Gold and Copper Exploration in Eritrea January 2014

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The Haykota Exploration Licence – Western Eritrea

Haykota Exploration Licence

Bisha Mine (Nevsun 60%, Enamco 40%) • Produced 313,000 oz. Au in 2012 • Bisha Main and Harena reserves at May 2012

• Supergene 6.4 Mt @ 4.09% Cu • Primary 19.2Mt @ 1.1% Cu, 6.3% Zn, 0.7 g/t Au, 47g/t Ag

Zara Mine (SFECO 60%, Enamco 40%)

840,000 oz. Au

Asmara Projects (Sunridge Gold Corporation)

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A private company, based in London, UK, exploring in Eritrea, East Africa

Andiamo is focused on:

VMS and gold deposits

Eritrea

Track record of discoveries including :

Yacob Dewar VMS system

Adi Meriray VMS system

Frataka VMS system

Shambotai & Jawkeray gold fields

Raised US$10.7M privately between 2009-2014

Prepared for Initial Public Offering (IPO)

Andiamo – History and Background

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Mark Parker Chairman, Non-Executive Director Exploration geologist and executive. Previously Founder/Managing Director of African Eagle (AIM) nickel discovery in Tanzania, East Africa. Involved in exploration and development projects in Africa.

Dr Tim Williams CEO, Director Mining Geologist with a strong financial background. 30 yrs experience in mining with majors (de Beers, JCI, Gencor) and juniors (Golden Star and MDN) Mining finance background(James Capel, Lehman Brothers, Ernst & Young). In Eritrea since 1995. PhD in mining geology.

Dr Seife Berhe Director, Country Manager, Eritrea Geologist, expert in Eritrean geology and its mineral deposits, authoring on Eritrean crustal evolution. Specialist in remote sensing applications for identification of economic mineralization. Founder of Global Resources, an environmental consultancy in Eritrea. PhD in geology and remote sensing.

William Fisher P.Geo Non-Executive Director Executive with 30 years experience. Chairman of GoldQuest; Previously Chairman of Aurelian Resources (sold to Kinross for $1.2 billion); previously CEO of GlobeStar Mining; and VP Exploration of Boliden.

Dr Stephen Francavilla CFO Chartered Accountant (Ernst & Young) with background in corporate finance and conduct of financial transactions. Experience of taking companies to IPO both in Canada and in the UK. PhD in geochemistry.

Dan Hamer Exploration Manager Exploration geologist with extensive experience both in VMS deposits and orogenic gold in Eritrea and Sudan. Background in managing operations for major mining companies operating in Africa.

Andiamo – Key Personnel

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Funds raised: • US$ 4.6M Aug 2010 (at US$ 0.50/share)

• US$ 4.1M Aug 2011 (at US$ 1.00/share)

• US$ 1.5M Jan-June 2013 (at US$ 0.50/share)

• US$ 0.5M Jan 2014 (at US$ 0.15/share)

____________________

Total US$ 10.7M

Cash Position: • US$0.5M plus US$1.0M due in tranches from Ortac Resources plc.

Shares Outstanding: • 30.7M

About 100 shareholders • Institutional, individuals and corporate

• Founders all invested in Andiamo

IPO ready: • Secured land position in Eritrea

• Fully compliant with exploration and expenditure commitments

• Audited 4 years Annual Financial Statements up to 31 December 2012

• NI 43-101 compliant resource report

Andiamo – Fund Raising and Shareholders

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Haykota: Bisha VMS Belt &

Shambotai Gold Trend

• Licence is 40 kms from Bisha Mine

• Haykota town (pop 5,000)

• New sealed highway all the

way to Asmara

• Ample water: Gash River

• Good telecommunications

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The Haykota Exploration Licence – Gravity and VTEM

Coincident gravity high + conductor = VMS target 8

• Bisha Volcanogenic Massive Sulphide belt (800 Myrs)

Yacob Dewar oxide gold and copper

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Gold 2010 - 2 short aircore holes

14 m @ 3.5 g/t gold 2011 - 32 diamond drill holes

16.2 m @ 5.0 g/t gold 2012 - 58 reverse circulation holes

25.2 m @ 7.3 g/t gold 2013 – 9 diamond drill holes

19.9 m @ 6.2 g/t gold 9.0 m @ 22.5 g/t gold

Copper 2011 32 diamond drill holes

13 m @ 1.8% Copper 2012 - 3 diamond drill holes

63 m @ 2.4 % Copper

Yacob Dewar VMS Discovery – at-surface gold

and copper oxide deposits above sulphides

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Yacob Dewar 2013 gold drilling

Yacob Dewar – some gold intersections

Borehole from

(m) interval

(m) Au>0.3

g/t

YDD-035 8.0 9.0 22.47

YDRC-33 6.0 16.0 10.81

YDD-030 28.0 19.9 6.16

YDD-005 4.5 13.3 5.31

YDD-002 5.0 16.2 4.10

YDD-034 37.5 12.0 5.40

YDD-001 12.0 7.0 8.11

HYR-2 0.0 14.0 3.68

YDRC-35 39.0 8.0 6.32

YDRC-45 35.0 17.0 2.48

YDRC-17 28.0 14.0 2.69

YDRC-05 57.0 8.0 4.16

YDRC-47 35.0 14.0 2.26

Borehole from

(m) interval

(m) Au> 0.3

g/t

YDRC-14 25.0 13.0 2.19

YDD-029 28.0 2.0 14.10

YDD-031 17.5 2.5 10.91

YDRC-21 26.0 5.0 4.97

YDD-013 57.2 10.2 2.41

YDD-028 33.0 4.0 5.37

YDRC-06 11.0 4.7 4.39

YDD-014 37.5 5.0 3.97

YDD-033 21.4 3.0 5.41

YDD-008 45.0 2.9 5.43

YDD-016 77.6 3.0 5.23

HYR-1 5.0 6.0 2.43

YDD-010 9.5 5.3 2.07

YDD-030 17.0 4.0 2.68

YDD-017 59.0 3.7 2.93

62 other intercepts >0.3 g/t Au HYR = Aircore holes YDD = Diamond Core Holes YDRC = Reverse Circulation Holes Intercepts approximately true width (except HYR-2 vertical hole) True depth below surface typically about 70% of listed downhole depth (holes angled 50°to East)

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UK engineers, SRK, to deliver

an independent NI 43-101

resource calculation for the

Jacob Dewar gold and

copper oxides in Q4, 2012

Gold and Copper are usually separate

Good gold grade 3.4 – 4.0 g/t

Surface deposit – open pit

No environmental problems identified

Process water available

Good infrastructure

Low Capital Cost: High return

Yacob Dewar Oxide Gold and Copper

Massive sulphide

63 m @ 2.4% Copper (oxide)

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Yacob Dewar – some copper intersections

Borehole from (m) Interval (m) Cu% > 0.5%

YDD-25 22.0 41.0 2.57

YDD-25 0.0 20.0 2.08

YDD-022 18.5 11.0 2.03

YDD-015 76.2 7.9 2.11

YDRC-09 56.0 17.0 0.86

YDRC-15 17.0 7.0 1.92

YDRC-48 99.0 9.0 1.40

YDRC-09 15.0 9.0 1.01

YDRC-36 22.0 11.0 0.76

YDD-019 117.0 3.0 2.70

YDD-013 22.1 7.0 1.13

YDD-019 0.0 8.5 0.80

YDD-25 110.0 2.5 2.69

92 other intercepts >0.5% Cu YDD = Diamond Core Holes YDRC = Reverse Circulation Holes Intercepts approximately true width (except possibly YDD-25 oxide) True depth below surface typically about 70% of listed downhole depth (holes angled 50°to East)

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Yacob Dewar – copper exploration upside

Copper expansion possibilities:

Yacob Dewar oxide copper

Haykota Licence VMS potential

New licence area

Regional expertise

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Ber Gebey Gossan 2.5 kms north east of Yacob Dewar

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• E X P L O R A T I O N L T D •

Yacob Dewar – copper exploration upside

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Shambotai – Jawkeray gold belt

Shambotai / Jawkeray

Lode and disseminated gold

Artisan workings

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• Strong gold anomaly

• Main zone 1.5kms x 0.5kms

• North zone 0.8kms x 0.5 kms

• Possibly connected

• Very extensive artisan activity

• Clear geophysics connection

• Demands follow-up

– Detailed mapping

– Surface sampling

– Further drilling

Shambotai Soil sampling

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Corporate Strategy

Development of Yacob Dewar • Surface gold deposit; open pit; high grade; simple processing

• Intention: to generate cash for copper/gold exploration

• Low capital costs; near term production; 55kms from Bisha

• 43-101 compliant resource estimate

Exploration for VMS in the Haykota Licence • Target is multi million tonne massive sulphide Cu/Zn surface deposits

• Strong geophysics and geochemical evidence

• Drilling has already demonstrated mineralisation

Exploration for shear hosted gold in Haykota Licence • Target is multi million ounce gold deposits at surface

• Extensive artisan mining activity: both valleys and veins

• Drilling has already demonstrated mineralisation

New Exploration Licence • VMS gossans identified from satellite interpretation

• Artisan gold workings on quartz vein swarm

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Inventory of Work completed

Exploration Method Unit 2009 2010 2011 2012 2013 Total

Geophysics

Airborne VTEM Line kms - - 4,047 - - 4,047

Magnetics Line kms - - 4,047 - - 4,047

Radiometrics Line kms - - 4,047 - - 4,047

Ground Gravity Stations - 9,628 6,108 - - 15,736

IP poly-dipole Line kms - - 14 20 27 61

IP gradient array Line kms - - 70 137 - 207

Magnetics Line kms - - 193 218 138 549

Mapping and sampling

Rock chip sampling Samples taken 50 60 200 157 18 485

Stream sampling Samples taken - - 70 76 167 313

Soil sampling Samples taken 380 383 1,889 900 2,482 6,034

Diamond Drilling Holes drilled - - 31 20 19 70

Metres - - 4,098 3,273 1,141 8,512

R/C Drilling Holes drilled - 2 - 58 - 60

Metres - 36 - 4,394 - 4,430

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Eritrea

Highly prospective geology, only recently opened up to exploration

• Land area about 120,000km2 ; Red Sea coastline 1,200 kms

• Population; approximately 5 million (UN 2008), plus another 1 million dispersed globally

• Topography: sea level to a fertile plain at about 2,500m. Steep, rugged escarpment

• Climate: Semi Arid: main rains July-Sept, largely in storms

• Culture: nine ethic groups and languages

• Major Language: Tigtinya, Arabic: English widely used in business

• Major Religions: Islam, Christianity

• Government: People’s Front for Democracy and Justice, the successor to EPLF

• Economy: dominated by agriculture, plus minor industries. Mining will dominate in the future.

• Independent following UN supervised referendum held in 1993.

• GNP per capita: approximately US$800 pa

• Capital: Asmara, since 1900; population approximately 500,000

• Ports: Massawa, which supplies Asmara; Assab, traditionally the major port for Ethiopia

• Airports: Asmara, International; potentially Massawa International (not yet), Assab

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Mineral Resources in Eritrea (Summary of reported numbers)

mt % Cu % Zn g/t Au g/t Ag t Cu t Zn oz Au oz Ag

Sunridge Gold Corporation EMBA DERHO

Supergene Cu rich 0.8 0.89 0.11 0.11 7.03 7,120 880 2,971 189,857

Primary Cu rich 37.6 1.02 1.01 0.19 9.36 383,520 379,760 229,563 11,3308,987

Primary Zn rich 20.5 0.28 2.39 0.39 12.13 57,400 481,750 257,672 8,014,265

Total Emba Derho 58.9 1.53 2.93 0.51 10.59 448,040 862,390 490,206 19,513,108

Sub-Sahara Resources

(SFECO)

ZARA

Indicated 4.27 6.31 866,000

Inferred 0.86 6.33 174,000

Total Zara 5.13 6.31 1,040,000

Sanu Resources HAMBOK

Indicated 10.7 0.98 2.25 0.2 6.84

Inferred 17.0 0.85 1.74 0.19 5.89

Total Hambok 27.7 0.90 1.94 0.19 6.26 250,000 536,000 172,651 5,572,347

Bisha Mining S.C.

(Nevsun Resources/ENAMCO)

BISHA

Measured and Indicated 27.286 1.68 3.26 1.84 40.59 457,273 889,091 1,610,000 35,610,000

Inferred Resource 11.726 0.91 5.35 0.66 46.15 106,818 626,818 250,000 17,400,000

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Independent young country actively encouraging its mining industry

– 1500s Ottoman Empire annexes Eritrea

– 1890 Italian Colony declared

– 1941 Allies defeat Italian forces: UK occupation

– 1952 UN declares federation of Eritrea and Ethiopia

– 1962 Ethiopia annexes Eritrea: independence struggle starts

– 1988 Battle of Afabet, Ethiopian military defeated by liberation forces

– 1990 Port of Massawa recaptured by EPLF

– 1991 EPLF recaptures Asmara, forms provisional government

– 1993 UN sponsored referendum; Eritrea becomes independent and joins United Nations

– 1998 Ethiopian incursion starts major hostilities

– 2000 Algiers agreement between Eritrea and Ethiopia to establish border commission

– 2003 UN Boundary Commission issues ruling: accepted by Eritrea, not accepted by Ethiopia

– 2009 Border dispute with Ethiopia still not resolved.

– 2009 Bisha mine fully financed by international institutions and banks

– 2011 Bisha mine starts commercial gold-silver production: 2011 379,000 oz Au; 2012 313,000 oz Au.

– 2012 Zara gold mine sold to China SFECO and ENAMCO for $114m.

Eritrea History

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Eritrea Mining Law

New Mining Law enacted in 1995

• Eritrean Mineral Proclamation 1995 and associated tax proclamations

• Based on law of Australian Northern Territories

• Written in Tigrinya and English

• Allows for:

– Prospecting Licence

• Valid for one year, not renewable, gives exclusive right to apply for Exploration Licence

– Exploration Licence

• Valid for 3 years

• Renewable twice for one year with reduction in area

• In practice, ELs have been renewed on an annual basis if adequate work has been done

– Mining Licence

• Valid for 20 years, renewable

• Taxation

– Royalty (NSR) of 5% on gold and 3.5% on base metals

– Corporate income tax rate of 38%

– 100% Capital allowances, carried forwards

– Nominal import taxes (0.5%) on qualifying imports

– Employees pay Eritrean income tax, expatriates pay 10% withholding tax

– State (ENAMCO) equity free carry 10%

– State additional 30% participating equity interest purchased at agreed price

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