28 November 2013

ASX CODE: MNE

Speculative Buy

Mining Group Limited Maiden drill program commences on high-grade

Cu play in Chile...intersects Cu mineralisation

Drilling commences at El Roble

Mining Group has kicked off a drilling program at the El Roble Copper Project in Chile

(option to acquire 90% via completion of Feasibility Study, staged payments of US$6.0

million and 12 million 5 cent Mining Group options-ASX Announcement 15/8/2013) with

initial drilling intersecting potentially high-grade ore shoots down dip from existing

underground workings. Four drill holes at Descubridora have confirmed chalcopyrite/

pyrite mineralisation persists into the sulphide zone for at least 140 metres below the

current workings.

An initial 1,000 metre HQ diamond drilling program is targeting the Descubridora (four

holes) and Veta Gruesa targets which are currently the subject of airleg mining focussed

on high-grade veins varying from 0.50 - 5 metres in true width. According to Mining

Group (ASX Announcement 6/11/2013), current mining is encountering copper grades

up to 16% with ore being treated at a nearby plant.

The initial drill program is likely to be finished in late November with results due in

December this year. High resolution magnetics has already identified numerous

structures of interest. Untested mineralisation consisting of multiple vein sets can be

traced for up to 6 km’s along strike. Mineralisation could extend a further 4 km’s.

El Roble a high Grade Producer

Historical production from the 1800’s at El Roble totals around 500Kt of high-grade

copper ores (cut-off grade 9% to a depth of up to 500 metres) with rock chip sampling by

Mining Group returning up to 28% Cu earlier this year.

Infrastructure Advantages & Geological Setting

The project is situated in a world class Cu province, 30 km’s from the port of Caldera and

covers approximately 6,000 hectares of underexplored ground. Two toll treatment plants

are located 70 km’s away. Copiapo, a major mining hub, is situated just 90 km’s away.

Low Capex Production Potential

Given the favourable infrastructure (roads, towns & processing plants) together with ready

access via existing underground working, RM Research believes that El Roble represents

a near term, low CAPEX/low OPEX production opportunity which could enable MNE to

become self funded for future exploration and development.

Comval Project-Philippines

Having outlined JORC Inferred and Indicated Resources of 32.4Mt @ 0.42% Cu and 0.12

g/t Au (160Kt tonnes Cueq) in 2012, the Company is maintaining a presence on the ground

and looking for alternative funding options to progress this project.

Price Catalysts

With the Company’s focus switching to Chile, near term price catalysts are the results

from this initial drilling program at El Roble. Given the lack of modern exploration, ongoing

mining of high-grade Cu ores and recent sampling results, the chance of exploration

success is considered high. High-grade Cu vein mineralisation may also indicate the

presence of larger-tonnage/lower grade IOCG style mineralisation.

Action and Recommendation

Speculative BUY. Watch for drilling results at El Roble in late CY 2013.

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Capital Structure

Sector Materials

Share Price (A$) 0.032

Fully Paid Ordinary Shares (m) 308.8

Listed Opt (ex 20c, exp 2/14) (m) 41.9

Listed Opt (ex 5c, exp 6/15) (m) 137.0

Unl Opt (ex 20-60c, exp 2/14-7/15) (m) 6.5

Market Capitalisation (undil) (A$m) 9.9

Share Price Year H-L (A$) 0.21-0.015

Approx Cash (A$m) (30/10/13) 2.4

Directors

Winton Willesee Non Executive Chairman

Zeffron Reeves Managing Director

Colin Johnstone Non Executive Director

Robert Buchart Non Executive Director

Major Shareholders

Mycatmax Pty Ltd The Viking S/F 4.37%

Ackerman Holdings Gp. Ltd 4.2%

The Gas S/F P/L 4.2%

Cadan Resources Corp 2.91%

Analyst

Guy Le Page +61 8 9488 0800

Share Price Performance

Source: Etrade

INVESTMENT CASE

LEVERAGE TO COPPER: Based on current mining of high-grade Cu ores and recent

sampling results and visual reports of drill intercepts, there is an excellent chance of

delivering high-grade JORC Resources suitable for local treatment or direct shipping.

EXPLORATION UPSIDE: Multiple vein sets have been traced over an apparent strike length

of up to 6 km’s with no modern exploration follow up. Recent magnetics and field

observations suggest mineralisation could extend for up to 10 km’s. RM Research considers

that the chance of exploration success remains high. High-grade vein hosted mineralisation

may also be related to proximal larger tonnage/low grade Cu+/-Au mineralisation.

LEVERAGE TO COPPER: While Cu has remained range bound between US$7,000 to

US$7,400 per tonne over the last three months on the back of mixed economic data and a

softening property market in China, the medium term outlook remains firm. With a copper

inventory of approximately 160,000 tonnes of Cueq (Comval Project-Philippines) and a focus

on high grade copper in Chile, MNE represents excellent leverage to the copper price.

LOW CAPEX/OPEX PRODUCTION POTETNIAL: Given the high-grade nature of the vein

hosted copper mineralisation, local treatment options and proximity to service towns such as

Copiapo and the port of Caldera, EL Roble presents a potentially low CAPEX/low OPEX

production opportunity.

CHILE A MAJOR COPPER PRODUCER: Chile is the world’s largest copper producer and

recently raised its copper output forecast for 2013 and upped its global copper surplus

expectations by around 40%, on soaring global production and slower demand growth. Chile

will produce approximately 5.7Mt of copper in 2013, an increase of almost 5% (YoY) and an

historic high due to increased forecasts from key mines including Escondida (Reuters

8/10/13).

COMPANY OVERVIEW Mining Group Limited

(“Mining Group”, MNE or

“the Company”) listed on the

A us t ra l i a n S ecu r i t i e s

Exchange (“ASX”) on 1 July

2011 raising A$2.5 million

via the issue 12.0 million

shares @ 20 cents per

share.

The Company was listed on

the back of a portfolio of

W e s t e r n A u s t r a l i a

exploration projects (Figure

1) comprising the Boorara,

T e u t o n i c a n d L a k e

Christopher Projects.

In January 2012 (Mining Group, ASX Announcement, 17/01/2012) the Company acquired an

80% interest in the Comval Copper Gold Project in the Philippines (Figure 1,2) covering

approximately 4,310 hectares over two granted exploration permits. Following successive

phases of drilling by MNE over 2012 the Company published a maiden JORC compliant

inferred Resource, incorporating previous operators drill information, of 32.7Mt @ 0.42% Cu

and 0.13 g/t Au using a 0.30% cut off at Comval which included a higher grade resource of

9Mt @ 0.80% Cu using a 0.40% Cu cut off.

On 15 August 2013 the Company announced a four year option to acquire up to 90% in a

high-grade copper project known as the El Roble Copper Project in Chile. The project is

situated approximately 23 km’s east of the Chilean Port City of Caldera within the Atacama

copper province. The consideration is A$6.0 million in staged payments over 48 months

together with 12 million Mining Group options (ex 5 cents, on/before 30/6/2015) to go to

68%. The Company can earn an additional 22% by completion of a Feasibility Study.

M i n i n g G r o u p p r o v i d e s tremendous leverage to high-grade vein hosted copper mineralisation in a world class copper province

FIGURE 1: Project Location Map

(source: Mining Group, website,

November 2013).

Mining Group listed in mid 2011

on the back of a portfolio of

Western Australia gold exploration

tenements.

Successive phases of exploration at Comval have outlined JORC Inferred resources of 32.7Mt @ 0.42% Cu & 0.12 g/t Au. El Roble has past production of over 1 million tonnes of copper ore

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RESOURCES & RESERVES

JORC compliant inferred Resources (Table 1, Figure 2) were completed (Mining Group ASX Announcement, 10/10/2012) by Perth based Cube Consulting with the majority of the resources at Tagpura East (33Kt Cu, 38.2K oz Au) beneath the existing open pit.

Detailed ground magnetics by MNE during 2012 identified two new Cu-Au bearing magnetite skarns along the north-west and east margins of the Tagpura East deposit. Tagpura West is situated at the western end of the open pit and remains open to the north, west and at depth.

At Maangob (Figure 2)

mineralisation is hosted within

altered volcanics with high-grade

mineralisation associated with

magnetite rich skarns. Mineralisation

remains open in all directions. At

Kalamatan, copper-gold

mineralisation is with an intrusive

diorite and is a true porphyry style of

mineralisation. The deep weathering

has identified Kalamatan as having

the potential for leach processing

with limited leach testing producing

recoveries of 84% in the oxide zone.

Mineralisation remains open in all

directions.

The drilling has shown

mineralisation to be complex and

upgrading existing JORC Resources

could be expensive. The potential

for higher-grade mineralisation

remains and we feel a JORC Resource approaching 50Mt @ 0.6% Cueq remains a realistic

target.

TABLE 1: Mining Group JORC

Resources and Reserves (source:

Mining Group, Annual Report,

October 2013).

FIGURE 2: Plan showing location

of JORC Resources and Reserves

and key prospectus at Comval

Project, Philippines (source:

Mining Group, Annual Report,

October 2013).

The project has potential for +50Mt

@ 0.60% Cueq….

….however drilling has shown

Skarn mineralisation to be complex

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Prospect Oxidation Tonnes Cu (%) Au (g/t) Cu (t) Au (oz)

Maangob oxide 500 0.32 0.06 1 1

transitional 265,500 0.37 0.04 1,000 300

fresh 4,756,000 0.41 0.06 19,500 9,200

Sub-Total 5,022,000 0.41 0.06 20,500 9,500

Kalamatan oxide - 0

transitional 1,811,000 0.38 0.22 6,800 12,600

fresh 4,836,000 0.36 0.23 17,200 35,300

Sub-Total 6,647,000 0.36 0.22 24,000 47,900

Tagpura West Oxide 251,000 0.39 0.06 1,000 500

transitional 2,225,500 0.36 0.06 8,000 4,300

Fresh 13,232,500 0.34 0.08 45,000 34,000

Sub-Total 15,709,000 0.34 0.08 54,000 38,800

Tagpura East Oxide 219,000 0.57 0.18 1,200 1,250

transitional 2,009,000 0.74 0.26 14,900 16,800

Fresh 3,069,000 0.70 0.25 21,500 24,650

Sub-Total 5,297,000 0.71 0.25 37,600 42,700

GRAND TOTAL 32,675,000 0.42 0.13 136,100 138,900

EXPLORATION OVERVIEW

El Roble Project (MNE option to acquire 90%)

Location & Access The project covers approximately 6,000

hectares and is situated 25 kilometres

from the port of Caldera and 90 km’s

from Copiapo. A sealed road is situated

10 km’s from the project. Two toll

treatment facilities are located within 70

kilometres (Figure 2).

Option Terms The terms of the acquisition comprise;

(a) Cash payments of US$6.0

million over 48 months to earn an initial

68%;

(b) A further 22% to be earned by

completion of a Feasibility Study;

(c) A total of 12 million options (ex 5

cents, exp 30/6/2015) have also been

issued to brokers in addition to 12% of

the Minera El Roble SpA shares. These

shares can be purchased back by MNE

at a 70% discount to Net Present Value

at completion of a BFS;

(d) A 2% net profit royalty is also payable to the broker that can be purchased by MNE at

any time for US$10 million; and

(e) The vendors remain free carried for 10% of the project upon completion of a Bankable

Feasibility Study (“BFS”).

Mining Group may increase its ownership to 90% by completing a feasibility study or within

two years of exercising its option, whichever occurs first.

A put and call option is also in place that will allow the Company to purchase an additional

10% (68%-78%) by paying an additional US$8 million in MNE shares (based on 30 day

VWAP prior to exercise) at completion of a BFS or within two years of exercising an option.

The vendor also has the right to “put” his option to MNE.

FIGURE 3: Location plan for the El

Roble copper project, Chile

showing proximity to ports, towns

and other copper deposits (source:

M i n i n g G r o u p , A S X

Announcement, 21 November

2013).

TABLE 2: Schedule of cash

payments to vendors of El Roble

Copper Project (source: Mining

Group, ASX Announcement, 15

August 2013).

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*Payment Amount Payable Comment

Date ($US)

12 months $750,000

18 months $250,000

24 months $250,000

30 Months $250,000

36 Months $250,000

42 Months $250,000

48 months $6,000,000 In cash or shares @ 30 day VWAP prior to settlement

*payments to be made from the date of signing of the 13/8/2013 option agreement.

Regional Geology and Mineralisation

Located in the world class Northern Chilean Atacama Iron Oxide Copper Gold (“IOCG”) region that hosts both high grade vein style IOCG deposits of copper and gold with some associated lower grade IOCG style deposits such as Candelaria, Mantoverde.

Ore deposits in this setting are typically vertically zoned with near surface oxide ore (consisting of copper and iron oxides) zoning into a weak secondary enriched zone and the lower parts of deposits consist of primary ore of chalcopyrite, Chalcocite, bornite, pyrite, and magnetite/hematite.

Geology and Mineralisation

Diorites are the dominant host rock which are in turn cross cut by numerous faults hosting IOCG style copper dominant mineralisation. Structurally the tenement is dominated by a NE trending fault system that is believed to be related to the Atacama fault system a major control to other IOCG deposits in the region. Mineralisation on the tenements comprises sets of quartz/calcite veins and tabular breccia bodies consisting of quartz and hematite hosted within diorites.

Three orientations have so far been identified;

Tabular veins and breccias trending NE/SW and dipping sub vertically to moderately

dipping to the NW and can be traced for up to 6 km’s in strike length. Widths vary from 0.5 to 15.0 metres;

Sets of NNW striking quartz hematite veins dipping steeply NE;

Steeply dipping Quartz /Calcite veins and breccias up to 3 metres in thickness trending

broadly EW and dipping steeply north or vertical. Strike extent in individual veins is over 1,000 metres in some cases. El Algarrobo and El Roble mines have been mined down to >400 metres depth (El Algarrobo).

A number of small underground mines also exist on the property. The main areas are Panga, Rincon, Viuda, Chica and Estaca. Copper and gold mineralised alteration haloes sometimes up to 5 metres from the vein wall have also been described.

FIGURE 4: Regional geology and

interpreted mineralised trends El

Roble Copper Project, Chile.

(source: Mining Group, ASX

Announcement, 4 October 2013).

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Production History

Historic reports indicate that from 1850 to 1900 approximately 500,000 tonnes of ore was extracted from El Algarrobo at >9% Cu (cut off grade for direct shipping ore in Britain at the time) with reported grades up to 20%.

Recent Exploration

The September Quarter saw exploration move into gear with surface and underground mapping and sampling at El Roble and detailed surveying in a number of underground mine areas. Surface Sampling A total of 194 samples were collected from both surface outcrops and underground workings/adits and assayed for copper, gold and a suite of multi elements with the following highlights;

Grades of up to 20.5% Cu and 13.50g/t Au were returned;

Widths ranged from 0.50 metres to > 5.0 metres;

Sampling was conducted over a strike length of 5 to 6 kilometres;

Due to recent sand cover, MNE believe that the strike extent of copper

mineralisation could exceed 10 km’s;

Mapping, sampling and surveying of adits was also undertaken with assays up to

11.2% Cu and 1.8 g/t Au;

Sampling of stockpiled ore returned assays up to 29% Cu and 2.8g/t Au with other

channel samples returning a number of assays over 4%; and

Veins were also found to be high in iron, cobalt and molybdenum.

Results of surface and adit sampling at the various prospects, stockpiles and underground workings are outlined in figures 5 to 8.

FIGURE 5: Surface geology and location of the three underground adit systems mapped and sampled – Descubridora, Dalse Estaca and Veta Gruesa. Yellow circles delineate approximate position of underground areas that have been mapped, sampled and surveyed to date (source: Mining Group, ASX Announcement, 4 October 2013).

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FIGURE 6: Plan of underground adits at the Descubridora vein. Red circle indicates location of main high grade ore shoot being mined from the ore drive floor (source: Mining Group, ASX Announcement, 4 October 2013).

FIGURE 7: Location map of Veta Gruesa underground. (source: M i n i n g G r o u p , A S X Announcement, 4 October 2013).

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Ground Magnetic Survey A ground magnetic survey (ASX Announcement 17/10/2013) has further outlined numerous structures (Figure 10) that may be associated with Cu mineralisation. This interpretation has been confirmed with the recent mapping and sampling program undertaken by the Company. Approximately 125 line km have been completed.

FIGURE 8 : P lan view of underground adit 4 at Veta Gruesa. Red circle indicates location of high grade ore shoot with arrow indicating direction of mining. Sample 1009825 – 3.18% Cu, 0.59g/t Au was taken from blasted rock from the floor in this area. (source: Mining Group, ASX Announcement, 4 October 2013). FIGURE 9: Magnetic Image of first ver t ica l der i vat ive showing mineralisation structures and interpreted structures. (source: M i n i n g G r o u p , A S X Announcement, 17 October 2013).

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Drilling Program A 1,000 metre HQ diamond drilling program was announced (ASX Announcement 28 October 2013) is focussing on the follow up of high grade shoots at Descubridora (four holes) and Veta Gruesa which are currently the subject of small scale air-leg mining (Figure 10, 11). Planned depths are in the order of 50 to 100 metres.

FIGURE 10: Plan of Descubridora drill holes on magnetic analytical signal image. (source: Mining Group, ASX Announcement, 28 October 2013). FIGURE 11: Section looking north for planned drill holes RCPDH 00001 and RCPDH 00002 (source: M i n i n g G r o u p , A S X Announcement, 28 October 2013).

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Descubridora Drilling Four holes for 546.20 metres have been completed so far at Descubridora and have successfully intersected chalcopyrite/pyrite mineralisation (concentrations between 1-10% sulphides) in the sulphide zone, below the current underground workings as set out in figures 12 - 14. Mineralisation was found to be offset by an andesite dyke and mineralisation was intersected slightly deeper than originally planned. Planned depths of the remaining holes are in the order of 50 to 100 metres.

FIGURE 12: Core from RCPDH 0002 at 129.30 metres downhole showing chalcopyrite, quartz, calcite veining over 15 cm (source: Mining Group, ASX Announcement, 12 November 2013).

TABLE 3: Drilling summary for Descubridora Prospect, El Roble Project, Chile (source: Mining Group, ASX Announcement, 12 November 2013). FIGURE 13: Drill hole location plan for Descubridora Project with yellow highlights indicating interpreted surface expression of mineralised veins (source: Mining Group, ASX Announcement, 12 November 2013). FIGURE 14: Cross section for RCPDH 00002 and 00004 showing interpreted geology (source: M i n i n g G r o u p , A S X Announcement, 12 November 2013).

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Hole Number Northing Easting RL Dip Azimuth Drilled Depth

RCPDH00001 7007955 343585.1 931.97 60 130 101

RCPDH00002 7007955 343585.1 931.97 75 130 160

RCPDH00003 7007894 343482.8 912.55 60 145 104.2

RCPDH00004 7007920 343492 912 75 140 181

COMVAL PROJECT

(MNE 80%, Cadan Resources 20%)

Location and Access The Comval Project is located in the Compostela Valley in East Mindanao (Philippines), approximately 90 km north of the major regional city of Davao (Figure 15). The Project is cross cut by a number of roads that access local villages and a number of secondary roads and trails that access old workings.

Geology and Mineralisation

A portion of the Philippine Fault Zone known to host epithermal gold, copper- gold porphyry and copper-gold magnetite skarn type mineralisation transects the project area. There are also numerous outcrops of copper and gold mineralisation on the contacts of quartz diorites and associated porphyries.

This Cu+/-Au belt is well endowed and includes the King-King (5B lb Cu and 10M oz AU) and the Dilwalwal deposits (10M oz Au) and the Co-O

Mine (1.3M oz Au).

At least four styles of mineralisation have so far been identified with the focus to date on copper bearing magnetite skarns which have an assemblage of magnetite-epidote-iron carbonate+-chalcopyrite+/-pyrite). Higher grades appear to be associated with zones of high-magnetite concentrations involving limestone replacement. Porphyry hosted mineralisation has also been identified at the Kalamatan Prospect.

The focus of the 2011-2012 program was the follow up of three historic targets of Tagpura, Maangob and Kalamatan that were identified by Cadan and more recently Mining Group has identified Bayag Bayag (copper skarn), Tagpura North (copper skarn and epithermal gold) and Taub (gold) as high priority targets.

A JORC compliant resource was outlined earlier in this report from historic drilling carried out by Cadan at Tagpura, Maangob and Kalamatan.

In addition to copper mineralisation, exploration in the northern part of the tenements identified high-grade epithermal gold mineralisation (Figure 16).

Plenty of upside remains at Comval and various alternative funding options are being assessed.

FIGURE 15: Comval Project and other significant deposits/mines in the Philippines (source: Mining Group Limited, website, November 2013).

FIGURE 16: Comval Project showing gold prospects in the northernmost part of the tenement (source: Mining Group Limited, website, November 2013).

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OTHER PROJECTS

Boorara Project: (MNE earning up to 70%, East Coolgardie Mineral Field, Western

Australia): Covers 206 hectares over two Prospecting Licenses. Gold and Base

Metals.

Teutonic Project: (MNE earning up to 70%, Eastern Goldfields Province, Western

Australia): One granted Exploration License covering 1,613 hectares. Gold and Base

Metals. A site visit was undertaken during the September quarter to review surface

geology and previous RAB/RC drill holes that are broadly coincident with a number of

magnetic anomalies. Some low level Au, As, Zn and Cu assays were returned.

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COMMODITY OUTLOOK

Copper

Copper been trading in a US$7,000-US$7,420 range since early August partly due to uncertainty about real demand growth (particularly from the property sector) from China. The increase in apparent demand in China in the last couple of months is partly restocking after the falls in prices during the summer months.

Bonded stocks in China are climbing, while premiums have begun to soften. Citigroup has estimated that bonded copper stocks have increased to around 450,000 tonnes from lows of 300,000 tonnes a month or two ago, while stocks have also built up in domestic non-exchange warehouses.

Reflecting softer demand, premiums for Shanghai bonded copper stocks have slipped by US$2.50 to US$180-$205, according to China price provider Shmet. Copper posted a fall of close to 1 % in October, its first monthly fall since June. Expectations for rising supply have also been hurting the outlook for copper prices.

Analysts polled by Reuters this month expected the copper market to record a surplus of 182,000 tonnes this year, up from a previous forecast of 153,000 tonnes, and then balloon to a surplus of 328,000 tonnes in 2014.

Traders also were watching for signals on when the U.S. Federal Reserve may start to reign in its bond purchases, which have buoyed commodities over the past few years by driving liquidity towards the asset group.

The short term outlook for copper is likely to hang on the third-quarter U.S. GDP figures and labour market report that should provide further insight as to the stage of the U.S. economy.

Sentiment was also hit by worries about a crackdown on China's property market after the southern city of Shenzhen was reported to be raising minimum down payments on second home purchases in an attempt to stem rising prices.

China's soaring property sector has been a major driver of copper imports.

FIGURE 17: LME 1 year copper price (source: www.kitcometal.com Base Metals Monthly, November 2013). FIGURE 18: LME 1 year stockpiles (source: www.kitcometal.com Base Metals Monthly, November 2013). Copper has been caught in the wake of a recent sell down of global risk assets

Copper market is likely to remain finely balanced

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source: etrade

CORPORATE

There have been a number of capital raisings since our last coverage in late 2012. They have

included;

Recently the Company raised A$8 million by way of a two tranche placement in

September 2013, (before expenses of the offer) via the issue of 120 million Shares @

2.5 cents each (and one for two free attaching options exercisable at 5 cents, on or

before 30 June 2015) (ASX Announcement 5 September 2013, 30 October 2013 and

20 November 2013).

In June this year, Mining Group raised approximately A$2.1 million through a fully

underwritten (Cygnet Capital Pty Ltd) one for four entitlement issue at 2.5 cents per

Share. The Company issued a total of 85.08 million Shares and 85.08 million options

(exercisable at 5 cents, on or before 30 June 2015) (ASX Announcement 12 June

2013).

RISK ANALYSIS

Exploration Risk: Mineral exploration is high risk and there is potential for Mining

Group’s exploration programs on its Chilean and Philippine exploration portfolio to fail

to outline any potentially economic mineralisation.

Metallurgical and Processing Risks: The metallurgy of mineral deposits, (e.g. skarn,

porphyry deposits) may present challenging metallurgical issues that may lead to an

increase in operating and/or capital costs and adversely affect project economics.

Land Owners: Failure to execute agreements relating to access on mining

concessions with the local landowners could impair exploration and/or development at

key projects.

Financial Position: The Company does not currently have the financial reserves to

fully evaluate all of its exploration projects and is likely to be dependent on raising

capital from the equity markets in the medium term.

Infrastructure Risks: Delays in infrastructure (port, roads) have the potential to

significant delay production plans.

Peer Underperformance: Underperformance of peer Au, Cu+/-Au explorers and/or

developers has the potential to adversely affect market sentiment and lead to lower

valuations for Mining Group.

Commodity Risks: The Company is primarily exposed to Cu. Declines in these

metals may adversely affect the valuation and project economics of key exploration

projects which may in turn, struggle to attract the required capital to enable further

exploration and/or development.

Market Risks: Further declines in equity markets may continue to put pressure on

junior resource companies as investors switch out of risk into safe haven investments.

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The Company is likely to be dependant on raising equity in the near term... Under-performance of junior explorers remains a real risk

DIRECTORS AND MANAGEMENT Mr Winton Willesee B.Bus, DipEd, PGDipBus, MCom, FFin, CPA, MAICD NON EXECUTIVE CHAIRMAN

Mr Willesee is an experienced company director. Mr Willesee brings a broad range of skills

and experience in strategy, company administration, corporate governance, company public

listings, merger and acquisition transactions, reconstructions and corporate finance from his

background with listed and unlisted public and other companies. Mr Willesee holds a Master

of Commerce, Post-Graduate Diploma in Business (Economics and Finance), a Graduate

Diploma in Applied Corporate Governance, a Graduate Diploma in Applied Finance and

Investment, a Graduate Diploma in Education and a Bachelor of Business. He is a Fellow of

the Financial Services Institute of Australasia, a Member of the Australian Institute of

Company Directors, a Member of CPA Australia and a Chartered Secretary.

Mr Zeffron Reeves, B.Sc. (Hons), MBA, MAIG MANAGING DIRECTOR

Mr Reeves has more than 15 years geological experience, most recently working with

Cleveland Mining Company Ltd as Principal Exploration Geologist, where he was responsible

for the delineation of the Premier Gold Mine resource as well as several new discoveries

within the Crixas greenstone belt (Brazil). He has also had discovery success in Brazil and

Australia with Ashburton Minerals having delineated previously unknown mineralisation within

the Pocone Goldfield, in Brazil.

Mr Reeves has a broad range of experience from grass roots exploration to underground

mining. He also has corporate and commercial experience gained as commercial manager for

a WA based electrical engineering contracting business and in his roles with Cleveland and

Ashburton. From Mining Group’s inception, Mr Reeves has worked as a consultant to the

Company, having provided technical, corporate and commercial consulting services.

Mr Colin (Cobb) Johnstone, BE,(Mine) NON EXECUTIVE DIRECTOR Mr Johnstone was formerly COO of Equinox Minerals Limited, and Sino Gold Mining

Limited prior to their respective acquisitions by Barrick Gold Corporation and Eldorado

Gold Corporation. Most recently, he was Managing Director of Territory Resources

Limited. He is a mining engineer with over 30 years' experience in the copper, gold and

metalliferous mining industries, including both large open cut and underground

operations. Mr Johnstone has extensive industry experience, having served as General

Manager at some of Australia's largest mines, including KCGM, Olympic Dam and

Northparkes. He has successfully constructed and operated mines in offshore jurisdictions

including Zambia, China, Canada, Argentina as well as Australia.

Mr Robert Butchart NON EXECUTIVE DIRECTOR

Mr Butchart has been involved in the mining industry for more than 25 years. He has owned

and operated exploration companies and drilling rigs in Australia and overseas, and has been

involved in heap leaching operations and narrow vein underground gold mines. Robert is the

President of Cadan Resources.

CONCLUSION RM Research believes that the El Roble play, based on its high-grade production history

together with recent surface and underground sampling by MNE, has the potential to deliver

near term, low CAPEX/OPEX Cu production. Given that the current drill program is focussed

on the identification of high-grade Cu ore shoots that are currently being mined, the potential

for exploration success is high. The possibility of mineralisation extending to a strike length of

10 kilometres is equally intriguing and could lead to the discovery of larger-low grade IOCG

deposits that are common throughout the district. Comval still has potential however the

grade, complexity of skarn mineralisation and disappointing results from follow up drilling in

the north of the tenements has seen this project placed on a slow burn.

Speculative Buy based on anticipated positive drilling results in late CY 2013. We intend to

revisit our peer analysis following further results from El Roble.

Mr Willesee is director of a number of ASX listed junior companies

Mr Reeves has been involved as a consultant since inception of Mining Group

Mr Johnstone was formerly COO of Equinox Minerals and Sino Gold Mining

Robert Butchart is President of

Cadan Resources Limited

EL Roble represents a near term low CAPEX/OPEX production opportunity

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Care has been taken to define the level of risk to return associated with a particular company. Our recommendation ranking system is as follows:

Buy Companies with ‘Buy’ recommendations have been cash flow positive for some time and have a moderate to low risk profile. We expect these to outperform the broader market.

Speculative Buy We forecast strong earnings growth or value creation that may achieve a return well above that of the broader market. These companies also carry a higher than normal level of risk.

Hold A sound well managed company that may achieve market performance or less, perhaps due to an overvalued share price, broader sector issues, or internal challenges.

Sell Risk is high and upside low or very difficult to determine. We expect a strong underperformance relative to the market and see better opportunities elsewhere.

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