Junior Miners: The Debt Sentence?

1. Junior Miners:The Debt Sentence? Dr Tim Williams Director Global Mining & Metals, Transaction Advisory Services, Ernst & Young LLP +44 (0)20 7951 2922twilliams@uk.ey.com

2. Ernst & Young in the mining industry FINEX ‘10 • A global leader in assurance, tax, transaction and advisory services • Globally we work for 25 of the top 30 mining and metals companies • We lead the way in emerging markets, and have advised on key flotations in the sector, including: Xstrata plc; Hochschild Mining Ltd; Kazakhmys plc; Gem Diamonds Ltd; Ferrexpo Ltd; Fresnillo plc; Ruuki Group plc; and on Rio Tinto/BHP and Xstrata/Anglo American proposals • We have advised on many transactions in the sector, including two of the largest deals in recent years: Falconbridge by Xstrata; and Inco by Vale • We are recognised as leading advisors in key financial centres: • We lead the UK mining new listings; 9 of the last 12 • We work for all of the FTSE 100 mining and metals companies

3. Don’t be short-termist FINEX ‘10

4. Copper, what recessions? FINEX ‘10

5. Aluminium, the young metal: solid electricity FINEX10

6. Aluminium stock shock Source: LME, Thompson Datastream FINEX10

7. Mining surviving FINEX10

8. YoY movement in net debt – 1980 to 2009 Recessions Forecast Source: Ernst & Young, Worldscope via Thomson Datastream. Forecasts are Reuters consensus estimates, via Reuters Knowledge

9. Mining eye looking good FINEX10

10. Miners have been leading AIM in 2010… FINEX ‘10

11. Mining returning to importance on AIM FINEX10

12. Ins and outs of the AIM miners FINEX10

13. AIM mining funds raised; and all AIM funding FINEX10

14. Gold remains the target Source: Ernst & Young FINEX ‘10

15. New mining listings on AIM this year Source: press reports FINEX10 • Scotgold gold Scotland £0.7m • Bellzone iron ore Guinea £34m • Kibo gold Tanzania £0m • Metminco Cu, Au, Mo, Zn Peru, Chile £9.3m • Ncondezi Coal coal Mozambique £36m • Central Asia Metals Cu, Au, Mo Kazakhstan, “ Mongolia £38m

16. AIM mining consolidators: “M” Source: press reports FINEX10 • Rusina Mining and European Nickel • Western Coal and Energybuild • Braemore Resources and Jubilee Platinum • Hidefield Gold and Minera IRL • Ridge Mining and Aquarius Platinum • Cambrian Mining and Western Coal Corp • Mano River Resources and African Aura

17. AIM miners as targets, last 18 months: “A” Source: press reports FINEX10 • Afnat Resources by Axmin • Kiwara by First Quantum • Mowdow Mines by Franco Nevada • CAMEC by ENRC • Moto Goldmines by Randgold Resources • Glencar Mining by Gold Fields • Minerva Resources by Dwyka Resources • Cambrian Mining by Western Coal • Oriel Resources = Mechel

18. Let’s be partners… Source: press reports FINEX10 • Jubilee Platinum and Sylvania Resources – PGMs joint venture • Mariana Resources and Cliffs Natural Resources – exploration partnership • Allied Gold – IFC • Nyota Minerals – IFC • Petra Diamonds IFC • Herencia Resources – Nyrstar • Serabi Mining – Eldorado Gold • Goldstone Resources – Bendigo Resources • Triple Plate Junction – Newcrest Mining: joint venture • Karelian Diamonds – Rio Tinto: exploration partnership • European Nickel – Hunter Dickinson

19. China! Source: press reports FINEX10 • African Minerals’ Tonkolili iron ore in Sierra Leone – China Railway Materials Commercial Corp • African Minerals – Shandong Iron & Steel • Oxus Gold’s Amantaytau Goldfields in Uzbekistan – Chinese financiers • European Nickel’s Caldag nickel project – Jiangxi Rare Earths and Rare Metals Tungsten Group • Toledo Mining’s nickel in Philippines – Jinchuan Group • Chromex Mining’s lumpy chrome (offtake) – Suzhou Kaiyuan Chemical • Bellzone Mining’s Kalia iron ore in Guinea - China International Fund • Kryso Resources’ Pakrut gold in Tajikistan – China Nonferrous Metals • Sirius Minerals - potash - Sino-Agri Mining

20. Bubble bath? Double bubble trouble? FINEX ‘10

21. INSTRUCTIONS • How to apply text styles: • Use the Decrease Indent and Increase Indent icons on the Formatting toolbar to apply the appropriate text styles. • Keyboard shortcut • Promote text style: ALT + SHIFT + ←(Arrow key) • Demote text style: ALT + SHIFT + → (Arrow key) Our views and opinionswww.ey.com/miningandmetals www.ey.com/miningandmetals

22. Thank you Michael D Lynch-Bell EMEIA Leader Mining & Metals Ernst & Young LLP +44 (0)20 7951 3064mlynchbell@uk.ey.com

23. This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research, or the exercise of professional judgement. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor. Disclaimer FINEX ‘10