His Majesty The King Mohamed VI, May GOD Assist Him.

01 Message from the General Director

03 Highlights02 International and national conjunctures

04 Petroleum exploration

01 Licensing domain02 Onhym’s activities03 Partner’s activities 04 Overview of activities

01 Petroleum agreements

02 Passage to additional periods as part of petroleum agreements 03 Amendments to petroleum agreements04 Reconnaissance contracts

01 Onhym’s own activities

02 Onhym service to partners

03 Hydrocarbon production 04 Maghreb Europe Gas Pipeline (MEG)

05 Addenda to reconnaissance contracts 06 Other agreements

05 Petroleum partnership & cooperation

06 Petroleum drilling & production

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At the end of 2011, licensing concerning conventional hydrocarbon exploration included 54 onshore permits, 61 offshore permits, 5 onshore reconnaissance permits, 3 offshore reconnaissance permits and 10 exploitation concessions. Concerning the exploration of unconventional hydrocarbons, 4 companies are partners to Onhym as a part of: 3 reconnaissance contracts for shale gas, 1 reconnaissance contract for oil shale, and 1 confidentiality agreement related to oil shale, covering a total area of 4 015,90 km².

The year 2011 was marked by the signing of :• 6 new petroleum agreements• 2 transitions to the additional periods as part of petroleum agreements• 10 amendments to petroleum agreements• 5 new reconnaissance contracts• 3 addenda to reconnaissance contracts • 1 amendment to a MOU as part of a petroleum agreement• 2 memorandum of understanding related to reconnaissance contracts• 4 confidentiality agreements from which 3 related to oil shale

• Execution of 6 new exploratory wells 2 in the Prerif and 4 in the Gharb onshore and offshore. The results of these two wells were positive after test.

• Hydrocarbon production remained concentrated on Essaouira and Gharb areas.

Summary

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07 Oil shale

08 Mining exploration

09 Mining partnership & cooperation

10 Mining drilling

11 Activity of the subsidiaries & portfolio income

12 Information system

13 Human resources & training

01 Precious metals02 General research (Precious metals)

03 Base metals

04 General research (Base metals)

05 Industrial rocks and minerals

06 General research (Industrial rocks and minerals)

07 Mining laboratories activity

01 Achievements

02 Exploration agreements

01 Assignment contracts

03 Memorandums of understanding

04 Framework agreements of cooperation

05 Lease contracts

06 Amendments 07 International Tenders

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The year 2011 was marked by the finalization of the regulatory framework for the extraction of hydrocarbon from bituminous rocks, and the acquisition of a part of the laboratory equipment specific to oil shale.

The mineral exploration this year concerned 20 projects including 10 for precious metals, 6 for base metals and energy substances and 4 for industrial rocks and minerals. Work in partnership has interested 11 projects including 4 for base metals, 4 for precious metals and 3 for industrial rocks and minerals.

Development of the partners portfolio with the signing of newagreements.

The activity of mining drilling concerned mostly the projects located in the southern provinces, namely Drag El Farnane, Lamlaga, Aghracha, Matallah and Twihinate. Mining drilling teams have operated over 6 sites for Onhym own projects.

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01 Message from the General Director

Worldwide, the year 2011 was marked by numerous geopolitical and economic events (Arab Spring, economic and financial) that heavily pressed on the price of the barrel, which reached an average of 111 dollars against 79 dollars in 2010.The world investments in exploration and production of hydrocarbons reached a record level with more than 540 G$, increasing by 15 %, compared to the previous year and the world investments in mining exploration reached a historic $ 18,2 billion record in 2011, that is an increase of 50 % with regard to the previous year.

On the national level, the year 2011 was characterized by a favorable evolution of the economy, due to the re-growth of the agricultural activities and by the good behavior of the non agricultural activities. So the national economy, according to the Higher Planning Commission, registered a 4,9 % growth in volume, with regard to 2010.

In this context, Onhym continues to display all its efforts to encourage and intensify the oil exploration of the Moroccan sedimentary basins, by its own means or in partnership.

At present, hydrocarbon exploration in Morocco is marked by sustained interests by the oil companies. This craze is the fruit of Onhym’s implemented strategy in terms of continued promotion actions and partnership, the favorable fiscal terms and the prospectivity of the Moroccan sedimentary basins. Several international oil companies among which the majors, the super-independents and the Independents operate in the various regions of Morocco, both offshore and onshore.

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In terms of partnership, this year was marked by the signature of six new petroleum agreements, five new reconnaissance contracts associating new international operators.

This period knew also the realization of 6 new exploration wells (2 in the Pre-Rif and 4 in Gharb onshore and offshore). After production tests, two of these wells have been proven positive in the Gharb.

Within the framework of its own activity, the Office pursued five projects, initiated during the previous exercise, on the coastal zones of Boujdour, the Meskala-Toukimt fields (seismic survey and the launch of the drilling of MKL-110), the Rabat-Tarfaya offshore segments, the Dakhla offshore region as well as a regional preliminary study of the potentialities of the sedimentary basins in terms of Shale Gas.

In the mining research domain, Onhym own activity during this year concerned 20 objectives among which 10 for precious metals, 6 for base metals and energy substances and 4 for industrial rocks and minerals. The year 2011 was also marked by the success of the renewal of the certification of the Onhym mine laboratories, according to the ISO 9001 reference, 2008 version.

In terms of the implementation of the Master Plan of the Information System (SDSI), the SI projects allowed to strengthen the geo- scientific tools for the processing and the interpretation of the mines and hydrocarbons data.

On the human resources management plan, Onhym pursues a steady program of training of the entire staff covering all the disciplines and joining an integrated vision of its strategy of valuation of the human resources. Concerning the social aspect, the staff benefited from an exceptional allowance, allowing him to assure a decent retirement pension.

Forward-looking and supported by a corporate culture based on the research for the excellence, Onhym pursues the implementation of its global strategy which has as objective the strengthening of the dynamic of opening on the world market and the development of partnership with the foreign or national investors to stimulate the promotion of the hydrocarbon and mining resources of the Moroccan subsurface and contribute effectively to the economic and social development of our country under the enlightened leadership of HIS MAJESTY THE KING MOHAMED VI, May GOD Assist Him.

Amina BENKHADRA General Director

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02 International & national conjunctures

01 International conjuncture

The price of oil has exceeded the previous record of $ 98 and totaled $ 111.

The year 2011 saw a slowdown in the world economy. According to the IMF, the growth of the world economy was estimated at 3,8 % against 5,2 % in 2010. The weakening in the Euro Zone and in the more developped countries contrasted with the economic performances of the emerging and developping countries. These countries continued to sustain the global recovery with a growth estimated at 6,2% in 2011 while the developped countries recorded a weak growth or even negative : +1,6 % in the Euro Zone, +1,8% in the US and – 0,9% in Japan.Furthermore, the geopolitical and economical events that marked the year 2011 had a deep impact on the price of the barrel. This price, rapidly increasing when compared to the average price of $79 in 2010, has exceeded the historic high of $98 reached in 2008 to stand at $111.

In this context, the global investment in hydrocarbon exploration/production reached in 2011 a record level of more than 540 G$, an increase of 15% in comparison with the previous year. All the geographical areas took benefit from this growth : the highest growth rates were recorded in the Middle-East (25%) and in Latin America (23%).

While 2010 recorded a peak in the global investment related to mineral exploration, the year 2011 saw an increase in the upward trend. Indeed, after an increase of 45% in 2010, the global investments in mineral exploration reached a peak record of 18,2 billion $ in 2011, an increase of 50% in comparison with the previous year. According to Metals Economics Group, the most sought after minerals in 2011 were gold (with 50% of the global investments) and copper (with 20% of the global investments).

Evolution of global E & P investments in 2011

Course of the Brent 1990 – 2011 ($/bl)

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02 National conjuncture

Favourable evolution of the national economy.

Boosted by a growing solid demand, the average prices of base and precious metals continued their strong upward during 2011. The average gold price grew by more than +32%. Another peak record of 1 896,5 $US/Oz was reached during 2011. In the same time, the average silver price has almost doubled (+90%) in comparison with 2010. For tin, a peak of +25% was recorded with a new peak of 33 252,5 US$/t reached in April.

In a global context marked by economic uncertainties at the level of our economic partners, the national economic growth remained sustained thanks to a strong domestic demand and to a lesser extent by the rise of the external demand that remained stable. The strength of the available short-term economic indicators is a proof of a favourable momentum of the national economic activity.

The year 2011 marks a favourable evolution of the national economy, sustained by return to growth of the agricultural activities to a positive trend, following a light decrease in 2010, and by the good performance of non-agricultural activities as it is shown by the good performances of the phosphates, telecoms, tourism and building sector.

Therefore, the national economy according to the “Haut-Commissariat au Plan” has recorded a growth of 4,9 % in comparison with the same period in 2010. The international environment for the mining sector remained advantageous in 2011 : the price index for metallic minerals exported by Morocco maintained its strong growth.

At the energy level, it is the continuing impetus of the established national energy policy, with notably the development of renewable energies, wind, solar for their contribution to the electric production, and the promotion of the energy efficiency in the sectors of industry, transport and housing.

Therefore, the year 2011 was marked by the start of many development projects related to renewable energies, in particular the solar and wind programs of 4000 MW, the construction of two hydropower plants of 500 MW (M’dez Elmenzel and Abdelmoumen) and the thermal projects of 2000 MW (Jorf Lasfar currently under construction, and Safi in its last step before becoming fully operational). In the same time, and in order to develop technologies and local knowledge in the sector of the renewable energies, the Department of Energy in the Ministry of Energy, Mines, Water and Environment, in collaboration with its different stakeholders, took the initiative to create the Research Institute for Solar Energy and Renewable Energies – IRESEN – with the task of developing the innovation, to sustain and extend the R & D structures, and to encourage their synergy with corporations and universities.

The oil bill was dramatically increased in 2011 by recording : 81,48 billion dirhams, an increase of 31,1 % in comparison with 2010. The energy bill shows also an increase of 31,2 % in comparison with 2010, and has reached 89,84 billion dirhams.

Total world exploration budget (non ferrous metals)

03 Highlights

01 Hydrocarbons

02 Mines

• SIGNING 06 new petroleum agreements

05 new reconnaissance contracts

10 amendments to petroleum agreements

03 addenda to reconnaissance contracts

03 MOU

04 confidentiality agreements

• INTERPRETATION 830 Km of 2D seimic lines in the Boujdour bassin

23 200 Km of 2D seismic

4000 Km² of 3D seismic in the atlantic offshore

• EXECUTION 6 new exploratory wells (2 in the Prerif and 4 in the Gharb onshore and offshore). The results of these two wells were positive after test

• ACQUISITION 5520,8 Km of 2D seismic

1902,8 Km² of 3D seismic

• REPROCESSING 5424 Km of 2D seismic 2080 Km² of 3D seismic

Onhym has continued its sustained efforts for the promotion of sedimentary basins of our country. This dynamism is reflected in the development of its portfolio of partners in the petroleum, mining and unconventional hydrocarbons domains.

• INVESTEMENT of 1 169 832 000 Dh by partners and 69 255 557 Dh by Onhym

• LAUNCH of the drilling of the MKL-110 well in Essaouira

• INITIATION of a pilot project for the Shale Gas potential in the Zag-Bas Draa basin

• EXPLORATION 20 objectives by Onhym 10 for precious metals 6 for base metals and energy substances 4 for industrial rocks and minerals 11 objectives by partners 4 for base metals 4 for precious metals 3 for industrial rocks and minerals

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• SIGNING 6 exploration agreements 2 cooperation framework agreements 4 memorandum of understanding 3 lease contracts 4 amendments

• TRANSFER of 2 projects to the private sector for development and exploitation

• CERTIFICATION of Mine laboratories in accordance with the new ISO 9001 version 2008

• INTENSIFICATION of research for uranium in the southern provinces

• CONTINUATION OF WORKS in partnership as part of the feasibility study on Achmmach (Sn) with Kasbah Resources (Australia) and for bentonite with Tolsa (Spain).The development of the zircon deposit of Bouissafen is underway with the French company Sanc, as well as the deposit of Zrahina (F-Ba-Pb) with the French Group Garrot-Chaillac.

Of an airborne geophysical survey (magnetic and radiometric) in the southern provinces in partnership with Metalex

Of a program of work in partnership for the evaluation and development of the gold deposit of Tafrent with Archean Group, Ain Kerma-Toufrite shows (Au, Pb, Zn, Ag) with Agricola, gold deposit of Tizegouine-Moumjjoud and copper deposits of Ighrem by Managem, Naour (Cu) and Jbel Khitem (Pb-Ag) by CMT

Of a geochemistry campaign with Newmont in the Anti-Atlas and realization by external provision of a regional geochemistry campaign in the region of Awserd

• LAUNCH

• CONFIRMATION of the interest of the projects related to Fe, Nb, Ta, U and REE of Glibat Lafhouda and Twihinate of the importance of two new prospects of Drag Al Farnan and Lamlaga

03 Oil shale

• SIGNING of 3 confidentiality agreements with the companies Kerogen, IES and Taqa respectively on the zones of « Timahdit 2 bis », « Tarfaya (Permits 17 - 24) » and « Tarfaya (Permits 13 - 16) », and an “oil shale agreement” with OCP on the zones of EL Brouj, Tadla and Essaouira

• FINALIZATION of the regulatory framework for the extraction of hydrocarbon from oil shale

• START of the construction of a San Leon pyrolysis unit IVE (In-situ Vapor Extraction) on Tarfaya area, and acquisition of a part of the laboratory equipment specific to oil shale

04 Petroleum exploration

Several projects conducted by Onhym’s own funds and / or in partnership were initiated or continued during 2011 and covered a total mining area of 447 448,82 km².

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01 Licensing

At the end of 2011, the licensing domain is shown as follows :

The hydrocarbon exploration was carried out on a total licensing area of 447 448,82 km².At the end of 2011, licensing concerning conventional hydrocarbon exploration included 54 onshore permits, 61 offshore permits, 5 onshore reconnaissance permits, 3 offshore reconnaissance permits and 10 exploitation concessions.

Concerning the exploration of unconventional hydrocarbons, 4 companies are partners to Onhym as a part of : 3 reconnaissance contracts for shale gas, 1 reconnaissance contract for oil shale, and 1 confidentiality agreement related to oil shale, covering a total area of 4015,90 km².

Investment of 1 169 832 000 Dh by partners and 69 255 557 Dh by Onhym.

02 Onhym’s activities

Evaluation studies

Play concepts of Boujdour coastal areas project

Meskala and Toukimt field development project

Onhym continued the integrated evaluation studies for the 5 projects that started the last year on the Boujdour coastal zones, Meskala and Toukimt fields, Rabat – Tarfaya offshore segment, Dakhla offshore and the regional study of the Moroccan basins potential in terms of Shale Gas. This pilot project, launched this year with Onhym’s own funds was focused on the Shale Gas potential of the Zag- Bas Draa basin, and will be converted to a reconnaissance contract with Anadarko. Meanwhile, 33 partners’ projects, 2 onshore and offshore promotion projects and a preliminary study project on the extension of the Atlantic Continental Shelf were carried out to assist our partners and intensify the exploration of our sedimentary basins.

The works carried out on the Rabat-Tarfaya and Dakhla projects, highlighted more precisely play concepts and prospects that have been previously determined, and to identify a new set of prospects that will enrich the Onhym’s portfolio and encourage the promotion of the open acreage, in order to attract new partners. On the Boujdour South Coastal zones, Onhym finalized the interpretation of the 2D seismic recently acquired and processed by its own resources. On the Meskala-Toukimt fields, the preparations for the appraisal/development of the MKL-110 well were finalized; the drilling campaign will start the first December 2011.

As part of the regional study of the Moroccan basins potential in terms of Shale Gas, synthesis and integration of geological and geochemical data allow to define geographical areas and geological horizons where the evaluation studies will be focused on the future.

The results of this work attracted many partners for the exploration of these new resources. As part of the new pilot project related to shale gas potential on the Zag – Bas Draa basin, the interpretation of 1 200 Km of 2D seismic lines defined the lateral extension and the thicknesses of the potential formations, and will contribute to the reserves estimations.

Onhym finalized the interpretation of 830 Km of 2D seismic that have been acquired in 2010. Following this interpretation, 8 horizons on the Tertiary and Cretaceous were correlated and two Albian leads and four intra Cretaceous leads were identified.

Contribution for the realization of the Workover final report for the MKL-102 well following the interpretation results of 3D data. Conclusion of the contract related to the economic evaluation study for the Meskala field that will be carried out at the end of the MKL – 110 drilling campaign. The MKL – 110 drilling campaign started on the first December 2011, and reached the depth of 624 m by the 31 December 2011.

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Play concepts of Dakhla offshore project

Regional study of the Moroccan basins potential in terms of Shale Gas project

Shale Gas pilot in the Zag- Bas Draa basin project

Play concepts of offshore Rabat-Tarfaya project

Interpretation of 8305 km of the 2D seismic and identification of data sea bed horizon, the Tertiary unconformity, the Top Santonian, the Top and Base of the Coniacian, the Middle Albian and the Top Jurassic.

Five leads have been identified: four of which are represented by structural closures in the Albian, and one of which in the Jurassic. In addition, a number of stratigraphic traps related to lowstand system tracts in the Coniacian have been mapped.

Integration of geological and geophysical data highlighted potential structures on the septentrional side of Dakhla basin, and the identification of progradational deposits in the Coniacian and Barremian. Seismic attribute analysis of these deposits showed amplitude anomalies that confirm the potential of these new play concepts in the Upper Cretaceous.

The work was focused on the elaboration of a synthesis on the Carboniferous shale gas potential in the High Plateaux, and geochemical analysis of 18 samples from Devonian and Carboniferous of the Oum Doul-1 well in the Zag Basin.

Moreover, a set of TOC maps for the Carboniferous, Devonian, Silurian and Ordovician were realized for all the Moroccan sedimentary basins. Other maps (Silurian, Devonian and Carboniferous) have been established in the Zag – Bas Draa basin.

The results of this work served for the promotional action. 3 reconnaissance permits were signed, two with Repsol (Boudenib and High Plateaux basins) and one with Anadarko for the Assa block. These actions will improve the exploration of the new unconventional resources.

The interpretation of 1 200 Km of 2D seismic defined the lateral extension and the thickness of 5 potential shaly formations in the Paleozoic, which are: Middle Cambrian, Lower Ordovician, Silurian, Upper Devonian and Visean. The TOC richness in these levels is moderate (from 0,5 to 2,5 %). Maturity measurements show that the Silurian and Devonian samples are mature for gas generation (Ro : 1,49 to 2,56%), and that the Carboniferous is overmature for oil generation (Ro : 1,33).

2D seismic interpretation allowed the identification of large anticlinal structures. The isopach maps show that these levels have sufficient thickness in all the area of interest from the Devonian, with a major subsidence axis in the middle of the basin.

Loading on workstations of 41 575 Km of 2D seismic data and 5 900 Km² of 3D seismic data. Seismic interpretation of 12 000 km of 2D seismic and 4 000 Km² of 3D seimic data and data collection for geological and geochemical modeling.

Regional interpretation of these seismic data combined to attribute extraction has resulted in the definition of plays concepts related to tilted triassic blocks. Reefal formations at the border of the Middle and Upper Jurassic carbonate platform, and sandy formations in the lowstand system tracts of the Lower and Upper Cretaceous. Other plays have been identified (diapir flanks, subsalt, toe thrust, and ponded sand in the mini basins between the salt domes and sedimentary structures). These new results were incorporated in presentations and data rooms for promotion.

ONHYM exploration activity in 2011

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Preliminary study project on the extension of the atlantic continental shelf (cooperation project)These efforts were crowned with the signature of 6 new petroleum agreements and 5 reconnaissance contracts.

As party of this project, seismic data have been loaded on workstation; two preliminary bathymetric maps covering the segments of Essaouira - Safi and Tarfaya - Boujdour were realized. Also, contacts have been made with Ifremer (Brest, France) to receive the seismic data related to the Mirror, Sismar and Dakhla campaigns that have been acquired for academic studies in the Moroccan Atlantic offshore.

A part of the requested data was received and is currently checked before its loading on the workstations. Onhym attended from 13 to 17 June - 2011 in New York, the 21st meeting of States Parties to the United Nations Convention on the Law of the Sea. The Onhym delegation contributed actively, during the work session of the informal groups related to the Commission on the limits of the continental shelf (CLPC).

03 Partner’s activities

Onhym partner’s activities in 2011 were marked by :•Discovery of two gas fields in the Gharb basinDrilling of 6 new exploration wellsAcquisition of 1 902,8 Km² of 3D seismic data and 5 520,8 Km of 2D seismic data Reprocessing of 5 424 Km of 2D seismic and 2080 Km² of 3D seismic in the onshore and offshore basins

Promotion

As part of actions aimed at promoting the Moroccan sedimentary basins to the oil & gas industry worldwide, Onhym attended the following petroleum conferences:

• NAPPE, from 16 to 19 february in Houston• APPEX 2011, from the 1st to 3 march in London• AAPG, from 10 to 13 april 2011 in Houston • 73rd EAGE Conference & Exhibition incorporating, from 23 to 26 may 2011 in Vienna• AAPG-Milan Italy, from 22 to 27 october 2011 in Milan• Africa Upstream, from 2 to 4 november 2011 in South Africa• World Petroleum Congress, from 4 to 8 december 2011 in Qatar

Furthermore, Onhym conducted, from 5 May to 6 June 2011, a door-to-door promotional campaign in the Middle-East, with the support of AMDI. In addition, technical presentations and data room have been organized to the representatives of the following oil companies:

Project Tanger - Larache permit (Repsol / Dana/ Gas Natural)

Project Gharb Offshore reconnaissance zone (Repsol)

Projects Casablanca offshore - Safi offshore permits (MPE)

Two wells have been drilled in this permit : DeepThon-1 drilled between 6 april and 15 may, it reached the final depth of 1810 m, and Merou-1, drilled between 17 may and 12 june, it reached the final depth of 2030 m in the post nappe Miocene. The results were not conclusive and the two wells were abandoned. Onhym contributed with a logistical assistance during the drilling campaigns.

Following the processing and interpretation of 509 Km of 2D seismic acquired in 2010, Repsol finalized an evaluation report on the area. The encouraging results of this preliminary study allowed Repsol to launch a large 2D seismic program of 3099 Km in 2011.

This partner reprocessed a selected set of seismic lines and continued the petroleum evaluation study of the area.

OffshoreZones• Project Loukkos Offshore permit (MPE)

Project Essaouira Deep offshore permit & Essaouira Shallow offshore reconnaissance zone (Kosmos/Canamens)

Project Agadir offshore permit (GBP)

In this permit, MPE finalized the reprocessing of the vintage seismic data and continued the petroleum evaluation study of the area.

The farmout campaign organized by Canamens allowed to a joint-venture with Kosmos in the Essaouira offshore blocks. In addition this partner started the acquisition of a new 3D seismic program of 2340 Km² (1102 Km² by 31 décembre 2011). An evaluation report is being prepared.

A farmout campaign is underway to attract new partners in order to acquire 340 Km² of 3D seismic data, to cover the leads Avocet and Heron.

Bell Exploration, Anadarko, Supex Ltd, East West Petroleum, Total, Kosmos, Oil Quest, Next Energy, Nautical Petroleum, Petro-celtic, Pura Vida, Société Renaissance, Anadarko, Canamens, Petrobras, Chariot oil, Vermilion energy, Merlon International

Project Sidi Moussa Offshore permit (San Leon / Serica /Longreach)

Project Cap Boujdour Offshore permit(Kosmos)

Project Foum Draa Offshore permit (San Leon / Serica /Longreach)

Project Tarfaya offshore permit (Tangiers Petroleum)

Project Boujdour offshore shallow permit (Teredo)

Project Foum Assaka permit (Kosmos / Pathfinder)

The three Onhym partners on this block: San Leon, Serica and Longreach realized an evaluation study that allowed the identification of 3 prospects from the Jurassic, and 11 leads related to the Trias and the Jurassic. The reprocessing of 2000 km of 2D seismic was also finalized.

Detailed mapping on this permit resulted in the identification of 3 prospects in the Lower Cretaceous: Safsaf, Gargaa and Argane. AVO and economic studies were also realized in the area. 30 % of the area was integrated to the promotion of the free zones and 70 % were converted to new permits known as Cap Boujdour Offshore.

The interpretation of 3D seismic data resulted in the identification of 12 prospects from which 10 are related to diapirs from cretaceous and 2 related to Lower Cretaceous channels. The reprocessing of 1500 Km² of 3D seismic was carried out to improve the quality of the seismic in the areas of interest.

In this permit, the geological and geophysical studies were finalized as well as the reprocessing of 2813 Km of 2D seismic and 580 Km² of 3D seismic by Fugro. The interpretation is underway. Concerning the acquisition of new seismic data, 675,140 Km² of 3D seismic were acquired by the 31 st December 2011 from a total of 700 Km².

Teredo has launched evaluation studies by collecting data on this permit. This company achieved the acquisition of 530 Km of 2D seismic and started the seismic interpretation, in order to identify some potential leads and prospects. Onhym contributed to the logistical assistance by performing a quality control of the seismic data.

The preliminary evaluation study from 2D and 3D seismic data has permitted the identification of 3 play concepts that will be analyzed in details. Preparations for the realization of a 3D seismic program of more than 2500 Km² are underway.

Project Ras Juby permit (Genting)

Genting achieved the economic study and the evaluation report of the area. Moreover, Genting organized a promotion campaign to share the risk related to a first exploration well, but did not attract a partner. This block was abandoned and integrated as part of the promotion of free zones.

OnshoreZones• Project Ouezzane-Tissa permit(Transatlanic / Direct / Anschutz / Longe)

Project Asilah permit (Translantic/Direct/ Anschuts/Longe)

Project Central Rharb and Rharb South permits (Cabre)

The well Had Kourt East-1 bis (HKE-1bis), that was drilled in 2010 demonstrated gas shows in the Tertiary. A test program in 6 levels on the well has been performed by these partners. The results of these tests were not satisfying. Transatlantic abandoned the permit the 30th april 2011 and finalized an evaluation report. Onhym achieved a closure report related to this project.

The well GRB-1 was drilled in this area. The main targets were the Asilah sandstones from Oligocene. The drilling campaign started the 12 january 2010 and was ended the 18 march 2011 at the final depth of 2503 m in the Oligocene. Gas shows were recorded during the drilling. The tests that were performed were not conclusive and the well was abandoned.

Cabre achieved seismic interpretation and mapping of the potential areas. A map of the localization of the oil fields in this permit has been realized. In addition, simulation tests on the BFD-1 well were performed. The review and analysis study of the 21 previously defined prospects has resulted on the selection of the first three prospects to be drilled in 2012.

Project Fez permit (Cabre)Finalization of the structural modeling integrating the seismic interpretation and gradiometric data as well as the structural mapping of the Domerian, these results were included in the final report. Petrostrat achieved microstratigraphic datations for the FES – 1 well combined with geochemical studies. In addition, Cabre launched an analysis study on the potential areas of this permit from the end of december, this study will continue on 2012.

Project Sebou permit (Circle oil)

Two wells (ADD-1 and KSR-11) were drilled in 2011 in this permit to test the Miocene sandstones. The first well Aidoudi-1 (ADD-1) reached a final depth of 1059 m and the second was stopped at a depth of 1868 m. These tests showed that these wells are productive. Other tests were performed on the DRJ-6 well, drilled in 2010. The results showed the presence of an accumulation of biogenic gas.

Moreover, Circle Oil acquired 21,8 Km of 2D seismic data and 16,873 Km² of 3D seismic data on this block in 2011. After the processing and interpretation of these data, a detailed study will be launched to define the best prospects to be drilled in the future.

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Project Lalla Mimouna permit (Circle oil)

Project Tselfat permit (Transatlantic)

Circle Oil acquired 109 Km² of 3D seismic data, the processing of the data is underway. Onhym assisted Circle Oil in the transfer process of geological and geophysical data, as well as in the topographic delimitations.

TransAtlantic drilled between 16 april and 16 may, the well Tekna – 1 (TKN-1). The drilling reached the final depth of 1502 m in the Nappe Prerifaine and was abandoned. In addition Transatlantic performed a reentry on the HR-33 Bis well to test the Burdigalian.

Project Zag basin permit(San Leon Energy/Longreach)

Following the topographic study, these partners acquired by the 31st december 2011, 1262 Km of the scheduled 1600 Km.

Project Tendrara permit (MPE)MPE continued the geological and geophysical study, as well as the interpretation of the 3D seismic; to better localize the gas accumulations in the area.

Project reconnaissance license Missour East (MPE)

MPE continued the petroleum evaluation of the area, integrating all the previous results.

Project Tarfaya onshore permit(San Leon Energy /Longreach)

The work planified by these partners concerned the clearing of 610 Km; this first task was achieved the 28th July 2011. The second task was the acquisition of 608,11 Km of 2D seismic, and was finalized the 28th November 2011. The processing of the data is underway.

Project reconnaissance license Taounate(Cabre)

Project reconnaissance licence Tendrara South (MPE)

Project Sidi Mokhtar permit (MPE)

Cabre has achieved a structural model for this area, and will allow to confirm the presence of structural trends in the subsurface. This partner integrated also additional seismic campaigns in its own database to cover all the area of Fez–Taounate.

MPE finalized a synthesis report of the seismostructural and seismostratigraphical study of the Triassic formations, as well as the geological and geophysical report.

MPE is continuing the petroleum evaluation of the area.

Project reconnaissance license Tadla (EOG)

EOG started the evaluation studies by organizing two field trips on the Tadla area. The collected samples were analyzed in order to determine the source rock potential of these rocks. In addition, EOG reprocessed and interpreted 611 Km of 2D seismic. Following the encouraging results, this company requested an additional year with a work program to define the structural model for this zone.

Project Haha permit (PEL)

PEL achieved the petroleum evaluation of the Jurassic prospects as well as the main triassic prospect. Onhym contributed with a pseudo well modeling as a request from PEL, and the elaboration of the provisional log related to the future drilling campaign for the Tamanar-1 well.

OffshoreOnshoreZones

Partners petroleum exploration activitiesin 2011

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04 Activity Overview 2011

Geophysical activity •

Drilling activity •

05 Petroleum partnership & cooperation

The year 2011 was marked by the signing of :• 6 new petroleum agreements 2 entries into the additional periods as part of petroleum agreements 10 amendments to petroleum agreements 5 new reconnaissance contracts 3 addenda to reconnaissance contracts 1 amendment to a MOU as part of a petroleum agreement 2 memorandum of understanding related to reconnaissance contracts 4 confidentiality agreements from which 3 related to oil shale

01 Petroleum agreements

Efforts to promote moroccan sedimentary basins have been crowned by the signing of several agreements and petroleum contracts that have strengthened the Onhym’s partnership portfolio.

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02 Entry into additional periods as part of petroleum agreements

03 Amendments to petroleum agreements

04 Reconnaissance contracts

05 Addenda to reconnaissance contracts

06 Other agreements

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02 Onhym service to partners

Circle Oil

Somas

As part of the service contract with Circle Oil Maroc Ltd, Onhym achieved the second dril-ling campaign that started in 2010 in the Gharb basin, with the rig H.525 and its staff. Onhym’s services to third parties concerned the drilling and cementing operations as well as well testing and a work over.

As part of the service contract with Circle Oil Maroc Ltd, Onhym achieved the second drilling campaign that started in 2010 in the Gharb ba-sin, with the rig H.525 and its staff. Onhym’s ser-vices to third parties concerned the drilling and cementing operations as well as well testing and a work over.

01 Onhym’s own activity

06 Petroleum drilling & production

The activity focused mainly on the drilling of the well MKL-110, launched the first december, the equipment and maintenance of H.1700 n °II and H.525 rigs, the installation of the rig H.1700 n°II as well as the site camp for the well site MKL-110.

Starting drilling the MKL-110 well in Meskala and completion of 6 exploration wells in the Gharb region, two of which were positive after testing.

The daily follow – up by the office of the partners drilling activity, was achieved for the wells: GRB-1, TKN-1, HKE-1 and HR-33 Bis of Transatlantic company, for Circle Oil company: the drilling of ADD-1 and KSR-11 and a work over for the well DRJ-6; for Repsol: the drilling of ‘’ Deep Thon-1’’ and ‘’Merou-1’’.

the domestic production of the hydrocarbon has ex-perienced an increase by 7,08% of natural gas (i.e. 37,78 Million Nm3 against 35,28 Million Nm3) and a small decline of 1,68% for condensate (i.e. 6 795 T against 6 911 T).

This activity remained concentrated on Essaouira and Gharb areas. Compared to the year 2010,

03 Hydrocarbon production

The total turnover, generated by the sale of hydro-carbon in 2011 reached 137,78 Million DH against 102,43 Millions DH in 2010, with an increase rate of 34,50%. This improvement is mainly due to the rise of the price of the N° 2 fuel and of the barrel of oil on which natural gas and condensate prices are respec-tively indexed, but also due to the new contracts with OCP and Super Cerame.

Services for partners•

Hydrocarbon sales•

Follow - up activity •

• These activities are summarized as follows:

Equipment maintenance and upgrading of the Onhym pipelines in the Gharb

Maintenance of the 8’’pipeline linking the station Korimat to OCP plants in Youssoufia

Achievement of the installation of the 8’’pipeline linking the station DRJ in Kenitra, this project was performed as part of the partnership between Onhym and Circle Oil

Starting of delivery of natural gas to the company Super Cerame in Kenitra, from the 4’’pipeline that supplies the CMCP, as part of the sales contract between Onhym, Circle Oil and Super Cerame

Exploitation•

As a representative of the Moroccan State for the management of the royalty, perceived as a result of the transit of Algerian gas through the Moroccan territory, Onhym supervises the daily, weekly and monthly gas supply, as well as the planification of the ONE consumption.

04 Maghreb Europe Gas Pipeline (MEG)

07 Oil shale

The year 2011 was marked by the finalization of the regulatory framework draft for the extraction of hydrocarbon from oil shale, and the acquisition of a part of the laboratory equipment specific to oil shale.

• Concerning the partnership, the activity was focused on:

Initiation of work as a part of the MOU signed with the Estonian company ENEFIT (Eesti Energia), rela-ted to the exploration of the zones of ‘’Tanger’’, ‘’Ouarzazate’’, ‘’Errachidia’’, ‘’Agadir’’ and ‘’Aghbala’’

The preparation of a draft MOU with ONE, for the construction of a pilot power plant on Tarfaya area

The signing of a special “oil shale agreement” between Onhym and OCP, related to the exploration of oil shales in the zones of ‘’EL Borouj’’, ’’Tadla’’ and ‘’Essaouira’’; a meeting with the working group of El Borouj was held the 19/12/2011, to achieve the report on the state of knowledge about the Oulad Abdoun basin, and the provisional work program

The start of the construction of a pyrolysis unit IVE (In-situ Vapor Extraction) on Tarfaya by the company San Leon

Initiation of the cooperation with the company Kerogen for the construction of a pilot unit for the exploi-tation of the deep formations of the Timahdit deposit

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08 Minning exploration

The mining exploration this year concerned 20 projects including 10 for precious metals, 6 for base metals and energy substances and 4 for industrial rocks and minerals. Work in partnership has interested 11 projects including 4 for base metals, 4 for precious metals and 3 for industrial rocks and minerals.

The results obtained by Onhym’s own activities have confirmed the potential of Fe, Nb, Ta, U and Light Rare Earth Elements (LREE) projects of Glibat Lafhouda and Twihinate (Awserd province), where partial and preliminary resource estimation has yielded very encouraging results. Several foreign companies have expressed interest for these projects. In SW of Twihinate, encouraging gold grades are obtained on quartz structures in the area of Laknouk. Valorization tests on the ore of Twihinate and Glibat Lafhouda projects will be carried out in the framework of cooperation between Onhym and the “Bureau de Recherches Géologiques et Minières” (BRGM, France).

The work has also confirmed the importance of two new prospects in Fe, Nb, Ta, U and LREE; Drag Al Farnan and Lamlaga. The latter showed, in addition to the substances mentioned, interesting grades of molybdenum. Preliminary resource estimation will be performed on these two prospects after obtaining all the results of drilling programs completed or ongoing in 2011.Many anomalies of precious metals have also been the subject of geological control in the southern provinces, Khzama, Assif Mqourn, and Tichka East. The research for platinum continued in the province of Awserd on the Twirga Amwaga site.

Research for uranium has been intensified in the southern provinces and allowed identification of several interesting shows, notably Aghracha and Matallah in the Awserd region. The Aghracha prospect has been recognized by a drilling campaign during the first half of 2011, and showed grades that can reach 371ppm U3O8 over 2,6 m thickness. In the prospect of Matallah, the uranium show of Tagneddest has also been recognized by drilling for the characterization of uranium mineralization in calcrêtes

Many anomalies in base metals (Sn, W, Cu, Pb, Zn) have been the subject of geological control in central Morocco (Bou Mimoune and Tafer-Tarmilat sectors) where the analysis results showed Sn contents up to 3% in quartz veins and has outlined a set of alluvial tin concentrations in the northern part of the Oulmès granite where a preliminary resource evaluation provides 200 000 t at 361 ppm Sn. In the area of Bou Mimoune, the analytical results of sampling conducted near the Tifoughaline show gave grades reaching 3% Zn and 1% Pb. Geological work also concerned the Cu-Ni shows in the Central High Atlas and the results of chemical analysis are on going.

For industrial rocks and minerals, very interesting areas were defined in the provinces of Sidi Kacem and Taza for fibrous clays and in the province of Meknes for feldspar and kaolin. A drilling program totaling 610 meters, will be achieved over these three projects during the first half of 2012.

Development of Onhym’s partners portfolio by the signing of new agreements.

Confirmation of the interest of the precious metals projects of Glibat Lafhouda, Twihinate Drag Al Farnan and Lamlaga.

01 Precious metals

Glibat Lafhouda (Nb, Ta, REE, U, Fe)

Drag - Al Farnan (Nb, Ta, U, Fe)

On the prospect of Glibat Lafhouda (Awserd province) which had been the subject of detailed geological survey, a ground magnetic and gravity survey, and 2 drilling campaigns totaling 1882m conducted in 2007-2008, the resources are estimated at 49 million tons at 0,4% Nb2O5, 265 ppm Ta2O5, 510 ppm U3O8, 35% Fe2O3 and 0,24% LREE (Eu + Ce + La + Sm + Nd + Pr). Valorization tests of the ore from this project will be done in the framework of cooperation between Onhym and the “Bureau de Recherches Géologiques et Minières” (BRGM, France). A preliminary sampling for mineralogical study was carried out during this year.

On the Drag Al Farnan prospect located at 90 km WSW of Awserd, exploration continued during the first half of 2011 by the realization of 162m of drilling for the completion of the campaign started in 2010 with 8 holes totaling 532,2m. This work was carried out following the encouraging results of the first campaign conducted in late 2009 and early 2010, bringing the overall length of drilling for this project to 1133,5m.

Preliminary results of the first three drill holes confirm those of the first campaign. Thus, the grades vary between 0,13 and 0,55% Nb2O5, 132 and 553ppm Ta2O5, 131 and 1230 ppm U3O8 with a thickness varying between 10 and 75m. Preliminary resource estimation will be performed upon receipt of all results on this project which appears as important as Glibat Lafhouda.

Twirga-Amwaga (Pd, Pt, Au)On the Twirga Amwaga project, the research continued by detailed lithogeochemical sampling. Preliminary results of chemical analysis confirmed the presence of traces of platinum and palladium in feldspathic and ferruginous orthogneiss with grades up to 63 ppb Pd and 80 ppb Pt, and in microdolerites with grades up to 38 ppb Pd and 87 ppb Pt. This sampling was conducted with the geological mapping at 1/5000 realized on an area of about 10 km² bringing the total mapped area on this objective to 20km².

Twihinate (Nb, U, REE, Fe, Au)On the Twihinate project (Awserd province), the results from the two drilling campaigns showed grades from 29 to 54% Fe2O3; 2100 to 3600 ppm Nb2O5 and 150 to 650 ppm U3O8 over a thickness range from 29 to 58m.

A third drilling campaign totaling 1600m is in progress, two holes totaling 298m were completed.

The investigation continued on the peripheral ring by geological control of Mo soil anomalies, by the collection of 111 samples, this work allowed identification of some structures where grades can reach 4100 ppm Mo with gold indication (200 ppb). A geological mapping at 1/5000 was conducted on the Laknouk structure with preliminary sampling that showed 1,5 ppm Au in a quartz structure. 203 samples were collected; preliminary results confirm the presence of gold with grades ranging between 1 and 8,5 ppm in quartz structures of plurimetric thickness with a hectometric extension.

A detailed geological survey with sampling was performed on this show. Similar to the project of Glibat Lafhouda, valorization tests of the ore from this project will be done in the framework of cooperation between Onhym and BRGM.

Lamlaga (Nb, U, REE, Fe, Au)

The Lamlaga project (Awserd province) was recognized in late 2009 by 3 drill holes that showed average grades of 0,57% Nb2O5, 0,77% LREE, 132 ppm U3O8 and 44,70 % Fe2O3 over a thickness of 21m in iron oxides and average grades of 0,29% Nb2O5, 0,59% LREE, 129 ppm U3O8 and 16,79% Fe2O3 on a thickness of 90 in the silica breccias.

A second campaign of 6 diamond drill holes totaling 943m has been completed on this prospect; the preliminary results confirm the data from the first campaign with average grades of 0,65% LREE, 0,29% Nb2O5, 137 ppm U3O8 on an average thickness of 90m.

A third campaign of 8 diamond drill holes totaling 1592,8m has been performed, all these holes intersected the targeted structures.

On the other hand, exploration continued around the peripheral ring of Lamlaga for the geological control of Mo anomalies and research for the lateral extension and on the surface of the molybdenum zone crossed by the drill hole LMS9 (0,1% MoS2 over 60 m or 0,18% MoS2 over 17m).

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Assif Mqourn (Au)

Khzama (Au, Ag, Pt)

In the Assif Mqourn sector, located 120 km NE of Tiznit, geological control of soil anomalies by lithogeochemical profiles, geophysics and by trenches, revealed two gold structures oriented respectively N115° and N130°. The trenches carried on the first structure revealed grades ranging from 1 to 8,7 g/t Au over a metric thickness. The trench made on the SW part of the second structure showed grades that vary between 0,2 and 1,5 g/t Au over 6m. To recognize the down-dip of these structures, a drilling program totaling 500 m is in progress, 413,4 m drilling were performed at 31-12-2011. The targeted structures were intercepted at depths varying between 20 and 50m vertically. The cores are currently being sampled for chemical analysis.

In the Khzama Project, located in the Sirwa massif (Ouarzazate province), the work done allowed identifying gold mineralization in ferruginous greywackes injected by quartz veins and veinlets. The majority of the analyzed samples showed gold grades ranging from 0,1 to 12 g/t Au.

In the area of Asdremt, gold mineralization is associated with ferruginous quartz veins that cross greywackes which were also marked by a ferruginous alteration and / or intense silicification. 274 samples were collected and analyzed. On all of these samples 28 show grades ranging from 0,1 to 0,5 g/t Au and two with grades of 2,4 and 3,4 g/t Au, 26 present copper grades from 0,1% to 1% Cu, 80 show grades ranging between 200 and 800 g/t Cu and 40 have molybdenum contents between 100 and 1112 g/t Mo.

Drill holes conducted in 2010 in the area of Asdremt were sampled and analyzed in the first quarter of 2011. All drill holes crossed the targeted structures; the results are low (rarely 0,1 g/t Au).

Taghdoute (Au, Ag, Cu, Pb, Zn)

In the area of Taghdoute located 90 km west of Ouarzazate in the northern part of the Taznakht inlier, the work done consisted of a ground control of hyperspectral anomalies, particularly the main anomaly known as Taghdoute anomaly. This large anomaly covers the belt comprising quartzites and carbonates allocated to Upper Precambrian II. Spectrometric prospection allowed sampling the western part of this anomaly following North-South profiles. The first results of the mineralogical identification allowed confirming and clarifying those of the airborne hyperspectral campaign, with chloritization in the South and epidotization then alunitisation to the north. The samples analyzed for Au, Ag, Cu, Pb, Zn, Mo and As showed low grades.

In the drill hole KZS3, there are anomalous zinc grades; among 80 samples, 35 have higher grades of Zn between 400 and 2700 ppm.

02 General Research (Precious Metals)

South Zone (RG-SZS)

As part of the general research for precious metals, detailed soil geochemistry survey has been performed in the Matallah region (Awsred province) over an area of 208 km² with collection of 1596 samples. Meanwhile, geological control of Pt-Pd anomalies continued by sampling of structures, which allowed identification of indication grades up to 103 ppb Pt. In order to better define these structures and because a great part of the terrain is hidden by Quaternary formations, profiles of detailed soil geochemistry have been carried out with a spacing of 100m between the profiles and a sampling interval of 50m.

Trenches were also performed on the anomalous zones with detailed sampling. In total, 335 samples were collected. Preliminary results have delineated indication grades of Pt, Pd in the Tidrarine sector which has also been mapped at 1/5000 scale over an area of 50 km².

Tichka Est (Au)

In the Tichka-Est project, located 140 km south of Marrakech, the investigations consisted on geological control of geochemistry alluvial anomalous points in gold. Sampling concerned quartz structures underlying grinding zones corresponding to regional faults or local faults with brecciated quartz rich in limonite and ankerite and structures outlined by basic and acidic dykes showing locally a grinding and an intense silicification. All these structures affect the Middle and Lower Cambrian formations. The drill survey programmed on the Analghi gold structures with grades reaching 33 g/t Au was postponed because of access problems.

Anti-Atlas (RG-SAA)

The general research in Anti-Atlas concerned the carbonate formations located about twenty kilometers SE of Tiznit.The copper-silver structure of Sidi Belghzal that showed grades reaching 9% Pb, 156 g/t Ag, 5,3% Cu and 0,6 g/t Au, has been the subject of a geophysical survey by resistivity / induced polarization method in order to check its lateral and vertical extension. The survey covered an area of 0,25 km² following seven profiles of 500m in length each. The results show the presence of a conductor axis which coincides more or less with the structure mapped on the surface. This axis, clearly bounded to the east, extends about 400m.

The sections show that in profiles that pass at the top of the hill, the conductor is narrow and deep. On the other side, on profiles located in the lower part, the conductor is relatively wide and shallow. This suggests that the structure is limited to the upper level of the hill.

Moreover, the observed values of apparent chargeability are low (24mV/V) and show no presence of concentration of polarizable elements. The low contrast marked by a decrease in chargeability in the conductor could be due to alteration of metallic elements caused by the circulation of water in the structure.

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03 Base metals

Achmmach «Kasbah Resources Ltd.» (Sn)

The Achmmach tin deposit (Province of El Hajeb), located NE of the Central Hercynian Massif, 50 km south of Meknes, was transfered to the Australian company Kasbah Resources as part of the agreement granting an exclusive option to purchase. Kasbah is still continuing the feasibility study for the project.During this year, 51 drill holes totaling 17,609 m have been performed. Five rigs are currently operational at the site to increase the resources of the deposit and also to upgrade areas Resource model from inferred to the indicated category. The drilling intersected the three mineralized systems identified up to now.

The upper system, located above the main system, about 150m deep, shows interesting intersections with grades ranging from 1,5 to 2,2% Sn on thicknesses that vary between 5 and 9m. The results at the main system confirm its potential to extend beyond 1km. The latest drill holes tested a gap of about 350m extension, immediately east of the central sector, less explored in previous drilling programs. One of the drill holes (AD100) has shown exceptional results, 14,2 m at 3,2% Sn, including 7m at 5,4% Sn. The shallow drilling program to define areas of potential open pit in the northern zone of the deposit has continued and the results are encouraging.Moreover, the feasibility study of the project continues and will be completed in the last quarter of 2012.

Bled Jemaa (Pb, Au, Ag, Zn)In Jemâa Bled (Khénifra Province), located in central Morocco about 1,5 km SW of Moulay Bou Azza, 5 diamond drill holes totaling 730,10 m were achieved in 2010 as part of a second campaign to increase the resources of this deposit. A resource assessment, based on the results of the two drilling campaigns, defined 336,301 tonnes at 2,99 ppm Au, 0,82% Pb, 0,49% Zn and 21,1 ppm Ag (variant 1) or 514 708 tonnes at 2,21 ppm Au, 0,60% Pb, 0,40% Zn and 15,7 ppm Ag (variant 2). In addition, the drill hole BJ.11, performed on a parallel structure, intersected 5,2 m of a quartz vein with massive sulfides (pyrite, galena, arsenopyrite, ..) with average grades of 2,44% Pb, 2,02% Zn, 2,64% As, 44ppm Ag, 813ppm Sn and 0,56 ppm Au.

This vein was also intersected in down dip by the drill hole BJ.5 during the first phase with a thickness of 1,60 m at 3,45% Pb, 3,46% Zn and 56 g/t Ag. Its resource evaluation defined 167,110 tonnes at 4,09% Pb, 1,75% Zn, 84,4 ppm Ag and 0,55 ppm Au over an average thickness of 3m. The project is on promotion.

Tafer Tarmilat (Sn, W)

The Tafer El Haj project (Khemisset province) located about 150 km SE of Rabat is hosted by Paleozoic shales, west of the old tin mine of El Karit. The quartz veins have generally NE-SW orientation with decimetric thickness and show cassiterite as inclusions in quartz. Initial results show grades reaching 3% Sn in quartz veins. The planned drillings for 2011 has not been completed as the permits covering this prospect has been farmed out to Silica Minerals Company. The alluvial and eluvial deposited in the northern part of the Oulmès granite spread over tens of hectares in the form of granitic sand containing fragments of cassiterite and quartz pebbles resulting from quartz veins in the granite. The works done has delineated tin placers where a preliminary resource assessment defined 200,000t at 361 g/t Sn with an average thickness of 0,82 m. Other similar concentrations could be delineated in the region.

Bou Mimoune (Sn, W)

In the area of Bou Mimoune (Khenifra Province), located in central Morocco, 20 km NW of Aguelmous, control of Pb-Zn geochemical anomalies continued in the northern part of the Ment granite by geological mapping and sampling within the potential areas. Inventoried veins, often with iron oxides, are generally lenticular and only one vein presents a continuing extension over 30m with a metric thickness. The veins, orientated NW to NE are hosted by Namurian sandstone-pelitic schists. 31 samples were collected from different veins for chemical analysis and the results showed grades reaching 3% Zn and 1% Pb, close to the Tifoughaline shows. In addition, sampling of other quartz structures gave indication contents of Pb and Zn, rarely exceeding 1000 ppm.

Zone Sud Uranium (U, Fe, Cu)

The exploration for uranium In the Southern Zone (Awserd Province) continued in the region of Bir Anzarane about 100 km NW Awserd. Geological control of spectrometric anomalies allowed highlighting the presence of radioactive calcrêtes with carnotite (up to 2800 c / s) in the region of Arkayz (Al Faj topographic sheet), an area about 10 km², sometimes associated with gypsum and calcite. Otherwise, geological work carried out on the topographic sheets of Mzayzat and Al Faj allowed identification of carnotite in calcrêtes which represent the source of airborne spectrometric anomalies. High radioactivity has also been recorded outside the Proterozoic block of Awserd in the eastern part of Laayoune-Dakhla basin.It is represented by altered and silicified sandstones of the Cretaceous where the radioactivity reached 5000 c/s or by silicified subtabular conglomerates, attributed to Tertiary where the radioactivity exceeded by location 3000 c/s.

In radioactive tabular sandstones of the Cretaceous which outcrop over a large area, a sample with a radioactivity of about 5000 c/s gave 1100 ppm U3O8. Radioactive conglomerates meanwhile showed values of radioactivity reaching 3000 c/s and the preliminary results provided grades ranging between 100 and 480 ppm U3O

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Aghracha (U, REE)

In the prospect of Aghracha (Awserd Province), located 100 km NW Awserd, a drilling program totaling 789,5 m, including 31 short drill holes (349,2 m) that was conducted to identify the extensions of uranium mineralization associated with calcrêtes and 5 holes (440,3 m) to recognize the radioactive carbonatites with uranium and rare earth elements. The uranium mineralization intersected by these drill hole, occurs in the form of carnotite in calcrêtes as well as in the orthogneiss basement at depths ranging between 0,5 and 14,6 m.

The first results of the drill holes conducted in the calcrêtes show grades reaching 371ppm U3O8 over 2,6 m thickness.In addition, radiometric prospecting was completed in the area of Atteha and continued in the area of Awhifrite where high radioactive anomalies were observed both in calcrêtes and in pegmatites. A sample from the pegmatites provided REE content of 16,5% and 1352 ppm U3O8. Other chemical analysis are pending.

Tassent (Cu, Ni)Matallah (Cu, Ni, Fe, U)

Tassent sector (Beni Mellal province) is located in the Central High Atlas about 18 km northwest of Imilchil and contains three copper-nickel shows. On Cascade and Anefgou shows, troctolitic gabbros with sulfide inclusions (pyrite, pyrrhotite, pentlandite and chalcopyrite) were mapped and sampled following lithogeochemical profiles for the research of Cu-Ni mineralization related to basic intrusions.

Along the northern contact of the intrusion with Jurassic limestones, a grinding zone with NE direction and an average thichness of 1m, was followed over 150m. The filling is composed by a breccias impregnated with iron oxides and copper (malachite). A total of 32 samples were collected for chemical analysis and the results are pending.

In the area of Matallah (Awserd Province), located about 250 km SSE of Dakhla, the work focused on geological and radiometric control of Taguendest anomaly, evidenced by the presence of carnotite in calcrêtes. The main uranium mineralization shows an EW direction, an extension of more than 5 km and an average width of 200m.

A radiometric prospection by the radiometer RS125 combined with sampling in small pits of 0,5 to 1 m depth, showed grades up to 320 ppm uranium. 17 diamond drill holes totaling 173,90 m were subsequently realized and intersected the calcrêtes with thicknesses up to 4m. Traces of carnotite have been identified in several drill holes with radioactivity exceeding 2000 c/s. The analytical results of these drill holes are ongoing.

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Tertiary basins «Onhym-Tolsa» (Bentonite)

Bouissafen (Zircon)

General research for base metals concerned the copper-molybdenum shows of Figri, Isk Imoula and Tamgherd n’Isli, located in the SW part of the Tichka granite, about 50 kilometers NE of Taroudant. A compilation and synthesis of previous works was conducted to assess the current state of knowledge on this sector. In the Figri show, molybdenite mineralization is located in garnet and pyroxene skarn and in metavolcanics. At Tamguerd n’Isli, mineralization of molybdenite and chalcopyrite are located at the hanging wall of the limestones in a horizon extending approximately 900 m in north-south direction. Geological works in this area are planned in order to explore and evaluate its mineral potential, especially in copper and molybdenum.

In the Tertiary basins (Nador Province), the work done as part of the agreement with TOLSA for bentonite research, consisted of geological mapping at 1/5000 and sampling in areas of Oued Oumassine and Ouled Mansour. Levels of bentonite with a thickness of about 3m were located in the area of Ouled Mansour, located about twenty kilometers west of Nador. 70 samples were collected of which 50 will be analyzed in TOLSA laboratories in Madrid.

In the Bouissafen zircon deposit (Guelmim Province), the work done under the preliminary agreement with the French company SANC, consisted essentially of sampling the zircon sands. 57 samples were collected by SANC and were sent to laboratories in China, France and Onhym to conduct chemical analysis, technology testing and semi-industrial tests.

Meanwhile, a topographic survey of all sampling points was carried out over an area of 3,46 km². SANC has raised the call option on the project and the assignment contract is being negotiated.

04 General Research (Base Metals)

05 Industrial rocks and minerals

Ad Doukat (fibrous clay)

In the area of Ad Doukat, located in the province of Guercif, 60 km south of Nador, the work done for the research of fibrous clays consisted of geological mapping at 1/25 000 and at 1/2000, and the collection of 45 samples in attapulgite horizons for chemical analysis and X-ray identification.

This work done allowed locating layers of absorbent clays with a thickness of about 3 m, which will be recognized by a diamond drilling campaign during the first quarter of 2012.

Jbel Zerhoun ((Feldspaths, kaolin)

The work performed for the research of feldspar and kaolin in Jbel Zerhoun (Meknes province), consisted of geological mapping at 1/1000 and detailed geological cross-sections at 1/400 with the sampling for chemical analysis and X-ray identification.The X-ray identification shows a more or less constant composition: kaolinite, quartz, muscovite, orthoclase, smectite and/or dolomite. Chemical analysis show encouraging results for silica, kaolin and feldspar. A campaign of drilling (210m) is planned during the first half of 2012.

General research for industrial rocks and minerals concerned the Oum Dba and Tisfourine sebkhas in Laayoune province for the research of lithium. The work consisted of carrying out 21 small pits, with depths ranging between 0,45 and 1,50 m. The sampling involved both brines and layers of salt and clays; 11 brine samples and 36 rock samples were collected.

The lithium grades do not exceed 2,7 mg/l in the brine of sebkha Oum Dba and 2,89 mg/l in the brine of sebkha Tisfourine. These grades are very low compared to those of the deposits (salars) in operation worldwide as Uyoni Bolivia (420 mg/l), Atacama in Chile (1800 mg/l) and Hombre Muerto in Argentina (744 mg/l).

06 General Research (Industrial rocks and minerals)

Mining Research2011 Projects

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CertificationMining Laboratories have successfully performed the transition from ISO 9001 version 2000 to version 2008. They are certified in accordance with the new reference ISO 9001 version 2008. Similarly and as part of the improvement process and management mode, the laboratories were equipped with LIMS (Laboratory Management Information System).

Renewal of the Certification of Mine laboratories in accordance with the new reference ISO 9001 version 2008.

Mineralogy Sample preparation

Petrographic and mineralogical studies

During this year, 211 thin sections, 21 polished blades, 26 polished sections were made up and 27 artificial alluvial concentrates were prepared. For a total of 285 samples.

Studies have concerned 115 samples that are divided into 88 petrographic studies and 27 mineralogical studies of alluvial and artificial concentrates.

These studies concerned mainly samples from Onhym’s own projects, particularly from projects of rare earths, uranium and precious metals.

07 Mining Laboratories Activity

Mineral processingThe number of samples prepared for chemical analysis during 2011 totaled 14 017.

In total, 29 days of flotation tests with the pilot circuit of the laboratories have been performed for certain subsidiaries of Managem: flotation of lead from cyanide discharge of Imiter, flotation of gold from a cobalt ore, flotation of copper sulfide from a sample of Bouskour, flotation of copper sulfide from a sample of Oumjerane and flotation of oxidized copper from two samples of Jbel Laasel.

Mineral chemistryThe number of determinations carried out in the Inorganic Chemistry Department during 2011 totaled 82 357. These determinations concerned 8951 samples.

09 Mining partenership & cooperation

The activity related to mining partnership and cooperation during this year was markedby the signature of :

•• 2 assignment contracts• 6 exploration agreements• 4 MOU• 2 framework agreements for cooperation• 3 lease contracts• 4 amendments

01 Assignment contracts

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02 Exploration agreements

03 Memorandums of understanding

04 Framework agreements of cooperation

05 Lease contracts

06 Amendments

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Following the launch on 21/03/2011, of the restricted tender for the preselection of investors for the total or partial transfer of the Zgounder Silver deposit, the evaluation commission instituted for the purpose of evaluation of the received bids has decided at its meeting of 08/09/2011 to accept the tender of the Canadian Company Maya Gold & Silver for the acquisition of this deposit and its facilities.

Launch on 25/04/2011, of the tender for the preselection of investors for the total transfer of the Awinate diatomite deposit. By the deadline for submission of bids set for June 17th, 2011, no offer has been delivered to Onhym.

Launch on 20/5/2011, of the international tender for the preselection of investors for the transfer of 85% of the polymetallic deposit of Boumadine.

The evaluation commission instituted for the purpose of evaluation of bids has decided at its meeting of 01/11/2011 to accept the tender of the Canadian Company Maya Gold & Silver to acquire 85% of this deposit.

Zgoundersilverdeposit

The Awinate diatomite deposit

Polymetallic deposit of Boumadine

07 International Tenders

The activity of mining drilling during fiscal year 2011 concerned mostly the projects located in the southern provinces, namely Drag El Farnane, Lamlaga, Aghracha, Matallah and Twihinate.

The volume of drilling recorded a slight decrease compared to that of 2010 with a total achievement amount of 3558,20 m against 3975,90 m achieved last year.

During 2011, Mining Drilling teams have operated over 6 sites for Onhym own projects. The details of the worksites are given by the following table :

10 Minning drilling

01 Achievements

Minning drilling

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11 Activity of the subsidiaries & portfolio income

02 Portfolio income 2004-2011

01 Activities of the subsidiaries

12 Information system

The implementation of the Managerial Plan of Information System (MPIS) has continued in accordance with the updating of the planning and the re-adjustment of the priorities for the year 2010.

The flagship projects for setting up the information system were approved : HGIS : Hydrocarbon GIS project IMS : Integrated Management Software ISHR : Information Systems of Human Resources LIMS : Laboratory Integrated Management System

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Information system projects have enhanced the tools of geo-scientific processing and data interpretation for mining and hydrocarbon domains. They also helped to establish the necessary infrastructure for the exploitation of the information system.

The outcomes from the MPIS projects are to better control the documentation and a positive and significant impact on quality of service provided to both internal and external users. The process of providing technical data to partners has improved considerably and mastered; partners are served in a short time thanks to the transfer of data in digital format.

To better evaluate in terms of timeline the managerial plan of Information system (MPIS), two audits were conducted to review of the MPIS program, and to implement an action plan to reinforce Heritage and security of the Information system.

Projects of data loading, scanning and archiving of mining and petroleum documents are either closed or in progress or being launched :

Petroleum documents (second project in progress) Mining documents and partners (closed) Geophysical data (second project in progress) Subsidiaries document and of management (2 projects in progress)

Scanning and transcript•

With the implementation of the Managerial Plan of Information System, tools for processing and interpretation of mining and hydrocarbon data have been strengthened, facilitating the control of the documentary heritage and ensuring a good quality of service to internal and externel users.

• Acquisition of mining data (closed)

• Upgrading the mining documentation (being launched)

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13 Humain resources & Training

By the end of 2011, the workforce was 827 employees including 176 engineers and executives, 389 supervisory agents, 13 employees and 249 workers. The ratios of advisory remained confined to 21%, due to lack of sufficient recruitment from year to year. The objective of 30% in the medium term cannot be achieved only if the objectives set under the triennial plan for recruitment are not followed by the approval of the annual framework law provided for that purpose.

Elaboration of a draft staff regulation by agreement with social partners.

The overall work-force of the office, after a regular decrease from 2001 to 2007, under the combined effect of the retirements and the operation of voluntary departures, saw a kind of stagnation from 2007 to 2009, and resumed a decreasing trend from 2009 to 2011, due to the very limited recruitment and mass retirements.

The 2011 framework law was limited to the recruitment of 20 positions; 14 engineers and executives, and 6 supervisory agents. The recruitment of 12 engineers and executives and 6 supervisory agents was realized. Concerning the recorded departures for this year, there are 96 of which: 52 retired – 3 resignations - 5 deaths and 36 voluntary departures under the operation in 2011.

01 Staff

Evolution of the staff number 2001-2011

15711538

Regarding the human resource management, Onhym is pursuing a sustained program of training for all staff covering all disciplines and as part of an integrated vision of its strategy for development of human capital. Concerning the consolidation of organizational foundations, acquisition and deployment of HRIS modules covering all human resources processes and staff training related to it, were recently completed. An intranet service on several management actions has been made available to internal employees.

Concerning the social aspect, staff received a special allowance to enable him to have a decent pension. On improving the work environment, a committee on health and safety has been established.

Establishment of a special allowance for the Onhym staff to ensure him a decent pension.

Establishment health and safety committee for the improvement of the work environment.

02 Consolidation actions of organizational foundations

03 Social activities

Key indicatorsThe training activity recorded :•

The realization of 122 actions as continuous short-term training, totaling 1880 MDT (men days training)

The registration of 34 Onhym staff in English courses, under the terms of the Onhym-Amideast contract. These courses totaled 445 MDT carried out in 3 sessions

The continuation of actions as long-term training (8 including 4 abroad) for 800 MDT

04 Training

• The Organization and the supervision of 350 trainees from different educational institutions, including 45% of students from institutions of higher education (schools, faculties, ins-titutes...)

• The preparation of files for granting scholarships for 339 children of Onhym agents

Domain of para-training

During this year, a new impetus was given to communica-tion with the launch of «Culture, Cohesion and adhesion» which was conducted in the form of managerial mornings, workshops, team building and evolutionary circles. These actions have concerned all categories of staff.

05 Communication

Completion of the complementary pension files from MCMA (transfer of the exceptional bonus granted to staff in this purpose)

Cultural Activities for Children : 150 children of employees were registered for the 2010-2011 year and benefit from a multitude of activities; language courses, computer, chess practice, music, civil education, designing and sewing, manual work, educational excursions and associative ac-tions. The recruitment of one temporary English teacher and one plastic artist will reinforce the center’s activities

Housing loans

Summering centers

Holiday camps : 251 children have benefited from holiday camps in Ben Smim and Tetouan

Pilgrimage : 14 agents were supported by the Office to accomplish the pilgrimage in the Holy Places of Islam

Medical assistance : 196 medical visits and 3092 take overs for hospitalization, biological analyses and radiogra-phies were granted

Collective medical care : 1430systematic medical care on worksites : 77systematic medical care to children in holiday camps : 48

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