Mining Eye

Q2 2012

Ernst & Youngs Mining Eye index monitors the performance of AIM mining companies on a weekly basis and can be viewed at www.ey.com/uk/miningeye. Movements and analysis of the index are reported in this quarterly publication. Ernst & Young also produces a similar index for the oil and gas sector, which can be viewed at www.ey.com/uk/oilandgaseye. To receive copies of the MiningEye, please contact Olivia Russell on +44 (0)20 7951 5559 or email orussell@uk.ey.com. To receive copies of the Oiland GasEye, please contact Rebecca Hanifin on +44 (0)20 7951 6682 or email rhanifin@uk.ey.com.

Q2 2012: crisis of confidence

The Mining Eye index saw a dramatic 31% decline over a difficult Q2 2012 for the junior mining sector. Softening prices, escalating costs, resource nationalism and an increasingly uncertain economic outlook has impacted confidence in the mining industry across the board. This resulted in increased aversion to risk, which has limited the availability of capital to the higher risk junior sector. There were no IPOs, and a significant fall in equity fundraising on AIM to 96m the lowest quarterly amount since Q3 2004. Companies are responding to the financing challenges in various ways, including exploring options for fast-tracking production; pre-emptive risk mitigation; cost cutting; and fund raising through asset sales. With equity becoming an expensive and increasingly dilutive form of finance, companies are also continuing to pursue alternative forms and sources of funding, primarily through strategic partnerships. We anticipate a challenging remainder of the year for AIMs junior miners, but capital is there for the right projects. Lower equity valuations may drive acquisition activity, as the majors turn their focus from build to buy and seek synergistic acquisition opportunities.

The Mining Eye is written by: Emily Colborne +44 (0)121 535 2086 ecolborne@uk.ey.com

Escalating capital costs and softening prices are forcing mining and metals companies to rethink investment decisions. This may herald a shift in focus from build to buy. However, resource nationalism and macroeconomic issues are making decisions difficult. This is reflected by the steady decline in deal volume since 2010. Synergistic and one chance deals continue to be undertaken, while more speculative deals are being deferred. The majors are able to access capital, but remain focused on maintaining investment grade credit ratings, driving efficiency and reducing financing costs. This suggests that there is capacity in the market to support activity that best demonstrates attractive returns including M&A and returnof capital to shareholders. To read more and download your copy of the report, pleasego to www.ey.com/mining.

Q2 2012 Mining Eye in review

Chart 1. Mining Eye index and FTSE AIM All-Share index performance over Q2 2012
Source: Ernst & Young, Thomson Datastream

Chart 2. Mining Eye index and peers over Q2 2012

Source: Ernst & Young, Thomson Datastream

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FTSE AIM All-Share (rebased)

Mining Eye FTSE AIM Basic Resources (rebased) FTSE All Share Mining (rebased)

S&P/TSX Composite Metals & Mining (rebased) S&P/ASX 300 Metals & Mining (rebased)

Chart 3. Mining Eye index and FTSE AIM All-Share index performance, last 12 months
Source: Ernst & Young, Thomson Datastream

Chart 4. Mining Eye index and peers, last 12 months

Source: Ernst & Young, Thomson Datastream

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Mining Eye FTSE AIM Basic Resources (rebased) FTSE All Share Mining (rebased)

S&P/TSX Composite Metals & Mining (rebased) S&P/ASX 300 Metals & Mining (rebased)

Ernst & Young Mining & Metals Mining Eye Q2 2012

25 Jun 12

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2012 is proving to be an incredibly tough year for financing for the junior mining sector. The Mining Eye index followed up a lacklustre first quarter with a dramatic decline of 31% over Q2. This was more than double the losses experienced by the broader AIM all-share (all sector) index and the senior miners in the FTSE Mining index. Underlying commodity prices suffered lesser but nonetheless significant falls, with copper declining 9%, nickel falling 6% and gold faring slightly better with a 4% drop over the quarter. Softening prices, escalating costs, resource nationalism and an increasingly uncertain economic outlook has impacted confidence in the mining industry across the board. The major producers are beginning to reconsider their build strategies, with a re-assessment and re-sequencing of uncommitted capex plans. This is in part a response to a seeming lack of conviction by the market that optimal returns will be delivered to shareholders in a reasonable time frame. This loss of confidence has translated into acute risk aversion at the junior end of the market. Equity proceeds raised by the mining sector on AIM reached just 96m in the quarter, the lowest quarterly amount since Q3 2004. The widespread fall in share prices (also seen in the Toronto and Australian junior markets) is making equity a costly and highly dilutive source of finance and therefore a tough sell to existing shareholders. Combined with ongoing barriers to debt markets, access to capital for the junior sector is becoming increasingly challenging. There were no mining IPOs on AIM in the quarter. Bauxite explorer Alufer, which had been targeting a Q2 2012 AIM listing, deferred its IPO until market conditions improve. Instead, the company raised 12m via a private placement with new equity and convertible note investors. It is possible that pre-IPO companies are finding it cheaper and easier to raise short-term funds privately in the current environment, without the imminent threat of indiscriminate share price destruction. However, this option is unlikely to be preferable or sustainable in the long term. A number of companies in Australia and Toronto have chosen to undertake an initial offering at a lower price, securing a platform for future funding and the benefits that a public listing can bring.

The tightening of equity funding to the pre-production junior sector will have an inevitable impact on its ability to continue exploring and progress projects. Metals Economics Group reported a fall in its Pipeline Activity Index of global exploration activity over the second quarter of 2012, with little expectation that drilling activity will 1 recover over the second half to the highs seen in 2011 . The impact of operational setbacks, political intervention and unexpected costs is critically intensified when funding options (and as a result, financial flexibility) become restricted. Nautilus Minerals, for example, is suddenly facing the prospect of cost escalations and delays to the start up of operations at its subsea Solwara 1 project, as a result of financing difficulties of a third party partner and a dispute with the government of Papua New Guinea. Rising and unexpected costs, such as those relating to equipment or legal proceedings, can also quickly burn up the working capital of early stage, pre-production juniors, leaving them with few options.

How are companies responding to these risks?

Preserving capital
Some companies are responding to risks with pre-emptive measures, in an attempt to mitigate the potential impact and establish some stability and predictability around project economics. Chaarat Gold temporarily suspended capital expenditure at its eponymous gold project, pending direct and pre-emptive negotiations with the Kyrgyz government ahead of 2 anticipated changes to the Kyrgyz fiscal regime . Others with more advanced projects are fast-tracking production options in order to begin generating all-important cash flow as early as possible. Nevertheless, the focus for the pre-production segment of the industry, in particular, may necessarily turn to cost cutting, cash preservation and fundraising through asset sales (distressed or strategic).

1 Metals Economics Group Pipeline Activity Index, July 2012. 2 In the event, Chaarat Gold lifted its suspension of activities without recourse to an independent investment agreement, in response to reports of the Kyrgyz governments new clearer and investor friendly mining legislative code. Source: Tulkubash Project suspension lifted, Chaarat Gold regulatory news release, 12 July 2012

Ernst & Young Mining & Metals Mining Eye Q2 2012

Raising capital
As traditional sources of finance become increasingly restricted, junior companies are exploring increasingly innovative and diverse sources of finance, both equity- and debt-based. Standard Equity Distribution Agreement (SEDA) financing is becoming more common in the junior market as a provider of last resort mezzanine financing. Under a SEDA arrangement, the fund provider undertakes to buy an agreed amount of the companys shares, at a discount, in exchange for a fee. This can provide useful bedrock support for equity placings and is promoted as being less

dilutive, as the fund provider takes fees as well as equity. However, critics of SEDAs raise concerns relating to ultimate loss of control. Strategic partnerships play an important role in the industry globally, with investments coming from state-owned enterprises, offtake investors, multi-lateral agencies, cornerstone financial investors and the majors. Such investments can come with stringent additional ties that may include partial loss of control and securing offtake. But aside from the injection of capital, strategic partnerships can add value in other ways:

Long-term investment that matches funding needs throughout the project development cycle A vote of confidence in the project and its management, which can bring in other investors Expertise, political influence, and banking and industry connections Potential exit through takeover Social and environmental integrity through partnership with multi-lateral agencies such as the International Finance Corp (IFC)

Table 1. Selected financing arrangements completed or arranged during Q2 2012

Company/Project
Anglo Asian Mining Gedabek gold/copper/silver mine, Azerbaijan Diamond Corp. Lace Diamond mine, SouthAfrica African Eagle Resources Dutwa nickel, Tanzania African Minerals Tonkolili iron ore, Sierra Leone Conroy Gold and Natural Resources Clontibret gold, Ireland Kryso Resources Pakrut gold project, Tajikistan Rambler Metals & Mining Tertiary Minerals

Arrangement
Loan

Investor/Lender/ Arranger
International Bank of Azerbaijan Industrial Development Corporation of SouthAfrica International Finance Corp. China Railway Materials YA Global

Amount
$7.5m

Project status*
Operating

Description
For early stages of construction of an agitation leaching plant. Annual interest rate of 12% on funds drawn. For underground development and purchase of capital equipment. Interest payable at South African Prime Rate + 2%. To fund the technical definition phase of the bankable feasibility study at Dutwa. Increasing proceeds to $400m of its 8.5% convertible bonds due 2017. Standby funding for the ongoing development programme at Clontibret. To finance the design, construction and operation of Pakrut. Terms include an annual fixed interest rate of 9% plus one-off management fee of 0.5%. For working capital and repayment of a portion of outstandingdebt. Can be drawn down at any time over the next three years. Subscription price will be at a 5% discount to an agreed reference price.

Term loan

$33.6m

Operating

Strategic equity Convert. bond SEDA

1.3m $50m >2.75m

Feasibility study Operating Pre-feasibility/ Scoping Feasibility study

Loan

China Nonferrous Metals Intl Mining Co. Tinma International Darwin Strategic

ca. $94m

Private equity placement Equity Financing Facility Strategic equity Equity Financing Facility

ca. 2.6m 10m

Vatukoula Gold Mines Vatukoula gold project, Fiji Ortac Resources

Zhongrun International Mining Darwin Strategic

5.4m 20m

Operating

For working capital and resource development. Can be drawn down at any time over the next threeyears. Subscription price will be at a 5% discount to an agreed reference price.

*Source: Intierra Information sourced from company reports and websites.

Ernst & Young Mining & Metals Mining Eye Q2 2012

Outlook
Without clear signals that sentiment is set to improve significantly in the near-term, we can expect to see a challenging remainder of the year for AIMs junior miners. Equity markets will remain volatile, potentially further damaging share prices, increasing the dilution impact of equity fundraising, and making the timing and pricing of IPOs a challenge. Lower equity valuations may drive acquisition activity in the junior sector, as the majors turn their focus from build to buy and seek synergistic acquisition opportunities. However, valuations become problematic at such discounted prices, with buyers seeking lower prices and vendors seeking higher prices, resulting in price mismatches and deals left on the table. We may see pockets of demand for higher yielding investment opportunities from investors with a greater risk appetite: this could present funding options for more speculative companies. However, uncertainty will govern in the short term. Juniors in need of funding should fully explore and prepare for the various options and funding structures available. Investors are seeking evidence of quality, scale, longevity and strong management: companies must competitively demonstrate these attributes and be agile enough to seize the occasional windows of opportunity that may open.

Ernst & Young Mining & Metals Mining Eye Q2 2012

Winners in Q2 2012
Chart 5. Mining Eye index and FTSE AIM All Share index since 2004
Source: Ernst & Young, Thomson Datastream
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FTSE AIM All-Share (rebased)

The share prices of only 14 (8%) of AIMs mining companies closed the quarter in positive territory this quarter. The share price of West African Minerals gained 212% over Q2 2012, as the market responded positively to the results of an aeromagnetic survey of the companys six exploration properties in Cameroon. The company reported encouraging indications of highly prospective targets for haematite Direct Shipping Ore (DSO), with a number of the properties within close proximity to the coast and port infrastructure. The news was boosted by assurances from the Government of Cameroon that it would give West African Minerals equal access to new port and railway infrastructure currently under construction. The company subsequently increased its ownership of its licences to 100% and raised 5.6m equity proceeds in challenging markets. Kryso Resources built on a strong start to the year, with a further 32% share price increase over the second quarter. Kryso is developing the Pakrut

gold project in Tajikistan and in May announced an updated JORC-complaint mineral resource of 5,020,000 ounces of gold (measured, indicated and inferred at a 0.5% gram per tonne cut-off). This represents a 40% increase over the previous resource estimate reported in 2011. The company succeeded in raising finance for the project, despite the challenging market conditions, securing a loan facility from its largest shareholder, China Nonferrous Metals Intl Mining. The US$83.5m loan, paying an annual fixed interest rate of 9%, completes the funding required to bring the project into production, with first production targeted for the second half of 2013. Toledo Minings share price gained 19%, despite ongoing delays to the granting of a tree cutting permit. The delay is restricting the companys ability to produce higher grade 1.8% nickel ore in line with the original mine plan at its Berong nickel mine in the Philippines. However, increased demand from Chinese customers

for Philippine nickel ores (in part a response to anticipated Indonesian export restrictions and enforced beneficiation), and an increase in prices compared with 2011, has made the shipment of 1.6% nickel and 1.5% nickel ores a viable alternative for the company. Toledo has also been considering options for its second project, the Ipilan nickel mine. The terms of a draft share purchase agreement received from Jinchuan Group were rejected by the company and its partners as wholly unacceptable. This is likely to mean a delay to the companys plans to release value from the project and raise funds for its primary asset, Berong. The expiry of an exclusivity right for Jinchuan creates opportunities for Toledo to pursue alternative options for the Ipilan project. Heavy mineral sands (HMS) producer Sierra Rutile reported a strong first half of production, with rutile production up 57% year-on-year and ilmenite production up 67% in a period of stronger pricing. Cash generated

Ernst & Young Mining & Metals Mining Eye Q2 2012

from its mining activities means that the company does not anticipate the need for additional external funding to progress its dry mining and Mogbwemo tailings projects. This is an enviable position for a junior in the current climate. In particular, the company intends to undertake the dry mining internally, which will improve the economics of the project compared with the cost outlined in tenders it has received from external contractors. However, recent negative guidance from major HMS producer, Iluka Minerals, caused a sharp decline in the share prices of junior HMS producers on the back of a significantly lower price outlook for HMS. The company is also exploring options to maximise the value of its landholdings in Sierra Leone with the appointment of Charles Keiser as CEO of its agriculture subsidiary. Among the many companies making significant progress with their projects

that was not reflected in their share price performances this quarter were iron ore developers Sable Mining and Afferro Mining. Sable Mining, which is exploring in west and southern Africa, reported a series of drilling updates at its Nimba iron ore project in Guinea, culminating in confirmation of high grades and DSO potential. Broad intersections of iron ore were identified, including 30.5 metres @ 63.8% iron. The project lies 30km from the newly reopened rail to deep water port in Liberia. The company is now developing the project toward a maiden JORC-compliant resource. The companys share price closed the quarter down 6%. Afferro Mining reported that a preliminary economic assessment (NI 43101 compliant) at its Nkout iron ore project in Cameroon confirmed its economic viability. A number of production scenarios are being explored, including the possibility of fast-tracking a DSO operation to generate all important cash flows.

The company is still some way from production, however, which is expected to start in 2017, with a funding requirement of between US$2.5b and US$3.9b on a shared infrastructure basis. The company has confirmed significant interest received from potential strategic partners.

Ernst & Young Mining & Metals Mining Eye Q2 2012

Fallers in Q2 2012
Chart 6. Mining Eye index, gold, copper and LME Index over Q2 2012
Source: Ernst & Young, Thomson Datastream

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LMEX Index (rebased)

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The share price of subsea explorer, Nautilus Minerals, lost 62% over the second quarter, following the disappointing news of a dispute with the Papua New Guinea government. Nautilus is refuting claims by the state that it breached the terms of an agreement that would see the state exercise its option to acquire a 30% interest in the Solwara 1 project, including payment of its share of the development costs incurred. Nautilus has warned that until the dispute is resolved, it will be forced to carry these costs. This may in turn require slowing or deferral of project spending and negatively impact the overall project economics. ATH Resources and Noventa were among the largest fallers for a second consecutive quarter. UK coal producer ATH Resources warned that due to falls in the international price of coal, declining margins would further adversely

impact its trading performance. The company is reviewing its mining plan and reducing capital expenditure in order to maximise cash generation. As a result, annual production levels are likely to remain depressed for as long as the low price environment persists. The companys share price closed the quarter down 80%. Following a series of operational challenges, junior tantalum producer Noventa provided further guidance to the market on the scale of its funding shortfall that is, the funds needed to pay its obligations, complete the process plant upgrade at its Marropino mine, and progress its activities at its other properties. Preferring to defer the issue of equity until further progress is made at Marropino, Noventa secured a short-term, unsecured bridging loan maturing 31 July 2012 from its largest shareholder, Richmond Capital. However, this was at some cost an

annual interest rate of 24% and an arrangement fee of 7% of the facility amount. The company remains hopeful of securing sufficient funding to continue its activities. Noventas share price closed the quarter down 75%. Pathfinder Minerals share price closed the quarter down 71% as trading in its shares resumed following a lengthy suspension. The companys shares were suspended from trading in November 2011 in response to the resignation of director General Veloso from the board, and his assertion that the company no longer owned the licence to mine heavy mineral sands licences in Mozambique. Pathfinder continues to pursue legal proceedings in order to restore control and continue developing the project. In its 2011 preliminary results, the company announced a 34.8m provision relating to the companys investment in the Mozambique project, but remains focused on resolving the dispute.

Ernst & Young Mining & Metals Mining Eye Q2 2012

Ins and outs of the AIM mining universe

Chart 7. Value of AIM mining universe and as % of all AIM, 20042011
Source: Ernst & Young analysis of AIM market statistics; market values as at quarter-end
25,000 30%

20,000 Mining market value GBm

25%

20% 15,000 15% 10,000 10% 5,000

Mining as % of all AIM

5%

0 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Mining Mining as a % of all AIM (RH scale)

0%

Chart 8. AIM mining admissions and delistings since 2006

Source: Ernst & Young analysis of AIM market statistics; includes placings, introductions and readmissions; excludes transfers to and from Main Market

14 12 10 Number of companies 8 6 4 2 0

With no new companies joining the market, and a significant quarterly decline in equity values, our AIM universe of mining and mining-related companies now stands 165 strong, with a combined market value of 8.5b. This represents a quarterly decline in value of 31% from 12.4b at the end of the first quarter. One company de-listed in the quarter Kalahari Minerals, following its acquisition by CGNPC Uranium Resources Co leaving just African Minerals in the 1b+ market cap club.

Index constituent changes

Kryso Resources and West African Minerals entered the Mining Eye index at the start of Q3 2012, replacing Frontier Mining and EMED Mining who both fell out of the top 20 following share prices falls of 13% and 9% respectively over the quarter. EMED Mining replaced Kalahari Minerals early on in the quarter, following Kalaharis takeover and delisting.
Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q3 2010 Q2 2012

Admissions

Delistings

Ernst & Young Mining & Metals Mining Eye Q2 2012

Fundraising in Q2 2012
Chart 9. Quarterly trend of funds raised on AIM mining and all sectors
Source: Ernst & Young analysis of AIM market statistics

1,600 1,400 1,200

AIM funds raised GBm

8,000 7,000 6,000

AIM total fund raised GBm

1,000 800 600 400 200 0

Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012

5,000 4,000 3,000 2,000 1,000 0

Mining new issues GBm

Mining further issues GBm

AIM total issues GBm

Proceeds raised in Q2 2012, at 96m, were at their lowest quarterly total since Q3 2004. This represents a decline of 62% from the previous quarter and 67% from the same period a year ago. Proceeds across AIM were also low, reflecting challenging market conditions, but fundraising by the mining sector accounted for just 13% of all total equity fundraising across AIM (compared with 27% last quarter). The decline in funding indicates a volatile, rather than completely closed, equity market, with issuers choosing to wait for fleeting improvements in sentiment to issue shares rather than risk significant dilution. Mwana Africa raised 22m in April, via a 13.3m placing with China International Mining Group Corp (CIMGC) and the balance with institutional investors. Proceeds will

be put toward the restart of the Bindura Nickel operation, in which Mwana holds a 52.9% interest, and the development of its Zani Kodo gold and SEMKHAT copper-cobalt projects in the DRC. Mwana hopes to leverage CIMGCs banking and industry connections to secure further project funding. Firestone Diamonds closed 14.7m of financing for the ongoing development of its Liqhobong project in Lesotho and repayment of debt. African Eagle Resources raised 9.5m toward the funding of a bankable feasibility study at its Dutwa nickel project in Tanzania. The IFC subscribed for a total of 1.3m, increasing its shareholding in African Eagle to 11.24%.

Shanta Gold raised equity proceeds of 9.5m which, in conjunction with a concurrent convertible bond issue, will be used for working capital to bring its New Luika gold mine in Tanzania into production in Q3 2012. Stratex International completed an oversubscribed 7.9m equity fundraising to accelerate the development of its majority-owned projects in East and West Africa. Both AngloGold Ashanti and Thani Ashanti participated in the placing to maintain their percentage equity holdings in Stratex at 11.5% and 2.2% respectively.

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Ernst & Young Mining & Metals Mining Eye Q2 2012

Fundraising on AIM, 20062012

Source: Ernst & Young analysis of AIM market statistics

Table 2. Fundraising on AIM, 20062012

Mining
New issues
No. of IPOs1
Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 0 3 0 4 4 0 7 1 4 1

AIM
Total issues
Proceeds m

Mining as % of all AIM

Total issues
Proceeds m

Further issues3
No. of money raising issues
31 44 34 18 48 46 60 38 47 32

New issues
Proceeds m

Further issues
Proceeds m

Total proceeds
%

No. of other new issues2

0 2 1 4 1 4 2 5 2 2

Proceeds m

Proceeds m

0 22 0 20 26 1 153 43 88 7

96 228 154 114 266 634 845 57 622 189

96 251 154 134 292 635 998 100 710 196

155 51 77 271 182 77 541 291 145 242

559 870 759 414 954 1,564 2,532 854 1,404 694

714 921 836 685 1,136 1,641 3,073 1,144 1,549 936

13% 27% 18% 20% 26% 39% 32% 9% 46% 21%

2011 2010 2009 2008 2007 2006

8 10 0 3 9 28

10 14 4 4 16 31

47 291 1 77 148 618

146 180 195 148 185 123

1,169 1,714 1,029 1,003 2,302 1,081

1,215 2,005 1,030 1,080 2,450 1,699

608 1,219 741 1,079 6,829 9,909

3,690 5,484 4,696 3,215 9,610 5,734

4,298 6,703 5,436 4,294 16,439 15,643

28% 30% 19% 25% 15% 11%

1 Where AIM is the primary market of listing for the companys first public issue of shares (does not include secondary listings). 2 Includes introductions, secondary listings, transfers and readmissions (money raising and non-money raising). 3 Funds raised from follow on issues of shares.

Ernst & Young Mining & Metals Mining Eye Q2 2012

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Index constituents selected at start of each quarter

Source: Ernst & Young; Thomson Datastream

Q1 2012

MV (m)

Q2 2012

MV (m)

Q3 2012

MV (m)

African Minerals European Goldfields Kirkland Lake Gold Highland Gold Mining Kalahari Minerals Archipelago Resources CoAL of Africa Discovery Metals London Mining Patagonia Gold Eastern Platinum Zanaga Iron Ore Sirius Minerals Nautilus Minerals Pan African Resources Sierra Rutile Bellzone Mining Metminco Petmin Beacon Hill Resources

1,447 1,347 664 611 606 395 384 376 338 315 305 300 274 247 220 216 179 148 118 104

African Minerals Kalahari Minerals Kirkland Lake Gold Highland Gold Mining CoAL of Africa London Mining Archipelago Resources Nautilus Minerals Zanaga Iron Ore Sierra Rutile Patagonia Gold Sirius Minerals Pan African Resources Bellzone Mining Eastern Platinum Metminco Petmin Cluff Gold Gemfields Frontier Mining

1,825 651 626 430 407 390 372 330 322 296 290 280 246 237 231 173 156 132 121 111

African Minerals Kirkland Lake Gold Highland Gold Mining Sierra Rutile Archipelago Resources London Mining CoAL of Africa Pan African Resources Sirius Minerals Patagonia Gold West African Minerals Zanaga Iron Ore Bellzone Mining Nautilus Minerals Eastern Platinum Gemfields Petmin Metminco Cluff Gold Kryso Resources

1,047 488 344 326 293 270 250 224 217 195 190 166 129 126 125 122 121 120 113 102

Top 20 market value m Total universe market value m Top 20 represent (%)

8,595 12,621 68%

Top 20 market value m Total universe market value m Top 20 represent (%)

7,626 12,401 61%

Top 20 market value m Total universe market value m Top 20 represent (%)
Shading represents index entrants

4,968 8,533 58%

1 Kalahari Minerals replaced by EMED Mining following its delisting on 4 April 2012.

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Ernst & Young Mining & Metals Mining Eye Q2 2012

Contacts
Ernst & Youngs Global Mining & Metals Center
With a strong but volatile outlook for the sector, the global mining and metals industry is focused on future growth through expanded production, without losing sight of operational efficiency and cost optimization. The sector is also faced with the increased challenges of changing expectations in the maintenance of its social license to operate, skills shortages, effectively executing capital projects and meeting government revenue expectations. Ernst & Youngs Global Mining & Metals Center brings together a worldwide team of professionals to help you achieve your potential a team with deep technical experience in providing assurance, tax, transactions and advisory services to the mining and metals sector. The Center is where people and ideas come together to help mining and metals companies meet the issues of today and anticipate those of tomorrow. Ultimately it enables us to help you meet your goals and compete more effectively. Its how Ernst & Young makes a difference.

Area contacts
Global Mining & Metals Leader Mike Elliott Tel: +61 2 9248 4588 michael.elliott@au.ey.com Oceania Scott Grimley Tel: +61 3 9655 2509 scott.grimley@au.ey.com China and Mongolia Peter Markey Tel: +86 21 2228 2616 peter.markey@cn.ey.com Japan Kunihiko Taniyama Tel: +81 3 4582 6470 kunihiko.taniyama@jp.ey.com Europe, Middle East, India and Africa Leader Mick Bardella Tel: +44 20 795 16486 mbardella@uk.ey.com Africa Wickus Botha Tel: +27 11 772 3386 wickus.botha@za.ey.com Commonwealth of Independent States Evgeni Khrustalev Tel: +7 495 648 9624 evgeni.khrustalev@ru.ey.com France and Luxemburg Christian Mion Tel: +33 1 46 93 65 47 christian.mion@fr.ey.com India Anjani Agrawal Tel: +91 982 061 4141 anjani.agrawal@in.ey.com United Kingdom & Ireland Lee Downham Tel: +44 20 7951 2178 ldownham@uk.ey.com Americas and United States Leader Andy Miller Tel: +1 314 290 1205 andy.miller@ey.com Canada Tom Whelan Tel: +1 604 891 8381 tom.s.whelan@ca.ey.com South America and Brazil Leader Carlos Assis Tel: +55 21 2109 1606 carlos.assis@br.ey.com

Service line contacts

Global Advisory Leader Paul Mitchell Tel: +86 21 22282300 paul.mitchell@cn.ey.com Global Assurance Leader Tom Whelan Tel: +1 604 891 8381 tom.s.whelan@ca.ey.com Global IFRS Leader Tracey Waring Tel: +44 20 7980 0646 tracey.waring@uk.ey.com Global Tax Leader Andy Miller Tel: +1 314 290 1205 andy.miller@ey.com Global Transactions Leader Lee Downham Tel: +44 20 7951 2178 ldownham@uk.ey.com

Ernst & Young Mining & Metals Mining Eye Q2 2012

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