state of the market exploration report edition 1 2013

7/29/2019 State of the Market Exploration Report Edition 1 2013

1/17

Edition 1, 2013

State of the Market:Exploration Report

Comprehensive examination of recent exploration activities

and trends, plus the outlook for the next quarter


2/17

02State of the Market: Exploration ReportEdition 1, 2013

Drillers Log 03Feasibility Studies 04

Capital Raising for Exploration 06

Exploration Hot Spots 07

Exploration Results 11

Assay Share Price Alert 15

Contents

STATE OF THE MARKET: EXPLORATION REPORT

Report is published by

IntierraRMG Pty Ltd

IntierraRMG

Abbey House, 5th Floor

74-76 St John Street

London, EC1M 4DZ

Tel: +44 (0)20 7780 7470

Website: www.intierraRMG.com

Contact

Chris Hinde

Editorial Director

Email: [email protected]

Kelly Chan

Marketing Manager

Email: [email protected]

CONTRIBUTORS

Stuart Ferguson

Narelle Gardiner

Chris Hinde

Glen Jones

Greg Kay

Richard Murphy

Peter Rossdeutscher

Jeremy Thompson

This report is supplied on a condential basis for the subscriber's use only. The contents must not be disclosed to third parties and it must not

be copied in whole or in part without the prior written permission of IntierraRMG Pty Limited. Photocopying and electronic forwarding prohibited.

Copyright 2013 IntierraRMG.
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Copper prices (US$/t)

Coal prices* (US$/t)Iron ore prices* (US$/t)

Gold prices (US$/oz)

Jan 2011 Dec 2012

80

90

100

110

120

130

140

150 * Australian thermal coal,(12,000btu/lb, under 1% sulphur, 14% ash,

FOB Newcastle/Port Kembla)

* 62% Fe CIF China

Jan 2011 Dec 20121,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

Jan 2011 Dec 20126,800

7,300

7,800

8,3008,800

9,300

9,800

10,300

Jan 2011 Dec 2012

100

110120

130

140

150

160

170

180


Drillers Log

There is light at the end of the tunnel, at last, for the beleagueredexploration sector but it is far from a beacon

Funds raised for mineral exploration in thethree months to end-December registered awelcome improvement compared with the direSeptember quarter. Moreover, financings bythe exploration (junior) companies themselvesalso saw growth during the latest period.

The upturn in funding for exploration, and by thejuniors, will be welcomed throughout the miningsector, and comes just in time for the Prospectorsand Developers Association of Canada (PDAC)conference in Toronto at the start of March.

Financing for exploration reached US$1.49billion in the quarter just ended, compared withonly US$0.65 billion in the three months to end-

September. The Toronto Stock Exchange (TSE) wasthe largest source of exploration funds for thequarter (US$586 million) followed by the AustralianStock Exchange (ASX; US$519 million) and the TSX-Venture Exchange (US$319 million); all measured interms of the primary exchanges for each financing.

There are caveats, however, and although wehave surely now passed the worst, the scenario forexploration companies remains extremely difficult.

There are almost 3,500 listed companies inthe international mining industry, and the sectorhad a combined market capitalisation of justover US$2,500 billion at the end of the December

quarter. The top 681 companies (those that eachhad a year-end market capitalisation of over US$100million), accounted for 98% of the industry's overallmarket capitalisation, and 84% of the combinedfinancing during the December quarter.

However, the majority of the companies inthe industry are extremely small. At the end of

December 2012, IntierraRMG estimated that therewere 1,756 companies (ie about half of the total)with a market capitalisation of under US$10million. There were a further 817 companies(almost one-quarter of the total) with a year-endmarket capitalisation of US$10-49 million.

The companies that represented the smallest 50% ofthe industry, raised less than 3% of the total financingin the past quarter, equivalent to just US$102,000 foreach company. With funding scarce, many of thesesmaller companies remain in a period of dormancy asthey ride out the current weakness in debt and equitymarkets. The situation remains especially difficultfor those with little prospect of early cash flow.

Even those companies with metals productionhave been battered by investors' perceptionsof disappointing revenue as metals prices fall,narrowing margins as costs continue to rise,and rising operating risk as social tension rise.

As companies went into the December quarter,cash holdings had fallen to under a combinedUS$2.0 billion for those companies with a marketcapitalisation of under US$10 million. The just over1,000 companies that have a market capitalisationof US$10-100 million had combined cash holdingsat the end of September 2012 of some US$7.3billion. This was dwarfed, however, by the US$252

billion held in cash by the largest companies.With the lacklustre commodity prices, valuations forthe smaller companies have remained depressed. This,in turn, has made it difficult to finance projects byraising equity through public offerings. With their largecash holdings; we expect bids from the majors for someof the struggling juniors that have attractive projects.


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State of the Market Reports

Each quarterly issue includes:

www.intierraRMG.com

FinanceMiningExploration

Market for Mining Exploration Hot Spots

Mergers and Acquisitions Exploration Results

Mining Finance Assay Highlights

Product Updates Special Features

The State of the Market Reports detail the state and outlook of the mining industry focusing on data-driven trends in

exploration, metals production, mining and finance. The report series provides data and opinion on the closed quarter,

plus forward views on the upcoming period. Contributors include Professor Magnus Ericsson and Dr. Chris Hinde.

Upcoming Special Features

Overview of the mining industry in 2012

Mining royalties and taxation Special Coverage: Cash cost data

Mid-year examination of the worlds metals stockpiles

Mining methods, and technology developments and trends

Metal prices, grade and tonnage predictions for 2014

State of the Market: Mining and Finance Report

State of the Market: Exploration Report

This quarterly report focuses specifically on exploration activities and

trends for the previous and upcoming quarters. It includes data and opinion

on exploration hot spots, drilling activity trends and exploration financing.

Each quarterly issue includes:

Drillers Log

Feasibility Studies

Capital Raising for Exploration

Exploration Hot Spots and Results

Assay Share Price Alert

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5/17


NUMbER OF NEw DEvELOPMENT PROjECTS

Fesibility Studies

Fesibility studies nnounced during qurter re perhps the best indictorof the helth of the explortion sector; nd the jury is out

The exploration scene across the international miningindustry is, at best, mixed. In the three monthsto end-December (Q4), compared with the year-ago equivalent (Q4; 2011), the life-of-mine (LOM)capital expenditure collapsed at feasibility studies*announced for projects in North America (US$12.73billion to US$3.84 billion; see graph on p5). Incontrast, the LOM capex soared at feasibility studiesfor projects in Asia; from only US$907 million ayear ago to US$6.93 billion in the latest quarter.

*In this regard, the graphs on p5 include pre- andbankable- feasibility studies, but do not incorporatepreliminary economic assessments or scoping studies.

These figures are reflected in the anticipated

net present value (NPV) for the announcedfeasibility studies (at a discount rate of 8%);see illustration. (Note that exchange rates are takenat the date of the individual announcements.)

One year ago, North American projects dominatedthese global valuations US$10.17 billion in Q4 2011),but now there is little to choose between the valueof projects in Africa, Asia, Europe and North America(all US$2.7-3.4 billion in Q4). The poor relationsin the quarter just ended are Australasia (US$1.15billion) and South America (only US$429 million).

In the qualifying algorithm for the number ofnew development projects, IntierraRMG has only

considered those studies where both a NPV anda capital-cost estimate has been given (this is alimiting factor, especially for projects in SouthAmerica). Under these rules, there were 26 new global

feasibility studies announced during the Decemberquarter (with Africa leading the way with nineprojects), compared with 21 in the year-ago quarter(with North America accounting for ten projects).

In terms of capex and value, Asian projectshave featured strongly in each of the pasttwo quarters, with each three-month periodbeing skewed by the announcement of avery significant single feasibility study.

In late August, Newcrest announced the results ofa pre-feasibility study (PFS) on the Golpu deposit,located in Papua New Guinea's Morobe Province.The announcement included a new ore reserveestimate for the deposit containing 12.4Moz of gold

and 5.4Mt copper (an increase of 11.0Moz gold and4.7Mt copper, compared with the previous estimate).

The PFS estimated total capital expenditurefor the life of the project to be in excess ofUS$9.8 billion, spread across over 32 years,with a capital cost of nearly US$5 billion to getto first production (estimated to be in 2019).

Another copper-gold project in PNG is FriedaRiver, and on Christmas Eve a project-updatefeasibility study was delivered. Key findings includeda LOM average output of 204,000t/y copper and305,000oz/y gold, and capex of US$5.6 billion,based on a 50-60Mt/y plant and a 1.29:1 strip

ratio. Further discussions are anticipated this yearbetween Frieda River Joint Venture Participants andthe government to determine equity ownership,partnering, permitting and development.

0

2

4

6

8

10

12

DECEMBER Q MARCH Q JUNE Q SEPTEMBER Q DECEMBER Q

2011 2012

NORTH AMERICA AFRICA AUSTRALASIA ASIA EUROPE SOUTH AMERICA


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LOM CAPEX by LOCATION

PROPOSED NPv by LOCATION

$14B

$12B

$10B

$8B

$6B

$4B

$2B

$0

AFRICA ASIA AUSTRALASIA EUROPE NORTH AMERICA SOUTH AMERICA

2011 - December Q 2012 - March Q 2012 - June Q 2012 - September Q 2012 - December Q

$12B

$10B

$8B

$6B

$4B

$2B

$0

AFRICA ASIA AUSTRALASIA EUROPE NORTH AMERICA SOUTH AMERICA

2011 - December Q 2012 - March Q 2012 - June Q 2012 - September Q 2012 - December Q


7/17


Cpitl Rising for Explortion

The qurter just ended sw very similr explortion finncing compred with yer go, but the composition of the funding hs chnged drmticlly

The amount of money raised for exploration inthe quarter to end-December was US$1.49 billion,very similar to the amount raised in the finalperiod of 2011. However, the contribution fromthe Toronto Stock Exchange (TSE) has almostdoubled to US$586 million (39% of the total) toovertake the contribution from the AustralianStock Exchange (US$519 million, compared withUS$638 million in the year-ago quarter).

The past quarter represented a significantimprovement on the previous two quarters.Only US$645 million was raised for explorationin the September quarter, and US$559 millionin the June quarter (with the ASX and TSX-

Venture Exchange, in Vancouver, dominatingboth periods); see illustration below.

If 'unspecified' destinations for the explorationfinancing are excluded (US$314 million in theDecember quarter), three regions dominated thegeographical focus in the last three months ofthe year; Africa (US$381 million), Australasia(US$364 million) and North America (US$314million). This brought the total amount raisedfor exploration in 2012 to US$3,956 million.

Fund-raising on the TSE for exploration wasdominated in the past quarter by the float ofIvanplats Ltd, which has the near-term objective

of developing two projects in the DemocraticRepublic of Congo (DRC) and one project in SouthAfrica. Over 60 million common shares wereissued, raising in excess of US$300 million.

Ivanplats is focussed on Africa, and its activityduring the past quarter is also what caused the Africanspike in the illustration below. The company is focusedon exploration and development of major copper,platinum, palladium, gold, nickel and zinc projects.

The higher ASX fund-raising for explorationin the December quarter, compared with thepreceding periods, was reflected in higherexploration expenditure in Australia.

A couple of major financings contributed

significantly to this overall picture. Focus Minerals,a leading Australian gold producer and explorer,completed a placement to Shandong Gold, issuingover 4 million new fully-paid ordinary shares (raisingsome US$225 million). As the company indicated atthe time, this funding will allow Focus to acceleratedevelopment of its significant land-holdingsacross two Australian gold producing regions.

A smaller, but still significant, financing wasthe next step in the fast developing Sirius story.The company issued 22 million new fully-paidordinary shares (allotted and issued in lateDecember), raising over US$44 million.

EXPLORATION CAP RAISING by REGION

EXPLORATION CAP RAISING by EXCHANGE

$0

$100

$200

$300

$400

$500

$600

$700

ASX TSX TSE London (AIM) Other NYSE

Millions

2011 - DECEMBER Q 2012 - MARCH Q 2012 - JUNE Q 2012 - SEPTEMBER Q 2012 - DECEMBER Q

$0

$50$100

$150

$200

$250

$300

$350

$400

$450

$500

AFRICA ASIA AUSTRALA SIA EUROPE NORTH AMERICA SOUTH AMERICA UNSPECIFIED

Millions

2011 - DECEMBER Q 2012 - MARCH Q 2012 - JUNE Q 2012 - SEPTEMBER Q 2012 - DECEMBER Q


8/17


Explortion Hot Spots

There is hope, t lst, for the mining sector despite new low in explortion ctivity

Last months exploration activity representedthe lowest monthly total since February 2010,and meant that the number of drilling reportshas fallen for three consecutive months.

According to IntierraRMGs on-line database,IntierraLive, there were drilling reports from a total of356 prospects in December 2012 (this total includesreports from more than one drilling prospect perproject), compared with 675 in December 2011.

There has been a particular slump in drilling atgold prospects, with only 155 being reported inDecember, compared with the recent peak of 493in November 2011; see chart on p10. (Note that thesum of the three one-month amounts in any quarter

will be considerably greater than the consolidatedthree-monthly project total shown in the drillingactivity tables, because of multiple reports of drillingfrom the same prospect during the period.)

The slump in drilling reports over the pastfew months left the total for calendar 2012 wellbehind the number recorded in 2011, but stillwell ahead of the industrys nadir in 2010.

GOLD DOMINaTESAs normal, the search for gold dominated thereports of drilling activity during the quarter toend-December, with a total of 702 prospects

(1,111 in the final quarter of 2011). The nextmost significant exploration targets (in terms ofindividual drilling prospects) were copper (238),silver (174) and zinc (72); see tables on this page.

Canada led the way in the gold sector, with192 prospects reporting drilling activity, followedby 114 in Australia and 52 in the US. However,these numbers are dramatically lower thanthe year-ago period, when the figures were279, 218 and 88, respectively, for the threecountries. Indeed, drilling activity for gold inthe whole of North and Central America hasfallen from 443 in the final three months of2011 to just 299 in the quarter just ended.

The next most important region for gold-drilling activity in the December quarter wasAustralasia (with reports from 116 projects),followed by Africa (108) and South America (88).Nevertheless, Australasia has seen a particularlysharp decline in gold exploration, with drillingreports falling 47% since the year-ago quarter.

Australia remains the leading explorationdestination for copper, with 64 prospectsreporting drilling activity during the quarterjust ended. This total is sharply lower, however,than the year ago figure (94), and leaves thecountry only just ahead of Canada (60 in the

December quarter, and 66 a year ago).Copper exploration has also fallen sharply inthe US, with just 18 prospects reporting drillingduring the final quarter of 2012, comparedwith 29 reports in the year-ago period.

Zinc Dec Q 2012 Sep Q 2012 Dec Q 2011

Canada 23 14 24

Australia 15 27 22

USA 6 5 9

Mexico 5 8 17

Brazil

N&C America 37 29 50

S. America 6 15 9

Europe 4 7 7

Africa 5 2 3

Asia 5 9 7

Australasia 15 27 22

TSX/TSX-V* 44 39 52

ASX* 21 35 37London* 2 4 3

TOTAL 72 89 98

* Primary listing of issuing company

Copper Dec Q 2012 Sep Q 2012 Dec Q 2011

Canada 60 50 66

Australia 64 83 94

USA 18 17 29

Mexico 7 8 16

Brazil 2 4 7

N&C America 90 83 113

S. America 28 31 36

Europe 10 21 10

Africa 33 31 23

Asia 13 28 40


TSX/TSX-V* 127 140 151

ASX* 103 128 147

London* 4 2 4

TOTAL 238 277 316


Lead Dec Q 2012 Sep Q 2012 Dec Q 2011

Canada 17 10 16

Australia 11 17 14

USA 4 3 6

Mexico 5 7 19

Brazil

N&C America 26 20 41S. America 1 9 9

Europe 2 4 5

Africa 3 2 1

Asia 5 9 5


TSX/TSX-V* 27 31 44

ASX* 17 23 24

London* 3 3 3

TOTAL 48 61 75


QUARTERLy DRILLING REPORTS (Indiidual Prospects)


9/17


Silver Dec Q 2012 Sep Q 2012 Dec Q 2011

Canada 39 31 56

Australia 18 23 22

USA 21 25 26

Mexico 47 48 67

Brazil

N&C America 112 110 151

S. America 24 56 55

Europe 2 10 8

Africa 5 14 9

Asia 13 15 16


TSX/TSX-V* 115 151 172

ASX* 28 40 49

London* 15 15 15

TOTAL 174 228 261


Gold Dec Q 2012 Sep Q 2012 Dec Q 2011

Canada 192 198 279

Australia 114 209 218

USA 52 72 88

Mexico 42 44 60

Brazil 23 21 32

N&C America 299 328 443

S. America 88 109 129

Europe 37 49 35

Africa 108 158 178

Asia 54 57 106


TSX/TSX-V* 422 511 615

ASX* 203 313 346

London* 47 43 57

TOTAL 702 911 1,111


Nevertheless, North and Central America againled the way in the search for the metal, with atotal of 90 reports during the quarter (113 a yearago), compared with 64 (94) in Australasia,33 (23) in Africa and 28 (36) in South America.

These targets are illustrated geographicallyin the Activity Map opposite.

Measuring the drilling reports in terms ofthe primary-listing location of the companymaking the announcement, it is clear thatCanadian companies are in the ascendancy.

Companies listed on the Toronto Stock Exchange(TSX) and TSX-Venture Exchange (together theTMX) accounted for 53% of the 238 copper reports

Explortion Hot Spots

continued

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View data on lease/project types and changes in status/activityInterrogate layers in context

Monitor acquisition targets for future pegging opportunities

Latest drill results and discoveries

Initial reserves estimates

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Commodity and geography trend analysis

Reserves replacement strategies

Tens of thousands of feasibility documents

www.intierraRMG.comContact: [email protected]

First Quantum uses IntierraLive as its primary research tool in evaluating acquisition opportunities. First Quantum hassuccessfully identified and subsequently purchased two outstanding projects with a value in excess of US$700M.

If we didnt have IntierraLive we would need another full time employee for evaluating new business opportunities.

Mike Christine, Exploration Director


10/17


ACTIvITy MAP (Decemer Quarter; 2012)

Operational Development Exploration

in the quarter just ended, and 60% of the 702gold-drilling reports. Companies listed on theAustralian Stock Exchange (ASX) accountedfor 43% of the copper, and 29% of the gold,reports. Companies listed on the London StockExchange and AIM (together abbreviated hereas LSE) hardly featured for either metal.

For copper, the year-ago proportions were48% and 47% for TMX and ASX, respectively,and 55% and 31% for gold drilling.

TMX-listed companies also dominated the drillingreports for lead, silver and zinc; see tables on p7-8.

SLUMP IN REPORTED RESOURCES

Not surprisingly, the decline in drilling announcementsduring the past three months had a knock-oneffect on the announcement of mineral resourcesand ore reserves (see tables on p12).

Contained gold in mineral resources announcedduring the December quarter were little changed fromthe September quarter at 79.4Moz. This represents aslump, however, compared with the year-ago period,when announced resources contained 232.4Moz.

The shortfall in gold resources came mainly in theUS (down from 35.0Moz to 6.9Moz) and in Canada

(42.5Moz to 20.8Moz). Together with a shortfallin Mexico, this meant announced gold resourcesin North and Central America had fallen two-thirdsbetween the December quarters of 2011 and 2012.

There was a similar slump in announcedgold reserves, which fell to 15.7Moz (containedmetal) in the quarter just ended, compared with78.2Moz a year ago. The damage was caused bymassive reductions in the Americas and Africa.

The picture was scarcely any better for copper.Resources reported in the December quartercontained just 22.3Mt, comparing favourablywith 16.7Mt in the September quarter but welldown on the 107.4Mt reported a year ago.

The reporting of new copper resourcescollapsed across the globe, with the containedmetal in South American falling from 63.1Mta year ago to 12.5Mt in the period just ended.

Copper reserves were little changed from theprevious quarter (5.2Mt, compared with 6.2Mt inthe September quarter) but were dramatically lowerthan a year ago (35.2Mt). Most of the damage wasfrom exploration projects in South America.

There was a similar story for other metals.


11/17


GLObAL DRILLING ACTIvITy


12/17


TOP-RANKED ASSAyS (Decemer quarter; grade x intersection)

COPPER Company Project HoleGrade

(%)Intersection

(m)Depth

(m) Project Location

1 OZ Minerals Ltd Carrapateena DD12CAR090W1 0.90 1,492.0 609.0 65km E Woomera (Australia)

2 Blackthorn Resources Ltd Kitumba KITDD_005 3.02 220.0 206.0 180km WNW Lusaka (Zambia)

3 Atico Mining Corp El Roble ATDHR-17 5.41 88.7 71.8 75km SW Medellin (Colombia)

4 Africo Resources Ltd Kalukundi BH ANTD006 5.29 80.7 25.8 30km ENE Kolwezi (Congo DR)

5 Intrepid Mines Ltd Tumpangpitu Sulphide GTD-12-350 0.68 568.9 498.0 209km SE Surabaya (Indonesia)

6 CuDeco Ltd Rocklands Group NVB018 7.45 47.0 165.0 17km WNW Cloncurry (Australia)

7 Pilot Gold Inc TV Tower (Kucukdag) KCD056 6.96 46.7 102.7 20km SE anakkale (Turkey)

8 Reservoir Minerals Inc Brestovac-Metovnica (Chukaru) FMTC 1217 3.17 100.0 584.0 5km S Bor (Serbia)

9 NovaCopper Inc Bornite (South Reef Zone) DDH RC12-0216 4.45 55.7 671.0 65km ENE Ambler (US)

10 Peel Mining Ltd Mallee Bull MBDD009 3.48 69.0 533.0 105km SSE Cobar (Australia)

GOLD Company Project Hole

Grade

(g/t)

Intersection

(m)

Depth

(m) Project Location1 Pilot Gold Inc TV Tower (Kucukdag target) KCD-50 193.0 12.0 117.5 20km SE anakkale (Turkey)

2 ABM Resources NL Old Pirate (Golden Hind prospect) GHRC100014 44.0 42.0 0.0 625km NW Alice Springs (Australia)

3 Golden Rim Resources Ltd Balogo (Netiana) BDH012 111.0 13.0 56.0 105km S Ouagadougou (Burkina Faso)

4 Northquest Ltd Pistol Bay (Vickers) PB-12-22 8.2 156.5 87.0 60km SSW Rankin Inlet (Canada)

5 Gran Colombia Gold Corp Marmato MT-1500 1.6 618.1 394.0 85km S Medellin (Colombia)

6 Pretium Resources Inc Brucejack (Valley of the Kings) SU-584 187.0 4.7 135.8 240km N Prince Rupert (Canada)

7 Atna Resources Ltd Pinson PRC-12-006 47.4 18.3 1.5 42km ENE Winnemucca (US)

8 Unity Mining Ltd Henty (Read zone) Z18553 269.0 3.1 105.7 30km N Queenstown (Australia)

9 Centerra Gold Inc Kumtor (SB zone) D1653 7.7 109.3 494.1 180km SSE Almaty (Kyrgyzstan)

10 Bralorne Gold Mines Ltd Bralorne-Pioneer UB12-015 386.0 2.1 163.7 74km N Whistler (Canada)

LEAD Company Project HoleGrade

(%)Intersection

(m)Depth


1 Eurasian Minerals Inc Balya (Hastanetepe) DB-81 13.80 18.0 33.0 28km WNW Balikesir (Turkey)

2 El Nino Ventures Inc Murray Brook MB-2012-138 4.58 45.4 179.6 56km WSW Bathurst (Canada)3 Buchans Minerals Corp Lundberg-Engine House H-12-3475 1.34 134.8 59.5 15k E Buchans (Canada)

4 US Silver & Gold Inc Galena (Lead Zone) DH49-196 17.40 6.4 78.6 2km W Wallace (US)

5 Rathdowney Resources Ltd Olza OLZ-147 3.88 27.3 134.4 Near Zawiercie (Poland)

6 Balamara Resources Ltd Brskovo DH3-12 3.63 28.0 111.0 70km NNE Podgorica (Montenegro)

7 Silvercorp Metals Inc Ying/SGX (S7-1) ZK07AS7-103 41.50 2.2 203.6 120km SW Luoyang (China)

8 Golden Tag Resources Ltd San Diego SD-12-50W 0.55 152.7 818.8 50km SSW Torreon (Mexico)

9 MacPhersons Resources Ltd Nimbus East NBRC216 4.70 17.0 205.0 20km ESE Kalgoorlie (Australia)

10 Red Metal Ltd Maronan MRN12003B 4.79 15.9 1,228.0 155km ESE Mt Isa (Australia)

SILVER Company Project HoleGrade(g/t)

Intersection(m)

Depth(m) Project Location

1 Sierra Metals Inc Promontorio (Cuerpo Oriente) B509 753.0 48.9 376.5 20km SSE Cuauhtemoc (Mexico)

2 Tahoe Resources Inc Escobal (East) 375 490.0 70.5 699.0 44km ESE Guatemala City (Guatemala)

3 Investigator Resources Ltd Peterlumbo PPDH023 2,591.0 10.0 165.0 165km W Port Augusta (Australia)


5 Brixton Metals Corp Thorn THN12-83 165.0 150.5 24.0 98km ENE Juneau (Canada)

6 Silver Standard Resources Inc Pirquitas (Cortaderas Breccia) DDH-250 206.0 120.8 76.0 207km NW San Salvador de Jujuy (Argentina)

7 GoGold Resources Inc San Diego (Chispa De Oro) GGS-056 87.0 194.3 31.2 110km SW Durango (Mexico)

8 Hecla Mining Co Greens Creek (South West Bench) GC3364 603.0 22.3 0.0 28km SW Juneau (US)

9 Focus Ventures Ltd El Reventon (Reventon Breccia) RC-08-8 71.3 155.4 13.7 55km NE Cosala (Mexico)

10 Hochschild Mining plc Arcata (Alexia) DDH400-S-12 984.0 9.3 0.0 75km NNW Cabanaconde (Peru)

ZINC Company Project HoleGrade

(%)Intersection

(m)Depth


1 Silver Standard Resources Inc Pirquitas (Cortaderas Breccia) DDH-250 5.0 120.8 76.0 207km NW San Salvador de Jujuy (Argentina)

2 Silver Bull Resources Inc Sierra Mojada (Shallow Silver Zone) T12116 13.9 40.4 0.0 190km N Gmez Palacio (Mexico)


4 Buchans Minerals Corp Lundberg-Engine House H-12-3475 3.1 134.8 59.5 15km E Buchans (Canada)

5 El Nino Ventures Inc Murray Brook MB-2012-138 8.5 45.4 179.6 56km WSW Bathurst (Canada)

6 Venturex Resources Ltd Sulphur Springs (copper/zinc mine) SSR002 19.4 11.0 174.0 112km SSE Port Hedland (Australia)

7 Golden Tag Resources Ltd San Diego SD-12-50W 1.4 152.7 818.8 50km SSW Torreon (Mexico)

8 Hecla Mining Co Greens Creek (South West Bench) GC3451 10.7 16.8 0.0 28km SW Juneau (US)

9 Cazaly Resources Ltd Mt Angelo North HCRC0005 2.8 62.0 24.0 35km WSW Halls Creek (Australia)

10 Imperial Metals Corp Ruddock Creek (V zone) RD-12-V38 24.0 6.4 175.3 100km NNW Revelstoke (Canada)

Explortion Results

Summry of the best ssy results during the pst qurter, nd new resources/reserves


13/17


Despite the sharp reduction in drilling activity (as reported)during the quarter just ended, there have been someremarkable intersections during the past few months.

The ten top-ranked assays are shown in the tableon p11 for each of five metals (simply measuredby taking the average grade multiplied by theintersection length, and taking no account of depth).

Top of the ranking for the copper assays during theDecember quarter was a drill hole on OZ MineralsCarrapateena project in Australia, which returned 0.90%Cu over 1,492m (at a depth of 609m). In second place

was an assay at Blackthorn Resources Kitumba projectin Zambia which yielded 3.02% Cu over 220m (at 206m).Ranked third was an 89m intersection grading 5.41%Cu at Atico Minings El Roble project in Colombia.

The top gold intersection during the Decemberquarter was Pilot Golds 193g/t, over 12m (at a depthof almost 118m) on its TV Tower project in Turkey (fora grade-intersection value of 2,316m.g/t). In secondplace during the quarter (but noteworthy because theintersection was from surface) was 44g/t over 42mat ABM Resources Old Pirate project in Australia.

QUARTERLy REvIEw OF RESERvES / RESOURCES ANNOUNCEMENTS

GOLD RESOURCES (oz; contained metal) GOLD RESERVES (oz; contained metal)

Dec Q 2012 Sep Q 2012 Dec Q 2011 Dec Q 2012 Sep Q 2012 Dec Q 2011

Canada 20,811,907 16,972,667 42,486,655 Canada 5,751,064 7,161,921 5,508,473

Australia 9,040,018 3,549,161 10,850,697 Australia 2,451,408 225,951 1,812,461

USA 6,918,025 3,463,209 34,990,622 USA 664,142 24,557,733

Mexico 106,346 316,357 5,950,056 Mexico 4,142,319 478,032

Brazil 8,080,381 4,732,025 8,036,141 Brazil 2,370,125 855,155 2,051,849

N&C America 28,875,291 21,378,822 84,217,187 N&C America 7,882,047 12,075,160 33,241,378

S. America 21,612,522 9,340,498 35,515,569 S. America 2,370,125 1,706,712 19,929,943

Europe 9,619,509 9,148,874 16,790,636 Europe 2,288,185 3,193,644

Africa 4,272,516 18,037,167 49,498,731 Africa 1,192,458 2,988,933 15,084,165

Asia 5,994,715 16,574,851 33,784,548 Asia 1,769,402 14,566,693 4,952,385

Australasia 9,040,018 3,549,161 12,552,027 Australasia 2,451,408 225,951 1,812,461

TOTAL 79,414,571 78,029,373 232,358,698 TOTAL 15,665,440 33,851,634 78,213,976

SILVER RESOURCES (oz; contained metal) SILVER RESERVES (oz; contained metal)


Canada 59,960,804 45,326,851 86,131,090 Canada 52,063,691 1,919,488

Australia 37,421,986 9,672,896 148,594,985 Australia 1,077,214 1,907,375 2,263,412

USA 41,424,856 82,496,983 456,390,869 USA 17,574,792 105,952,706

Mexico 37,160,251 379,747,649 446,601,438 Mexico 387,150,783 45,002,369 44,776,110

Brazil 263,293 Brazil

N&C America 139,809,216 514,125,635 1,016,688,374 N&C America 465,968,234 62,577,161 179,565,248

S. America 113,629,100 62,203,594 525,615,929 S. America 8,240,753 145,811,332

Europe 32,965,357 17,327,272 274,108,874 Europe 9,976,485 4,794,340

Africa 33,808,951 16,798,475 16,236,029 Africa 752,649 5,462,092

Asia 12,120,759 86,132,977 189,699,267 Asia 1,458,459 52,534,110

Australasia 37,421,986 9,672,896 148,594,985 Australasia 1,077,214 1,907,375 2,263,412

TOTAL 369,755,369 706,260,849 2,170,943,458 TOTAL 469,256,556 88,163,866 384,968,442

Explortion Results

continued


14/17


COPPER RESOURCES (t; contained metal) COPPER RESERVES (t; contained metal)


Canada 344,842 358,759 5,633,152 Canada 2,541,972 943 1,548,578

Australia 225,986 1,754,448 2,991,735 Australia 40,488 49,406 445,271

USA 381,974 5,927,462 2,085,063 USA 109,864 698,208 358,809

Mexico 1,090,298 4,832,905 Mexico 65,592

Brazil 319,752 236,138 Brazil 444,449 75,787

N&C America 726,816 7,510,007 12,694,538 N&C America 5,172,326 786,847 2,422,510

S. America 12,545,239 1,263,608 63,097,753 S. America 670,049 23,168,430

Europe 811,350 87,027 1,984,578 Europe

Africa 4,933,456 737,029 14,210,886 Africa 26,000 83,200 1,631,417

Asia 3,024,759 5,334,250 12,393,819 Asia 4,657,200 7,517,888

Australasia 225,986 1,754,448 2,991,735 Australasia 40,488 49,406 445,271

TOTAL 22,267,606 16,686,369 107,373,309 TOTAL 5,238,814 6,246,702 35,185,516


15/17


Some of the intersections announced during thepast quarter had a significant effect on the shareprice of the project owners (see list below). Ten-

day share-price gains of over 60% were recordedby Newera Resources and Greenpower Energyfor their projects at Shanagan Uul and Mirboo,respectively. A further eight companies saw theirshare prices appreciate by more than 25% in theten days following a drilling announcement.

Indicative of the mooted exploration activity(and markets) in the final weeks of the year, onlyone of the 28 instances of share prices risingover 12% (measured ten days after an explorationannouncement) was in December. There were 17 suchshare-price rises in October and 10 in November.Indeed, even this one exploration share-price spikein December was by Newera, which had set the

quarters record price gain during the previous

month. Despite a share-price retreat between thetwo drilling reports, Neweras share price doubled;demonstrating the abiding appeal of junior stocks.

PROGNOSIS

So, what do the statistics in this report signal?Even allowing for the skewing effect of a few large

exploration results, the numbers are clearly awful.But they do not tell the whole picture. There hasbeen a significant increase recently in funds raisedfor exploration, which suggests that drilling activitymight start rising again in the months ahead.

As noted on p3, the funds raised by explorationcompanies rose sharply in the quarter to end-December, reaching over US$3.4 billion. Thiscontrasts with the paltry US$1.8 billion raised byexploration companies in the September quarter and

is 19% better than the final three months of 2011.

ZINC RESOURCES (t; contained metal) ZINC RESERVES (t; contained metal)


Canada 336,111 969,705 7,543,713 Canada

Australia 108,800 3,451 2,591,072 Australia 66,091 77,600

USA 20,059 668,954 817,240 USA 60,735

Mexico 76,360 2,121,228 1,203,944 Mexico 806,254 30,460

Brazil Brazil

N&C America 432,530 3,759,887 9,564,897 N&C America 806,254 107,703

S. America 27,942 445,421 2,106,765 S. America

Europe 1,978,940 214,246 898,035 Europe 32,420

Africa 2,106,290 591,939 316,124 Africa 579,600

Asia 335,003 25,203 779,889 Asia 35,649

Australasia 108,800 3,451 2,591,072 Australasia 66,091 77,600

TOTAL 4,989,505 5,040,147 16,256,782 TOTAL 872,345 579,600 253,372


16/17


IMPACT OF DRILLING RESULTS ON SHARE PRICES (Decemer Quarter)

SHARE PRICE (US$)

COMPANY NAME PROPERTY PRESS RELEASE FROM TO* GAIN (%)

Newera Resources Ltd Shanagan Uul East November 0.021 0.035 66.7

Greenpower Energy Ltd Mirboo October 0.040 0.064 60.0

Aguia Resources Ltd Tres Estradas November 0.130 0.180 38.5

Indico Resources Ltd Maria Reyna October 0.180 0.240 33.3

Newera Resources Ltd Shanagan Uul East December 0.030 0.039 30.0

Cockatoo Coal Ltd Baralaba October 0.140 0.180 28.6

Marmota Energy Ltd Angel Wing October 0.072 0.090 25.0

Stellar Resources Ltd Heemskirk October 0.080 0.100 25.0

Foyson Resources Ltd New Britain November 0.008 0.010 25.0

Merah Resources Ltd Lawlers October 0.200 0.250 25.0

St George Mining Ltd East Laverton October 0.250 0.310 24.0

Navarre Minerals Ltd Bendigo North October 0.130 0.160 23.1

Atrum Coal NL Groundhog October 0.180 0.220 22.2

Hannans Reward Ltd Pahtohavare November 0.015 0.018 20.0

International Goldfields Ltd Latin October 0.027 0.032 18.5

Talga Resources Ltd Nunasvaara October 0.300 0.355 18.3

Blackthorn Resources Ltd Kitumba October 1.100 1.285 16.8

Kalgoorlie Mining Co Bullant October 0.006 0.007 16.7

Haranga Resources Ltd Bayantsogt November 0.155 0.180 16.1

Eagle Hill Exploration Corp Windfall Lake November 0.125 0.145 16.0

Monax Mining Ltd Punt Hill October 0.048 0.055 14.6

Northern Minerals Ltd Browns Range October 0.210 0.240 14.3

Shaw River Manganese Ltd Otjozondu November 0.014 0.016 14.3

Sirius Resources NL Nova October 2.180 2.480 13.8

Emmerson Resources Ltd Orlando November 0.120 0.135 12.5

International Goldfields Ltd Latin November 0.024 0.027 12.5

Latin Resources Ltd Mariela October 0.160 0.180 12.5

Eagle Hill Exploration Corp Windfall Lake November 0.125 0.140 12.0

Sirius Resources NL Nova October 2.180 2.430 11.5

* Share price ten days following assay announcement

assy Shre-Price alert

Mny of the drill intersections nnounced during the pstqurter hd significnt shre-price impct


17/17

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