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2006

Jan 2006 - Golden Tiger Mining

Golden Tiger Mining NL (GTX) –Establishing a Mineable Resource at Zhudong in Eastern Guangxi

  • Golden Tiger’s current projects are all located in the province of Guangxi in southern China, with most of them contained in a vast ~15,550 sqkm Exclusive Area in the Dayaoshan region of eastern Guangxi (approximately 180km x 75km with a north eastern extension of ~50km x 40km up to the boundary between Guangxi and Guangdong), ~31sqkm at Xinka Tian near Guilin in the north, and ~11sqkm at Yueli in the northwest, south of Fengshan in the “Golden Triangle”.
  • GTX use an in-house Landsat-based technique to identify major structures and potential mineralisation, followed by geochem and IP, which when combined with its managerial team’s knowledge and expertise in discovering orebodies, enables GTX to identify what areas it believes have the greatest potential likelihood of success when it starts drilling.
  • The result has been for GTX to focus initially on the four areas of Zhudong, Jin Zhu Zhou, Ying Yan Guan, and Wanan out of 33 licence areas under scrutiny in the Dayaoshan Exclusive area in which GTX has either a 76% or 82% interest with up to 3 Geological Brigades and 3 Institutes in the Guangxi BGMR. GTX is also focusing on its Yueli prospect in western Guangxi.
  • Rocks in the Dayaoshan region are predominantly from the Cambrian era and the gold orebodies are hence usually free-milling compared to the refractory “Carlin style” Triassic orebodies that are typical of western Guangxi. Drilling has initially focused on Zhudong in the breccia and skarn types of mineralisation there before targeting the deeper “plumbing system” from early December 2005.
  • After Zhudong, the next area of focus is Jin Zhu Zhou which contains a number of nuggetty gold vein sets with an average grade of 1oz/t within sampled grades ranging between 5g/t and 435g/t in good ground conditions. GTX are targeting a buried intrusive to the west as the feeder source for the stacked vein mineralisation, and intend to conduct 2 IP surveys and a geochem stream sediment survey over the general district, starting by the end of December 2005.

Jan 2006 - Michelago Limited

Michelago Limited (MIC) – Merging with Golden China Resources (AUC.V)

  • On 14 December 2005, MIC announced that it had executed a BCA (Business Combination Agreement) under which it intended to merge with Golden China Resources Corporation (AUC.V) using a scheme of arrangement. In the BCA, both companies undergo a consolidation of their shares such that MIC shareholders receive 1 new AUC –for- 25 MIC shares and AUC shareholders receive 1 new AUC –for- 5 old AUC shares (or effectively MIC shareholders receive 1AUC –for- 5 MIC).
  • As part of the BCA, Golden China Resources (GCR) intends to provide MIC with a >US$9.2m loan (secured by MIC’s ASG (Gold Ridge) assets), to add to the US$12.2m ANZ loan and other monies being used to replace the US$25m working capital facility that Shandong BioGold was receiving from the Bank of China to purchase the concentrates treated at the BioGold facility in Shandong Province.
  • Michelago sees the proposed merger as providing the next stage in its growth due to Golden China’s: advanced refractory project at Nibao in Guizhou, exploration and financial assets, 85% international institutional holding, and Hong Kong based investment bank sponsorship connection providing another access to China.
  • Golden China’s refractory Nibao orebody asset in Guizhou may be able to initially supply the expansion of BioGold and enable the combined company to reap the full benefits of mining the ore through to gold bars. Nibao could also have the potential to feed a separate Bactech (bacterial oxidation or bacox) plant in the Golden Triangle. Golden China also has a number of exploration assets and agreements in China at various stages of exploration through to possible fruition.
  • All of the current 3 orebodies at Nibao have differing characteristics and their geological interpretation is under review as further information comes to hand. The resource at Nibao could ultimately range between 1moz and 4moz, although just how much is mineable (some of the grades are <1g/t) depends on the PFS and subsequent BFS, as the orebody requires a higher cost bacox-type process.
  • MIC still appears to be receiving little recognition for its holding in ASG and hence Gold Ridge, despite the increase in the gold price potentially significantly upgrading the Project’s worth. Gold Ridge appears to have upside potential from the “gaps” in its orebodies, at depth, and the fact that its resources were top-cut.

Mar 2006 - Platinum Australia

Platinum Australia Ltd (PLA) – Bringing Smokey Hills into Production at ~95,000ozpa 4E (>40,000ozpa platinum)

  • Platinum Australia (PLA) currently has two main projects in South Africa that are in the process of being taken through to platinum production, namely Smokey Hills in the east (~13km NW of Steelpoort) and Kalplats (~90km SW of Mafeking).
  • PLA expects both projects to soon receive their “New Order” Prospecting Rights allowing Smokey Hills to convert to a Mining Right after completing the BFS in June 2006, and Kalplats to extend the exploration, upgrade the ore resource and complete a BFS by June 2007.
  • Smokey Hills is a conventional UG2 eastern limb (of the Bushveld) reef that is expected to initially be mined by open-cut and then underground, very similar to the UG2 being mined underground on the adjacent Modikwa (ARM/Angloplats) platinum mine about 4km further south. Production has been estimated at ~95,000ozpa 4E PGM (Pt, Pd, Rh, Au) based on diluted grades of 5.0g/t and 82.5% recoveries, although >5.2g/t 4E and >=85% recoveries appear to be achievable.
  • Kalplats represents a previously unrecognised style of platinum mineralisation in 3bn year-old greenstone rocks. Initial studies show that production from the >3.5g/t higher grade reefs could result in 3E PGM production rates ~190,000ozpa, although we have used a more conservative model on 3.25g/t and ~175,000ozpa.
  • Both Smokey Hills and Kalplats appear to have significant upside potential. Smokey Hills could extend its planned mining west across the boundary into Modikwa ground in an arrangement with ARM/Angloplats, while Kalplats appears to have been misunderstood, with recoveries ~80% using conventional techniques, and possibly material extensions on strike and on parallel structures.

Apr 2006 - Crescent Gold Ltd

Crescent Gold Limited (CRE) –Bringing Sickle into Production by the end of 2006

  • Crescent’s main asset is the old Barnicoat operation of Sons of Gwalia at Laverton in WA to which it has added a number of exploration projects to result in the current sizeable land position. A new discovery was made called Sickle, only ~5km southeast of the existing plant, and CRE has been extending the resources and reserves with a target to start production in the December Quarter of 2006 at 60,000ozpa for 5 years at cash costs of ~US$300/oz.
  • The cost of modifying the 1mtpa old plant up to current required standards has been estimated at A$5.6m, and it appears that CRE may then expand the plant up to a rated 1.5mtpa and 90,000ozpa to 100,000ozpa based on resource extensions, for an additional A$6m. Such extensions could come from satellite orebodies, reduction of the cut-off grade with higher A$/oz gold prices and/or following a number of possibilities to extend Sickle below its current 100m depth.
  • Aside from the extended life potential at Laverton, CREs other assets are often overlooked, namely nickel, uranium and China. CRE’s 4 uranium exploration projects are still under consideration for possibly an in-specie / IPO distribution similar to some of the recent very successful uranium exploration IPOs.
  • The 3 CRE uranium projects in the NT (which approves of uranium mining) are relatively advanced, with a project north of the old Rum Jungle uranium mine, the Tennant Creek project containing uranium anomalism, and the Calvert Hills project containing recognised Westmoreland Conglomerate uranium host rock.

May 2006 - IAMGOLD Corp

IAMGOLD Corporation (IGD.AX, IAG, IMG.TO) –Combining Gallery Gold into a >500,000ozpa ~ US$275/oz Cash Cost Gold Producer

  • This report is based on publicly available information and was commissioned by Gallery Gold Limited (now IAMGOLD Corporation) to increase the market’s knowledge of IAMGOLD Australasia’s operations and regional potential of their key projects of Mupane in Botswana & Buckreef in Tanzania.
  • While Gallery Gold brought operating mining expertise and an Australian geological knowledge approach to the merger, IAMGOLD brought financial muscle resulting in a much stronger gold producer with production >500,000ozpa, a market cap >A$2bn, and US$99m in net cash (which includes 148,420oz in gold at US$329/oz).
  • Gallery Gold was bought for approximately US$200m, and has two operational areas being the Mupane mine in the Tati region of Botswana that produces about 100,000ozpa at cash costs of US$260/oz, and the Buckreef prospect in the Lake Victoria Goldfields of Tanzania on which a scoping study estimated production of 140,000ozpa at cash costs ~ US$260/oz for capex ~US$55m.
  • IAG has holdings in 4 operating gold mines in West Africa, being 40% of Sadiola and 38% of Yatela in JV with Anglogold Ashanti in Mali, and 18.9% of Damang and Tarkwa in JV with Gold Fields in Ghana. These 4 holdings resulted in attributable production of almost 450,000oz in 2005 and have been estimated (by IAG) to produce almost 480,000oz at cash costs of almost US$280/oz in 2006. The addition of GGN currently increases production to well over 500,000ozpa at similar costs.
  • All the prospects at Mupane and Buckreef-Busolwa are being re-interpreted using the latest 3 dimensional geological techniques by parts of the same team that successfully applied the technology to Kingsgate’s Chatree mine and region in Thailand. The initial re-interpretations have determined a number of new targets that could lead to higher resources at potentially higher grades.

Jun 2006 - Cons Minerals

Consolidated Minerals Ltd (CSM) –Establishing One of WA’s Lowest Cost Long Life Nickel Producers at >10,000tpa Nickel

  • With the early success from East Alpha’s Hangingwall Reef, potential in Beta West and Beta South, extensions to Beta Contact, mining of Beta Hangingwall (above both the 20 and 40 surfaces), and initial results from the ore sorter, CSM appears to be creating a Nickel Division that has the potential to produce >10,000t Ni pa for at least 10 years at possibly one of WA’s lowest cash costs of nickel.
  • On 4 May 2006, CSM’s Board announced approval for a new $14m ventilation shaft to be sunk at Beta Hunt as part of its visionary 2-phase twin-decline underground nickel exploration and development initiative. Phase 1 targets 90,000t of nickel mineralisation over 1-2km of lava channels south-east on strike from Beta and East Alpha, and Phase 2 targets another 150,000t of nickel, further SE on strike.
  • The completion of the new ventilation shaft enables movement of up to 1mtpa to occur up the decline, potentially comprising 400,000tpa of Nickel ore, 300,000tpa of Gold ore and up to 300,000tpa of waste (depending on the future installation of an underground ore-sorter to remove the waste for use as backfill).
  • The initial results from the A$1.5m CSM-Ultrasort developed ore sorter have been unprecedented, upgrading unsaleable 0.5%Ni low grade waste into a ~3%Ni to 4%Ni very saleable product. This product can be used as a sweetener to increase the average ore grade delivered to the old WMC concentrator, resulting in lower costs, higher recoveries and potentially greater profitability.
  • The discovery of the hidden mega orebody at Greensnake and potential hidden look-alikes at Camp East and Mike East, all infer that Woodie Woodie Manganese has the potential to have a life >20 years at a production rate >1.0mtpa.

Jul 2006 - Avoca Resources

Avoca Resources Limited (AVO) –Becoming a >100,000ozpa ~US$300/oz Cash Cost Gold Producer, initially with Trident

  • Avoca has significantly advanced its understanding of the gold mineralisation at its Trident mine at Higginsville, clearly delineating the 3 main ore types of Athena, Western and Eastern. The current mining plan focuses on building up the Western Zone to a sustainable production rate of >100,000ozpa, and taking ore in the “gap” area while declining both towards the Western Zone and down to Athena.
  • It appears that a production rate of >100,000ozpa can be achieved by 2008 through bulk mining the central area of Trident’s 20m - 25m thick Western Zone using Kanowna-Belle style (sub-level open) stoping while bench stoping the ~5m thick Athena for a combined production rate of >700,000tpa @ >6g/t (>125,000ozpa at a 93% recovery).
  • AVO is taking the short-cut to production through toll-treating its ore in a number of nearby plants, but such expected production rates soon place a strain on regional plant availability. Consequently, AVO appears likely to construct its own 1.0mtpa to 1.5mtpa plant by 2008, especially if Trident continues to grow, and its regional ore sources are treated (such as Fairplay, the Palaeos, and possibly Erin).
  • Trident appears to be a combination of Norseman and St Ives-type mineralisation, with thicker, more continuous and better, steep dipping ultra high grade Athena veins, linked by flats, abutting the Western Zone.
  • Just what production rate can be achieved (potentially >170,000ozpa) and at what cash cost appears to be something that can only be delineated through mining from the Western Zone at possibly >5g/t and Athena at potentially as high as 20g/t. While the initial production depends on what can be mined from the “gap” area.

Aug 2006 - Kingsgate Cons

Kingsgate Consolidated Limited (KCN) – Expanding to ~300,000ozpa gold and ~2mozpa silver from 2008

Aug 2006 - Marengo Mining

Marengo Mining Ltd (MGO) – Delineating their Copper-Moly-Gold Orebody at Yandera

  • In early 2005, Marengo switched from exploration in WA to establishing an orebody at Yandera in PNG. Yandera had been explored by BHP in the mid-1970s at the same time as BHP farmed-in to Ok Tedi (and delineated the gold cap over the orebody) which caused Yandera to drop onto the back burner. A number of companies have since looked at Yandera mainly from a large company viewpoint but failed to take it any further until Marengo acquired the Project.
  • Yandera is a classic large company target with a copper geochem anomaly ~8km long by 2km wide averaging 0.5%Cu with 5 identified phases of porphyries containing grades up to ~1%Cu (plus Molybdenum and Gold credits), which may include some higher grade zones. MGO started their drilling campaign at the end of May 2006 on their main Gremi Zone target aimed at establishing continuity for a recognised JORC resource by December 2006.
  • As we have seen with other Australian junior companies, the large mining company approach is not necessarily always the way to develop these orebodies, and geological techniques and technology have advanced considerably since the 1970’s. A greater understanding of Yandera is expected after MGO brings in structural geological consultants to delineate the main controls of the copper-molybdenum-gold mineralisation, and identify how best to proceed forward.
  • Although Yandera generally appears to have an overall low grade signature for Molybdenum (~150ppm or 0.015%), we encountered a number of samples of visible Molybdenum, including rocks that appeared to be riddled with it (as shown in Figure 6b on page 4 of this report).
  • Gold appears to have not been a separate consideration as a individual entity when Yandera was being explored, despite the presence of pin-head sized visible gold, and alluvial workings (that are still being worked). Reputedly there is gold in quartz veining too, which requires further follow up and investigation.

Oct 2006 - Sally Malay Mining

Sally Malay Mining Limited (SMY) –Increasing After-tax Profits to >A$60mpa

  • With nickel averaging ~US$28,300/t in SQ06 (US$12.87/lb or 40% higher than JQ06 in A$/t terms at A$37,400/t), and copper ~US$7,640 (US$3.46/lb), SMY may have had a spectacular quarter, easily the best so far. Even providing for hedging, in SQ06 SMY may have exceeded last years’ NPAT of ~A$16m. Significant after tax profits are being generated at these nickel prices, if nickel averages US$20,700/t in 2008 (in line with its forward price), SMY’s after tax profit could then be >A$110m.
  • Sally Malay recently gave a production forecast lasting 10 years based mainly on its namesake mine of Sally Malay which according to our modelling is the main profit driver behind the company. However, the forecast does not take into account the lower orebody or extensions on strike along the boundary of the intrusion, that could extend SMY’s life well beyond 10 years.
  • Sally Malay expects to use the spare capacity in its mill to treat ore from Copernicus (in JV with Thundelarra) and from Panton (in JV with Platinum Australia). However, the additional profits from these two satellites are relatively small compared to Sally Malay using our current price profiles, grade and cost estimates, and have been excluded from our total modelling.
  • Lanfranchi’s current estimated life at ~10,000tpa nickel production is about 5 years. However, it has the potential to be significantly longer since there appears to be little difference between the mineralised lava channels at Lanfranchi and the lava channels at Kambalda and Widgiemooltha that have been found by the other small nickel sulphide producers to extend on strike for many kilometres.
  • Production at both of SMY’s WA nickel mines, being the 100% owned Kimberley Nickel Mines (KNM) and 75% owned Lanfranchi Nickel Mines (LNM) has settled down and blossomed, and could achieve an attributable ~13,500tNi in the year to June 2007 and ~18,000tNi attributable in 2008 according to our (ERA) estimates.

Oct 2006 - Platinum Australia

Platinum Australia Ltd (PLA) – Smokey Hills Production Still Expected from 2007

  • All 3 Platinum Australia (PLA) projects are now on a path to platinum production, with Smokey Hills (Eastern South Africa) expected to start production early in 2007. The Panton project in WA could be in production in JV with Sally Malay by the end of 2007, and Kalplats (Central South Africa) after the expected completion of its BFS by the end of 2007, could be in production in late 2008 / early 2009.
  • Smokey Hills received its “New Order” Prospecting Right on 11 September 2006 through the cessation (or transfer) of the New Order Prospecting Right from its JV partner (Corridor Mining Resources) to the JV company (PhokaThaba Platinum Pty Ltd) in which PLA holds 80%. Application has been made for the New Order Mining Right, which may be received by late 2006 or early 2007.
  • Should the Mining Right be received by early 2007, PLA expects to start mining and toll treating Smokey Hills’ UG2 ore through a nearby plant, while constructing its own concentrator for production of ~100,000ozpa 4EPGE (Pt, Pd, Rh & Au).
  • A “New Order” Prospecting Right was also received for Kalplats on 11 September 2006 and drilling has consequently started aimed at increasing the size of the resource, as part of completing a PFS by April/May 2007 and a subsequent BFS by the end of 2007. Production is targeted at 170,000ozpa to 270,000ozpa 3EPGE with PLA earning a 49% interest from ARMplats.
  • Both Smokey Hills and Kalplats appear to have significant upside potential. Smokey Hills could extend its planned mining west across the boundary into Modikwa ground in an arrangement with ARM/Angloplats, while Kalplats appears to have been misunderstood, with recoveries ~80% using conventional techniques, & potentially material extensions on strike and on parallel structures.

Nov 2006 - Albidon Limited

Albidon Limited (ALB) – Bringing Munali Into Production at 9,000tpa Ni and ~US$2/lb Cash Operating Costs

  • In the 2.5 years since its IPO in March 2004, Albidon has significantly advanced its main project of Munali Nickel (with Copper, Cobalt and PGE credits) in Zambia. Recently completing the BFS and receiving all the required Zambian approvals for construction and production from the mine at an estimated 900,000tpa to produce 9,000tpa Ni for at least 10 years from mid-2008 at cash operating costs of ~US$2/lb (ERA’s cost estimates are : Operating ~US$1.80/lb,C1~US$1.65/lb,C3~US$2.35/lb).
  • Albidon is currently cutting the box-cut for the portal to develop the underground mine at Munali, and expected to finalise its offtake agreements and financing of the ~US$65m project capex during the current quarter to December 2006.
  • The discovery at Munali is still being extended and has almost reached 110,000t of contained nickel. Due to nearby exploration similarities and potential extensions to the existing mineralisation, Munali may become a Tier 1 discovery (the most sought after by the major companies with a potential profit of >US$1bn).
  • Albidon’s next most advanced project appears to be Njame Uranium, also located in Zambia and immediately SW of Munali. Already a resource of 2,200t U3O8 has been delineated at Njame North, and it appears to have a similar style of banded mineralisation in sandstones to Paladin’s Kayelekera Project further northeast.
  • Although the next most likely mine after Njame at this stage appears to be its Luwumbu Platinum JV with Goldstream and Lonplats, Albidon’s holding is being gradually diluted down to effectively a 3% royalty. However, Albidon does have a number of other exploration prospects that are showing potential in the East African S-shaped nickel belt that passes from Tanzania through to Botswana.

Dec 2006 - Golden Tiger

Golden Tiger Mining NL (GTX) –Encouraging Intersections at Weilong

  • Golden Tiger Mining has retained its concentration on the Guangxi Province of Southern China, having moved to focus on drilling its new Weilong project in Western Guangxi, and take its other main potential projects around Huangganchong, Huangguan and Zhudong in its ~15,000sq km (~194km x 75km & ~51km x 56km) Dayaoshan JV area of Eastern Guangxi through geochem to soil sampling and drilling.
  • The latest drillhole intersection of 9m @ 5.2g/t at Weilong, is GTX’s most encouraging result in China since its inception. Lying within 48m @ 1.5g/t the WDDH 4 intersection is in line with some of GTX’s sampling in the old workings of 26m @ 2.7g/t, and supports the potential stacked lode system interpretation.
  • The next most prospective area after Weilong could be at Huangganchong, with its >50ppb gold anomaly over 1km long along a NE/SW structure. There are a number of values above 250ppb (usually classified as drill-ready) with peaks to 500ppb.
  • The third group of projects showing very early geochem promise are in the Huangguan vicinity (being Changtian and TongHe), and Fengyuan and Muyikou south of Zhudong. Higher values have been identified from stream geochem at these projects, and they are being followed up with grid soil analysis.
  • The prospectivity of Yueli may return assuming that shareholders approve the alliance with Sino Gold (SGX) that results in SGX holding 19.9% of GTX through subscribing for 15.3m shares at A$0.10/share and raising A$1.5m for Golden Tiger.

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