gold and base metals exploration in eritrea

AFRICA RESOURCESINVESTMENT CONGRESS

IRONMONGERS’ HALL, CITY OF LONDON ● TUESDAY, 12 JUNE 2012

www.ObjectiveCapitalConferences.comJune 2012 Andiamo update

Gold and base metals exploration in EritreaTim Williams – Chairman, Andiamo Exploration

June 2012 Andiamo update 2

Andiamo Exploration Limited

Base Metals and Gold in EritreaInvestor Update June 2012

ELEPHANT COUNTRYHaykota – April 2012Photo: Seife

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DisclaimerThis presentation (the “Presentation”), which has been prepared by Andiamo Exploration Limited (the “Company”), is confidential and is being provided to a limited number of recipients solely for their information and June not be copied, published, reproduced or redistributed in whole or in part to any person at any time, or used for any other purpose, without the prior written consent of the Company. The Presentation has not been independently verified and the information contained in it is subject to updating, completion, revision, verification and further amendment. The Presentation does not purport to contain all information that a prospective investor June require.This Presentation does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to subscribe for or purchase, any securities of the Company, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, or act as any inducement to enter into, any contract or commitment whatsoever with respect to any such securities. This Presentation has not been approved by an authorised person pursuant to section 21 of the Financial Services and Markets Act 2000 (“FSMA”) and accordingly, in the United Kingdom, it is issued and only made available to, and directed at (a) persons who are investment professionals falling within the scope of Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); (b) high net worth entities and other persons to whom it June otherwise lawfully be communicated falling within the scope of Article 49 of the Order; and (c) any other person to whom this communication June otherwise lawfully be communicated or caused to be communicated (all such persons in (a) to (c) together being referred to as “relevant persons”). Any investment or investment activity to which the Presentation relates is available only to relevant persons or will be engaged in only with such persons, and persons who do not have professional experience in matters relating to investments, and persons of any other description, should not rely or act upon it. The communication of this Presentation to any other person in the United Kingdom other than relevant persons is unauthorised and June contravene FSMA.The information in this Presentation was obtained from various sources. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information and opinions (whether written or oral) contained in the Presentation. The information contained in this Presentation is for the recipient’s information regarding the Company and is for discussion purposes only. Accordingly, neither the Company nor any of its shareholders, directors, officers, managers, agents, employees or advisors take any responsibility for, or will accept any liability, whether direct or indirect, express or implied, contractual, tortuous, statutory or otherwise, in respect of, the accuracy of completeness of the information herein or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation.This Presentation should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, managers, agents, employees or advisors. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumption and each recipient should satisfy itself in relation to such matters.No securities commission or other similar regulatory authority has reviewed or passed on the merits of this Presentation and any representation of the contrary is an offence. This Presentation is not, and under no circumstances is to be interpreted as, a prospectus (whether under section 87A of FSMA, or otherwise), public information, solicitation or advertisement for the sale or trade of securities, and has not been approved by or filed with the UK Financial Services Authority.Nothing in this disclaimer shall be effective to limit or exclude any liability which by law cannot be limited or excluded.

3June 2012 Andiamo update3

• Highly experienced management, in Eritrea over 17 years• Raised over US$8 million in 2010/2011• 723 square km land position with demonstrated potential for both:

– copper/gold Volcanogenic Massive Sulphide (VMS) – gold in shear zone systems

• Andiamo discovered the Yacob Dewar VMS in early 2011 - 55km SW of Nevsun’s newly commissioned Bisha VMS Mine.

• Yacob Dewar hosts a gold bearing oxide cap.• Extensive airborne and ground geophysics; geochemistry; mapping

– 1st phase diamond drilling 4,000m – very encouraging results– 2nd phase Reverse Circulation 4,000m -to test oxide gold cap at Yacob Dewar– 3rd phase diamond drill program 4,000m - to test deeper copper/gold

sulphides and reconnaissance drilling for gold shear zones. Assays expected during June 2012.

June 2012 Andiamo update4

Andiamo – a Private Company exploring in Eritrea

William Fisher P.Geo Chairman, non-executive Successful exploration executive with 30 years experience. Chairman of GoldQuest Mining Corporation.

Previously Chairman of Aurelian Resources, acquired in 2008 by Kinross Gold for $1.2 billion. Previously CEO of Globe Star Mining (which built a mine in the Dominican Republic) and Vice-President Exploration of Boliden (a major base metal mining company).

Dr Tim Williams CEOMining Geologist with a strong financial background. Thirty years previous experience in the mining industry in

both major mining companies including De Beers, JCI and Gencor, and in juniors including Golden Star and MDN Inc. Previous mining finance background in James Capel, Lehman Brothers and Ernst & Young. Operated in Eritrea since 1995

Dr Seife Berhe Country Manager: Resident in EritreaGeologist, extensive knowledge of Eritrean geology and its mineral deposits. Author of several substantial

references on Eritrean crustal evolution. Specialist in remote sensing applications for identification of economic mineralisation. Founder and manager of Global Resources, an environmental consultancy in Asmara, Eritrea.

Mark Parker Non-executive DirectorSuccessful and experienced mining exploration geologist and executive: the founder and previously Managing

Director of African Eagle, an AIM-listed company that has made a major base metal discovery in Tanzania, East Africa and has several exploration and development projects in Africa.

Dr Stephen Francavilla Chief Financial OfficerChartered Accountant, with background in corporate finance and conduct of financial transactions. Experience

of taking companies to IPO both in Canada and in the UK. PhD in Geology.

Andiamo Management

Andiamo updateJune 2012 5

• Formed February 2008• Granted Haykota Exploration Licence in Eritrea July 2009• Initially supported entirely by two founders, Tim Williams and Seife Berhe• Raised c. $4million July 2010 at $0.50• Raised c. $3.5million July 2011 at $1.00• Approximately 25 million shares currently in issue (fully diluted basis)• Cash in treasury c.$1.0million• Fully compliant with historic spending commitments• Audit of 3-year Annual Financial Statements mid 2012• NI 43-101 compliant reporting as standard


Andiamo – History of a Private Company

• E X P L O R A T I O N L T D •

Eritrea Mineral Licences and Applications (March 2012)

HAYKOTAExplorationLicence

June 2012 7 Andiamo update

• 723 square kilometres granted July 2009• First renewal due July 2012 – drop 25%• Second renewal due July 2013 – drop further 25%• Subsequent annual renewals so long as satisfactory work continues• Exclusive right to apply for Mining Licence(s) in the residual area• Minimum annual expenditures (already exceeded)

• State retains 10% free carry• State June purchase further 30% participating interest on agreed terms• Capital gain is taxed as income, plus 4% transfer tax• Royalties: gold up to 5%, base metals up to 3.5%• Income Tax 38%


Haykota Exploration Licence – Eritrea

November 2011 9

The Haykota area targets :

* VMS with gold caps * lode gold

Good Infrastructure:

* Water* People* Sealed road* Communications

June 2012 9

Haykota License on southern extension of the Bisha VMS belt and the newly identified Shambotei gold trend


June 2012 10

Geophysics and interpretation programs have led to numerous targets being identified

Magnetics VTEM

November 2011 Andiamo update 11

Haykota Target areas (March 2012)

+/- 2

2 km

sTar Road. Asmara →

Gash River


Haykota Licence – multiple targets (June 2012)

Target Type Stage

Yakob Dewar Oxide gold 2 Aircore discovery holes. Diamond core drilled – 32 holes58 reverse circulation holes complete, assays arriving

Yakob Dewar Sulphides Disseminated sulphides located with core drilling: 4 x 250m deep core drillholes underway

Ber Gebay Oxide & Sulphide Gossan assayed: source not yet locatedIP program to identify conducting and chargeable mineralisation

Adi Meriray Sulphides Outcrop gossan. Disseminated sulphides exposed in road cut.8 diamond core holes complete - waiting assays

Shekeret/Berkele Oxide gold Strong geochemical gold anomaly6 diamond core holes completed – waiting assays

Shambotei/Jawkerai Shear hosted gold Extensive artisan activity6 diamond core holes complete – waiting assays

Hoba VMS Coincident geophysical anomalies and gossans.Core holes being sited - road to be built into the area

Carbonate Hills Skarn Marbles invaded by quartz veining

Geophysical anomalies Mostly VMS North East and South of licence area.Field confirmation required

• VMS target• Gold bearing oxide cap• Extensive disseminated sulphides• Gold and copper values in oxide cap• 2010 2 short aircore holes• 2011 32 diamond drill holes• 2012 58 reverse circulation holes • 2012 3 diamond drill holes to 250m

– to test deeper potential sulphides– Expect assays in June 2012

• 2012 Continuing ground geophysics (IP and mag)• 2012/3? Infill and step-out R/C programs suggested


Target: Yacob Dewar

Target: Yacob Dewar


Yakob Dewar aircore and 1st diamond core drillinghighlights

Hole Depth From

(m)

Intersection(m)

Au(g/t)

Ag(g/t)

Cu(%)

HYR-1 1.0 14.0 3.5 5 -

HYR-2 6.0 5.0 2.8 20 -

YDD-001 11.0 10.0 5.7 - -

YDD-002 5.0 16.2 5.0 33 -

YDD-005 0.4 18.4 3.4 5 -

YDD-008 45.0 2.9 5.4 12 -

YDD-014 37.5 5.0 4.0 19 -

YDD-018 218.5 2.5 0.2 48 1.3

YDD-019 117.0 3.0 1.4 61 2.7

YDD-022 17.5 13.0 - - 1.8

November 2011 Andiamo update

Reverse Circulation holesangled at 50 degrees to the East

Reverse Circulation drilling at Yakob Dewar 2012


Yakob Dewar Reverse Circulation drilling highlights E&OE

Hole Depth From (m)

Width(m)

Au(g/t)

Cu(%)

YDRC-04 53 6 1.10 0.51

YDRC-05 56 11 3.05 -

YDRC-06 10 29 2.01 -YDRC-07 59 4 - 1.14YDRC-08 12 2 - 1.86YDRC-09 49 31 - 0.62YDRC-10 20 20 0.51 -YDRC-15 6 35 - 0.59

YDRC-17 22 25 1.57 -YDRC-18 21 16 - 0.58YDRC-23 6 12 - 0.52

YDRC-24 9 3 - 0.54YDRC-25 19 3 - 0.59YDRC-32 39 6 1.16 -YDRC-33 6 25 7.32 -YDRC-45 23 52 0.86 -

June 2012 Andiamo update

Yacob Dewar Reverse Circulation drilling (June 2012)

Note: these are preliminary calculations

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Botryoidal malachite/chrysocolla (?) from Yakob Dewar 2012



June 2012

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Induced Polarisation (IP) targets sulphides for drilling

• VMS target• NE of Yakob Dewar about 5kms• Extensive disseminated sulphides• Gold and copper values in gossan• 2009 Ground gravity survey• 2010 Airborne geophysics • 2011 Geology mapping found gossan• 2012 8 diamond drill holes complete

– to test disseminate and deeper potential sulphides– expect assays in June 2012

• 2012 Continuing ground geophysics (IP and mag)


Target: Adi Mereray


Adi Meriray: diamond drilling now being logged

Gravityanomaly

VTEManomaly

Completeddrillholes

Surface contours

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November 2011 Andiamo update23

Adi Meriray – disseminated and massive sulphides

Oxidiseddisseminated

sulphides

Adi Meriray road cut for drill pads

Adi Meriray sulphides

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In Eritrea the VMS deposits are believed to be about 750-800 million years old


Adi Meriray

Drill core


Adi Meriray 8 core holes completed – assays pending

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• VMS target

• 2009 Ground gravity survey• 2010 Airborne geophysics • 2011 Geology mapping found several gossans• 2012 8 diamond drill holes planned

– to test disseminate and deeper potential sulphides

• 2012 Access road construction, and build drill padsGround geophysics, Stream sediment and outcrop samplingDiamond core drilling later in 2012


Target: Mount Hoba


MountHoba

Mount Hoba from Adi Meriray drilling Feb 2012


Gossan+/- 900m

Gravityanomaly

VTEManomaly

Proposeddrillholes

Integrated geophysics approach at Mt Hoba

• VMS and gold target• Local artisans producing gold• Large exhalative outcrop• Significant values from outcrop sampling• 2010 Airborne geophysics • 2011 Geology mapping found exhalative horizon• 2012 6 diamond drill holes complete

– to test extent of surface mineralisation– expect assays in June 2012

• 2012 Continuing ground geophysics (IP and mag)


Target: Shekeret and Berkele


Berkele/Shekeret

Geochemistry: Surface Sampling: Geology Mapping

• 6 Diamond core holes completed January 2012

• Core logging and splitting

• Assays expected June 2012

Yakob Dewar

Berkele/Shekeret

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Gold targets at Berkele and Shekeret

June 2012

Andiamo update 32

Drilling at Shekeret January 2012


• Lode and disseminated gold target• Extensive artisanal workings, both in valley and quartz veins• Gold values in outcrop sampling

• 2010 Airborne geophysics • 2012 Access across Gash River built

Roads constructed and drill pads built 6 diamond drill holes complete at Shambotei

• to test for vein hosted and disseminated gold values• expect assays in June 2012

Ground geophysics (IP and mag)Geology mapping


Target: Shambotei/Jawkerei

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GOLD

In EritreaThese shear hosted gold deposits

are believed to be about 500 million years old

November 2011 Andiamo update

Gold at Shambotei

Shambotei artisan valley

workings


Andiamo – Private CompanyAndiamo’s gold exploration program

Quartz vein workings

Valley workings

• Extensive artisanal workings producing gold led Andiamo to systematically begin the gold exploration program in mid 2011

• Surface sampling up to 15.5 g/t gold

•Sampling and airborne geophysics suggest large scale anomalies and structures over a 20 kms long belt; associated with artisanal workings

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Shambotei/Jawkerei alteration zone; and marbles

Jawkerei

Shambotei

Carbonates

Radiometricalterationsignature

Shambotei carbonates with quartz veining


Jawkerei valley artisan workings

– Geophysics• Ongoing interpretation integrating airborne and ground geophysics,• Further ground gravity surveys. • IP and ground magnetic teams operational

– Geochemistry• Soil sampling • Stream Sediment sampling• Surface sampling

– Mapping• Hoba anomalies and gossans being prepared for drilling• Target exhalites in NE to be mapped in detail over several kms• Detailed gold mapping program

– Drilling• 58 R/C holes for 4,400 m completed at Yakob Dewar for oxide mineralisation• 870m core drilling at Yakob Dewar and Z1A • Shekeret and Berkele drilled with 6 diamond core holes• Adi Meriray VMS – 6 diamond core holes completed• Shambotei Gold – roads built and 6 diamond core holes completed• Multiple further targets already identified

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Work Program Snapshot (June 2012)

41June 2012 Andiamo update

June 2012


Wax Chandlers Hall6 Gresham StreetLondon EC2V 7AD

Tel: +44 20 7600 1888

[email protected]@andiamoexploration.com

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