 2008, Akoko and Julie West, and defined an initial Au resource in 2009. Wa Gold Project (Ghana, 10,000m 2): covers an area 180km long by 30-80km wide. Target geology is two Numerous targets in +12,000km 2 holding, in the vicinity of Birimian aged greenstone belts (250km strike) and associated shears, which are of a type known to ho st gold in w est Africa. Castle’s neighbours here, to the west and north, include Ampella Resources (ASX:AMX) known gold-bearing regional structures and big deposits - and Azumah Resources (ASX:AZM), which have a combined ~3.5moz Au resource inventory. Part of CDT’s i.e. strong "nearology". exploration model is that known gold-hosting structures continue onto its own tenements. The four main prospect corridors are the relatively unexplored Julie-Jang trend, the exciting Kandia trend, and further Discovery momentum is now increasing with 80,000m drill south, 80km of the Wa-Lawra Greenstone Belt and the WA South Prospect , a 60km extension o f the Batie West Shear Zone, which to the NW has yielded 2.2moz for AMX (at Konkera). program underway. Baayiri Discovery: In what could be CDT’s most significant virgin discovery to date, and one which seems to underpin the potential of CDT’s massive Ghana tenement position, CDT has recently announced the Neighbour Azumah Resources (ASX:AZM) building a stake discovery of a broad, shallow potentially large scale disseminated mineralised gold zone in a totally in CDT, likes what it sees. unexplored region of the Julie-Jang trend (Wa Project area). First pass RC drilling of the 12km x 6km Baayiri anomalous zone has produced some spectacularly wide intercepts including 55m @1.82g/t from 15m and 20m @ 0.55g/t from 10m, 5m @ 6.64g/t from surface). Further results are due soon, and the RC Major new discovery at Baayiri - broad disseminated rig has now commenced a 30,000-50,000m follow up campaign to further te st beneath and along strike of mineralised zones - potential for substantial deposit in the discovery hole, plus further wide spaced drilling along the rest of the trend. unexplored corridoor. Kandia Prospect : In 2Q10, Castle found a 600m long artisanal goldfield over a granite/sediment contact, 10km SE of Julie West. The work define d a 25km gold anomaly, including 9 high priority targets on 12km strike. Initial drilling included 10m @ 1.44g/t Au from 35m, 20m @ 0.53g/t Au from 15m (Feb ’11) on a new Kandia discovery - new 2.5km zone - potential for bulk 2.5km trend. In May ’11 further very encouraging intercepts were confirmed including 15m @ 2.39g/t an d tonnage sediment hosted gold. 20m @ 1.05g/t from surface, indicating potential for bulk tonnage of sediment hosted gold. At the Bulenga Prospect , west of the Kandia Trend, trenching has returned 19m @ 1.14g/t Au (Feb ’11) in near-surface Current market cap. ~A$40m, >A$8m cash to fund drilling, bedrock. Drilling is planned. At the Wa South Prospect, close to the intersection of Wa Lawra and Batie West, has numerous regional (ie 2-20km) scale gold anomalies with aggregate strike length of 60km. suggests excellent share upside as strong newsflow from Azumah Resources (ASX:AZM) Strategic Stake: There probably can be no better demons tration of the drilling continues. upside in CDT’s Ghana exploration than NW Ghana neighbour and production hopeful (1.2moz resource) AZM recently accumulating a 15.2% stake in CDT, diluted to 13.3% after recent placement. Say no more! Corporate: Share placement announced 24 June will raise A$4.8m at A$0.35/share. Investment Comment : Significant new discoveries are continuing to flow from Castle’s extensive 2 CDT - Castle Minerals Limited (80,000m) current drilling program on its +12,000km holding in Ghana. CDT’s market cap. is sitting at ~ A$40m (with ~A$8.4m cash) so there is considerable upside when compared with other ASX-listed gold 0.7 companies in Ghana (with less exploration ground) who have advanced further along the track to production (e.g. Azumah [ASX:AZM], mkt cap A$154m; and Adamus [ASX:ADU], mkt cap A$266m). With major drilling 0.6 programs driving discovery momentum, we expect to see CDT’s resource inventory grow strongly in the next 1-2 years, and its market cap. could start to push up towards these peer company levels. 0.5 Reserves and Resources/Mineralised Material 0.4 Code for reporting mineral resources - Australian: (JORC) 0.3 Gold Classification Project Ore Au c/off Au Au Eqty Equity Mt g/t g/t t koz koz

Share Price ($/Share) Price Share 0.2 Reserves 0.0 0.0 0.0 0.1 Resources Julie West (Wa Project) Ind + Inf 100% 0.41 4.2 1 1.7 56.2 56.2 0 Akoko (Nth and Sth) Ind + Inf 100% 2.04 1.6 na 3.3 102.0 102.0 5.0 158 158.2 Apr-11 Oct-10 Jun-10 Jan-11 Mar-11 Aug-10 Sep-10 Nov-10 Dec-10 May-11 Mineralised Material (est., non compliant with JORC) 0.0 0 0 Source: Bloomberg *Also has iron ore, 136mt at Opon Mansi Project

Contact Directors Key Projects

Mr Michael Ivey M Ivey (Exec Chair, MD) Ownership/ JV Target Process Project (Executive Chairman, MD) C Ansell (Non Exec) Project Option Metal Partner Type Route Status Location Tel: 61 (0) 8 9322 7018 M Ashforth (Non Exec) Akoko Gold 100% Au - Shear na Scoping Ghana West Perth, WA, Australia Wa Gold 100% Au - Shear na Scoping Ghana www.castleminerals.com Banso Gold 100% Au - Shear na Exploration Ghana [email protected] Bondaye Gold 100% Au - Shear na Grassroots Ghana Antubia 100% Au - Shear na Exploration Ghana Analyst: Dr Tony Parry Opon Mansi 100% Fe - Shear na Adv Expl Ghana [email protected]

Resource Capital Research

The recent Baayiri discovery in Castle’s 10,000km2 Wa Project area, NW Ghana, is in the Julie-Jang trend, ~15km NW of the existing Julie West resource. The disseminated mineralisation appears intrusion-related. Some existing major gold intrusive deposits in Ghana include Ayanfuri (6moz) and Ahafo (17moz).

The initial discovery holes at the Baayiri Prospect indicate very broad zones of disseminated mineralisation (LH graphic). The aeromag. image (RH graphic) suggests that the Baayiri discovery sits near cross cutting structures on the NW trending Baayiri fault zone, that extends for over 30km.

Resource Capital Research

Gold Road Resources Limited GOR.AU A$ 0.57 Gold Road Resources Limited

27 June 2011 GOR's discovery momentum and increasing focus on potential Gold, Uranium production should continue to drive share price out-performance in Australia (WA) Advanced Exploration 2H11, as the resource inventory builds from additional high grade zones Exchanges: ASX:GOR in its dominant position in the under-explored Yamarna Belt.

Capital Profile Production and Financial Forecasts

Share price (A$) 0.57 YEAR END: June Mar-11a Jun-11F 2010a 2011F 2012F 52 week range (A$/share) 0.08 to 0.84 Number of shares (m) * 317.2 Exploration and evaluation (A$m) 1.04 2.90 2.13 6.60 9.20 Options and warrants (m) * 17.6 Corporate (A$m) 0.57 0.35 0.94 1.68 1.40 Convertible notes (m) 0.0 Exploration/(Expl.+ Corporate) (%) 65 89 69 88 104 Fully diluted (m) 334.8 Funding duration at current burn (years) 0.6 1.3 0.0 Market capitalisation (undiluted) (A$m) 180.8 Shares on issue (pr end) (m shares) ** 273.8 317.2 195.8 317.2 317.2 Debt (A$m) - Jun 11F 0.0 Drilling - RAB (m) 10,000 30,00010,500 60,000 72,000 Enterprise value (A$m) 180.8 Drilling - RC/Diamond (m) 10,000 15,000 18,900 36,000 48,000 Major shareholders: Directors (7.1%), Perth Select Seafood (4.0%), Land holding ('000 ha) 500 500 410 500 500 Geiger Counter Fund (3.1%), HSBC Nominees (3.0%). Tenement costs ($k per year) - - - - - Avg monthly volume (m) 35 Capital raisings (A$m) ** 1.45 2.98 2.67 17.36 0.00 Cash (A$m) - Jun 11F 10.4 Funding from JV partners (A$m) 0 0 0 0 0 Price/Cash (x) 17.4 Cash (A$m) 10.5 10.4 1.8 10.4 0.1 Price/Book (x) 7.9 Cash backing (Ac/share) 3.9 3.3 0.9 3.6 0.0 Company options: GORO Net asset backing (Ac/share) 7.3 7.2 3.4 7.9 8.2 * assumes all 30 June 2011 A$0.07 options are exercised ** Jun-11F shares on issue assumes 7c options fully converted in 2Q11. Investment Points Company Comment Overview: GOR listed on the ASX July ’06 as Eleckra Mines Ltd. Its focus is the Yamarna greenstone GOR's holds a strategic position (~5,000km 2) in remote belt where it has now established >1Moz gold resources, and a 6.2mlb shallow calcrete U 3O8 resource. under-explored Yamarna greenstone belt Eastern Yamarna Project (WA): GOR’s exploration focus is on the under explored remote Yamarna greenstone Goldfields, WA. Exploration budget ~A$9mpa. belt - a regional scale mineralised trend considered potentially to be WA’s fifth major greenstone belt. Central Bore (“CB”) : Discovered in 2009. CB is a linear steeply dipping high grade carbonate narrow high grade vein system. The JORC resource is 595kt @ 7.9g/t for 150koz along an 800m strike length, Total Yamarna resource 1.07Moz, likely to continue to to a depth of ~400m. RAB drilling indicates the mineralisation may extend up to 1.1km to the north (CB increase with multiple high grade zones. North) and 1.2km to the south. Importantly the high grade Imperial Shoot contains 57.1koz @ 23.1g/t. Parallel Discovery Zones : The cluster of four additional zones discovered in the last 18 months in a n 2 Central Bore discovery - 150kz at 7.86g/t grade. Includes area of only 6km around CB have been a revelation that has transformed thinking about the Yamarna high grade Imperial Shoot, 57koz @ 23.1g/t. Recent Belt. Justinian (200m E of CB), is an exciting high grade discovery (7m @ 27.2g/t incl. 1m @ 102g/t) indicating broader mineralised zones than CB. A recent single diamond core hole (5m @ 8.28g/t) deeper drilling confirms high grade depth extension. confirmed this is potentially a high grade structure wider than CB – a very significant result. R ecent RAB programs indicate a potential strike length of at least 500m. The Hann anomaly (2.4km W of CB) is Cluster of multiple parallel high grade zones discovered in 4.3km length after soil geochem sampling. Recent shallow drilling (8,000m RC) in 2Q11 confirmed 2 mineralisation over a 660m strike length in the S portion. Central Bore North , suggests the start of the just 6km around Central Bore: Justinian, Hann, Central next high grade zone 500m N of CB. Byzantium, exhibits 2 anomalies ~1km long. Bore North and new targets. Atilla Resource (3.7km W of CB): The ‘original’ resource - 917koz @ 1.44g/t - which occurs in multiple zones along a 33km strike length. GOR will go back and drill gaps and high grade shoots previously New Justinian zone at least 500m long, looks like high identified. Excellent potential to prove up higher grade zones, which will be drill tested 4Q11. Next Steps : GOR is increasing its planned drilling from 37,000m CY10 to a planned ~100,000 m in grade with widths > Central Bore. Initial JORC resource CY11. It now has three rigs operating, plus an auger rig. At Central Bore GOR is following up with a 50 expected early 1Q11. hole RC program in the anticipation of finding additional high grade shoots to the N and S of the current CB resource, as well as confirming depth extensions of CB A recent hole (deepest to date) intersected GOR is assessing possible fast track low capex on-site 13m @ 40.1g/t from 426m, which is very encouraging for higher grades at depth. At Justinian , t he production or trucking/toll treatment option. second RC rig is now undertaking a follow up program to define the extent of the high grade zone. We would anticipate a n initial JORC resource in early 1Q12. RAB drilling of other new target areas should produce a pipeline of targets for RC follow up in 2H11, plus drilling at Atilla targeting high grade shoots. With continued discovery momentum and resource Fast Track Development Potential: GOR is undertaking scop ing study assessment for potential tonnage and grade likely to build, we have raised our six production from CB (on site gravity processing or trucking), but likely to expand to include Justinian. 2 month target to A$0.72/share. Golden Sands (WA): (1,500km , gold) Largely unexplored tenements north of the Tropicana gold project (5Moz resource). Deep sand cover, scout drilling (1 hole) and 2 holes Dorothy Hills planned. Investment Comment: The share price has already broken into our target range of A$0.48/share to GOR - Gold Road Resources Limited A$0.56/share from our March Quarter Review. The key to maintaining share price out-perform ance for GOR will be continuing exploration success in the new target zones being drilled in 2H 11, thereby 0.9 maintaining ‘resource momentum’. If that is achieved, we see the share price in the next six mo nths 0.8 heading towards the upper level of our revised target range of A$0.63-A$0.72 (fully diluted) 0.7 Reserves and Resources/Mineralised Material 0.6 Code for reporting mineral resources - Australian: (JORC) Gold Classification Project Ore Au Cut OffAu Au Au Equity 0.5 Equity Mt g/t g/t t koz koz 0.4 Reserves 0.0 0.0 0.0

0.3 Resources Share Price ($/Share) Price Share 0.2 Yamarna - Attila Meas., Ind. & Inf. 100% 19.82 1.44 0.50 28.5 917 917 Yamarna - Central Bore Meas., Ind. & Inf. 100% 0.60 7.86 1.00 4.7 150 150 0.1 Total Resources 20.4 1.63 33.2 1,067 1,067

0 Mineralised Material (est., non compliant with JORC) 0.0 0.0 0.0

Project U3O8 Cut Off U3O8 U3O8 U3O8 Apr-11 Jun-10 Oct-10 Jan-11 Jun-11 Mar-11 Aug-10 Sep-10 Nov-10 Dec-10 May-11 Uranium Resources Equity Mt % ppm kt mlb Eqty mlb Source: Bloomberg Thatcher Soak Inferred 100% 16.1 0.017 100 2.7 6.2 6.2 Contacts Directors Key Projects

Mr Ian Murray I Murray (Exec Chairman) Ownership/ JV Target Process Project Executive Chairman Z Lubieniecki (Exec Dir) Project Option Metal Partner Type Route Status Location Tel: 61 (0) 8 9486 4144 K Hart (Non Exec Dir) Yamarna - Central Bore 100%Au none h.g.vein gravity/CIP Adv. Expl. Aus (WA) West Perth, WA, Australia M Pyle (Non Exec Dir) Yamarna - Atilla 100% Au none ox/sulp heap leach Adv. Expl. Aus (WA) www.goldroad.com.au R Davis (Non Exec Dir) Yamarna - Gold regional 100%Au none ox/sulp na Early Expl. Aus (WA) Golden Sands 100% Au,U none ox/sulp na Early Expl. Aus (WA) Analyst: Dr Tony Parry Yamarna: Thatcher Soak 100% U none Calcrete Alk. Leach Adv. Expl. Aus (WA) [email protected] June Quarter 2011 Disclaimer and disclosure attached. Copyright © 2011 by Resource Capital Research Pty Ltd. All rights reserved. 15

Resource Capital Research

The stepped up 2H11 drilling campaign, focusing on Central Bore strike and depth extensions, Justinian, Attilla high grade shoots and other parallel zones near Central Bore suggests that the upper level of our A$0.63 – A$0.72/share target valuation range could be coming into focus if the good results keep flowing.

GOLD ROAD RESOURCES LIMITED - VALUATION

Target Valuation Range Gold Resource Low * Mid** High ^ Equity (moz) A$m A$m A$m Projects + Atilla existing resource (current 0.92Moz valued @ A$50-A$60/oz) 100% 0.92 45.9 55.0 55.0 + Central Bore (current 0.15Moz high grade resource valued @ A$200-A$$250oz) 100% 0.15 30.0 37.5 37.5 + Justinian, Hann, Byzantium, CB North - likely new parallel high grade zones 100% 30.0 56.3 75.0 + Thatcher Soak uranium resource (6.2Mlb @ A$0.50/lb) 100% 3.1 3.1 3.1 2 + Yamarna 4,000km Regional Expl'n (excellent potential for further h.g. zones) 100% 30.0 40.0 50.0 + Other Exploration (Uranium potential, Golden Sands Au) 100% 2.0 3.0 5.0

Sub Total 141.0 194.9 225.6

+ Cash (est Jun '11) 10.4 10.4 10.4 - Debt (est. Jun '11) 0.0 0.0 0.0 Sub Total 10.4 10.4 10.4

GOR NET ASSET VALUE 151.4 205.3 236.0

Capital Structure Shares - 30 June 2011F (m) ^^ 317.2 317.2 317.2 Fully Diluted Shares (m) 334.8 334.8 334.8

GOR NET ASSET VALUE PER SHARE :A$/share 0.48 0.65 0.74 GOR NET ASSET VALUE DILUTED :A$/share fully diluted 0.47 0.63 0.72

* Low valuation assumes little 2H11 exploration success - new high grade parallel discovery zones valued at 100% of Central Bore valuation. ** Mid valuation assumes modest 2011 exploration success - new high grade parallel discovery zones valued at 50% premium to Central Bore valuation. ^ High valuation assumes continued 2011 exploration success - multiple new high grade parallel discovery zones valued at a 100% premium to Central Bore. ^^ Shares on issue assumes 100% conversion of June 2011 A$0.07 options by 30 June 2011.

The longer term upside for GOR is underlined by the fact that the new high grade discovery zones occur in a small 6 km 2 segment, out of GOR’s total ~5,000 km 2 Yamarna greenstone belt tenements, which remain relatively unexplored due to remoteness and soil cover.

Resource Capital Research Gowest Gold Limited GWA.CN C$ 0.27 Gowest Gold Limited

27 June 2011 GWA offers good exploration potential. Resource upgrade (June 2011) Gold to 1.2moz of gold (+140% from 0.5moz). With grades of +6g/t, the Canada (ON) Early-Mid Exploration Frankfield East project (100% GWA) in Timmins, Ontario could be Exchanges: TSX.V:GWA, US:OTC:GWSAF, FSE:1GW developed as early as 4Q12. PEA expected 3Q11.

Capital Profile Production and Financial Forecasts

Share price (C$) 0.27 YEAR END: Oct Jan-11a Apr-11F 2010a 2011F 2012F 52 week range (C$/share) 0.17 to 0.43 Number of shares (m) 98.9 Exploration and evaluation (C$m) 2.27 1.20 2.955.87 5.60 Options and warrants (m) 26.9 Corporate (C$m) 0.30 0.30 0.921.20 1.20 Convertible notes (m) 0.0 Exploration/(Expl.+ Corporate) (%) 88 80 76 83 82 Fully diluted (m) 125.8 Funding duration at current burn (years) 0.7 0.4 0.2 Market capitalisation (undiluted) (C$m) 28.2 Shares on issue (pr end) (m shares) 96.3 98.1 84.1 114.4 134.4 Debt (C$m) - Apr 11F 0.0 Drilling - RAB (m) 0 0 0 0 0 Enterprise value (C$m) 28.2 Drilling - Other/Diamond (m) 4,500 4,500 20,000 18,000 18,000 Major shareholders: Land holding ('000 ha) 26 60 25 60 60 New Textmont (15%), Management (12.0%) Tenement costs ($k per year) - - - - - Avg monthly volume (m) 231.2 Capital raisings (C$m) 2.75 0.50 6.43 7.75 5.50 Cash (C$m) - Apr 11F 1.6 Funding from JV partners (C$m) 0 0 0 0 0 Price/Cash (x) 16.7 Cash (C$m) 2.7 1.6 2.7 3.0 1.5 Price/Book (x) 2.6 Cash backing (Ac/share) 2.8 1.6 3.2 2.6 1.1 Listed company options: No Net asset backing (Ac/share) 9.8 10.5 8.3 12.3 13.5

Investment Points Company Comment

The company is exclusively focused on gold exploration in Overview: Gowest Gold Ltd. is a Toronto based exploration and development company listed on the TSXV over 20 years ago. It was restructured May 2008, and is exclusively focused on t he Frankfield a stable jurisdiction - Ontario, Canada. gold project (100% GWA) located in Timmins, Ontario, Canada. The company was known as Gowest Amalgamated Resources before changing its name to Gowest Gold Ltd in April 2011. Key project - Frankfield East (100% GWA): 1.2moz gold Frankfield East Project (ON): The company's sole project is situated 40 km from the town of Timmins (+6g/t), in prolific Timmins/Abitibi gold district. within the prolific Abitibi Greenstone Belt , which has been historically well endowed with gold. The 24 km 2 project area comprises 42 claims and is open along strike (~850m) and at depth (~1000m). GWA has an agreement with Transition Metals to explore and eventually earn an interest (up to 75% with Frankfield underground development potential: PEA expenditure of C$3.2m over 5 years) in an additional 34km 2 in the adjacent Porcupine mining district expected 3Q11. DFS 2H12. High grade material (+6g/t) Updated Resource: The company announced (June 2011) a significant resour ce upgrade to 1.2moz increases the probability of economic extraction. (up 140% from 0.5moz previously). The NI 43-101 estimate contains an indicated resource of 1.62mt with a grade of 6.7g/t and an inferred resource of 4.34mt grading 6.0g/t at a cut-off of 3g/t. The resource envelope is approx 750m strike averaging about 800m depth. GWA has had good success with its historic drilling, where Exploration Upside: GWA is making reasonable progress with its Phase 3 drilling program (2Q11 - a higher proportion of recent holes (>90%) have 1Q12) – infill and testing for depth extensions to ~1,000m, and recent exploration continues to intersected mineralization. Finding cost ~US$10/oz. demonstrate the down dip continuity of the mineralized zone to a depth of ~900 m. The latest hole intersected 5.1m @ 4.1g/t (GW1096, down to 996m depth), and although this is well below the current resource grade, the extension of higher grade ore to depth is welcomed news. Further depth extension Good exploration potential along strike and at depth. drill results pending. There are also numerous areas within the minerali sed resource envelope that are Resource defined to ~800m depth. Drilling 2011 not included in the resource due to wide drill spacing - these are currently being infill drilled. N ext (18,000m). Resource upgrade expected 1Q12. resource update 4Q11 or 1Q12. The company also has regional exploration targets. The Frankfield East deposit has not been thoroughly tested below the 1000m level , although it is situated in a district known to host higher grade material well below that depth (Lake Shore’s Bell Creek Resource potential at depth well defined in region (at mine and Goldcorp’s Hoyle Pond mine - 1.5 km elevation). Being able to go beyond the 1.5km ma rk like higher grades), eg: Macassa mine (Kirkland, 25g/t Au) neighbouring Kirkland Lake’s Macassa mine (2.2km) is possible but we think unlikely, given the much 2.2km deep; Hoyle Pond mine (Goldcorp) 1.5km deep. higher grade that would have to be found at that level to enable for economical extraction. Macassa has a reserve grade north of 25.0g/t. Next Steps: A preliminary economic assessment (PEA) is underway and is due to be completed in 3Q11. The study is contemplating a 1,400tpd operation producing 100kozpa exclusively as an GWA - Gowest Gold Limited underground operation. Given positive results from the PEA, the company could be gin mine development in 2012. The company will continue drilling with a planned 18km of drilling in 2011. 0.45 Investment Comment: Despite having more than doubled its resource ounces to 1.2moz from a 0.40 previous 0.5moz, GWA has not been fully rewarded by the mar ket for the recent positive results. 0.35 Although this has been a general trend amongst gold companies, which have witnessed ~20% relative underperformance to the bullion YTD. We believe the ~16% drop in GWA's shares since its updated 0.30 resource announcement (June 1, 2011) is unwarranted. Not only is the company demonstrating an 0.25 ability to find more ounces at the Frankfield project, it's doing so quite inexpensively at $10/oz. At a share price of C$0.30, GWA’s adjusted EV/resource ratio is ~US$30/oz, suggesting g ood potential for 0.20 rerating, particularly if the PEA demonstrates favourable economics 3Q11. Other key catalysts include 0.15 an update resource statement expected by 1Q12. Share Price ($/Share) Price Share 0.10 Reserves and Resources/Mineralised Material 0.05 Code for reporting mineral resources - Canadian: NI 43-101 0.00 Gold Classification Project Ore Au Cut Off Au Au Eqty EquityMt g/t g/t kt koz koz Jul-10 Apr-11 Oct-10 Jan-11 Feb-11 Mar-11 Aug-10 Sep-10 Dec-10 May-11 Reserves 0.0 0.0 0.0 Source: Bloomberg Resources Frankfield East Project Indicated 100% 1.626.7 3.0 10.8 347.9 347.9

Contacts Directors Frankfield East Project Inferred 100% 4.34 6.0 3.0 26.1 838.6 838.6 5.96 6.2 36.9 1,187 1,187 Greg Romain F Elliott (Chairman) President & CEO G Romain (CEO) Mineralised Material (est., non compliant with NI 43-101) 0.0 0.0 0.0 Tel: 416 363 1210 ext. 20 E Mason (Non Exec Dir)

Toronto, ON, Canada J Niemi (Non Exec Dir) Key Projects [email protected] L Phillips (Non Exec Dir) Ownership/ JV Target Process Project Project Option Metal Partner Type Route Status Location Analyst: Khaled Sultan (Toronto) Frankfield East 100% Au none Early-Mid. Expl. Can (ON) [email protected]

Resource Capital Research

Abitibi Greenstone Belt: GWA's early-mid exploration stage gold project (Frankfield) is situated in the highly prospective Timmins gold camp. The area is home to a number of producing mines including Lake Shore's Bell Creek mine, and Goldcorp's Porcupine mine (Dome, Hoyle Pond, Palmour, Hollinger).

The Frankfield East deposit has been drilled down to the ~ 1000m depth level, and hosts a 1.2moz indicated and inferred resource with an average grade of 6.2g/t. Mines in close proximity are known to be home to mineralization that reach depths of 1.5 – 2.2km, highlighting GWA’s exploration potential.

Resource Capital Research Kingsgate Consolidated Limited KCN.AU A$ 7.62 Kingsgate Consolidated Limited *

27 June 2011 KCN is vying for the number two spot for Australian-based gold Gold, Silver producers with FY13F production growing to >300kozpa and further Thailand Production, Advanced Exploration potential growth to come from South America. The company's eventual Exchanges: ASX:KCN aim is >500kozpa to become a globally significant gold producer.

Capital Profile Production and Financial Forecasts

Share price (A$) 7.62 YEAR END: June 2009a 2010a 2011F 2012F 2013F 52 week range (A$/share) 6.91 to 12.3 Number of shares (m) 135.3 Equity Production (koz) 93.0 132.6 121.4 264.1 334.5 Options and warrants (m) 1.6 EBIT (A$m) 34.9 83.7 67.7 172.9 196.7 Convertible notes (m) 0.0 Net Profit (norm) (A$m) 32.5 73.1 60.4 147.1 173.6 Fully diluted^ (m) 137 EPS (norm) (A¢/share) 34.3 72.5 50.6 107.7 127.1 Market capitalisation (undiluted) (A$m) 1030.8 CFPS (A¢/share) 48.7 104.0 74.5 161.5 192.7 Debt (A$m) - Jun 11F 47.5 Dividends (A¢/share) 0 25 25 30 40 Enterprise value (A$m) 1078.3 PER (x) 22.2 10.5 15.1 7.1 6.0 Major shareholders: Blackrock Inv. Mgt (7.8%), P/CF (x) 15.6 7.3 10.2 4.7 4.0 UBS AG Nominees (5.0%), Directors (4.6%). Yield (%) 0.0% 3.3% 3.3% 3.9% 5.2% Avg monthly volume (m) 15 EV/EBITDA (x) 23.20 11.04 12.76 4.87 4.09 Cash (A$m) - Jun 11F 30.7 Exploration and Evaluation (A$m) 30 18 18 24 24 Price/Cash (x) 33.6 Drilling - RAB (m) 86,000 88,000 88,000 86,000 80,000 Price/Book (x) 2.9 Drilling - RC/Diamond (m) 130,000 135,000 140,000 140,000 155,000 Listed company options: No Land holding ('000 ha) 130 130 130 130 130 Note: Net profit is before forex losses and exchange differences on translation. Investment Points Company Comment Overview: KCN re-listed on the ASX in 1988, focused on gold mining and exploration in Thailand. KCN ’s KCN is an unhedged mid tier gold producer in a strong Chatree mine commenced production in 2001. It is a low cost, efficient SE Asian gold mining operation. growth phase. Chatree Performance : In 1Q11 grades were still low due to access issues (1. 0g/t), production dipped to 16.8koz. Access issues have recently been resolved which will allow access to all areas including C Production 121koz in FY11 growing to 264koz FY12, North, meaning grades should recover in 3Q11. Despite lower grades cash costs were outstanding (C1 cash cost US$308/oz after silver credits, C3 total cost US$534/oz). We have reduced our forecas t to 334koz FY13 with Chatree expansion and DOM merger. 80koz FY11 production, (as per company guidance) before the plant expansion kicks in. 2Q11 has been affected by unscheduled production downtime. Efficient low cost operation at Chatree, Thailand. Total Plant Expansion: The ~A$130m plant expansion (from ~2.6mtpa to ~5.3mtpa) is under construction cash costs 1Q11 US$425/oz despite low 1.0g/t grades. with commissioning in 3Q11, full speed by Dec ‘11. Our FY12 Chatree forecast is 153koz, FY13, 207koz. Dominion Merger: Expectations for the Challenger deep underground gold mine in South Australia are for ~100koz of production in FY11 and cash costs ~A$770/oz. Production could increase to ~120kozpa Chatree expanding to >200kozpa production by 1Q12. in FY12 with grades edging up, however, we expect opex to maintain around A$800 /oz as deeper ore (>700m vertical depth below base of pit) is accessed. Mine life is modest, current resources of 950koz DOM underground production is higher cost, US$814 in equivalent to 6.7 years, and mostly located in the deeper extensions of the ore body. R eserves of 1Q12, limited mine life being addressed with exploration. 420koz represent 3.5 years. From DOM merger, KCN now holds extensive early stage explorati on projects in Australia (SA,WA) and Laos, with a focus on gold and copper. South America: KCN’s 69% takeover of A$22m minnow Laguna Resources gives it control of the 1.5g/t, Entry into South America (Chile, 1.1moz resource) 1.1moz Aqueros epithermal deposit in Chile (potential 100kozpa open cut production – Scoping Study foreshadows Scoping Study for production and further underway ) a strong position in a region with interesting exploration potential, and significantly, a foothold exploration for major deposits. in South America, which is likely to be a key focus of future exploration. Profit Forecast: Our FY11 net profit forecast has been reduced to A$59.4m ( 49.8cps). FY12 forecast is 264koz equity production and big rise in net profit to A$147m (108cps). FY13 output forecast is 334koz KCN's push to become Australia's standout number two with a full year of production from the Chatree expansion, forecast FY13 net profit A$174m (127cps). producer behind Newcrest makes sense. Investment Comment: KCN’s clear goal is to become a much more significant Australian-based gold producer and to fill the ‘number two’ gap behind market leader Newcrest. Conquest and Catalpa are on Our valuations (A$9.47/share US$900/oz long term gold, the same path. It has embarked on an acquisition and diversification strategy which should get it to >300kozpa production in FY13 and >A$1.3 bn market capitalisation. A likely Thai IPO to divest part of US$12.97/share using spot gold) suggest further re-rating Chatree could be a complicating factor, but by then the focus may well shift to South America to get to likely as Chatree expansion bites in 2H11. >400kozpa. W e think it is the right strategy for the company and will eventually pay dividends if it becomes Australia’s number two gold stock. Based on our valuation range (A$9.47 – A$12.97/share , (see following page), and FY12 P/E ratio >8, the stock currently looks undervalued. DOM underground production is higher cost, merger will KCN - Kingsgate Consolidated Limited Reserves and Resources/Mineralised Material increase shares by 31% for +50% gold output. 14.00 Code for reporting mineral resources - Australian: (JORC) Reserves and Resources as at 29 July 2010 $11M exploration budget for 2008. Gold Classification Project Ore Au c/off Au Au Eqty 12.00 Reserves Equity Mt g/t g/t t koz koz Chatree South Proved & Probable 100% 8.1 1.13 0.49.2 290 290 Experienced10.00 board and management. Chatree North Proved & Probable 100% 48.0 0.97 0.4 46.6 1,490 1,490 8.00 Stockpiles 100% 5.60 0.79 4.4 140 140 Total 61.7 0.97 0.4 60.11,930 1,930 6.00 Dominion - Challenger Reserves: 2.31mt @ 5.7g/t for 420koz Au 4.00 Resources (includes proved and probable reserves) * Share Price ($/Share) Price Share Chatree South Meas+ind+inf 100% 50.3 0.80 0.4 40.2 1,300 1,300 2.00 Chatree North Meas+ind+inf100% 117.6 0.76 0.4 89.4 2,880 2,880 Stockpiles Meas+ind+inf 100% 5.6 0.79 4.4 140 140 0.00

Total 173.5 0.77 0.4 134.0 4,320 4,320 Oct-10 Jun-10 Jan-11 Jun-11 Feb-11 Mar-11 Aug-10 Sep-10 Nov-10 Dec-10 Source: Bloomberg May-11 Dominion - Challenger Resources: 4.37mt @ 6.8g/t for 950koz Mineralised Material (est., non compliant with JORC) 0.0 0.0 0.0 * Note: Contained silver is 29.9moz (0.5moz Au equiv.), resource grade is 7.3g/t Ag. Contacts Directors Key Projects

Mr Gavin Thomas R Smyth-Kirk (Chairman) Ownership/ JV Target Process Project MD, Chief Executive Officer G Thomas (MD) Project Option Metal Partner Type Route Status Location Tel: 61 (2) 8256 4800 P McAleer (Non Exec Dir) Chatree 100% Au none epithermal CIL 2.4mtpa Production Thailand Sydney, NSW, Australia C Carracher (Non Exec Dir) Chatree North 100% Au none epithermal as above Production Thailand www.kingsgate.com.au P Alexander (Non Exec Dir) Chokdee 100% Au none epithermal na Mid Expl. Thailand Suwan 100% Au none epithermal na Early Expl. Thailand Analyst: Dr Tony Parry Challenger 100% Au none IOCG CIP Production Aust (SA) [email protected] Arqueros 69%/100%Au, Cu none epithermal na Mid Expl. Chile

Resource Capital Research

Kingsgate Consolidated Limited

YEAR END: June Year Year ASSUMPTIONS 2009a 2010a 2011F 2012F 2013F FINANCIAL RATIOS 2009a 2010F 2011F 2012F 2013F A$/US$ 0.75 0.88 1.00 1.07 1.01 Gold Price (US$/oz) 886 1,094 1,387 1,481 1,323 Net debt/equity (%) -3% -5% 2% -13% -26% Gold Price Realised (US$/oz) 875 1,103 1,306 1,528 1,347 Net debt/ net debt + equity (%) -3% -5% 2% -15% -35% Current ratio (x) 3.3 3.8 3.8 12.8 20.8 EBIT/interest (x) 19 63 34 58 87 EQUITY PRODUCTION Debt/operating cashflow (%) 12% 0% 56% 16% 10% Chatree Production (koz) 93 133 80 153 207 Exploration/total overhead (%) 3% 4% 7% 23% 23% Equity Challenger Production (koz) 0 0 41 112 127 EV/EBITDA (x) 23.2 11.0 12.8 4.9 4.1 KCN Equity Production Gold (koz) 93 133 121 264 335 Market cap/net cash (x) 37.4 21.0 -61.3 7.9 3.9 Cash Costs (US$/oz)** 479 257 581 608 558 Market cap/book (x) 4.2 3.3 2.9 2.0 1.6 ** Cash Cost is direct operating cost before royalties and by product credits

PROFIT AND LOSS (A$m) FINANCIAL SENSITIVITIES Revenues 117 176 172 400 481 Operating costs (direct) -60 -77 -71 -151 -185 % Change in EPS for a 10% increase in: Depreciation/amortization -12 -14 -17 -48 -67 Exploration Expensed 0 0 -1 -2 -2 AUD/USD -22% -23% -25% Corporate -8 -10 -14 -8 -8 Gold Price 25% 25% 28% Other (incl. Royalties) -2 9 -2 -17 -22 EBIT 35 84 68 173 197 Interest 2 1 2 3 2 % Change in NPV for a 10% increase in forecast minelife Operating profit/loss 33 82 66 170 194 commodity assumptions for: Tax -1 -9 -5 -23 -21 Base + 10% Minorities 0 0 0 0 0 A$/share A$/share % Net profit/loss 33 73 60 147 174 Gold Price US$850/oz 9.47 9.96 5% Net abnormals/extaordinaries 0 0 -40 0 0 Net profit/loss (reported) 33 73 21 147 174

BALANCE SHEET (A$m) VALUATION (A$m) Q2 11 Cash and deposits 30 49 31 169 292 Total current assets 58 103 59 197 321 Assumptions Base "What if" PP&E 200 222 320 314 305 Long Term Gold Price :US$/oz 900 1,540 Total non-current assets 213 266 383 400 415 Long Term AUUS 0.82 1.05 Total assets 271 369 442 597 736 Projects Total current liabilities 17 30 19 31 31 Chatree and Chatree North 100% NPV@5% A$174/oz 668 856 Reclamation reserves 0 0 0 0 0 Challenger Mine 100% NPV@5% 124 162 Long term debt 0 0 48 38 28 Resources and Exploration Total non-current liabilities 8 23 70 60 50 Chatree and Chatree North 100% NPV@5% A$69/oz 299 468 Total liabilities 26 53 89 91 81 Thai Regional Exploration 100% 100 125 Equity 245 316 353 506 654 Challenger Exploration 100% 60 100 Laguna Resources 100% 30 50 Total debt 2 0 48 38 28 Assets Net debt -28 -49 17 -131 -265 Cash and deposits - Jun 11F 31 31 Average shares (fully diluted) (m) 102 103 120 137 137 Rehabilitation Fund 0 0 Other - tax benefits 60 60 FLOW OF FUNDS (A$m) Liabilities EBITDA 46 98 84 221 264 Debt - Jun 11F -48 -48 Cash flow from operating activities Corporate Overheads (NPV @ 10%) -54 -54 Operating surplus 34 91 100 244 281 Reclaimation Reserve 0 0 Corporate -8 -10 -14 -8 -8 Net Assets 1270 1750 Net borrowing cost -2 -1 -3 -7 -13 Net tax paid -7 -9 -8 -9 -12 Fully Diluted Shares (m) 137 137 Net exploration paid -30 -18 -18 -24 -24 Net assets/share (A$/share) 9.47 12.97 Other non cash items 32 -1 28 39 45 Net cash from operating activities 18 52 85 236 269 Cash flow from investing activities Valuation/Reserve oz :US$/oz 539 952 Capital expenditure -12 -48 -121 -42 -59 Valuation/Reserve & Resource oz :US$/oz 241 425 Asset Sales & Other -36 -24 -18 -24 -24 Net cash from investing activities -48 -72 -139 -66 -83 Cash flow from financing activities Chatree Challenger Net proceeds from issue of shares 16 0 0 0 0 Dividends paid 0 -25 -32 -27 -54 400 Net proceeds from borrowings 0 0 38 -10 -10 Net cash from financing activities 16 -25 6 -37 -64 350 Net change in cash -14 -44 -48 133 122 300 PRODUCTION STATISTICS Chatree 100% 250 Ore Treated (kt) 2,405 2,705 2,471 3,905 5,300 Head Grade (g/t) 1.20 1.65 1.29 1.35 1.35 200 Recovery (%) 90 92 86 90 90 Recovered grade (g/t) 0.96 1.52 1.01 1.22 1.22 150 Gold Produced (koz) 74 133 80 153 207 Equity Production (koz) 74 133 80 153 207 GoldProduction 100 Cash Costs (US$/oz) 74 316 510 464 450 Production Costs (A$/t) 19.08 17.55 16.53 17.02 17.37 50 EBIT (A$m) 35.0 83.0 54.4 123.4 151.2 0 Challenger 100% 2009a 2010a 2011F 2012F 2013F Ore Treated (kt) 163 651 650 650 Head Grade (g/t) 4.81 5.51 5.80 6.63 Recovery (%) 91 95 92 92 Year end 30 June Recovered grade (g/t) 4.38 4.78 5.34 6.10 Gold Produced (koz) 23 100 112 127 Equity Production (koz) 23 100 112 127 Cash Costs (US$/oz) 654 769 802 734 KCN has a strong forward production growth Production Costs (A$/t) 104.35 118.41 129.22 142.10 profile after a contraction in FY11 EBIT (A$m) 11.1 27.3 36.5 24.2

Resource Capital Research Norseman Gold Plc NGX.AU A$ 0.30 Norseman Gold Plc *

27 June 2011 NGX's 2011 production expansion plans have gone into reverse, Gold resulting in falling gold output and losses in FY11. We expect to see a Australia (WA). Production, Advanced Exploration significant improvement in 2H11 as underground mine productivity Exchanges: ASX:NGX; AIM:NGL improves and the North Royal Open Pit hits higher grade ore.

Capital Profile Production and Financial Forecasts

Share price (A$) 0.30 YEAR END: June 2009a 2010a 2011F 2012F 2013F 52 week range (A$/share) 0.24 to 1.50 Number of shares (m) 219.9 Equity Production (koz) 80.7 60.5 50.3 82.8 92.6 Options and warrants (m) 10.7 Ave. Cash Cost (A$/oz) 715 976 1287 1006 996 Convertible notes (m) 0 EBIT (A$m) 22.3 1.1 -10.7 8.9 17.0 Fully diluted (m) 230.6 Net Profit (norm) (A$m)** 20.3 3.1 -4.9 5.4 11.3 Market capitalisation (undiluted) (A$m) 66.0 EPS (norm) (A¢/share) 16.6 1.9 -2.2 2.6 5.2 Debt (A$m) - Jun 11F 13.0 CFPS (A¢/share) 25.9 7.5 0.6 11.1 11.3 Enterprise value (A$m) 78.9 Dividends (A¢/share) 0 0 0 0 0 Major shareholders: Sprott Asset Management (9.8%), PER (x) 1.8 16.1 -14.9 12.7 5.8 JP Morgan Asset Managers (9.4%), Baker Steel Capital Managers (7.4%) P/CF (x) 1.2 4.0 53.2 3.0 2.7 Avg monthly volume (m) 4.0 Yield (%) 0% 0% 0% 0% 0% Cash (A$m) - Jun 11F * 15.9 Shares on Issue (EOP) (m) 171.9 172.6 219.9 219.9 219.9 Price/Cash (x) 4.1 Exploration (A$m) 7 6 6 6 6 Price/Book (x) 0.7 Drilling - RAB (m) 0 0 0 0 0 Listed company options: No Drilling - RC/Diamond (m) 40,000 40,000 80,000 80,000 80,000 * Cash includes A$5.5m in cash-backed environmental bonds Land holding ('000 ha) 161 161 161 161 161 Investment Points Company Comment

Norseman field has long history of high grade quartz reef Overview: NGX acquired the historic Norseman gold operations, 725km east of Perth, in April 2007. NGX was originally listed on AIM (London). Since June 2009 it has been dual listed on the ASX. mining since 1894 with >5.5moz extracted. History: The Norseman operation is Australia’s longest continua lly running gold operation with a production history that dates back to 1894 and an estimated 5.5Moz of gold extracted. NGX's 'fill the mill' strategy with two additional mines on Reserves & Resources: Current reserves (Prov. + Prob., Mar ‘10) are 420koz (grade 7.7g/t) . The total stream in FY11 to boost production has faltered. JORC resource is 3.8Moz at a grade of 5.3g/t, 68% of which is an underground resource (grade 8.9g/t) and 32% an open pit resource (grade 2.9g/t). The complexity of the nuggety vein mineralisation means that underground resources can only be converted to reserves through mine development. Third underground mine (OK Decline) has been slow to Current Operations: In FY10 NGX had been sourcing ore from two underground high grade narrow come into production. Existing two production declines quartz vein mining operations – the Bullen and Harlequin Declines. Ore is treated though the 700ktpa (Bullen and Harlequin) poor recent productivity. Phoenix gravity/CIL mill, which has been only running at ~55% capacity (~380ktpa FY10 ) due to development limitations from these two declines. NGX’s FY11 strategy to “fill the mill” (700ktpa) was based on a 2H10 production ramp up from two additional mines , the OK Decline and North Royal Open Fourth mine North Royal Open Pit delivering low grades Pit. This was expected to approximately double production from ~60kozpa (FY10) to ~120kozpa in while pe-stripping, but about to hit higher grades? FY11. However, this expansion strategy has run into serious problems. In 1Q11, ore treatment was only 114kt (65% mill capacity), average grades only 3.4g/t (5.05g/t pcp), gold output only 11.8koz. Cash opex Opex 1Q11 was A$1492/oz (A$991/oz in 1Q10). was A$1,492 /oz (A$990/oz pcp). The two traditional mines, Bullen and Harlequin continued to experience productivity problems, producing only 8.9koz in 1Q11. Production from the OK Decline is still development focussed and experiencing low productivity – it contributed only 1.8koz in 1Q11. North FY11 production will be ~50koz, after original forecast of Royal was still in pre strip mode , with initial production from low grade soft oxide ore. The soft ore can ~120koz. Operating loss in FY11 despite high Au price. only be blended in at low rates, hence only 0.3koz was contributed from this pit. Production Outlook: At this stage it is difficult to predict the extent to which tonnage production and average grades can be recovered , but we would expect to see some significant underground production We expect to see productivity improvements in coming improvement in the current quarter (2Q11) plus a lift from the North Royal open pit as it finally starts to quarters, which could re-build some investor confidence. get into higher grade ore. NGX Guidance: In April 2011 NGX slashed its original FY11 guidance from 105-110koz to 55-60koz, RCR Foreca st: We have reduced our FY11 forecast to a disappointing 50koz, We forecast FY12 output to recover to ~83koz. and an EB IT loss of A$10.7m. Our FY12 forecast shows EBIT of A$8.9m assuming average grades recover to 4.57g/t and 575kt of ore is treated to produce 83koz. If grades recover to 4.7g/t in FY13 and mill thoughput is 625kt, gold produced will be 98koz and EBIT A$17m. Our NAV using spot gold price is A$0.99/share, but can a Investment Comment: Can NGX management rescue an expansion strategy (and its credibility) that recovery be achieved without further cash injection? has recently come off the rails and seen the company’s share price smashed? Is it a delay or an irreversible disaster? The MD, Barry Cahill definitely thinks the former is the case , being a recent buyer. Our view is that coming quarters might rebuild some confidence, with an improvement in undergound NGX - Norseman Gold Plc productivity, particularly with OK getting into ore, and a big lift from the North Royal Open pit in 3Q 11 as it hits higher grade ore. This will result in a strong production and profitability recovery and confirm that Reserves1.4 420koz, total resource base 3.8Moz (5.3g/t). “fill the mill” is not dead, but a further capital raising may be required. Our base case assessed NAV assuming long term grades get back to 4.7g/t (based on conservative RCR forecast US$900/oz long 1.2 term gold and A$/US$=0.82) is A$0.17/share . Gearing to the gold price is huge. Assuming current spot $11M exploration budget for 2008. prices (US$1,500/oz, A$/US$=1.05) long term, NAV at 4.7g/t rises to A$0.99/share . 1 Reserves and Resources/Mineralised Material Experienced0.8 board and management. Code for reporting mineral resources - Australian: (JORC) Gold Classification Project Ore Au c/off Au Au Eqty 0.6 Reserves Equity Mt g/t g/t t koz koz

Share Price ($/Share) Price Share Norseman - Open Pit Proved + Probable 100% 0.42 3.20 1.3 45 45 0.4 Norseman - U'ground Proved + Probable 100% 1.30 8.90 11.6 370 370 Total 1.7 7.70 12.9 420 420 0.2

Resources (includes proved and probable reserves as above) 0 Norseman - Open Pit Meas+ind+inf 100% 13.0 2.90 37.7 1,200 1,200 Norseman U'ground Meas+ind+inf 100% 8.8 8.90 78.3 2,600 2,600 Jun-10 Jun-11 Feb-11 Mar-11 Nov-10 Aug-10 Sep-10 Dec-10 Source: Bloomberg May-11 Total 21.0 5.30 116.0 3,800 3,800 Reserves and Resources as at 31 March 2010. Open pit resources/reserves do not include North Royal Open Pit. Mineralised Material (est., non compliant with JORC) 0.0 0.0 0.0 Contacts Directors Key Projects

Mr Barry Cahill V Pendal (Chairman) Chief Executive Officer B Cahill (CEO) Ownership/ JV Target Process Project Tel: 61 (8) 9473 2200 M de Villiers (Non Exec Dir) Project Option Metal Partner Type Route Status Location South Perth, WA, Australia P Bilbe (Non Exec Dir) Norseman 100% Au none qtz vein Gravity/CIL Production Aus(WA) www.norsemangold.com G Steinepreis (Non Exec Dir) Norseman Iron Ore 100% Fe none mag'tite na Early Expl. Aus(WA) Analyst: Dr Tony Parry [email protected]

Resource Capital Research

Norseman Gold Plc

YEAR END: June Year Year ASSUMPTIONS 2009a 2010F 2011F 2012F 2013F FINANCIAL RATIOS 2009a 2010a 2011F 2012F 2013F A$/US$ 0.75 0.88 1.00 1.07 1.01 Ave. Gold Price (US$/oz) 886 1,094 1,387 1,519 1,551 Net debt/equity (%) -39% -11% -5% -10% -16% Gold Price Realised (US$/oz) 894 1,086 1,304 1,483 1,361 Net debt/ net debt + equity (%) -64% -12% -5% -11% -19% Current ratio (x) 2.4 1.1 1.1 1.4 1.7 EBIT/interest (x) 39 7650 -23 10 18 EQUITY PRODUCTION Debt/operating cashflow (%) 27% 52% 397% 48% 49% Norseman Production (koz) 81 60 50 83 93 Exploration/total overhead (%) 44% -4% 5% 13% 13% NGX Equity Production Gold (koz) 81 60 50 83 93 EV/EBITDA (x) 2.5 7.0 40.5 3.1 3.0 Cash Costs (A$/oz)** 715 976 1287 1006 996 Market cap/net cash (x) 2.6 9.1 22.1 10.3 6.2 Cash Costs (US$/oz)** 571 861 1284 1071 1008 Market cap/book (x) 1.0 0.9 0.7 0.6 0.5 ** Cash Cost is direct operating cost before royalties.

PROFIT AND LOSS (A$m) FINANCIAL SENSITIVITIES Revenues 97 77 68 116 126 Operating costs -62 -59 -65 -83 -92 % Change in EPS for a 10% increase in: Depreciation/amortization -10 -10 -13 -17 -9 Exploration Expensed -2 0 0 -1 -1 AUD/USD 5% -10% 56% Corporate -3 -5 -6 -4 -4 Gold Price 13% 11% -57% Other (incl. Royalties) 1 -2 5 -3 -3 EBIT 22 1 -11 9 17 Interest 1 0 0 1 1 % Change in NPV for a 10% increase in forecast minelife Operating profit/loss 22 1 -11 8 16 commodity assumptions for: Tax -2 2 6 -3 -5 Base + 10% Minorities 0 0 0 0 0 A$/share A$/share % Net profit/loss 20 3 -5 5 11 Gold Price US$850/oz 0.17 0.29 75% Net abnormals/extaordinaries 0 0 0 0 0 Net profit/loss (reported) 20 3 -5 5 11

BALANCE SHEET (A$m) VALUATION (A$m) Q3 10 Cash and deposits 33 14 16 19 24 Spot Gold Total current assets 40 24 16 19 24 Assumptions Base "What if" PP&E 32 26 49 53 60 Long Term Gold Price :US$/oz 900 1500 Total non-current assets 62 90 119 129 142 Long Term AUUS 0.82 1.05 Total assets 102 115 135 148 165 Projects Total current liabilities 20 23 14 17 17 Norseman Operations 100% NPV@5% A$32/oz 27 217 Reclamation reserves 0 0 0 0 0 Assumes 11 year LOM @ 4.7g/t ave. grade Long term debt 3 7 7 7 7 Resources and Exploration Total non-current liabilities 14 20 20 20 20 Total liabilities 34 43 34 37 37 Regional Exploration 100% 25 25 Equity 68 72 101 111 128 Other Total debt 7 6 13 13 13 Assets Net debt -26 -7 -3 -6 -11 Cash and deposits (Jun '11F) 16 16 Average shares (fully diluted) (m) 124 175 208 231 231 Rehabilitation Fund 0 0 Other - Tax Losses 10 10 FLOW OF FUNDS (A$m) Liabilities EBITDA 32 11 2 26 26 Debt -13 -13 Cash flow from operating activities Corporate Overheads NPV @5%) -28 -28 Operating surplus 33 18 2 32 32 Reclaimation Reserve 0 0 Corporate -3 -5 -6 -4 -4 Net Assets 37 227 Net borrowing cost -1 -2 -2 -2 -2 Net tax paid -2 -1 0 -1 -3 Fully Diluted Shares (m) 231 231 Net exploration paid -7 -6 -6 -6 -6 Net assets/share (A$/share) 0.17 0.99 Other non cash items 5 9 15 8 9 Net cash from operating activities 26 12 3 27 26 Cash flow from investing activities Valuation/Reserve oz :US$/oz 76 596 Capital expenditure -5 -28 -37 -20 -16 Valuation/Reserve & Resource oz :US$/oz 8 63 Asset Sales & Other -7 -6 -6 -6 -6 Net cash from investing activities -12 -34 -43 -26 -22 Cash flow from financing activities 1600.00 Net proceeds from issue of shares 20 0 16 0 0 Dividends paid 0 0 0 0 0 Net proceeds from borrowings -11 -3 0 0 0 1400.00 Net cash from financing activities 9 -3 16 0 0 Net change in cash 24 -25 -24 1 4 1200.00 PRODUCTION STATISTICS Norseman 100% 1000.00 Ore Treated (kt) 415 380 440 575 625 Ave. Head Grade (g/t) 6.07 5.08 3.70 4.57 4.70 Recovery (%) 96 97 96 98 98 800.00 Recovered grade (g/t) 5.82 4.95 3.56 4.48 4.61 Gold Produced (koz) 78 60 50 83 93 Equity Production (koz) 78 60 50 83 93 600.00 Cash Costs (US$/oz) 571 823 1260 1070 1008 Production Costs (A$/t) 154.00 148.40 144.44 144.74 147.38 EBIT (A$m) -8.0 8.6 -1.0 27.5 37.3 400.00

ReportedCash Operating Costs(A$/0z) 200.00

0.00 3Q10 4Q10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

NGX has to increase ore throughput and improved average grade to arrest the recent spiral in opex.

Resource Capital Research PepinNini Minerals Limited PNN.AU A$ 0.10 PepinNini Minerals Limited

27 June 2011 With the Crocker Well Uranium BFS (60% SinoSteel, 40% PNN, 11.7mlb Uranium, REE, Iron, Gold/Silver, Lead/Zinc, Copper/Nickel resource) on hold, PNN is targeting high grade gold in QLD, Au-Cu Australia (SA,QLD,WA), Argentina BFS, Advanced Exploration potential in Argentina, a DSO iron ore resource in WA and large scale Exchanges: ASX:PNN magnetite deposits in the Curnamona Province (SA).

Capital Profile Production and Financial Forecasts

Share price (A$) 0.10 YEAR END: June Mar-11a Jun-11F 2010a 2011F 2012F 52 week range (A$/share) 0.10 to 0.37 Number of shares (m) 89.7 Exploration and evaluation (A$m) 0.69 0.80 4.88 3.48 3.60 Options and warrants (m) 0.0 Corporate (A$m) 0.46 0.20 1.01 1.40 1.20 Convertible notes (m) 0 Exploration/(Expl.+ Corporate) (%) 60 80 83 78 75 Fully diluted (m) 89.7 Funding duration at current burn (years) 1.0 0.9 -0.3 Market capitalisation (undiluted) (A$m) 9.0 Shares on issue (pr end) (m shares) 90 90 78 90 90 Debt (A$m) - Jun 11F 0.0 Drilling - vacuum/aircore (m) 3,500 3,500 8,725 12,315 14,000 Enterprise value (A$m) 9.0 Drilling - RC/Diamond (m) ** 1,250 5,000 8,408 11,141 12,000 Major shareholders: NL Kennedy (10.6%), RA Holland-Kennedy (10.6%) Land holding ('000 ha)* 1,607 1,607 1,607 1,607 1,607 Sinosteel Corporation Pty Ltd (3.7%), National Noms (2.4%). Tenement costs ($k per year) --- - - Avg monthly volume (m) 4 Capital raisings (share buybacks)(A$m) 3.1 0.0 0.0 3.1 0.0 Cash (A$m) - Jun 11F 4.5 Funding from JV partners (A$m) 1.0 0.0 4.4 3.0 0.0 Price/Cash (x) 2.0 Cash (A$m) 5.4 4.5 5.9 4.5 -1.6 Price/Book (x) 0.4 Cash backing (Ac/share) 6.0 5.0 7.5 5.6 -1.8 Listed company options: No Net asset backing (Ac/share) 28.7 28.5 30.3 31.4 24.7 *Tenements held or applied for ** Drilling includes JV drilling sole-funded by Sinosteel Investment Points Company Comment Overview: PNN listed on the ASX in April 2005. PNN is a diversified explorer - targeting uranium, base Flagship Crocker Well/Mt Victoria uranium project (11.7mlb metals, iron ore, rare earths and gold in S.A. and Qld, and iron ore in W.A. resource) is at BFS stage, now on hold. Georgetown Inlier/Woolgar Goldfield (QLD), 2,773km 2, (100%): This area has d emonstrated uranium and phosphates potential, but PNN is focussing on precious metals, with extensive narrow vein high grade Au + Ag mineralisation at Percyville, 30km SE of the Kidston mine and nearby ‘The Return” N Qld drilling 4Q10 confirmed high grade gold/silver vein prospects confirmed in the initial 3,256m 4Q10 RC drilling program of priority targets. Results include 2m systems - scoping study is next step. @ 10.1g/t Au, 33g/t Ag and 1m@ 20.3g/t Au and 35g/t Ag. An inaugural JORC resource is possible in 2011, dependent on results of a scoping study now underway for economic viability. Tenements applied for in Argentina - Au-Cu prospective Argentina: PNN is applying for tenements (one granted) in the Salta Province near the Chile border. Prospective for copper-gold porphyries, base metals. Not far from some major recent discoveries e.g. El region, with some major regional discoveries. Quevar (60.5Moz Ag, Linero (2.2Moz Au), Tac Tac (11.2Blb Cu, 3.77Moz Au, 450Mlb Mo). Robinson Range Iron Ore Project (WA), 700km 2, (50%/40%) : Iron ore exploration is now a high priority Robinson Range JV (midwest WA), iron ore, aiming for for PNN. PNN has farmed into a total seven tenements in the Midwest iron ore province. The tenements 10mt DSO initial resource - 100mt potential. cover 40km of the Robinson Range banded iron formation, 550 km NE of Geraldton. Surface sampling at 12 sites has identified out-cropping high grade hematite mineralisation (up to 67.3%Fe, low P), suggesting direct shipping ore (DSO) potential. An initial 5,000m RC drilling campaign is to commence Expected newsflow in 2H11: Maiden iron ore resource soon , targeting an initial 10mt DSO JORC resource. PNN believes total resource potential is >100mt. (WA), REE, base metals drilling (Curnamona, SA), scoping DSO ore could be trucked to rail head of Oakajee Port and Rail development, if it proceeds. 2 study, possible initial gold resource (N QLD), further Curnamona Province – 3,778 km (SA) – Sinosteel JV. Crocker Well/Mt Victoria: The Crocker Well Uranium Project (discovered in the 1950’s) is a JV between Sinosteel Corporation (“SSC”) , operator REE/base metal drilling (Musgrave, SA). (60%) and PNN (40%). Scoping Study was completed Mar ’06 (1.3mlbpa production). A BFS in progress in 2008 was put on ice pending more favourable uranium prices and A$/US$ exchange rates. Rare Earth In the Curnamona Province (SA), focus shifting to Fe. Targets: Focus has now switched to rare earth targets where 2Q10 JV drilling at high grade uranium targets has yielded significant high grade uranium and rare earth values. Iron Ore Potential: The Curnamona Province Braemer Iron Formation is now attracting iron ore exploration . The Sinosteel JV has Cash (Jun '11) A$4.4m (5c/share), expl'n ~A$3.5mpa, plus identified three areas with the potential to host large scale magnetite resources. Rail infrastructure is A$4.6m free spend Sinosteel, Curnamona JV. nearby. The JV is planning to undertake an RC/DDH drilling campaign in 2H11. JV Base Metals Targets: SSC is sole funding (A$4.6m remaining spend) drilling of multiple base metals and gold targets in the Our assessed NAV is A$0.24/share, the market finds it Curnamona Province. Over 30 targets have been identified. Drilling program currently underway. Musgrave Province (SA), 9,601 km 2 (100%), Rio Tinto Farm-in 1,382km 2 (51%): PNN is focu sing on difficult to value such a diversified explorer without a priority AEM anomaly Ni-Cu targets, Voisey’s Bay type settings current 'champion' project. Corporate: A$3.1m raised in Jan ’11 via a placement at A$0.27/share. Est. cash at 31 March is A$5.4m. Investment Comment: Looking at the sum of the parts, valuing Crocker Well at US$1/lb, and putting modest values on the various exploration projects, our assessed NAV for PNN is now A$0.24/share , PNN - PepinNini Minerals Limited which is more than double the curre nt share price. Cash is A$0.05/share. Clearly, t he market finds it Current price reflects zero value for excellent gold, base difficult to value such a diversified explorer with a perception that it could be ‘overstretched’ with focus in metals0.40 and uranium exploration potential. multiple areas and commodities. It needs one project to ‘take off’ and become its champion. 0.35 0.30 Reserves and Resources/Mineralised Material 0.25 Code for reporting mineral resources - Australian: (JORC)

0.20 Uranium (U 3O8) Classification ProjectOre Grade Cut Off Eqty Equity Mt % ppm Kt Mlb Mlb 0.15 Reserves 0.0 0.0 0.0 0.10

Share Price ($/Share) Price Share Resources 0.05 Crocker Well Indicated 40% 13.3 0.0283 150 3.7 8.3 3.3 0.00 Crocker Well Inferred 40% 5.6 0.0275 150 1.5 3.4 1.4 Mt Victoria ** Inferred 40% 0.3 0.1600 300 0.4 0.9 0.4 Total Province Inferred 19.1 0.0298 5.7 12.5 5.0 Oct-10 Jun-11 Jun-10 Jan-11 Feb-11 Mar-11 Aug-10 Sep-10 Dec-10 May-11 Source: Bloomberg Historical (est., non compliant with JORC) 0.0 0.0 0.0

Contacts Directors Key Projects

Mr Norman Kennedy N Kennedy (Chair, MD) Ownership/ JV Target Process Project Managing Director R Holland-Kennedy (Exec Dir) Project Option Metal Partner Type Route Status Location Tel: 61 (0) 8 8218 5000 A Harris (Non-Exec Dir) Crocker Well/Mt Vict. 40% IOCGU Sinosteel Breccia convent'nl BFS Aus (SA) Adelaide, Australia C Lambert (Non-Exec Dir) Curnamona Province 40% U,Cu,REE Sinosteel various na Early Expl. Aus (SA) www.pepinnini.com.au Robinson Range 50%/40% Fe G'ton Gold hematite DSO Early Expl. Aus(WA) Musgrave Province 100% Ni-Cu na ultramafic na Early Expl. Aus (SA) Analyst: Dr Tony Parry Musgrave Rio Tinto JV 0/51% Ni-Cu na ultramafic na Early Expl. Aus (SA) [email protected] Georgetown/Woolgar 100% U, Au, Ag na volcanogenic na Early Expl. Aus (QLD) Salta Project 100% Cu-Au na porphyry na Early Expl. Arg'tina

Resource Capital Research

Our current assessed value of PNN is A$0.24/share comprising A$0.10/share for the Crocker Well Uranium Project JV with uranium/rare earths/base metals resource upside, cash A$0.05/share, and A$0.19/share for other varied exploration projects.

PEPINNINI MINERALS VALUATION

Project Value PNN Valuation Valuation A$m Equity A$m A$/share Curanamona Province JV (Sinosteel 60%) Crocker Well Uranium Project - BFS Stage Total Resource (mlb) 11.7 Project Valuation (US$/lb) 1.00 Project Value 11.1 40% 4.5 0.05

Curanamona Exploration (Uranium, REE - multiple targets to drill) 5.0 40% 2.0 0.02 Curanamona Exploration (Base metals - multiple targets)* 6.0 40% 2.4 0.03 *(A$4.6m remaining spend sole-funded by Sinosteel) Sub Total (Curanamona Province equivalent - PNN) 8.9 0.10

+ Musgrave Province Project (large unexplored area, Cu/Ni Voisey's Bay style targets) 100% 3.0 0.03 + Musgrave Rio Tinto Farm-in tenements (multiple Ni/Cu targets, PNN earning 51%) 51% 2.0 0.02 + N QLD - Gold Exploration (High grade gold intercepts - resource imminent?) 100% 5.0 0.06 + Argentina - gold copper tenment applications 100% 2.0 0.02 + WA Project - Robinson Range Iron Ore (50% JV, 10mt DSO Potential) 50%/40% 5.0 0.06 Sub Total (Musgrave, N QLD, Robinson Range Exploration & Cash) 17.0 0.19

+ Cash (f'cast end Jun '11) 4.5 0.05 - Corporate (NPV) -8.6 -0.10 + Tax Losses 0.0 0.00 Sub Total -4.0 -0.05

PNN NET ASSET VALUE 21.8 0.24

Capital Structure Shares 89.7 Fully Diluted Shares 89.7

PNN NET ASSET VALUE PER SHARE :A$/share 0.24 PNN NET ASSET VALUE DILUTED :A$/share fully diluted 0.24

PepinNini has developed a strong and highly diversified project pipeline. Two advancing project areas that are likely to generate newsflow in 2H11 are the Robinson Range Iron Ore Project (WA, LH graphic) and the North Queensland high grade gold-silver exploration near Kidston (RH graphic). .

Resource Capital Research Sumatra Copper & Gold plc SUM.AU A$ 0.22 Sumatra Copper & Gold plc

27 June 2011 PFS 3Q11 on the flagship Tembang deposit (>1moz Au, 13moz Ag). Gold, Copper Potential to become a mid-tier producer (60-70koz) 4Q13. Newcrest JV on Indonesia Advanced Exploration, Exploration Tandai project (former mine - production 1.4moz @ 15.5g/t Au). Drilling on Exchanges: ASX:SUM several projects (>2,000 m) planned in 3Q11.

Capital Profile Production and Financial Forecasts

Share price (A$) 0.22 Year End December Mar-11a Jun-11F 2010a 2011F 2012F 52 week range (A$/share) 0.19 to 0.40 Number of shares (m)* 160 Exploration and evaluation - gross (GBPm) 1.13 1.10 3.044.83 6.00 Options and warrants (m) 31 Corporate (GBPm) 0.23 0.18 1.64 0.81 0.80 Convertible notes (m) 0 Exploration/(Expl.+ Corporate) (%) 83 86 65 86 88 Fully diluted (m) 191 Funding duration at current burn (years) 0.9 1.2 1.6 Market capitalisation (undiluted) (A$m) 35.2 Shares on issue (pr end) (m shares) 159.9 159.9 153.9 179.9 199.9 Debt (GBPm) - Jun 11F 0.0 Drilling - RAB (m) 0 0 0 0 0 Enterprise value (A$m) 35.2 Drilling - Other/Diamond (m) 3,500 3,500 2,000 14,000 14,000 Major shareholders: SUM Management (11%), Macquarie Bank (8%), Land holding ('000 ha) 322 322 322 322 0 Newcrest (7%) Tenement costs ($k per year) - - - - - Avg monthly volume (m) 5 Capital raisings (GBPm) 0.28 0.00 4.50 8.28 10.00 Cash (GBPm) - Jun 11F 1.6 Funding from JV partners (GBPm) 0 0 0 0 0 Price/Cash (x) - Cash (GBPm) 2.8 1.6 4.2 6.8 10.6 Price/Book (x) - Cash backing (p/share) 1.7 1.0 2.8 3.8 5.3 Listed company options: No Net asset backing (p/share) 10.1 10.1 10.1 13.3 16.8 * Issued as Chess Depository Interests (CDI's) - equivalent to 1 ASX share Quarters refer to calendar year. Investment Points Company Comment

Emerging producer with possible 4Q13 production of 60- Overview : Sumatra Copper & Gold plc is a Sydney based company listed on the ASX Oct ‘09 to explore 2 70kozpa from Tembang. Planned 10 year life from >1moz for Au and Cu in Sumatra, Indonesia. SUM holds ~ 3,219 km of tenements in 7 mining permits, including brownfields sites, along the Sumatra Fault Zone (host to Martabe – 5.3moz and Way Linggo >230koz). Au and 13moz Ag resource - open at depth. Tembang (Sumatra): The Tembang project is located ~12km NNE of Bengkulu in South Sumatra province. This brownfields site produced from the Berenai, Belinau and Bujang pits from 1997-2000. The Tembang (100% SUM) PFS due 3Q11. The PFS is deposit is an inter mediate sulphidation epithermal vein system 1 to 20m wide, with significant Zn and Pb expected to clarify ROM head grades, and resource to concentrations. Resources lie beneath and along strike from previously mined pits. There is potential to extend resources to depth on a number of high grade shoots at Berenai, with values of >25 gram-metres . reserves conversion rates - potential re-rating of stock. The best ever drill intersection by SUM (hole RDD11126) is 17.3m @ 9.73g/t Au, 11.0g/t Ag from 146m down hole. PFS (Runge, Lycopodium) planned completion late August 2011. DFS planned to commence SUM has 7 properties in the highly mineralized Sumatra 3Q11. JORC Resource >1moz Au, 13moz Ag, with a 60-70koz/yr operation targeted for a 10 year mine life Fault Zone, home to Way Linggo (Kingrose) and Martabe from o/p and u/g workings. Additional potential for a high grade u/g resource of 130koz Au exists at the (G Resources). Belinau prospect. C1 cash costs estimated at A$500/oz, after silver credits . Measured and indicated categories represent 76% of the Tembang resource in March 2011, a 39% increase on the 2009 resource. Tandai (Sumatra – Newcrest JV): The target is a high grade vein system for u/g mining at this former Targets are low sulphidation epithermal gold deposits (with Dutch mine site that produced 1.4moz at 15.4 g/t Au. Newcrest is to spend US$12m over 5 years to earn > 5g/t Au), with potential for porphyry Cu/Au and 70%, with an initial commitment of US$1.75m over 18 months. This is the minimum expenditure replacement Au deposits. commitment by Newcrest. SUM has the right to buy back Newcrest’s 70% for a nominal co nsideration if Newcrest does not complete the US$12m expenditure. SUM is managing the exploration program over the first 18 months. Drilling suggests a mineralized halo up to 22m wide around the 2m zone previously mined. Tembang and Tandai are historical mine sites. Tembang Sontang: NW/SE mineralized corridor with intrusives. 2,000m scout drilling in Feb ‘11 produced a best was mined 1997-2000 but many veins were not drilled. intersection of 12m @ 6.5g/t Au, 33g/t Ag and 8% Zn over +150m of strike, to a depth of 75m. Tandai (1.4moz @ 15.4g/t, was mined by the Dutch). Mineralization occurs as bodies within calcareous units up to 7m wide. There is potential to ext end mineralization under cover to the SE. Greenfields projects: SUM has a number of greenfields projects ( Jambi, Musi Rawas, Madina ) with Newcrest is earning 70% in a JV on the Tandai project, by potential for sediment hosted, epithermal and mesothermal style gold mineralization in central Sumatra. spending US$12m over 5 years. Minimum spend Corporate: The company acquired minority interests in the projects Mar ‘11, with the former owner (now US$1.75m. SUM managing exploration. board member) Mr Adi Sjoekri receiving 3.8m shares and A$368,000. Mr Sjoekri is an experienced Indonesian geologist and consultant who previously worked for CSR and Newmont. Investment Comment: The company is poised to become a moderate scale (60-70kozpa) producer from Low EV/resource ratio ~US$26/oz Au. Tembang in 2013, with a solid resource base. SUM is also advancing regional exploration prospects in 2011 and drilling the Tandai JV with Newcrest – NCM’s participation giving the project added profile (NCM’s typical resource target aspiration is 3-5moz Au for project involvement). Regional exploration projects have potential for high grade discovery. Notwithstanding the deposits are relatively low grade (2- 2.5g/t Au), SUM appears to offer an attractive EV/oz ratio – at A$0.22/share (A$35m Mcap) the adjusted EV/oz ratio for gold is~US$26/oz – valuing the company as a grassroots explorer. Potential share price SUM - Sumatra Copper & Gold plc catalysts include PFS 3Q11 and ongoing exploration results. Capital raising anticipated 2H11. 0.45 0.40 Reserves and Resources/Mineralised Material 0.35 Code for reporting mineral resources - Australian: (JORC) 0.30 Gold Classification Project Ore Au AuOff Au Ag Cu Au Equity Mt g/t g/t Koz Koz Mlb 0.25 0.20 Reserves 0.0 0.0 0.0 0.15 Resources 0.10

Share Price ($/Share) Price Share Tembang Measured 100% 3.4 2.3 na 247.7 4,018 0.05 (vein) Indicated 100% 4.4 2.4 na 335.9 4,114 0.00 Inferred 100% 3.6 1.8 na 207.2 2,267 Tembang (Halo) Indicated + inferred 100% 12.2 0.5 209.7 2,722 Apr-11 Oct-10 Jun-11 Jun-10 Jan-11 Mar-11 Aug-10 Sep-10 Nov-10 Dec-10 May-11

Source: Bloomberg Tembang (Vein + halo) Measured, Indicated, inferred 23.5 1.3 1,000.5 13,121 0.0 Mineralised Material (est., non compliant with JORC) 0.0 0.0 0.0

Contacts Directors Key Projects

Julian Ford W Morris (Chairman) Ownership/ JVTarget Process Project Chief Executive Officer A Sjoekri (Exec) Project Option Metal Partner Type Route Status Location Tel: 61 (02) 9300 3377 M Price (Non exec) Tembang 100% Au none Epithermal N/A Resource defn Indonesia www.sumatracoppergold.com P Nightingale (Non exec) Tandai 100%* Au Newcrest Epithermal N/A Adv. Exp Indonesia J Waller (Non exec) Sontang 100%** Au none Sandstone N/A Adv. Exp Indonesia Jambi 100% Au none Epithermal N/A Early Expl. Indonesia Analyst: Murray Brooker Musi Rawas 100% Au none Sed hosted N/A Early Expl. Indonesia [email protected] Madina 100% Au none Epithermal N/A Early Expl. Indonesia Local people hold a nominal percentage in all projects, as required by Indonesian law * Newcrest earning 70% ** Replacement in sandstone

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Sumatra Copper & Gold has 7 tenements in central and southern Sumatra, along the Sumatra Fault Zone. These include historic mine sites at Tembang and Tandai (1.4moz @ 15.4g/t Au), the latter is joint ventured to Newcrest Mining.

Deposits – Tembang Project

Tembang Project – Berenai Deposit: Long section looking west, showing the high grade shoots open to depth. The Berenai pit was mined during 1997-2000 - note the previous surface profile – mining went to ~100m depth.

Underground mining potential

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Industry Trends Worldwide nonferrous exploration budgets by target - 2009

Gold exploration has dominated global nonferrous metals exploration budgets, accounting for 48% of total expenditure.

Source: Metals Economics Group, World Exploration Trends, 2010

Worldwide nonferrous exploration budgets by region

Latin America is the biggest recipient of nonferrous metals exploration dollars (26%), dwarfing Australia (13%), Canada (16%) and Africa (15%).

Source: Metals Economics Group, World Exploration Trends, 2010

Major gold discoveries 1997-2008

The number of major gold discoveries decreased significantly from 1997 to 2008, despite increased gold exploration spend.

Source: Kinross 2011 Presentation, Metals Economics Group.

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Industry and Market Trends

Gold Prices for Producers

Gold prices in local currencies for major production and exploration countries such as Australia, Canada and South Africa have shown significant variance from the US dollar gold price in recent years.

Over the longer term Gold price in national currency units (ten years), commodity-linked Country Current* 1 month 3 month 6 month 1 year 10 year currency appreciation in Australia and Canada USA USD 1,503 1,525 1,431 1,381 1,243 271 has served to dramatically reduce Australia AUD 1,432 1,444 1,403 1,375 1,434 529 gains stemming from Canada CAD 1,486 1,489 1,396 1,392 1,296 410 South Africa ZAR 10,368 10,645 9,831 9,308 9,459 2,180 higher US dollar gold prices. *Table data as at June 24 2011 Source: Bloomberg, RCR

Gold price movements in national currency units

Country Current 1 month 3 month 6 month 1 year 10 year

USA USD na -1.5% 5.0% 8.8% 20.9% 454%

Australia AUD na -1% 2% 4% 0% 171% Canada CAD na 0% 6% 7% 15% 262% South Africa ZAR na -3% 5% 11% 10% 376%

This is also the case *Table data as at June 24 2011 Source: Bloomberg, RCR over the past twelve months with Generally, producer countries with commodity-linked currencies are currency getting reduced benefit from a rising US dollar gold price while the gold appreciation price rises are being driven by US dollar weakness. reducing gold price gains for producer In the longer term, (ten year data), the weakening trend of the US countries, dollar has seen these countries’ commodity-based currencies (apart particularly Australia from South Africa) appreciate against the greenback, to the extent that which has the local currency gold price has significantly underperformed the US experienced a flat A$ dollar gold price. gold price over the past year. Currency appreciation factors have had a similar effect over the past twelve months, with the one-year data indicating gold prices for Australian producers have received no benefit from the 21% US$ gold The Canadian gold price rise, due to a strongly appreciating currency. The Australian dollar price is up by 15% gold price has been effectively gone nowhere all year. So much for over the past year, record gold prices! South Africa up by 10%, relative to a Canadian producers have seen their local currency gold price rise by 21% rise in US dollar 15% over the past twelve months, and South African producers have gold. seen around half of the 21% US dollar gold price rise.

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Gold Equities Performance

So how have gold equities performed in the past twelve months, in the light of the gold price movements detailed above?

The table below shows the performance of gold share indices for the US, Canadian, Australian, South African and UK markets, measured against the gold price in US dollars and the overall performance of global equity markets (Morgan Stanley World Index).

Over the past twelve months, Performance of share market gold indices major gold share indices have Current * 1 month 3 month 6 month 1 year significantly underperformed Gold Price Comex US$/oz na -1% 5% 9% 21% relative to overall equity markets and USA S&P 500 Gold Index na -5% -4% -13% -11% the US dollar gold Canada S&P/TSX Gold Index na -5% -10% -13% -3% Australia S&P/ASX200 Gold Index na -4% -8% -11% 8% price. South Africa FTSE/JSE Gold Index na -12% -16% -14% -10% FTSE Gold Index FTSE Gold Index na -1% -10% -11% 0%

World Markets (all sectors) Morgan Stanley World Index na -3% -4% 0% 18%

*Table data as at June 24 2011 Source: Bloomberg, RCR

The data for the past twelve months show that gold shares have (on average) strongly under-performed the US dollar gold price and overall Only the Australian world equity markets as measured by the Morgan Stanley World Index. gold share index is Despite the flat A$ gold price, the Australian gold share index was the in net positive only one to register any gain over the twelve month period, up by a territory over the modest 8% relative to an 18% gain for world equity markets and 21% twelve months gain for the US dollar gold price. If we look at the past six months, the period. Australian gold share index is down by 11%, relative to a 9% rise in the US dollar gold price and flat world equity markets.

The US, Canadian, South African and UK-based gold share indices have mostly fared worse than the Australian gold share index over the past year. Gold equities have failed to provide What is clear from this data is that gold equities have, in general (as the safe haven that measured by the gold share indices), failed to provide a safe haven gold investors are investment. Clearly, during this period, if you were looking for a safe generally looking haven, physical gold (or ETF’s that track gold) itself provided some for. comfort, while gold shares were clearly inferior to the gold price, and have not been a safe haven.

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Are Australian Gold Shares Oversold?

The re-rating of the Australian gold shares in the second half of 2009 saw the ratio of the Gold Index to the A$ gold price rise to above 5.5. This was still well below the range of 6 to 7 pre GFC, when the gold price was much more subdued, but equities generally were more highly rated. We have argued that the Australian Index should trade in a range of around 5 to 6.

The Australian Gold Index relative to the A$ gold price

The Australian gold sector’s re-rating Gold (A$/Oz) A$ Gold Price Ratio ASX Gold Index:A$Gold (RHS) Ratio Index:Gold in late 2009 made 1600.0 8 it look a little fully PRE GFC valued relative to the Australian 1400.0 7 dollar gold price...

1200.0 6

1000.0 5

800.0 4

…but in the past 600.0 3 three months the Australian gold 400.0 2 sector has been de-

rated (as evidenced Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 by gold share Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 under Source: Bloomberg, RCR performance).

In our last Review (March 28 2011), when the gold index:gold price ratio was at the higher end of that range, we stated that: “…we do not consider that the Australian gold producers, as measured by the gold index, present outstanding value. In the absence of further corporate activity, and with a currency that tends to buffer gold’s gain, we would not expect strong out-performance of the Australian gold index relative to the US dollar gold price form here.”

We now believe the The recent underperformance of the Australian gold shares has been in Australian gold effect a de-rating of these equities, and we now see that the ratio of the share index looks gold index to the A$ gold price has fallen below 5.0 for the first time in oversold, and could nearly two years. At the same time, we are seeing signs of a re- represent value emergence of corporate activity, as evidenced by the proposed merger relative to physical of Catalpa Resources Limited (ASX:CAH) and Conquest Mining Limited gold, particularly if (ASX:CQT), along with acquisition of Newcrest mines to form a serious corporate activity mid tier gold producer. continues. With our outlook for the US dollar gold price over the next six months being positive, we now feel we can reverse our position on Australian gold shares. We believe they are now in a moderately oversold state,

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and we may see a period of outperformance relative to the gold price, particularly if we see further corporate activity,

Junior Exploration Companies Over the past twelve months, the The gold share indices detailed above reflect share prices of the major fifteen producers in each country. Emerging exploration and development gold predominantly companies have tended to out-perform their big brothers when gold is junior explorers in in favour and gold prices are strong. the Review have outperformed Thus, of the fifteen predominantly exploration and development-focused strongly (up by junior companies covered in this Review, average share price gains average of 85%)… were 85% over the past twelve months, compared to an 8% rise in the Australian gold index representing established gold producers.

…but performance However, in the past six months, as the gold shares have ‘gone off the of the junior gold boil’, it appears that the junior explorers have been hit harder than the stocks has dropped producers that make up the index. For the fifteen companies in the off in the past six Review, the average share movement over the past six months was - months, and they 14%, underperforming the index, which was down by 11%). In the have under past three months the juniors were down by 24%, and down by 10% in performed the past month, (versus -8% and -4% respectively for the Australian gold index).

This change in sentiment on the gold equities sector is reflected in a We have seen the major drop-off in gold exploration IPO’s coming to the ASX in the first flow of gold IPO’s half of 2011, after a rush of new gold floats of ‘boom time’ proportions stemmed. seen in the second half of calendar 2010.

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Selected Charts and Gold Sector Statistics

Precious metal prices, interest rates, and oil price charts.

Gold Price (Spot US$/oz) Silver Price (Spot US$/oz)

1800 60 1600 50 1400 1200 40 1000 30 800 600 20 SilverPrice (US$/oz) Gold Price (US$/oz) 400 10 200 0 0 Jul-08 Jul-09 Apr-04 Oct-07 Jan-05 Jun-06 Jun-01 Oct-08 Apr-10 Mar-09 Jun-01 Mar-02 Jun-04 Jan-08 Jan-11 Feb-07 Dec-09 Aug-10 Sep-05 Nov-02 Aug-03 Mar-02 Feb-05 Nov-05 May-11 Dec-02 Sep-03 Aug-06 May-07 Source: Bloomberg Source: Bloomberg

Platinum Price (Spot US$/oz) Palladium Price (Spot US$/oz)

2500 1000 900 2000 800 700 1500 600 500 1000 400 300 500 200 Platinum Price (US$/oz) Palladium Price (US$/oz) 100 0 0 Jul-09 Jul-04 Apr-07 Oct-08 Jan-08 Jun-01 Mar-10 Apr-07 Mar-02 Feb-05 Apr-02 Oct-03 Jan-08 Jun-09 Nov-05 Jun-01 Jan-03 Dec-10 Aug-06 Dec-02 Sep-03 Feb-10 Mar-05 May-04 Nov-10 Nov-05 Sep-08 Aug-06 Source: Bloomberg Source: Bloomberg

US Federal Funds Rate (%) NYMEX WTI Crude Oil Futures (US$/barrel) 6 160 140 5 120 4 100 3 80 (%) 60 2 (US$/barrel) 40 1 20 0 0 Jul-08 Apr-09 Apr-02 Jun-01 Jan-05 Jun-06 Jun-01 Jun-04 Jun-07 Mar-02 Feb-07 Nov-07 Dec-09 Sep-10 Sep-05 Dec-02 Aug-03 Mar-05 Feb-11 Feb-08 Nov-08 May-11 Dec-02 Sep-03 May-04 Dec-05 Sep-06 Aug-09 May-10 Source: Bloomberg Source: Bloomberg

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The top 20 global gold producers (ranked by CY2010 equity gold production).

Equity production gold Equity production gold Equity resources gold Company Name CY10 (koz) CY09 (koz) (moz)

Barrick Gold Corporation 7161 6632 222.6 Newmont Mining Corporation 4227 5284 151.6 The top 10 global Gold Fields Limited 3493 3244 66.7 producers’ output of AngloGold Ashanti Limited 3254 4406 222.7 25.1 moz represents Newcrest Mining Limited 2714 2604 135.6

29% of total global Kinross Gold Corporation 2487 2327 105.5 2010 production (est. Goldcorp Inc. 1802 2317 110.3 Freeport-McMoRan Copper & Gold 85.4moz). The top 20 1876 2958 110.5 Inc. produced 39.3moz Goldcorp Inc. 1792 2253 110.7 (down 10% on CY09’s Harmony Gold Mining Co Ltd 1448 1418 191.5 43.6moz) which is OJSC Polyus Gold 1242 1219 139.0 46% of global output. ZiJin Mining Group Co. Ltd. 1180 2423 3.0 Rio Tinto Limited 1168 1133 10.6 Compania de Minas Buenaventura S.A.A. 932 1321 20.5 IAMGold Corporation 919 1005 31.5 Yamana Gold Inc. 770 835 49.2 Agnico-Eagle Mines Limited 731 487 35.6 Sumitomo Metal Mining Co Ltd 711 299 9.3 African Barrick Gold plc 697 716 31.1 Centerra Gold Inc. 679 676 18.5 TOTAL 39283 43557 1776.0 Data Source: Intierra – Resource Intelligence

The top 20 global gold mines (ranked by CY2010 gold

production).

Country/ Total Cost Mine Name State/Province Grade (g/t) Prodn (oz) Cash Cost (AUD/oz) (AUD/oz) Operator Grasberg Gold/Copper Operation Indonesia 0.91 1,959,000 NR NR Freeport-McMoRan Copper & Gold Inc. Goldstrike Gold Operation United States 6.41 1,241,000 511 593 Barrick Gold Corporation . Cortez Gold Operation United States 8.63 1,140,000 274 429 Barrick Gold Corporation .

The world’s 20 Veladero Gold/Silver Mine Argentina 1.5 1,124,000 237 324 Barrick Gold Corporation . biggest gold Lagunas Norte Gold Mine Peru 1.36 807,000 162 200 Barrick Gold Corporation . producing mines in Lihir Gold Mine Papua New Guinea 5.24 806,877 219 384 Newcrest Mining Limited . Kalgoorlie Consolidated Gold Mines Pty 2010 produced a Super Pit Gold Operation Australia 2.3 756,000 514 579 Ltd . combined 15.3moz or Tarkwa Gold Mine Ghana 734,900 570 749 Gold Fields Limited . 18% of total global Kupol Gold/Silver Mine Russia 18.04 720,906 NR 310 Kinross Gold Corporation . production of Telfer Gold/Copper Mine Australia 1.06 680,537 NR NR Newcrest Mining Limited . 85.4moz. Kloof/Driefontein Gold Operation South Africa 634,000 823 NR Gold Fields Limited . Severstal (Production) Gold Operation Russia 602,583 NR NR OAO SeverStal .

Kennecott Utah Copper Refinery United States 596,000 NR NR Rio Tinto plc .

Kumtor Gold Mine Kyrgyzstan 3.1 567,802 511 625 Centerra Gold Inc. .

Porgera Gold Mine Papua New Guinea 3.77 545,000 558 627 Barrick Gold Corporation . PNG Sustainable Development Program Ok Tedi Copper/Gold Mine Papua New Guinea 0.95 486,400 NR NR Limited . Paracatu (Morro Do Ouro) Gold Mine Brazil 0.45 482,417 NR 554 Kinross Gold Corporation .

Gosowong Gold Mine Indonesia 27.48 478,099 NR NR Newcrest Mining Limited .

St Ives Gold Operation Australia 467,800 708 NR Gold Fields Limited .

Bingham Canyon Copper Mine United States 0.38 466,000 NR NR Rio Tinto plc . Total/Average 15,296,321 462 489 Data Source: Intierra – Resource Intelligence

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Report Contributors

Australian based analysts

John Wilson: John has a background in mining, finance and equity research. He worked on Wall Street for 6 years and has covered US, Australian and Latin American mining stocks. He has also worked with BHP in their minerals division. Qualifications include an MBA from the Wharton School of the University of Pennsylvania and a Bachelor of Engineering from the University of Sydney.

Tony Parry: Tony has extensive experience in metallurgical process development, (working with MIM Limited for five years) and in mining equity research, equity sales and mining corporate finance (working in London for five years and subsequently Perth). He was a founding Director and CEO of an ASX listed exploration company and has been engaged extensively as a strategic planning consultant to many small-medium enterprises. Tony’s qualifications include a BSc (Hons) in Metallurgy and a PhD in Metallurgy from the University of NSW.

Murray Brooker: Murray has a background in mining and consulting as a geologist. He worked for North Limited (now part of Rio Tinto) for 10 years and for Parsons Brinckerhoff (a global engineering consultancy). He has 20 years’ experience assessing exploration projects in Australia, New Zealand, Mexico and South America. Murray has an MSc in Geology (James Cook University, Qld) and an MSc in Hydrogeology. He was also a founding Director of an unlisted Australian geothermal company.

Canadian based analysts

Khaled Sultan: Khaled has a background in oil and gas, mining and equity research. He has 11 years of industry experience, and most recently has spent more than four years focused on equity research and investment analysis. He has worked with one of Canada's top five investment banks in Toronto covering the precious metals sector with a focus on gold equities. He covered 21 gold companies including senior producers; Barrick, Newmont, and Goldcorp. Qualifications include a Bachelor of Engineering from the University of Western Ontario and an MBA from the Rotman School of Business (University of Toronto).

TheWith gold supplycurrent Investme demandfinancial Resource Capital Research nt fundamenmarketJewellery demand talsuncertainis the are

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