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Gold Company ReviewExploration and Development CompaniesSeptember Quarter 2009

Resource Capital Research


Suite 1306 183 Kent Street Sydney, NSW 2000

Tel: +612 9252 9405 Fax: +612 9251 2859 Email: [email protected]: www.rcresearch.com.au

Resource Capital Research ACN 111 622 489

Gold Company ReviewSeptember Quarter 2009

Resource Analyst (Gold): Dr Tony Parry

Resource Analyst: John WilsonResource Analyst: Dr Trent Allen

This report is subject to copyright and may not be redistributed without written permission from RCR. The information contained in this report is for use by US and Australian residents only. Copies are available for purchase from RCR.

21 September 2009


September Quarter 2009 Disclaimer and disclosure attached. Copyright© 2009 by Resource Capital Research Pty Ltd. All rights reserved. 2

Contents

Contents...................................................................................................................2 Overview and Investment Comment .............................................................................3 RCR September Quarter 2009 Featured Company Summary.............................................4 Comparative Charts....................................................................................................6 Financial Data............................................................................................................7 Company Statistics.....................................................................................................7 Reserves, Resources and Historic Mineralisation .............................................................8 Valuation and Performance Data ..................................................................................8

Exploration, Development and Production Companies

[Ampella Mining Limited ………………………………………………………………………………………………………………] Avoca Resources Limited.............................................................................................9 Catalpa Resources Limited......................................................................................... 11 [Chalice Gold Mines Limited ......................................................................................... ] [Cortona Resources Limited ......................................................................................... ] Eleckra Mines Limited ............................................................................................... 13 Kentor Gold Limited.................................................................................................. 15 Kingsgate Consolidated Limited * ............................................................................... 17 Korab Resources Limited ........................................................................................... 19 [Morning Star Gold NL ................................................................................................ ] Norseman Gold Plc * ................................................................................................ 21 North Queensland Metals Limited ............................................................................... 23 [Perseus Mining Limited .............................................................................................. ] [West Wits Mining Limited ........................................................................................... ] YTC Resources Limited.............................................................................................. 25

[Gold Market Fundamentals ......................................................................................... ] Selected Charts and Gold Sector Statistics ................................................................... 27 Report Contributors .................................................................................................. 29 Disclosure and Disclaimer.......................................................................................... 30

* Indicates companies with detailed financial projections and valuation available.

[This is the Abridged Report version of the September Quarter RCR Gold Company Review. The purchase price of RCR September quarter reports (gold, uranium and tin) which includes the comprehensive version of the Gold Company Review (57 pages) is A$2,200. There is also a Subscriber Report version (for gold, uranium and tin) which is available for A$110. Contents and purchase details can be found at www.rcresearch.com.au]



Overview and Investment Comment

Gold Price Performance Gold has been generating headlines recently after breaking through the US$1,000/oz level in Mid September. The current gold price has eased to US$998/oz (September 25), 1.9% below its three month high (US$1,017/oz on September 16), but up strongly (+9.8%) from the three month low of US$909/oz seen on July 8. The 10% rally in the gold price since early July has been driven primarily by a weakening US dollar, but also helped by sporadic headlines regarding future inflationary risks. In the last three months the US dollar, as measured by the Trade Weighted Index of major trading partners, has fallen by 6%. Equity markets have been rallying strongly (The Morgan Stanley World Index is up 18.9% in the last three months) which suggests that ‘crisis-driven’ safe haven buying, which was prevalent early in 2009, is not a key driver of the gold price. Gold prices for producers in Australia and Canada have gone nowhere in the last three months due to commodity-linked currency appreciation. Gold Market Fundamentals With improved equity market performance and reduced banking sector fears, flow of funds into gold backed Exchange Traded Funds (ETF’s) fell dramatically (down 88%) to 57 tonnes (gold equivalent) in 2Q09, after record 465 tonne inflows in 1Q09. Fortunately the slack was taken up by a rebound in jewellery demand (up 17% 2Q09 vs 1Q09). Much less scrap gold coming on to the market (down 41% in 2Q09 vs 1Q09) also supported the gold market fundamentals. Gold Price Outlook RCR expects gold to trade in the range of US$950/oz to US$1,000/oz in the next six months, supported by on going concerns over the US dollar, with the odd dash of inflation fear thrown in. The fundamentals, particularly reduced crisis-driven investment demand, do not suggest the price will sustain the push through US$1,000/oz. We see more risk on the downside towards US$900/oz if equity markets continue to rally. Inflation is not yet real enough to be a sustained driver of gold (this is expected in 2H10). Gold Equities Movements in Gold Share Indices

Current * 1 month 3 month 6 month 1 year

USA S&P 500 Gold Index na 15% 9% 12% 13%Canada S&P/TSX Gold Index na 14% 16% 9% 34%Australia S&P/ASX200 Gold Index na 17% 13% 13% 34%South Africa FTSE/JSE Gold Index na 11% 6% -7% 40%FTSE Gold Index FTSE Gold Index na 20% 20% 32% 44%

World Markets (all sectors) Morgan Stanley World Index na 9% 19% 44% -6%

*Table data as at September 21 2009 Source: Bloomberg, RCR

Gold has surged ~10% (now just below US$1,000/oz), from a three month low of US$909/oz in July. A weak US dollar has been the main driving force behind gold’s recent rally. For producers local currency prices have been flat. Flow of funds into Exchange Traded Funds has almost dried up after record levels in 1Q09. Anticipated trading range US$950 to US$1,000/oz over next 6 months, with more risk on the downside towards US$900/oz. On a 12 month view, (and in the last month with gold above US$1,000/oz), gold shares have out-performed strongly, but in the last six months the strong recovery in equity markets has outshone gold share performance as measured by the major indices.



RCR September Quarter 2009 Featured Company Summary AUSTRALIA

Company Code Comment

Ampella Mining Limited AMX Early ExplorationAMX has made six gold discoveries in 12 months at the Batie West Project in Burkina Faso, where it isexploring 110km of strike. Results include 28.8m @ 3.7g/t Au with 4.1m @ 15.5g/t (Konkera). Drilling isunder way and a JORC resource is expected in FY10.

Avoca Resources Limited AVO ProductionTrident Gold Mine is now consistently meeting target costs and mining rates. 52.8koz Au was produced in2Q09 (annualised rate of 207kozpa) at opex A$442/oz. EBITDA 09/10F is A$114m. Attempted takeover ofDioro Resources closed Aug '09 with AVO owning 44.85% of DIO.

Catalpa Resources Limited CAH Plant Construction - Advanced ExplorationCatalpa's proposed merger with its major shareholder (Lion Selection) will boost projected gold output from95koz to 126koz (FY11), and importantly increase earnings per share. When the dust settles we expect thelarger merged group to re-rate towards A$0.19 share price.

Chalice Gold Mines Limited CHN ScopingA merger with Sub Sahara Resources (ASX:SBS) has added the Zara Gold Project (Eritrea) to CHN'sportfolio of Australian exploration assets (gold, base metals). Zara includes the Koka Deposit (944koz Au)and ~50km prospective strike. Share placement of A$4.4m in Sep '09.

Cortona Resources Limited CRC Advanced ExplorationAn intercept of 17m @ 7.44g/t Au at Dargues Reef, NSW, should boost the resource upgrade (to ~500kozAu) and Scoping Study expected 3Q09. CRC's drilling-focused exploration program is defining a large-scalemineralised system at Majors Creek.

Eleckra Mines Limited EKM Advanced ExplorationEKM's recent drilling should expand its 749koz gold resource in the underexplored Yamarna belt (WA).EKM shares are finally starting to reflect some value for the 6.2mlb Thatcher Soak U3O8 resource - a dealwith neighbour Uranex would trigger further upside to ~A$0.11/share.

Kentor Gold Limited KGL BFS, Project DevelopmentAmbitious Kyrgyz Republic-based KGL may have found its 'company maker' in the advanced ~A$70mcapex Andash Au-Cu project (1.15moz gold-equiv. resource, BFS completed) - can purchase 80% forUS$10m (~US$9/oz Au equiv. resource) plus US$5m for equipment.

Kingsgate Consolidated Limited KCN Production, Advanced ExplorationHigher grades (2.3g/t) have dropped 2Q09 opex to a low US$228/oz. FY09 production 93koz, to grow to137koz FY10 and 210koz FY11. The Sino Gold-Edorado merger should increase focus on KCN as a lowcost, potential >200koz quality SE Asian gold producer.

Korab Resources Limited KOR Definitive Feasibility StudyKOR has four projects near to production (gold, magnesium, phosphate) and is in the process of a uraniumspin-off. Current gold focus is on the Bobrikovo Project (Ukraine, target +640koz Au), where low-cost miningcould commence in 4Q09.

Morning Star Gold NL MCO Production, Advanced Exploration, After 16 years of refurbishment work and >A$23m spent, MCO has recommenced mining at Victoria'shistoric Morning Star underground mine (last mined 1963, past production ~900koz at 26g/t) with a verydifferent approach to Lihir Gold's Ballarat foray.

Norseman Gold Plc NGX Production, Advanced ExplorationNGX has produced a solid A$20m profit in FY09 from production of 81koz from the high grade Norsemanunderground operations (3.7moz resource). With spare mill capacity, plans to expand to ~120kozpa withadditional mining output are now being implemented.

North Queensland Metals limited NQM Production, Advanced ExplorationNQM's has reported a solid full year profit of A$5.6m from the 60kozpa Pajingo (QLD) gold operation (NQM60%). Pajingo cashflow will drive NQM's strategy to grow to a mid tier gold producer (~100kozpa in 5 years)from satellite ore bodies such as Twin Hills and Dotswood.

Perseus Mining Limited PRU Pre-FeasibilityPRU plans +300kozpa gold production from its Ayanfuri and Tengrela gold projects in west Africa. Currentequity resource base is ~6.3moz Au in open-pittable deposits. Ayanfuri DFS released July 2009. Recent highgrade hits (Tengrela) include 20m @ 65.5g/t Au.

West Wits Mining Limited WWI Advanced ExplorationWWI expects to be in small scale production (~20kozpa) by Dec '09 from the shallow Emerald deposit(124koz resource) on the Witwatersrand Basin. Cash flow will then fund exploration for major >4moz goldand >15mlb uranium targets on the Witwatersrand leases.

YTC Resources Limited YTC Pre-Feasibility StudyYTC plans to mine its A$12m acquisition, the Hera gold and base metal project (NSW), from Jan ’11. This issubject to a DFS (expected Feb ’10) and final permitting. Current gold-equivalent resource is ~510koz Au,with infill and expansion drilling to commence Oct '09.



Explorer’s Development Cycle: Conceptual market capitalisation versus development stage; September Q 2009

Exploration DiscoveryResource expansion; Economic assessment

Project approvals; Funding Construction Commis'g

High risk/ High return

Declining exploration risk

AUS ATN CHZ SAU SGZ

CAN

AUSAMX

AVQ TGX TMX YTC

CAN

AUSKGL MLI

NAV RRL RED WWI

CAN

AUS AVO BCD CTO KCN HEG MLI

MUN MCONGX NQM

Production

AUS ADU AGD ALK AND AZM CHN CRC EKM GDR KALKOR IGR PRU YTC

AUS CAH AAM KRM

CAN ATW

Share Price

CAN SAC XRC

CAN FIU IAU UME



Comparative Charts

Explorers' & producers' cash balances(forecast end September 2009 quarter)

0 10 20 30 40 50 60 70

Morning Star Gold NL

Cortona Resources Limited

Korab Resources Limited

Eleckra Mines Limited

Kentor Gold Limited

West Wits Mining Limited

Ampella Mining Limited

North Queensland Metals limited

Chalice Gold Mines Limited

YTC Resources Limited

Catalpa Resources Limited

Avoca Resources Limited

Norseman Gold Plc

Kingsgate Consolidated Limited

Perseus Mining Limited

US$m

Percentage difference in share price from12-month low, as at September 21 2009

0

100

200

300

400

500

600

700

800

900

1000

1100

1200


Norseman Gold Plc

North Queensland Metals limited

Cortona Resources Limited



Morning Star Gold NL

West Wits Mining Limited

Kentor Gold Limited

Chalice Gold Mines Limited



Perseus Mining Limited


Ampella Mining Limited

Per cent share price movement

Cash is flowing into the sector - most

explorers have raised cash through well supported equity issues, or are planning

to do so in the next 3 months.

Share prices recoveries have been spectacular with even the most subdued

having doubled from their 12 months lows.



Financial Data

COMPANY Aust

Can

ada

USA

Euro

pe

othe

r

List

ed

optio

ns

Share Price (LC$/share)3

2 FullyDiluted

MarketCap Book Enterprise

ExchangesCode Status1 Yr End 52 week Current Shares Opt+W2 Other2 Shares (undiluted) Cash Debt Value Value21 September 2009 Hi Low (m) (m) (m) (m) (LC$m)3 (LC$m)3 (LC$m)3 (LC$m)3 (LC$m)3

AUSTRALIA (A$)

Ampella Mining Limited AMX E June ASX AMXO 0.66 0.04 0.55 129 28 0 157 70 5.7 0.0 5 70 Avoca Resources Limited AVO P June ASX No 2.17 0.88 1.65 272 11 12 285 448 32.0 46.3 157 495 Catalpa Resources Limited CAH I June ASX CAHO 0.15 0.02 0.13 1172 300 0 1472 152 17.0 0.0 41 152 Chalice Gold Mines Limited CHN E June ASX No 0.42 0.07 0.38 137 7 0 145 52 8.3 0.0 12 52 Cortona Resources Limited CRC E June ASX No 0.24 0.07 0.19 101 20 0 121 19 1.3 0.0 23 19 Eleckra Mines Limited EKM E June ASX No 0.13 0.01 0.07 170 73 0 244 11 2.0 0.0 8 11 Kentor Gold Limited KGL I June ASX No 0.15 0.02 0.11 143 12 0 155 15 2.1 0.0 5 15 Kingsgate Consolidated Limited KCN P June ASX No 8.39 2.20 7.89 96 6 0 102 759 35.7 2.1 245 761 Korab Resources Limited KOR I June ASX BE KORO 0.24 0.04 0.24 68 1 0 69 16 1.6 0.2 5 16 Morning Star Gold NL MCO I June ASX No 0.39 0.09 0.33 128 122 0 251 42 0.8 0.0 4 42 Norseman Gold Plc NGX P June ASX AIM No 0.91 0.45 0.88 96 6 0 102 85 32.2 4.7 68 89 North Queensland Metals limited NQM P June ASX No 0.34 0.14 0.28 199 1 0 200 55 7.9 0.0 38 55 Perseus Mining Limited PRU I June ASX FRA No 1.37 0.20 1.24 301 14 0 315 371 69.2 0.0 145 371 West Wits Mining Limited WWI I June ASX No 0.15 0.03 0.14 122 16 0 138 17 5.6 0.0 26 17 YTC Resources Limited YTC E June ASX No 0.47 0.08 0.26 154 5 0 159 40 12.7 0.0 6 40

Total: Australia 234.1 53.3 789 2205

Total: Global (US$)4 206 46 690 1912

(1) P: Producer; E: Explorer; I: Imminent - includes companies with bankable feasibility studies and likely to be in production within 3 years; IHC: Investment Holding Company(2) Fully Diluted (shares, options + warrants (opt. + w), convertible notes (Conv. N), other obligations)(3) L.C. - Local Currency unit (4) AUD/USD: 0.86; CAN/USD: 0.93

Exchanges

Company Statistics COMPANY

(A) Exploration (L.C.$m)7 (B) Corporate (L.C.$m)7Drilling ('000 m)Code Land (A)/(A+B) %27 September 2009 ('000 ha)6 Mar-09 Jun-09 2008 2009 Mar-09 Jun-09 2008 2009 Mar-09 Jun-09 2008 2009 Jun-09 2008 2009

AUSTRALIA (A$)

Ampella Mining Limited AMX 200 0.0 6.8 0.0 9.8 0.8 1.1 2.1 3.7 0.2 0.1 0.7 0.9 89.9 74.4 81.1Avoca Resources Limited AVO 348 12.0 12.0 60.1 60.7 2.5 0.9 11.0 8.0 0.0 2.3 3.2 2.3 28.5 77.5 77.9Catalpa Resources Limited CAH 88 4.5 4.0 11.0 16.0 1.1 2.5 2.0 5.4 0.5 1.3 1.4 2.7 65.5 59.5 66.7Chalice Gold Mines Limited CHN 150 0.0 0.0 0.0 0.0 0.2 0.1 0.4 0.7 0.3 0.3 1.1 1.4 15.9 25.4 32.9Cortona Resources Limited CRC 200 2.0 8.0 16.2 22.0 0.4 0.4 2.8 2.4 0.2 0.3 1.2 1.1 58.5 70.6 69.2Eleckra Mines Limited EKM 450 3.0 5.5 21.0 18.5 0.2 0.4 1.7 1.1 0.1 0.2 1.0 0.7 72.7 63.2 60.7Kentor Gold Limited KGL 200 2.0 1.5 1.0 4.5 0.0 0.2 0.0 0.7 0.4 0.2 0.4 1.5 44.3 0.0 32.0Kingsgate Consolidated Limited KCN 130 57.0 57.0 145.0 216.0 7.7 5.0 4.7 30.4 3.9 3.9 15.2 8.5 56.2 23.7 78.2Korab Resources Limited KOR 243 0.0 0.0 0.0 0.0 0.1 0.1 1.5 0.9 0.1 0.1 1.6 0.7 32.5 49.2 56.1Morning Star Gold NL MCO 22 0.5 0.6 6.8 2.4 0.1 0.2 2.9 1.6 0.2 0.2 0.5 0.8 45.2 84.5 67.8Norseman Gold Plc NGX 161 5.0 5.0 20.0 20.0 2.0 2.0 4.1 6.8 0.7 0.7 3.4 2.7 74.1 54.8 71.6North Queensland Metals limited NQM 151 3.0 5.2 2.0 15.3 0.3 0.8 4.0 2.3 0.4 0.5 1.7 2.3 61.5 69.8 49.9Perseus Mining Limited PRU 347 3.7 25.2 81.0 56.4 2.8 3.7 27.0 22.2 0.3 0.5 1.5 2.0 88.1 94.6 91.6West Wits Mining Limited WWI 0 2.2 4.0 10.9 20.2 1.0 0.9 1.6 5.6 0.3 0.3 0.4 1.3 75.0 79.6 81.3YTC Resources Limited YTC 180 3.0 3.0 20.0 14.0 0.1 0.1 2.4 1.1 0.3 0.4 1.2 1.4 11.5 67.7 45.3

Total: Australia 97.8 137.8 395.0 475.9 19.3 18.2 68.2 92.9

Total: Global (US$)4 17 16 59 80

(6) To convert hectares to acres, multiply by 2.47; eg 100 thousand hectares ('000 ha) = 247 thousand acres ('000 ac)(7) L.C. - Local Currency unit

(A) Exploration (L.C.$m)7 (B) Corporate (L.C.$m)7Drilling ('000 m)



Reserves, Resources and Historic Mineralisation COMPANY

Code Status1 Silver Other Silver Other Silver Other1 October 2009 koz t moz koz t moz koz t moz moz t

AUSTRALIA

Ampella Mining Limited AMX E 0 0.0 0 0.0 0 0.0 0 0.0 Avoca Resources Limited AVO P 646 20.1 1,448 45.0 0 0.0 1,448 45.0 Catalpa Resources Limited CAH I 886 27.6 1,735 54.0 0 0.0 1,735 54.0 Chalice Gold Mines Limited CHN E 0 0.0 755 23.5 0 0.0 755 23.5 Cortona Resources Limited CRC E 0 0.0 358 11.1 173kt Ni 0 0.0 358 11.1 Eleckra Mines Limited EKM E 0 0.0 749 23.3 6.2mlb U 0 0.0 749 23.3 Kentor Gold Limited KGL I 432 13.4 50kt Cu 579 18.0 62kt Cu 0 0.0 579 18.0 Kingsgate Consolidated Limited KCN P 1,393 43.3 3,163 98.4 0 0.0 3,163 98.4 Korab Resources Limited KOR I 0 0.0 306 9.5 0.3 7mt Mg 344 10.7 650 20.2 Morning Star Gold NL MCO I 0 0.0 910 28.3 0 0.0 910 28.3 Norseman Gold Plc NGX P 400 12.4 3,700 115.1 0 0.0 3,700 115.1 North Queensland Metals limited NQM P 61 1.9 31kt Cu 230 7.2 0 0.0 230 7.2 Perseus Mining Limited PRU I 1,927 59.9 6,269 195.0 0 0.0 6,269 195.0 West Wits Mining Limited WWI I 0 0.0 411 12.8 0 0.0 411 12.8 YTC Resources Limited YTC E 0 0.0 283 8.8 1.6 49mlb Sn 0 0.0 283 8.8

Total/Total Average 5,745 178.7 20,897 650.0 1.9 344 10.7 21,241 660.7

(1) P: Producer; E: Explorer; I: Imminent - includes companies with bankable feasibility studies and likely to be in production within 2 years; IHC: Investment Holding Company(2) Reserves, resources and mineralised material published by the relevant company. The applicable mineral resource codes are by country: Australian: JORC, Canadian: NI 43-101, South Africa: SAMREC

* Mineral resource estimates are inclusive of the mineral reserve.

(All Au Mineralisation)

Total Gold (Au)

Gold (Au) Gold (Au) Gold (Au)

Reserves (Equity)2 Resources (Equity)2 Historical/Mineralised Material (Equity)2

Valuation and Performance Data COMPANY EV-Cash EV-Cash EV-Cash

Code P/Book P/Net Cash /Reserves /Res'v+resources /Total Au21 September 2009 (x) (x) US$/oz US$/oz US$/oz 1 month 3 month 6 month 12 month Hi Lo

AUSTRALIA

Ampella Mining Limited AMX 13.4 12.3 na na na 51 58 319 761 17 1167Avoca Resources Limited AVO 2.9 -31.4 616.4 274.8 274.8 2 5 -5 -12 24 89Catalpa Resources Limited CAH 3.7 9.0 131.3 67.1 67.1 18 38 60 238 13 584Chalice Gold Mines Limited CHN 4.3 6.2 na 49.2 49.2 17 36 275 275 11 436Cortona Resources Limited CRC 0.8 14.4 na 41.9 41.9 28 3 -5 32 23 185Eleckra Mines Limited EKM 1.4 5.8 na 10.7 10.7 65 78 454 -46 51 450Kentor Gold Limited KGL 3.3 7.1 25.7 19.2 19.2 -19 163 289 31 28 400Kingsgate Consolidated Limited KCN 3.1 22.6 447.6 197.1 197.1 25 26 62 48 6 259Korab Resources Limited KOR 3.2 11.1 na 40.9 19.2 42 262 352 161 2 518Morning Star Gold NL MCO 9.8 51.6 na 38.7 38.7 41 103 160 103 17 282Norseman Gold Plc NGX 1.2 3.1 122.7 13.3 13.3 50 na na na 3 96North Queensland Metals limited NQM 1.4 6.9 657.3 174.6 174.6 34 2 6 14 19 104Perseus Mining Limited PRU 2.6 5.4 134.7 41.4 41.4 45 49 67 65 10 521West Wits Mining Limited WWI 0.7 3.1 na 24.0 24.0 77 27 87 47 3 383YTC Resources Limited YTC 6.6 3.2 na 83.0 83.0 -4 0 117 -25 45 229

Total/Total Average 305.1 76.8 75.3 32 61 160 121 18 380

(%)

Share Price Performance Current Share Price

% off 12 month




2.17

Debt (A$m) - Sep 09FEnterprise value (A$m)

Avg monthly volume (m)Cash (A$m) - Sep 09FPrice/Cash (x) Drilling - RAB (m)Price/Book (x) Listed company options: Land holding ('000 ha)** Convertible at A$1.72/share; coupon rate 6% *Tenements applied for or granted. Quarters based on calendar year end. Total 05/06 prod'n w as 82koz Au, AVO 48.5%.

ReservesHigginsville Gold ProjectResources (includes proved and probable reserves)Higginsville Gold Project Meas, ind + infMineralised Material (est., non compliant w ith JORC)Resources - Uranium Hillview Inferred

Contacts DirectorsMr Rohan WilliamsManaging DirectorTel: 61 (0) 8 9226 0625West Perth, WA, Australiawww.avocaresources.com.au

Analyst: Dr Trent Allen

LocationType

Aus (WA)

Status

Early Expl.Production

10.6

Early Expl.na

Eqty lbsEquity Mt U3O8 % U3O8 % kt mlbs

40%,20%Au,Ni

J Castro (Non-Exec)Mt Fischer

Sandstone

12.3

4.4100%

JV Target

D Quinlivan (Non-Exec)

1,4480.0

c/offg/tg/t koz

0.8-3.0

(JORC)

20%

CILna

27.6 0.017

Metal

3.7

Process

100%

Project Option

0.01

na

Partner100%

Greenstone100%

Gold

45.3

Mt

20.1

Equity

[email protected]

4.6

0.0

4.8

Encounter JV

0

AuAu

Route

na

Greenstone

646646

2.1

Aus (WA)

1,448

koz

Reserves and Resources/Mineralised MaterialClassification Project Ore Eqty

40.416.4

22.8-6.0

165.3165.3

01070

33.822.8

-5

2007a

120.9

-280

-23.2

-116-740

33.6

CFPS (A¢/share)

A$ 1.65

-1666.7

64


Trident Gold Mine is consistently meeting target costs and miningrates. 52.8koz Au was produced in 2Q09 (rate of 207kozpa) at opexA$442/oz. EBITDA 09/10F is A$114m. Attempted takeover of DioroResources closed Aug '09 with AVO owning 44.85% of DIO.

4793.3

0Commonw ealth Bank of Australia (7.5%)7

Production and Financial Forecasts

2011F2008a 2009a 2010F

0.0

-137.2Yield (%)

PER (x)P/CF (x)Major shareholders: Pala Investments AG (22.5%)

0

-1.9

Market capitalisation (undiluted) (A$m)EPS (norm) (A¢/share)

-0.8-1.4

448.4

5.1

-2.2-1.7

-3

-950

-20504

-264.2

5

YEAR END: June1.650.88

EBIT (A$m)12

Equity Production (koz)

Net Profit (norm) (A$m)296

-4.0

21 September 2009

272

Shares in convertible bonds (m)*

Share price (A$)

Options and warrants (m)

25.9

0Dividends (A¢/share)46.3

EV/EBITDA (x)

AVO.AU

13

Gold, UraniumAustralia (WA)ProductionExchanges: ASX:AVO

Capital Profile

52 week range (A$/share)Number of shares (m)

to

U ENR

Au

29

Fully diluted (m)

494.8

na

Code for reporting mineral resources - Australian:

2.4 Drilling - Other/Diamond (m)

100% focus on gold exploration and production.

Trident undergrond gold mine (Higginsville) - first newgold operation in WA since 2001.

Gold production commenced at Trident June '08;ramping to 190koz Au FY10. Target cash cost<A$450/oz.

2Q09 output 52.8koz Au, above target rate of 170kozpa.

Higginsville resource base 1.45moz. Material extensionsto Trident likely. Resource conversion to reserve at 89%.

Exploration upside in Higginsville area could be >4mozAu - current budget ~A$11mpa, drilling ~50,000m.

Several new mine feasibility studies expected in 2009.

Acquired 44.85% of Dioro Exploration (ASX:DIO) intakeover attempt, share now worth A$11m. Three of AVO board are now DIO board members (Sep '09).

Investment Points Company Comment

328No 348 37037048,000

00 060,14312,000 60,731

370

S Unwin (Non-Exec)

R Reynolds (Non-Ex Chair)R Williams (MD)

Higginsville

t

Ownership/

Au

032.014.0

8Exploration and Evaluation (A$m) 8 110

1010

0.0

Aus (WA)

Key Projects

48,000

4.3

Project

Overview: Avoca Resources listed on the ASX in April 2002. It is focused on developing its recently commissioned Trident gold mine and adjacent tenements in the Higginsville district of the Eastern Goldfields, WA, which is between the St Ives and Norseman goldfields that have produced +20moz Au. Higginsville Gold Project (Au, WA): 2700km2 holding, 180km south of Kalgoorlie. Avoca controls the greenstone belt between the +15moz St Ives and the +6moz Norseman gold fields. 75% of all gold from St Ives and Norseman is from underground. Prior to Trident’s discovery, only 5% of gold at Higginsville and Chalice was from underground. The project includes the Trident Underground Gold Mine - resource 0.95moz at 6g/t, with 89% conversion rate of initial Indicated resource to reserve (0.65moz to 0.58moz). The resource is open along strike and at depth. Capital mine development began Feb ’07 and first gold pour from new CIL plant was in Jun ’08. Aim is for 10+ year mine life, producing 160-200kozpa Au by processing 1.2mtpa. Wide intersections show potential for large high-grade stopes, eg 24.1m @ 36.4g/t(Athena), 48.3m @ 7.1g/t (Western Zone). Production FY09 was 1.1mt for 120.9koz Au, target 190koz in FY2010. Production (treated) in 2Q09 was 301kt @ 5.5g/t for 52.8koz Au (rate 206.4kozpa), an 83% increase on 1Q09 ounces. Cash cost was A$442/oz, down from A$762/oz due to increase in head grade. Recovery in 2Q09 was 97.5% (65% gravity). AVO cash cost estimate for reserve life is ~A$450/oz. Plant has 10mw power station (dual gas/diesel) and 1.5gl borefield. Capex A$77m; 10+ years mining. Higginsville exploration: Estimated exploration budget is ~A$11m for CY09. The Graveyard to Trident trend has >6km strike of gold-bearing lodes and is open along strike and has little previous testing below 300m depth. The Chalice Leases, acquired Jul. ’07 for $6m scrip, include the Chalice mine, which produced 556koz Au at 5.6g/t. Underground inferred resource of 123koz grading 5.2g/t Au. PFS (3Q08) projects 3.5yrs production at 150-350kt for 25-60koz Au, subject to resource upgrade drilling and DFS(expected 4Q09). Fairplay, 2km south of Higginsville plant, has a 2Q09 DFS for open cut production from a reserve of 64koz grading 1.9g/t Au. Other mine feasibility studies planned for 2009 include Two Boys(U/G) and Musket (O/P). The latter, 40km SE of Trident, includes 18m @ 10.9g/t Au from 68m; the known deposit is 300m long by 120m deep and open– potential open cut mine, focus of ongoing drilling. Attempted takeover of Dioro Exploration NL (ASX:DIO): In Apr ’09, AVO launched an all-scrip takeover offer for WA-based gold company DIO (assets include JORC resources 2.15moz Au and the 1.2mtpa Jubilee Mill). The offer closed in Aug ’09 with AVO holding 44.85% of DIO. Investment Comment: Avoca’s Trident gold mine reached nameplate output, and target mine-life cash costs, in 1H09. There is exploration upside at Trident at depth and along strike and the Higginsville region is prospective for further Au discoveries, with a target of ~4moz Au. Avoca has borrowings of A$46.3m (Sep 09F): ongoing repayments (Tranche 2) amount to ~A$10m every six months to end 1Q11, which is co-incident with repayment of Tranche 1 (A$23m, extendable to Mar ’12). These should be readily met by Higginsville cash flow. An AVO net asset value based on Trident with current resources is A$302m (5% discount, gold price US$850/oz). With JV projects, the shares in DIO and exploration ounces, we estimate Avoca’s NPV as A$437m or A$1.61/share (undiluted), close to the current share price.



AVOCA RESOURCES LIMITED VALUATION

TargetPrice (Low) (High)

Equity Gold Valuation A$m A$m A$mProjects (moz) US$/oz

+ Higginsville - Trident 100% 0.98 232 290 290 369+ Higginsville - Other 100% 0.47 116 70 323+ Regional Exploration 100% 2.55 30 77 51 102+ Joint ventures Various - 20 10 30

Sub Total 457 351 824

+ Cash 32.0 32.0 32.0+ Tax Losses 2.5 2.5 2.5- Debt (incl convertible note) 62.0 62.0 62.0- Corporate 2.6 2.6 2.6

Sub Total -30.1 -30.1 -30.1

11 11 11AVO NET ASSET VALUE 437 332 805

Capital StructureShares 272 272 272Fully Diluted Shares 296 296 296

AVO NET ASSET VALUE PER SHARE :A$/share 1.61 1.22 2.96AVO NET ASSET VALUE DILUTED :A$/share fully diluted* 1.48 1.24 2.72

*incl. conversion of A$20.2m in convertible notes at A$1.74/share

HIGGINSVILLE GOLD PROJECTEquity

LONG TERM GOLD PRICE^ :US$/oz 600 800 1000 1200 1400EXCHANGE RATE :AUUS 0.78 0.78 0.78 0.78 0.78LONG TERM GOLD PRICE :A$/oz 769 1026 1282 1538 1795

HIGGINSVILLE GOLD PROJECT NPV @ 5% NOMINAL*:A$m 100% 290 376 482 587 692HIGGINSVILLE GOLD NPV @ 5% NOMINAL* :US$m 100% 226 294 376 458 540NPV/SHARE :A$/share 1.07 1.38 1.77 2.16 2.55

^ Calendar year gold price forecasts are US$950/oz in 2H09, US$900/oz in 2010, thence long term price indicated.

HIGGINSVILLE GOLD PROJECT KEY ASSUMPTIONS DERIVED FROM BFS*

RESOURCE ESTIMATESConceptual Gold Target

Mt gt koz

Current resource (Higginsville - Trident) 5.2 5.8 977Current resource (Higginsville - other) 7.0 2.1 471Subtotal 12.3 3.7 1448

Higginsville, regional exploration 21.5 3.7 2552

Total conceptual resource 33.7 3.7 4000

Dec '06 reserve (Trident, A$800/oz) 3.4 5.3 581

MINING METHOD Underground

PROCESS METHOD Dedicated Gold PlantSingle ball mill, gravity or carbon-in-leach (CIL)

PRODUCTION RATE :mtpa 1-1.1 Initial and expansion:kozpa 170-190 Based on reserve grade 5.3g/t Au

CAPITAL COSTS :A$m 77 Plus sustaining capex of 4%RECOVERY - GOLD :% 95OPERATING COSTS :A$/t 69

US$/oz 452TAX :% 30ROYALTY (WA) :% 2.5MINE LIFE :Years 10+ Based on total Higginsville resourceCOMMISSION DATE : 2Q08

* These figures are based on the BFS and ongoing production. Some refinement may result as production and exploration proceed.

Valuation Sensitivity

Sensitivity

Gold

... plus shares in Dioro Exploration




0.15Gold Price (US$/oz)

Revenue (A$m) 173.3


Avg monthly volume (m)Cash (A$m) - Sep 09FPrice/Cash (x)Price/Book (x) ASX-listed options:

Cracow **Total

Cracow **

* Resources includes reservesMineralised Material (est., non compliant with JORC)

(no estimates of mineralised material available).

Contacts Directors Key ProjectsMr Bruce McFadzean Ownership/Managing Director ProjectTel: 61 (8) 9321 3088 Edna May

Cracow ** Cracow subject to proposed LST merger.

925

34.8

4.1

58.2

898

178.7128.1

899

28.3

73823.0 738

5.04.0

56.133.5

10.0

7%

29.0

53.1-2.6

6.912.2 80.4

0.0

121

** Assumes Cracow merger proceeds - Cracow data from NCM release 17.8.09

0.53.1925.8

Location

1,73572.0

42.5

1.6

AuAu

145

16.9

Status

1,366

55.1

4%1.6

0.5

21 September 2009

Proposed Lion Selection (ASX:LST) merger will injectCracow JV (30%), boost CAH gold production by 30% to~130kozpa.

Cracow JV is a quality profitable asset (NCM managed) -LST merger will be EPS positive for CAH.

Share register will be more open with LST gone, largestshareholder will have 6.5%.

Our accelerated med-term share price expectation isA$0.19 if merger proceeds, with ~130koz productionlooming 2Q10. (NAV is A$329m, A$0.195/share).

Current P/E ratio for FY11 less than 5x.

Edna May forward sales (~70% for 5 yrs) locked in atA$1,557/oz: adds A$91m or A$0.08/share to NPV.

Construction of A$92m Edna May plant on track for firstproduction 2Q10.

Total A$106m debt and equity raised to fund A$92m EdnaMay capex.

N Johnson (Non Exec Dir)

Analyst: Dr Tony Parry

naNCM

IRG/reefepithermal

RouteProject

0.0 0.0

OperatingCILAus (WA)Aus(QLD)

[email protected]

17.0

Reserves and Resources/Mineralised Material

JV

CAHO

8.6

121

B Sullivan (Non Exec Dir) 30%

Ore

Partner

886

Au Eqty

32.6

A$ 0.13

Process

8.1

2.5

145

0

Target

1,366

Shares on Issue (EOP) 345

100%100%

Gold (long term from FY13) = US$850/oz; A$/US$=0.78 (long term).Key Assumptions: Assumes Cracow merger proceeds 4Q09 - 1:11 share consolidation by end 4Q09


Greenfinch

t

3.8

Gold

AuAu

Company Comment

Major shareholders: Lion Selection Holdings (49.3%),

48

www.catalparesources.com.auPerth, WA, Australia

100%

Total

Resources *

J Rowe (Non Exec Ch)B McFadzean (MD) Metal

EPS (norm) (A¢/share)Market capitalisation (undiluted) (A$m)

0.0

Option

Reserves

Classification

P/CF (x)

EV/EBITDA (x)Yield (%)

-728.3

M Pollock (Non Exec Dir)

Fully diluted (m)146.51472.2

6.9

Investment Points

697.2

Greenfinch Meas+Ind+Inf 1.18

na0

-0.2

00

na

-0.1

0

GoldAustralia (WA)Plant Construction - Advanced Exploration

1172Number of shares (m)52 week range (A$/share) to

Exchange: ASX:CAH

4.9

0

-0.1

Capital Profile

2009F 2010F2008a

Net Profit (norm) (A$m)

Convertible notes (m)Options and warrants (m)

0.2

834 886

0.0 0.1

0.00

na

-0.2

-2.6

na

CFPS (A¢/share)Dividends (A¢/share)

Goldrich Holdings Pty Ltd (3.1%), Zero Nominees (1.7%).

146.5

PER (x)

CAH.AU


2012F

-0.2


Share price (A$)

EBIT (A$m)

300


Catalpa's proposed merger with its major shareholder (Lion Selection) willboost projected gold output from 95koz to 126koz (FY11), and importantlyincrease earnings per share. When the dust settles we expect the largermerged group to re-rate towards A$0.19 share price.

22.30.0 0.0Equity Production (koz) 125.8

2011F

Edna May Proven & probable 100% 19.10

30%Proven & probable2.00

38.24

0.70 7.20

1.11

21.10

79na

Mt g/t

1.20 0.5

231

Au

11.2145

g/t

(JORC)Cut Off

-56.61172

Project

Proven & probable 100%

Edna May Meas+Ind+Inf

koz

1,048

Construction

791.22 0.5 2.5

TypeCIL

koz

82.5

2.4

Equity

828 248Meas+Ind+Inf 3.14 8.20 na30%2,31544.57

CAH - Catalpa Resources Limited

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

Sep

-08

Oct

-08

Dec

-08

Jan-

09

Feb-

09

Mar

-09

May

-09

Jun-

09

Jul-0

9

Aug

-09

Sep

-09

Shar

e Pr

ice

($/S

hare

)

Source: Bloomberg

Overview: CAH was listed on the ASX in Aug ’02, after purchasing the Edna May mining tenements(310km E of Perth) in ’94. The company is on track to re-commence production at Edna May by mid 2010 at a rate of ~100kozpa. The A$90m Edna May Project is fully debt and equity funded. CAH is now intending to proceed with a proposal to merge with its largest shareholder Lion Selection (ASX:LST). The Cracow Merger Proposal: The Cracow joint venture (70% Newcrest (ASX:NCM), 30% Lion Selection (ASX:LST)) is a key asset of CAH’s current major shareholder, LST. It is proposed that LST merge with CAH through an offer of 1 CAH share for each LST share – after CAH has undertaken a 1:11 shareconsolidation, and LST has demerged its other assets (apart from A$1.5m cash). The CAH options LST holds will be cancelled. In essence CAH shareholders will get the 30% Cracow JV, pre-emptive rights over NCM’s 70% of the JV, plus A$1.5m cash for an effective increase in CAH shares (after consolidation) from106m to ~145m (i.e. ~59m additional shares after 1:11 consolidation). The Cracow Joint Venture: Situated in S Queensland, Cracow is a high grade underground mining field based on an epithermal system that has yielded over 1.1moz since 1932. NCM commenced recent operations in 2004. In FY09, 423kt of ore was treated to produce 99koz at an average head grade of 7.3g/t. Cash costs were A$530/oz. Total reserves are 231koz (7.2g/t) and resources 828koz (8.2g/t) – sufficient for ~7 years further operation if all resources are converted to mineable reserves (we have assumed 80% conversion). Based on the long history of the ore body production and rolling reserve increases, and recent discoveries of new shoots (e.g. Kilkenny) it is likely that the mine will have a life well in excess of 10 years. Cracow JV Forecast : We are forecasting FY10 output of 101koz for the Cracow JV with treatment of 440kt of ore grading 7.8g/t. Cash costs A$530/oz (A$120/t of ore treated). Effect of LST Merger: (see Table on opposite page): Our assessed net asset value of the Cracow JV (assuming 80% resource conversion to reserves) is A$170m (@5% discount rate), giving A$51m for the 30% LST stake. The merger increases our CAH valuation from A$277m to A$329m. The NAV/share decreases slightly from A$0.217/share to A$0.215/share (pre-merger shares), however this is based on afairly conservative assumption of 6.5 year Cracow mine life. The merger is EPS positive, with EPS in FY11increasing from 2.7c to 2.9c, and importantly CAH is pushed higher up the mid tier producer ranks, with FY11 production forecast to increase to 126koz from ~95koz pre merger. Investment Comment:. With the Edna May plant being built and the market now focused on 2Q10 commissioning, the LST merger is a positive development that will increase gold output and EPS and should accelerate CAH’s re-rating towards a more lofty ~130koz producer status (100koz pre merger). Post merger our base case NPV is A$0.215/share fully diluted (US$850 long term gold, A$/US$ 0.78). The shares have moved towards our previous A$0.15 target, we now see a six month pre-commisioning target of A$0.19/share (A$2.09 post 1:11 consolidation) if merger proceeds .



CATALPA RESOURCES LIMITED VALUATION

Pro FormaEquity Resource Current Post

Gold Resource Valuation Pre Merger MergerEquity (moz) US$/oz A$m ^ A$m ^

Projects+ Edna May Gold Project 100% 1.48 98 185 185+ Cracow JV 30% 0.25 160 51+ Regional Exploration 100% 10.0 10.0

Sub Total 195.0 246.0

+ Cash (est Sep '09) 17.0 18.5+ Tax Losses 5.8 26.5+ Discounted Value of Forward Sales (5% nominal) 91.0 91.0- Debt (est. Sep '09) 0.0 0.0- Corporate 17.4 17.4

Sub Total 96.4 118.6

CAH NET ASSET VALUE 131 291.4 364.6

Capital StructureShares (m) 1172 145Fully Diluted Shares (m) 1472 161

CAH NET ASSET VALUE PER SHARE :A$/share 0.249 2.51CAH NET ASSET VALUE DILUTED :A$/share fully diluted 0.217 2.37

:A$/share (fully dil.)pre-consolidation 0.215^Valuation based on RCR long term gold price forecast of US$850/ounce, A$/US$ = 0.78.

EFFECT OF LION SELECTION MERGER ON CAH PRODUCTION & PROFIT

Financial Year: 2010/2011 2011/2012 2010/2011 2011/2012

Gold production (koz) 125.8 128.1 95.4 97.1

Group Revenues (A$m) 168.5 173.7 133.0 138.0

EBIT (A$m) 75.5 77.6 59.4 61.9

Net profit (A$m) 49.7 51.6 38.4 40.7

Shares on Issue (m)

EPS (cents) 31.4 32.6Equiv. EPS (pre 1:11 consol) 2.9 3.0 2.7 2.9

P/E RATIO (@A$0.13 share price) 4.6 4.4 4.8 4.5

Forecasts based on US$850 long term gold price and A$/US$ = 0.78

With LST Merger Without LST Merger

145 1172




0.13


Avg monthly volume (m)Cash (A$m) - Sep 09FPrice/Cash (x) Cash (A$m)Price/Book (x) Company options: Net asset backing (Ac/share)

*Gold and uranium prospective tenements, both held and under application.

Reserves

Contacts DirectorsMr. Ian Murray(Executive Chairman)Tel: 61 (0) 8 9486 4144West Perth, WA, Australia

15,500 12,00015,000

0.0

749

6.2

0.5

2.71000.017

23.31.00

Aus (WA)

Location

Aus (WA)Aus (WA)

0.0

0.0

U3O8

K Hart (Non-Exec Dir)

koz

Status

0.0

mlb

0.0

1.78

Golden Sands 100%Yamarna: Thatcher Soak

Yamarna - Gold regional

R Davis (Non-Exec Dir) Project


www.eleckramines.com.auAlk. Leach

0 0

g/t g/t

(JORC)

EquityOre Au

Partner

0

Adv. Expl. Aus (WA)

Mid Expl.

6.2

00.00

2.5

na

2.0


Key Projects

749

AuMt

0.32.5

Type

Early Expl.

heap leach

ox/sulpMid Expl.

Calcrete

ox/sulpRoute

1.1 2.5

Gold Au

ox/sulp naAu none

Early Expl.Lake Rason + Lake Wells

Yamarna - Attila

nonenone

100%

100%100% none

100%

JVOption

AuMetal

Uranium Resources Mt

100%

16.1100%

13.1

EquityProject

I Murray (Exec Chairman) Ownership/

1.4

Company Comment

4.5

Thatcher Soak

Yamarna - Attila-Alaric Inf., Ind. & Meas.

Mineralised Material (est., non compliant with JORC)

Project

4.8

EKM's focus is gold and uranium in WA. Explorationbudget is ~A$1.5mpa mostly directed to gold.

Strategic position (~2,500km2) in remote under-exploredYamarna greenstone belt in Yilgarn Craton.

Yamarna (Attila-Alaric) gold resource 749koz Au nearsurface - many untested targets along 17km strike.Currently drilling untested nearby targets.

2Q09 Central Bore RAB drilling produced promising new300m new mineralised zone - 5,000m RC drill 3Q09.

Golden Sands project covers unexplored ground nearAngloGold's Tropicana discovery (5moz resource).

Recent partial takeover of WA uranium hopeful (EnergyMetals) has renewed interest in WA uranium.

If EKM does a deal with Uranex on Thatcher Soak, wewould expect shares to trade at ~10-11cents.


5.8

Investment Points

1.3No

71

2.0

61

-

2,000

0.600.150.40

1.6

ProjectProcessTarget

0.21.4

450- -

62.1

0.00

Au noneU

22

Fully diluted (m)

11.2

U

Inferred

Calcrete Alk. Leach Aus (WA)

170.4170.4

0.0

t

9.7

-HSBC Custody Nom's (4.6%), Haifa Pty Ltd (4.0%).

17,400

2.662.50Capital raisings (A$m)

3,000450

0.0

450

3,000

Convertible notes (m)243.5

0.0 73Exploration/(Expl.+ Corporate) (%) 73Funding duration at current burn (years)

Market capitalisation (undiluted) (A$m)

Major shareholders: Perth Select Seafood (5.9%), Troyleigh Inv. Ltd (4.8%)

11.2 170.4

Drilling - Other/Diamond (m)Land holding ('000 ha)*

Drilling - RAB (m)Shares on issue (pr end) (m shares)

05,500

170.4Options and warrants (m)

0.070.0152 week range (A$/share)

200

EKM.AU

73.1

Gold, UraniumAustralia (WA)Advanced ExplorationExchanges: ASX:EKM

Capital ProfileShare price (A$)

Number of shares (m)to

21 September 2009

0.6170.4

0.00

4503,550


2010FSep-09F 2008aJun-09a 2009F

0.710.9963


EKM's recent drilling should expand its 749koz gold resource in theunderexplored Yamarna belt (WA). EKM shares are finally starting toreflect some value for the 6.2mlb Thatcher Soak U3O8 resource - a dealwith neighbour Uranex would trigger further upside to ~A$0.11/share.

1.71 1.501.100.40Exploration and evaluation (A$m)

A$ 0.07

YEAR END: June

Funding from JV partners (A$m)

0.15

4.7

0

Tenement costs ($k per year) -

4.8

Corporate (A$m)

Cash backing (Ac/share) 1.4

Resources

kozCut Off Au EqClassification

[email protected]

Eqty mlbU3O8 Cut Off U3O8

ktppm%U3O8

EKM - Eleckra Mines Limited

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

Sep

-08

Mar

-09

May

-09

Jul-0

9

Aug

-09

Shar

e Pr

ice

($/S

hare

)

Source: Bloomberg

Overview: EKM listed on the ASX July ‘06. The company’s highest priority is the Yamarna Greenstone Belt where it has established the 749koz (1.78g/t) Attila gold deposit, and a 6.2mlb shallow calcrete U3O8resource, an extension to the Thatcher Soak drainage channel (20mlb global resource). Yamarna project (WA): (2,500km2, gold) EKM has defined an initial gold resource along the Yamarna shear zone - a regional scale mineralised trend considered prospective for multi-million ounce discoveries. EKM’s 749koz resource defined to date occurs in the Attila-Alaric zone along a 17km strike length. There are gaps in drill coverage with over 50% of the strike length untested. The deposit is open at depth and along strike. Anticipated resource conversion is ~50% with EKM aiming to achieve resources of 1moz – 1.5moz Au before commencing a PFS. Preliminary metallurgical testing has indicated good heap leach characteristics. Recent Drilling: In 2Q09 EKM conducted a 5,500m, 310 hole RAB drilling campaign on 5 new unexplored gold anomaly target areas parallel to the existing Attila resource. Best results were reported at Central Bore (3.7km E of Attila) over a 300m zone with some good hits (e.g. 4m @ 4.01g/t from surface, 4m @ 14.14g/t from 16m). A 7,000m follow up RC drill program for Central Bore is planned for 3Q09, which will include holes to test the depth potential for higher grade gold shoots already identified. Golden Sands (WA): (1,500km2, gold) EKM has recently been granted largely unexplored exploration tenements between Yamarna and the tenements to the south of the AngloGold Ashanti/Independence Group Tropicana gold project (5moz resource – currently subject of a PFS for a ~400kozpa operation). EKM is planning an initial program comprising airborne magnetic and radiometric surveys. Thatcher Soak Tenements: (500km2, uranium) EKM holds Eastern portion of the Thatcher Soak calcrete uranium prospect, (total 20mlb global resource - Uranex NL (ASX:UNX) 14mlb and EKM 6.2mlb). The grades are low (170ppm, @ 100ppm cut off), but deposit is shallow, easily mined. UNX is pushing ahead and is nearing completion of a scoping study. Recently UNX purchased small part of Thatcher Soak resource from South Boulder mines which valued resource at ~A$0.75/lb. UNX’s intent seems clear – strategically they would be in a stronger position through owning the full resource. Best opportunity for EKM to unlock U value would be to sell to UNX. Corporate: EKM raised A$2.7m in 2Q09 to maintain gold exploration momentum during FY10. Investment Comment: With an established 749koz resource, newsflow from drilling of new Yamarna belt targets, cash ~A$2m, and renewed market interest in WA uranium deposits, EKM is trading at a significant discount to our assessed value. Based on UNX recent purchase, we think a deal with UNX could value Thatcher Soak at min.~A$1.00/lb, and if gold resource was valued at modest ~A$10.00/oz,then UNX would be trading at ~11cents/share.



EKM’s Yamarna tenements (red boundary) include the 6.2mlb U3O8 Thatcher Soak resource and the 749koz Attila gold resource and numerous advanced gold drill targets. Further south, the newly acquired Golden

Sands tenement north of AngloGold’s 5moz Tropicana discovery is unexplored.

Eleckra has commenced drilling new gold targets adjacent to the Attila gold resource. RAB drilling in 2Q09 at Central Bore (4km from Attila) produced promising hits over a 300m zone. A 7,000m RC drilling

campaign commenced in 3Q09, which will include testing of higher grade potential of Yarmana Deeps.



Kentor Gold Limited

0.15

Debt (A$m) - Sep 09FEnterprise value (A$m)Major shareholders: Macquarie Bank (10.9%), Directors (3.0%),

Avg monthly volume (m)Cash (A$m) - Sep 09FPrice/Cash (x) Cash (A$m)Price/Book (x) Listed company options: Net asset backing (Ac/share)

* Gold and geothermal tenements held or applied for.

0.16

* Andash acquisition subject to US$10m option payment* Andash ore reserve includes 63kt cont. Cu, (477koz Au equivalent), resource includes 77kt cont. Cu (392koz Au equiv.)


Contacts DirectorsMr Simon MilroyManaging DirectorTel: 61 (0) 7 3121 3206Brisbane, QLD, Australiawww.kentorgold.com.au

Analyst: Dr Tony [email protected]

1.15

Route

naGeothermal energy 80%/49%

54321.1 679

0.00.0 0.0

StatusJV

koz

432

36

Au Eqty

porphyrygranites

naAurum

qtz vein

KyrgyzJ Taylor (Non Exec)

2.1

Key Projects

Au

540

22.2

6.24.3

mtEquity

80%

Aut

Aug/tAu

Kentor Gold Limited

Ambitious Kyrgyz Republic-based KGL may have found its 'companymaker' in the advanced ~A$70m capex Andash Au-Cu project (1.15mozgold-equiv. resource, BFS completed) - can purchase 80% for US$10m(~US$9/oz Au equiv. resource) plus US$5m for equipment.

3.32 2.201.530.20

A$ 0.11

77

Jun-09a 2009aYEAR END: December

1.1657

Exploration and development (A$m)0.99

44 67

(JORC)

3.050


242Tenement costs ($k per year)

95.1Market capitalisation (undiluted) (A$m)

Share price (A$) 0.11

5.1

01,500

760.25

1,500

0Options and warrants (m)

Exploration/(Expl.+ Corporate) (%)Convertible notes (m)

KGL.AU

12

Gold, Base Metals, Geothermal EnergyKyrgyz Republic, Central AsiaBFS, Project DevelopmentExchanges: ASX:KGL

Capital Profile

52 week range (A$/share) toNumber of shares (m)

242

Funding duration at current burn (years)

Drilling - Other/Diamond (m)

15.1156

0.0 0

0.02

0.25143

Corporate (A$m)

21 September 2009

143.4

Land holding ('000 ha)*


0.80


2010FSep-09F 2008a

2.1 2.21.2

Ore

1.5

Project

1.8 1.0

Reserves and Resources/Mineralised MaterialGold

0

1.4

0

0.3221.2

0

0.795.1

2,000

-

Metal

7.2

Investment Points

2.1No

-

Classification


0.3

6,0000

Au

14.8

Fully diluted (m)

15.1

Reserves

KGL is focussed on Tien Shan gold belt projects in theKyrgyz republic, Central Asia.

Kyrgyz Republic has medium sovereign risk, now politically stable and keen to attract mining investment

KGL's local base and Russian speaking Kyrgyz-basedmanagment is key to progress in that country.

Andash gold-copper project (option to purchase 80%)based on 1.1moz gold-equiv. resource - BFS completed.

Andash economics look sound, capex est. ~A$70m?

Option to purchase Andash for US$10m (~US$9/oz Auequiv. resource) plus US$5m equipment.

Savoyardy Au Project purchase option US$1.25m. Small10kozpa output for cashflow, now a distraction?

If KGL (with Mac Bank help) can raise ~A$20m andpurchase Andash, stock will re-rate, (LOM revenue~A$100mpa, project NPV probably >>A$200m?)

Proven + Probable

Cut Off

5.55

242-

200

1.7

1.1

-

0

Adv. Expl; BFS KyrgyzAdv. Expl;PFS

0

ProjectLocation

1.10

221.2

Resources

Partner

19.36

Type

6.76

Biox/leachAu/Cu float'n/conc.

na PAX

Savoyardy

Early Expl

Kyrgyz

Inferred

S Milroy (MD)Ownership/

Option

Savoyardy ^

Total

J Barr (Non Exec Chair.)Project

H McKinnin (Exec Dir)Andash

0/100%A Daley (Non Exec) 0/80%

ProcessTarget

1.10

^ Savoyardy subject to US$1.25m purchase payments

579714

4,000

16.8

3.0

3.9

242

0

g/t

-5.00

koz

Company Comment

0.3

Capital raisings (A$m) 0.00

4.8Cash backing (Ac/share)

4.02

Andash * 1.05

19.201.1 36

16.0

100%Meas. + Ind.Andash * 80%

KGL - Kentor Gold Limited

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

Sep

-08

Dec

-08

Feb-

09

Apr

-09

May

-09

Jul-0

9

Aug

-09

Shar

e Pr

ice

($/S

hare

)

Source: Bloomberg

Overview: KGL was formed in 1998 to explore for gold in the Kyrgyz Republic and listed on the ASXin 2005 to further that aim. It is now seeking to acquire two advanced gold and copper-golddevelopment projects. Importantly, KGL’s local credentials are sound - it has a long established basein the Kyrgyz Republic and a Russian-speaking Exec Director based there. The Kyrgyz Republic: Also known as Kyrgyzstan, a former Soviet Union State in Central Asiabounded by China, Kazakhstan, Tajikistan and Uzbekistan. A small mountainous landlocked country,population ~5.3m. The 1,500km Tien Shan belt (which hosts multiple major mesothermal type golddeposits) passes through the country from Uzbekistan in the west thence into NW China Existing Mining: Gold mining is a significant contributor to the economy, The country’s majoroperation is the Kumtor mine in the near the border with China, operated by Centerra Gold Inc.(TSX:CG). Kumtor has yielded over 6moz from 1997 - 2007. Grades are ~3.8g/t, output is ~560kozpa. Andash Project: A major ‘development ready’ project currently owned 80% by Aurum Mining plc(AIM:AUR), KGL has secured a purchase option from AUR for its 80% for US$10m, plus US$5m forequipment already purchased. Payment timetable is tight, with impending payment deadline of Dec ’09(option period extension). AUR is a seller post ‘GFC’ after spending ~US$30m and completing a BFSin 2007. Andash is located in the Tien Shan gold belt approx. ~180km W of the capital Bishkek. It iswell served with infrastructure and water availability is good. Apart from established reserves andresources (see table below) the surrounding EL contains highly prospective ground for additionalAu/Cu resources. Andash BFS: The 2007 BFS (done by Wardell Armstrong International) and beingupdated by KGL was based on a 2mtpa operation, LOM 8 years, producing ~50kozpa Au and ~4ktpaCu (gross revenue ~A$100mpa at current prices), capex US$55m, opex US$9.60/t (US$223/Au ozequiv.),strip ratio 0.8:1, simple crush/grind/flotation flowsheet to produce a Cu/Au concentrate. KGL’soptimised approach is to start at 1.5mtpa (to reduce initial capex) and then expand to 2.5mtpa in yr 3(~60koz Au and 5ktpa Cu), also an interim open pit to access higher grades earlier. Savoyardy Project: KGL has option to acquire 100% from fellow Kyrgyz explorer Manas Resources(ASX:MSR) for US$1.25m (2 staged payments). Situated in S of country modest 35.5koz JORCinferred resource. KGL undertook PFS early in 2009 for a small low capex (US$1.2m) 3 year 10kozpaoperation (Biox + leach, opex ~US$370/oz). Could start 4Q10 but cashflow is modest (~A$5mpa?). Corporate: KGL recently raised A$1.05m through a placement at A$0.04/share, and subsequently aplacement @ A$0.09 to raise A$2.0m, (SPP now impending). This brought Macquarie Bank on boardas a shareholder – a positive for funding the US$15m (A$18m) Andash option payments. Investment Comment: Can a small ~A$15m market cap Australian company purchase an advanced,major ~A$70m capex gold-copper project in little known Kyrgyz Republic for only ~US$9/containedounce equivalent, and get into production in 2 years? It will probably have to raise ~A$20m in the next3 months to do it, and a further ~A$25m equity alongside a debt facility in mid 2010. If the perceivedsovereign risk can be addressed and the already completed BFS stacks up, then KGL, with input frommajor shareholder Macquarie Bank, is likely to get its company maker.



The map below shows the Tien Shan gold belt which runs from Uzbekistan, through the Kyrgyz Republic and into NW China. The belt host the 1.1moz Au equiv Andash Au-Cu deposit (KGL option to purchase 80%) plus many world class operations including Kumtor, Kyrgyz’s only major gold mine (560kozpa).

KGL’s projected development schedule for Andash shows potential production in 3Q11. The immediate focus is to complete due diligence and raise ~A$20m (probably utilising Macquarie Bank) to complete the

purchase by Dec ’09.



Kingsgate Consolidated Limited *

8.39


Avg monthly volume (m)Cash (A$m) - Sep 09FPrice/Cash (x) Drilling - RAB (m)Price/Book (x) Listed company options: Land holding ('000 ha)

** Net profit after extraordinaries for FY08 was A$36m after A$44.4m pre tax profit on sale of shares in Andean Resources Ltd

$11M exploration budget for 2008.

Experienced board and management.

Resources (includes proved and probable reserves)

Mineralised Material (est., non compliant with JORC)Reserves and Resources as at 30 June 2008

Contacts DirectorsMr Gavin Thomas(MD, Chief Executive Officer) G Thomas (MD)Tel: 61 (2) 8256 4800 P McAleer (Non Exec Dir)Sydney, NSW, Australia C Carracher (Non Exec Dir)

13.6

2.0%

85,000

6.55

88,000

130

0PER (x)

Exploration and Evaluation (A$m)

Production

69022.0

3

140,000

92.191.9

Au none

Eqty

100% 0.0333.9

2.9g/t

2.10

1.101.2033.9

(JORC)Au

15.7100%

www.kingsgate.com.au

StockpilesTotal

Chatree

R Smyth-Kirk (Chairman)

Total

Chokdee 100%

100%100% 0.0

0.0

3,163

65.3

3,163

0.0

81.0

0.0

0.51.10

Reserves

Chatree North

Code for reporting mineral resources - Australian:Classification

Chatree

Gold

Meas+ind+infMeas+ind+inf

Dividends (A¢/share)

100%Chatree 100%Project

Chatree North

Stockpiles Meas+ind+inf

Au

TotalTotal

OptionOwnership/

60,000

Convertible notes (m) 0.0

P/CF (x)

EV/EBITDA (x)Yield (%)

130140,000

1688,000

30 16

2.5%

Company Comment

130,000Drilling - RC/Diamond (m)

7.03.2% 3.2%5.6

130

5

58.1

25113.1

258.6 11.1


40.70.5

g/t0.5 100

Au

Chatree North

c/off

1.4Total 100%100%

AuMt

CFPS (A¢/share)

5.26

t

16

EquityOre

86,000

Project

130

8.00

EPS (norm) (A¢/share)Net Profit (norm) (A$m)** 32.5 72.5

72.734.3-8.1-8.2

-97.3 10.88.5

20

16.27

23.016.3

15

50.580.0%

Exchanges: ASX:KCN

Capital Profile

52 week range (A$/share)Share price (A$)

to7.872.20

KCN.AUGold, SilverThailandProduction, Advanced Exploration

21 September 2009

96.1Options and warrants (m) 5.9

102Fully diluted^ (m)

Number of shares (m)


756.3

756.3

Major shareholders: Gold 2000 Ltd. (6.3%), Jabre Capital (6.5%)

Thailand-based KCN is an unhedged mid tier goldproducer in a strong growth phase.

Production 93koz in FY09, forecast 137koz in FY10,increasing to ~210koz FY11 (plant expansion from 2.6 to5.0mtpa).

Solid FY09 profit and resumed dividend, profit expected todouble in FY10.

Transition to new Chatree North leases has dramaticallylifted grades (2.3g/t 2Q09), gold output and profitability.

Excellent drilling results from resource drilling Chatree N -indicates likely higher resource grades.

Highly grade sensitive - every 0.1g/t increase in long termreserve grade adds A$1/share to NPV.

Regional exploration success - Chokdee discovery couldunderpin 10moz province (curent 3moz resources).

Current cash ~A$36m. Profit growth and l.term gradeupside potential could drive stock towards A$10/share.

.

15

21.2

Investment Points

3.3No

Directors (6.3%).

35.7

3

6902,47078.4

30.01,39343.7

Location

as aboveThailandProductionThailand


na

Process

0.5

Route

1.20

Target

[email protected]

A$ 7.87

79.7

2011F

112.8

Higher grades (2.3g/t) have dropped 2Q09 opex to a low US$228/oz. FY09production 93koz, to grow to 137koz FY10 and 210koz FY11. The SinoGold-Edorado merger should increase focus on KCN as a low cost,potential >200koz quality SE Asian gold producer.

137.5


210.5

Key Projects

MetalJV

Partner Typenone

AuThailand

noneCIL 2.4mtpa

0.5

0.50.51.20

1.40

88,000

1,393

100

2,470

1.20

70.7

Mid Expl.

ProjectStatus

0.0

1,290

140,000

koz

130

2008a 2012FYEAR END: June

5.7188.1

EBIT (A$m)93.0Equity Production (koz)

48.2

74.134.9 86.7

92.7


2009a 2010F

100.4

70.4

141.1

0.5

koz

3

1,290

KCN - Kingsgate Consolidated Limited

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Sep-

08

Oct

-08

Nov

-08

Jan-

09

Feb-

09

Mar

-09

Apr

-09

May

-09

Jun-

09

Jul-0

9

Sep-

09

Shar

e Pr

ice

($/S

hare

)

Overview: Kingsgate re-listed on the ASX in 1988, focused on gold mining and exploration in Thailand where it has benefited from its first mover position. KCN’s Chatree mine has been in production since 2001 and is now a leading example of a low cost, efficiently operated SE Asian gold mining operation, benefitting from a low tax regime. Chatree Production has Soared: After low production (17koz) and operating losses in 2H08, the opening of the Chatree N leases has boosted production which has soared to 76koz in 1H09 due mainly to much higher grades from Chatree N in 1H09 (2.3g/t in 2Q09 and 1.7g/t in 1Q09 versus 1.0g/t @2H08). The production plant has been running at full capacity (~2.6mtpa)since Mar ’09. Opex has fallen dramatically. 1Q09 cash costs (incl. royalties) are down to US$228/oz in 2Q09 versus US$364/oz 1Q09, confirming KCN currently in the lowest quartile of global gold producers.Outlook: As we have seen from the past two quarters, the key to future performance is all about grades,and secondly future plant expansion. We are expecting grades to come back to around 1.85g/t averagefor FY10, still well above the reserve grade of 1.2g/t. with annual production of 137,000oz forecast, and EBIT of A$80m, net earnings more than doubling to A$0.73/share. A review of the proposed plant expansion to 5.0mtpa is underway – decision expected 4Q09. We have assumed that expansion will proceed at a capital cost of A$130m (50% debt funded, balance funded by cashflow), start up by 4Q10. This will bring production up to around 210kozpa in FY11. In FY12 production drops to 188koz assuming grades come back to current reserve grades (but will they?). Chatree N Resource Drilling:Total reported reserves (Chatree and Chatree N at 30 June 2008) are 1.39moz and resources 3.16 moz at a grade of 1.2g/t. KCN expects an increase in resources and reserves in the next 24 months with an on-going drill program (5 drill rigs, >100,000m pa). The high grade intersections being reported at Chatree N are encouraging for longer term increases in reserve grades. Grade Sensitivity: Our modeling indicates that a 0.1g/t increase in reserve grade (or US$100/oz increase in the gold price) increases the NPV by ~A$1/share. This is a key issue to watch. Regional Exploration: 1300km2 surrounding Chatree, with many drill ready targets. Chokdee 20km N of Chatree, has resulted in a major new discovery, could rival total Chatree resources of 5moz to date. Investment Comment: Our NPV is A$6.26/share, (5% DR, US$850/oz long term Au, A$/US$=0.78, 65% resource conversion) or A$8.11/share at Au price of US$1,000/oz. In the longer term the higher grades from Chatree N resource drilling could have a A$2–A$3/share effect on valuation due to possible lifting of longer term resource grades. KCN is a stand-out low cost dividend-paying Asian producer now coming into the range of institutional funds as it approaches A$1bn market cap.




ASSUMPTIONS 2008a 2009a 2010F 2011F 2012F FINANCIAL RATIOS 2008a 2009a 2010F 2011F 2012FA$/US$ 0.90 0.75 0.80 0.79 0.78Gold Price (US$/oz) 834 886 925 900 899 Net debt/equity (%) -5% -4% 5% -8% -16%Gold Price Realised (US$/oz) 854 875 933 900 899 Net debt/ net debt + equity (%) -6% -4% 5% -8% -19%

Current ratio (x) 7.0 3.3 2.8 10.5 14.7EBIT/interest (x) 3 19 32 25 22

EQUITY PRODUCTION Debt/operating cashflow (%) 0% 12% 64% 43% 45%Chatree Production (koz) 74 93 137 211 188 Exploration/total overhead (%) 2% 3% 17% 17% 17%

EV/EBITDA (x) 50.6 16.3 8.0 5.3 6.6KCN Equity Production Gold (koz) 74 93 137 211 188 Market cap/net cash (x) 18.8 27.5 -19.7 12.8 6.3Cash Costs (US$/oz)** 457 479 335 323 401 Market cap/book (x) 4.2 3.1 2.5 2.0 1.7 ** Cash Cost is direct operating cost before royalties and by product credits

PROFIT AND LOSS (A$m) FINANCIAL SENSITIVITIESRevenues 76 117 170 252 233Operating costs (direct) -42 -53 -58 -86 -96 % Change in EPS for a 10% increase in:Depreciation/amortization -9 -12 -15 -31 -29Exploration Expensed 0 0 -2 -2 -2 AUD/USD -58% -17% -21%Corporate -15 -8 -8 -8 -8 Gold Price 64% 19% 23%Other (incl. Royalties) -4 -9 -8 -12 -11EBIT 6 35 80 113 87Interest 2 2 2 4 4 % Change in NPV for a 10% increase in forecast minelifeOperating profit/loss 3 33 77 108 83 commodity assumptions for:Tax -12 -1 -5 -16 -12 Base + 10%Minorities 0 0 0 0 0 A$/share A$/share %Net profit/loss -8 33 72 92 70 Gold Price US$850/oz 6.26 7.31 17%Net abnormals/extaordinaries 44 0 0 0 0Net profit/loss (reported) 36 33 72 92 70

BALANCE SHEET (A$m) VALUATION (A$m) Q3 08 Cash and deposits 40 30 24 119 170Total current assets 57 58 34 129 180 Assumptions Base "What if" PP&E 140 200 315 298 277 Long Term Gold Price :US$/oz 850 1,000Total non-current assets 147 213 344 343 338 Long Term AUUS 0.78 0.78Total assets 203 271 378 472 518 ProjectsTotal current liabilities 16 17 12 19 17 Chatree and Chatree North 100% NPV@5% A$112/oz 313 389 Reclamation reserves 0 0 0 0 0 Based on reserves only Long term debt 2 0 60 58 48 Resources and ExplorationTotal non-current liabilities 6 8 69 66 56 Chatree and Chatree North 100% NPV@5% A$91/oz 289 377Total liabilities 22 26 81 85 73 Regional Exploration 100% 50 75Equity 181 245 297 387 445

OtherTotal debt 0 2 63 60 50 AssetsNet debt -40 -28 38 -59 -120 Cash and deposits (3Q09) 36 36Average shares (fully diluted) (m) 101 102 102 102 102 Rehabilitation Fund 0 0

Other -26 -26FLOW OF FUNDS (A$m) LiabilitiesEBITDA 15 46 95 144 115 Debt 0 0Cash flow from operating activities Corporate -57 -57 Operating surplus 20 34 109 162 127 Reclaimation Reserve 0 0 Corporate -15 -8 -8 -8 -8 Net Assets 604 793 Net borrowing cost -6 -2 -5 -7 -11 Net tax paid 0 -7 -2 -12 -11 Fully Diluted Shares (m) 102 102 Net exploration paid -5 -30 -16 -16 -16 Net assets/share (A$/share) 6.26 8.11 Other non cash items 24 32 19 22 30Net cash from operating activities 19 18 97 141 111Cash flow from investing activities Valuation/Reserve oz :US$/oz 169 222 Capital expenditure -20 -12 -130 -14 -8 Valuation/Reserve & Resource oz :US$/oz 149 196 Asset Sales & Other 57 -36 -26 -16 -16Net cash from investing activities 37 -48 -156 -30 -24Cash flow from financing activities Net proceeds from issue of shares 0 16 0 0 0 Dividends paid 0 0 -24 -19 -24 Net proceeds from borrowings -20 0 63 -3 -10Net cash from financing activities -20 16 38 -22 -34Net change in cash 36 -14 -20 89 53

PRODUCTION STATISTICSChatree 100%Ore Treated (kt) 2,000 2,405 2,560 4,500 5,000 Head Grade (g/t) 2.40 1.20 1.85 1.62 1.30Recovery (%) 90 90 90 90 90Recovered grade (g/t) 2.18 0.96 1.67 1.46 1.17Gold Produced (koz) 140 74 137 211 188Equity Production (koz) 140 74 137 211 188Cash Costs (US$/oz) 206 462 335 323 401Production Costs (A$/t) 16.09 19.08 22.47 19.09 19.28 EBIT (A$m) 17.4 -13.2 62.3 118.3 86.8

It's All About GradesOur modelling predicts 1.16g/t residual reserve grade in 3Q10.

The sensitivity of KCN NAV to better grades is significant

Year YearYEAR END: June

EFFECT OF LONG TERM GRADE ON NET ASSET VALUE

6.00

7.00

8.00

9.00

10.00

11.00

12.00

13.00

14.00

1.16 1.26 1.36 1.46 1.56

Long Term Resource Grade (from 3Q10 on)

Net

Ass

et V

alue

(A$/

shar

e -

fully

dil.

)

Gold US$850/oz Gold US$1,000/oz




0.24


Avg monthly volume (m)Cash (A$m) - Sep 09FPrice/Cash (x) Cash (A$m)Price/Book (x) Listed company options: Net asset backing (Ac/share)

*Gold prospective tenements only, both held and under application. Quarters stated on calendar year basis.

ReservesResources MelroseMineralised Material (est., non compliant with JORC) Bobrikovo, oxide high grade Bobrikovo, oxide low grade Bobrikovo, sulphide TotalOther JORC resources: Winchester, 16.6mt grading 42% Mg. Other mineralised material: Bobrikovo, 328koz Ag grading 45.2g/t.

Contact DirectorsAndrej K Karpinski(Executive Chairman)Tel: 61 (0) 8 9474 6166South Perth, WA, Australia

Batchelor - UAUMelroseBatchelor - SundanceBatchelor - Winchester BFS

na Carbonate na AUS (NT)100% Mg na na na AUS (NT)

Adv ExplToll Scoping AUS (WA)

Multiple

Au

9.5

na

0.0

344.3

Location

Adv Expl AUS (NT)na

kozEqty

Reserves and Resources/Mineralised MaterialCode for reporting mineral resources - Australian:Gold

(JORC)Classification Au

Ownership/

Gravity

Project

[email protected]

Quarry DFS

Au

JV TargetOption

nana

100%100%

U

UkraineStatus

306.0 306.0

0 0

Project Ore

7.3

0.2

Company Comment

4.7

243243 200-

0.123.07-

2.00

1.6


2010F

Exploration and evaluation (A$m)

4932

243

67.5

74

78.0

KOR.AU

0.600.70

A$ 0.24Korab Resources Limited

KOR has four projects near to production (gold, magnesium,phosphate) and is in the process of a uranium spin-off. Current goldfocus is on the Bobrikovo Project (Ukraine, target +640koz Au),where low-cost mining could commence in 4Q09.

1.570.15

Jun-09a

0.43

2009F

1.52 1.700.89

Sep-09F 2008a

0.05

Capital Profile

Options and warrants (m)

52 week range (A$/share) to

0.5

Gold, phopshate, uranium, magnesiumAustralia (NT,WA), UkraineDefinitive Feasibility StudyExchanges: ASX:KOR, Berlin:C6S.BE

Convertible notes (m)

YEAR END: July0.240.04

Corporate (A$m)0

Share price (A$)

Number of shares (m) 68.0

21 September 2009

2.00

74Exploration/(Expl.+ Corporate) (%)

- -243

16.068.5

0.1056

068.0 78.0

0

0.3

00.20

1.368.0

7,5000

0.1

00

0Market capitalisation (undiluted) (A$m)

Funding duration at current burn (yrs)

Drilling - Other/Diamond (m)Land holding ('000 ha)

2.3 Cash backing (Ac/share)



Chancery Holdings (8.4%)3

Fully diluted (m)

16.1

KORO

Focussed on gold (Ukraine,WA,NT), phosphate,magnesium and uranium (all NT).

Bobrikovo Au (Ukraine): mining of 84-104koz Au inshallow oxide ore planned from 4Q09, processing fromlate 2010; opex US$280/oz, start-up capex US$2.8m.

Potential to develop Bobrikovo sulphide ore: near-termtarget 640koz Au to 200m depth, exploration target 4moz Au to +3,000m depth. Spin-off likely 2009-10.

Other gold projects include Melrose (WA): resource306koz Au, initial capex A$2m for mining from 2010,potential to toll treat at nearby gold plants.

Batchelor Project (NT): plans to mine phosphate(Geolsec) and Mg (Winchester) from 2010. Spin-off ofRum Jungle uranium assets (UAU) planned for Oct '09.

Ongoing share purchase plan at A$0.2/share could raiseup to A$2m in working capital.

Investment Points

2.9

Tenement costs ($k per year)

g/tAu

Au,Ag

0

0.0

7.32.1

0

0.3

Capital raisings (A$m)

12.0

0.0

c/off

1.68.7

t koz

3.8

0

Aus (NT)DFS

344.3

Partner Type

10.7

1.1

-

navarious

Batchelor - GeolSec74% Orogenic

100%

Shear100% AuAnalyst: Dr Trent Allen

JM McKenzie (Non Exec)

0.2

0.04

g/tEquity Mt

Process

Key Projects

Major shareholders: AK Karpinski (30%), Merril Lynch Nom (9.6%)

RouteAK Karpinski (Exec Chair)RH Skeet (Non Exec)

www.korabresources.com.au

ProjectBobrikovo

Phosphate

0

Metal

0.3

1.69.8

7.2 1.6 52.6

100% 6.7 1.43 na

37.471% 1.0 1.6 51.7 36.771%

170.571% 3.20 7.5 240

Overview: Korab listed on the ASX in August 2005. It is a diversified mining and exploration company with operations in Australia and the Ukraine, focused on gold, rock phosphate, magnesium and uranium. Bobrikovo (Au/Ag; Ukraine; KOR 74%): Operated by 74%-owned subsidiary Donetsky Kryazh Ltd (DKL) and held by 96% owned Lugansk Gold Ltd (LUG). The deposit, located in the Tethyan gold province and similarin style to Sukhoi Log (57moz Au, Russia), is in free milling quartz carbonate veins (7m-25m wide). The ore zone is 2.5km-3km long (within an 11km structure) and 0.9km-1km wide. There is an oxide zone to 30-40m depth, underlain by sulphides to +3,200m. Historic, non-JORC gold reserves within the oxide zone (C2 by Russian classification) include 52.6koz Au in higher grade ore @ 7.2g/t, and 51.7koz Au in lower grade ore @ 1.0 g/t, with 328koz silver @ 45.2g/t. There is also a non-JORC historic resource within the deepersulphide zone, of 240koz Au grading 3.2g/t to a depth of 150m, and ~640koz Au to a depth of 200m. KOR has an exploration target of 4moz Au for Bobrikovo. Campaign mining (free digging at 1.2mtpa) and stockpiling is planned from 4Q09, with Stage 1 processing from late 2010 or early 2011 by gravity tables(recoveries 63%-76%), rate 0.12mtpa, head grade 4.2g/t Au (blending high and low-grade ore); year 1 production ~12koz Au. There is potential in Stage 2 to expand to +300ktpa, boost recoveries and process lower grade oxide ore (~1g/t Au) blended with Stage 1 tailings (~1.2g/t Au). Metallurgy demonstrates oxide and sulphide recoveries up to 97%-98%. Sulphide ore is non-refractory. Stage 1 opex US$280/oz Au (DFSrevised Aug ‘09). Stage 1 capex is ~US$2.8 million. In the mid-term, the sulphide ore could be mined at opexUS$400-$500/oz, financed by debt or a spin-out of LUG – announcement expected 2H09. Melrose (Au; WA; KOR 100%): 170km N of Leonora. An advanced project: mining could begin 2010. TotalJORC resource of 306koz Au averaging 1.43g/t over three deposits. Possible opex A$550/oz Au, capex A$2m, production +20kozpa Au. Ore could be toll treated (e.g. at Bronzewing, Darlot). Drill intercepts outside the resource envelope include 56m @ 3.6g/t Au from 49m depth and 5m @ 11.0g/t from 120m depth. Batchelor Project (Phosphate,Mg,U,Au; Australia [NT]; KOR 100%): ~65km south of Darwin. This project includes the GeolSec Phosphate and Winchester Magnesite operations, which could both be mining in2010. KOR projects GeolSec gross profit of A$26-$27 million over first 3 years (15ktpa-30ktpa, margin A$350-400/t). There are also uranium assets (Rum Jungle Mineral Field), held by subsidiary Uranium Australia Ltd (UAU) – an A$11m IPO is planned for Oct ’09, with existing KOR investors receiving free shares (1.37 for each KOR share, including new SPP shares), ex date is October 8, record date October 14. Investment Comment: KOR has plans for four new mines, one spin-off in progress (UAU) and another planned for 2010 (LUG). At US$850/oz Au and using DFS parameters, NPV of Bobrikovo oxide operation is A$6m (5% discount rate), with upside from developing the sulphide; GeoSec, at 30ktpa, margin A$350/t, for 5 years (and 5% disc), has NPV A$20.6m – a combined A$26.6m or A$0.33/share for these operations. With several advanced projects, exploration properties in WA (gold, iron ore, uranium), and a market cap of A$16m, KOR appears under-rated. UAU and LUG spin-outs could help unlock some of this latent value.



Bobrikovo Au-Ag deposit oxide and upper sulphide ore zones (concentrations of Au): the oxide zone extends to a depth of 35m and has historic (non-JORC) reserves of up to 104koz Au. It could be mined from

4Q09 and the ore processed from late 2010. The underlying sulphide zone is open below 200m depth.

Location of the GeolSec rock phosphate deposit: quarrying at the project could commence in 2010, to

supply the demand for rock phosphate from organic farming. KOR projects cash flow of A$26-$27 million over first 3 years (30ktpa). Exploration target 1mt of phosphate, based on historic (non-JORC) resource.



Norseman Gold Plc *

0.92

Cash Cost (A$/oz)


Avg monthly volume (m)Cash (A$m) - Sep 09FPrice/Cash (x)Price/Book (x) Drilling - RAB (m)Listed company options:

Land holding ('000 ha)

$11M exploration budget for 2008.

Experienced board and management.

Resources (includes proved and probable reserves as above)


Contacts DirectorsMr Barry Cahill(Chief Executive Officer) B Cahill (CEO)Tel: 61 (8) 9473 2200 D Steinepreis (Non Exec Dir)South Perth, WA, Australia M de Villiers (Non Exec Dir)

G Steinepreis (Non Exec Dir)P Bilbe (Non Exec Dir)

1.3

0%

20,000

171.9

0

161

0PER (x)

Exploration and Evaluation (A$m)

1,10033.6

0

24.914.3

Eqty

1.4

12.0100%


9.30

www.norsemangold.com

Total

Norseman - Open Pit

V Pendal (Chairman)

TotalReserves and Resources as at 31 March 2009

Meas+ind+inf3,700

8.43,70020.0

100%2.80

P/CF (x)

Shares on Issue (EOP) (m)

Norseman U'ground

Code for reporting mineral resources - Australian:Classification

Norseman - Open Pit

Gold

Meas+ind+inf

Norseman 100%Project

Au

Proven + Probable

OptionOwnership/


20,000

0%

0

161

60

81.0

0

0%3.270.4

0%

Norseman - U'ground

c/off

0.44

06.1

Drilling - RC/Diamond (m)

0%81.0

Yield (%)

20,000

g/t453.20

161

Company Comment161

Reserves

(JORC)Au

1.4g/t


10.901.00

4

Proven + Probable 100%100%

AuMt

7 6

CFPS (A¢/share)

171.9

t

6

EquityOre

0

Project

161

171.9

EPS (norm) (A¢/share)Net Profit (norm) (A$m)** 20.3 19.9

11.516.6-10.2-8.7

-8.6 7.73.8

05.33.4

0

Exchanges: ASX:NGX; AIM:NGL

Capital Profile

52 week range (A$/share)Share price (A$)

to0.880.45

NGX.AUGoldAustralia (WA).Production, Advanced Exploration

21 September 2009

96.1Options and warrants (m) 6

102Fully diluted (m)


Convertible notes (m) 0


89.3

84.6

Major shareholders: Sprott Asset Managment (11.6%),

Profitable unhedged mid tier gold producer entering astrong growth phase.

Norseman field has long history of high grade quartz reefmining since 1894 with >5.5moz extracted

NGX is operating two underground mines - high gradenarrow quartz reefs.

Reserves 400koz, total resource base 3.7moz, conversionsubject to mine development.

FY09 production 81koz @ A$715/oz cash cost, net profitA$20.3m, ave grade 6.04g/t

Production expansion to ~120kozpa forecast usingexisting mill capacity, subject to 3rd mine startup.

Our assessed NAV is A$1.18 (US$850 long term goldprice) or A$1.69/share @ US$1,000/oz (A$/US$=.0.78).

Prospective P/E ratio only 6.1x for potential 120kozpaproducer (FY11), cash of ~A$32m

5.3

2.6

Investment Points

1.2No

Baker Steel Capital Managers (9.2%), Directors (10.2%).

32.3

40012.3

1,1002,50078.1

0.0

LocationAus(WA)Productionqtz vein Gravity/CIL

Target

[email protected]

A$ 0.88

28.6

2011F

35.6

NGX has produced a solid A$20m profit in FY09 from production of 81koz from the high grade Norseman underground operations (3.7mozresource). With spare mill capacity, plans to expand to ~120kozpa withadditional mining output are now being implemented.

95.3

Norseman Gold Plc

8.90

Key Projects

MetalJV

Partner Typenone

400

2,500

ProcessRoute

5.50

0.0

350

20,000

koz

10.9

Au

0.0

ProjectStatus

YEAR END: June

-7.7

123.1

EBIT (A$m)

80.7Equity Production (koz) 123.1800 715

2008a

25.9

77.7

22.3 36.7

22.9


2009a 2010F

45

111.7

25.7

27.8

koz

350

14.828.9

06.03.0

695 702 709

2012F

NGX - Norseman Gold Plc(listed on ASX June 2009)

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

Sep-

08

Mar

-09

May

-09

Jun-

09

Aug-

09

Shar

e Pr

ice

($/S

hare

)

Overview:. NGX acquired the historic Norseman gold operations, 725km East of Perth, in April 2007, from the former Croesus Mining Linmited (now Sirius Resources). NGX was originally listed on the AIM (London) market and since June 2009 has been dual listed on the ASX. History: The Norseman operation is Australia’s longest continually running gold operation with aproduction history that dates back to 1894 when gold was first discovered at Norseman. An estimated5.5moz of gold has been extracted from the field, most in the last 65 years of production. Current Operations: NGX is currently sourcing ore from two underground high grade narrow quartz vein mining operations – The Bullen decline and Harlequin decline. Ore is treated though the 700ktpa capacity Phoenix gravity/CIL mill. The mill is currently only running at ~70% capacity (~400ktpa) due to haulage limitations from the two existing mines. In FY2008 415kt was milled for 77.7koz of production at a head grade of 6.02g/t. In FY09 gold output improved to 80.7koz from 398kt of ore milled at an average grade of 6.04g/t. Average cash cost of production in FY09 was A$715/oz (down to A$636/oz in 2Q09 with grades increased to 6.66g/t). A net profit of A$20.3m was recorded in FY09 (EBIT of A$22.3m), compared to a loss of A$8.7m in FY08. Current Reserves & Resources: Current reserves (prov. + prob.) are 400koz (grade 8.9g/t), ~80% of which is derived from the two current underground mining operations at Bullen and Harlequin. The totalJORC resource is 3.7moz at a grade of 5.5g/t, 67% of which is an underground resource (grade 9.3g/t) and 33% an open pit resource (grade 2.8g/t). The complexity of the mineralisation (particularly at Harlequin with a high ‘nugget’ effect), means that underground resources can only be converted to reserves through mine development, and the correlation between estimated resource grades and actual head grades is difficult to accurately predict, and is only confirmed by extraction and ore treatment. Future Expansion: NGX’s strategy is to expand mine output to increase ore treatment rates to more fully utilize the Phoenix mill capacity of 700ktpa. To do this, NGX will need to commence a third miningoperation, likely in the next 12 months. Exploration and resource drilling is focused on 3 areas: the OK Decline (OK Deeps – various target areas below and to the W of historical OK mine workings), North Royal (open pit potential plus u/g remnant pillars) and the Crown Reef (potential 1moz resource in pillars from historical workings). A decision on opening up one of these areas is likely in the next 6 months. RCR Modeling Assumptions: Our forecasts assume mill throughput is expanded to 620ktpa by 2Q10and gold output increases to 123kozpa, recovery 98%. We have assumed longer term head grades of 6.3g/t, opex A$135/t which gives ~A$700/oz. Sustaining (mine development) capex of A$16mpa with an additional A$10m in 1H10 to develop the third mine. Total mine life of 10 years assumed. Investment Comment: After losses in FY08 and a patchy prior history (Croesus as operator), it has been a major milestone in FY09 for the NGX team to show that the Norseman operations can beoperated more efficiently with a solid A$20m profit, with recent cash costs well below A$700/oz. The potential expansion to ~120kozpa is now the main focus – as it looms nearer we would expect a major stock re-rating with a current FY10 P/E of only 7.7x and our assessed NAV of A$1.18/share based on US$850 long term gold and A$/US$=0.78 (A$1.69/share with long term gold @ US$1,000/oz).



Norseman Gold Plc

ASSUMPTIONS 2008a 2009a 2010F 2011F 2012F FINANCIAL RATIOS 2008a 2009a 2010F 2011F 2012FA$/US$ 0.90 0.75 0.80 0.79 0.78Gold Price (US$/oz) 834 886 925 900 899 Net debt/equity (%) 18% -30% -33% -59% -86%Gold Price Realised (US$/oz) 821 894 930 900 899 Net debt/ net debt + equity (%) 15% -44% -49% -143% -590%

Current ratio (x) 0.8 2.4 2.0 3.6 5.2EBIT/interest (x) -4 39 215 na na

EQUITY PRODUCTION Debt/operating cashflow (%) na 27% 0% 0% 0%Norseman Production (koz) 78 81 95 123 123 Exploration/total overhead (%) 0% 44% 16% 16% 16%NGX Equity Production Gold (koz) 78 81 95 123 123 EV/EBITDA (x) 84.2 2.8 2.2 1.8 1.8Cash Costs (A$/oz)** 800 715 695 702 709 Market cap/net cash (x) -5.5 3.3 3.0 1.7 1.2Cash Costs (US$/oz)** 717 571 556 556 555 Market cap/book (x) 3.3 1.2 0.9 0.7 0.6 ** Cash Cost is direct operating cost before royalties.

PROFIT AND LOSS (A$m) FINANCIAL SENSITIVITIESRevenues 72 97 113 142 145Operating costs -64 -62 -66 -86 -87 % Change in EPS for a 10% increase in:Depreciation/amortization -9 -10 -12 -13 -14Exploration Expensed 0 -2 -1 -1 -1 AUD/USD 5% -15% -36%Corporate -3 -3 -3 -3 -3 Gold Price 13% 17% 39%Other (incl. Royalties) -4 1 -3 -3 -4EBIT -8 22 29 36 37Interest 2 1 0 0 0 % Change in NPV for a 10% increase in forecast minelifeOperating profit/loss -9 22 28 36 37 commodity assumptions for:Tax 0 -2 -9 -11 -11 Base + 10%Minorities 0 0 0 0 0 A$/share A$/share %Net profit/loss -9 20 20 25 26 Gold Price US$850/oz 1.18 1.47 25%Net abnormals/extaordinaries 0 0 0 0 0Net profit/loss (reported) -9 20 20 25 26

BALANCE SHEET (A$m) VALUATION (A$m) Q3 08 Cash and deposits 7 33 28 50 72Total current assets 17 40 28 50 72 Assumptions Base "What if" PP&E 28 32 50 53 55 Long Term Gold Price :US$/oz 850 1000Total non-current assets 49 62 86 95 103 Long Term AUUS 0.78 0.78Total assets 66 102 114 145 176 ProjectsTotal current liabilities 21 20 17 17 17 Norseman Operations 100% NPV@5% A$210/oz 167 253 Reclamation reserves 0 0 0 0 0 Assumes 10 year LOM @ 6.3g/t grade Long term debt 15 3 -4 -4 -4 Resources and ExplorationTotal non-current liabilities 19 14 8 8 8Total liabilities 41 34 24 25 25 Regional Exploration 100% 25 30Equity 25 68 90 120 151

OtherTotal debt 22 7 0 0 0 AssetsNet debt 15 -26 -28 -50 -72 Cash and deposits (3Q09) 31 31Average shares (fully diluted) (m) 85 124 176 176 176 Rehabilitation Fund 0 0

Other 3 3FLOW OF FUNDS (A$m) LiabilitiesEBITDA 1 32 40 49 51 Debt -5 -5Cash flow from operating activities Corporate -18 -18 Operating surplus 6 33 45 53 54 Reclaimation Reserve 0 0 Corporate -3 -3 -3 -3 -3 Net Assets 203 294 Net borrowing cost -2 -1 -2 -2 -3 Net tax paid 0 -2 -11 -9 -9 Fully Diluted Shares (m) 176 176 Net exploration paid -4 -7 -6 -6 -6 Net assets/share (A$/share) 1.18 1.69 Other non cash items 3 5 11 10 12Net cash from operating activities 0 26 34 44 45Cash flow from investing activities Valuation/Reserve oz :US$/oz 396 573 Capital expenditure 0 -5 -30 -16 -16 Valuation/Reserve & Resource oz :US$/oz 43 62 Asset Sales & Other -4 -7 -6 -6 -6Net cash from investing activities -5 -12 -36 -22 -22Cash flow from financing activities Net proceeds from issue of shares 0 20 0 0 0 Dividends paid 0 0 0 0 0 Net proceeds from borrowings -5 -11 -5 0 0Net cash from financing activities -5 9 -5 0 0Net change in cash -10 24 -7 22 23

PRODUCTION STATISTICSNorseman 100%Ore Treated (kt) 415 423 480 620 620 Head Grade (g/t) 6.07 6.06 6.30 6.30 6.30Recovery (%) 96 98 98 98 98Recovered grade (g/t) 5.82 5.93 6.17 6.17 6.17Gold Produced (koz) 78 81 95 123 123Equity Production (koz) 78 81 95 123 123Cash Costs (US$/oz) 717 571 555 556 555Production Costs (A$/t) 154.00 137.00 137.93 139.28 140.68 EBIT (A$m) -8.0 23.0 38.2 44.8 44.4

Year YearYEAR END: June



North Queensland Metals Limited

0.37Gold Price (US$/oz)Equity Production (koz)


Avg monthly volume (m)Cash (A$m) - Sep 09FPrice/Cash (x) EV/EBITDA (x)Price/Book (x) Listed company options:

Total


Contacts DirectorsMr John McKinstryCEOTel: 61 (0) 7 3666 0510

26.0

7.4

Au Au Eqty

Baal Gammon probable ore reserves 3.31mt @ 0.93% Cu, 0.20% Sn, 32.0g/t Ag, 29.3g/t In.

0.8

Pajingo Proven & Probable 0.5

(JORC)

12.08.18.0

1.48

IndicatedInferred

Code for reporting mineral resources - Australian:GoldReserves

1.7

3.25.90

Shares on Issue (EOP)

10.1

float

na??Aunaepithermal

* NQM holds option to purchase 100% of Dotswood

0/100% Au mid expl.Heemskirk

na

214.8

0.0

StatusProject

0.0

Aus(QLD)mid expl.

epithermal

volcanicsfloat

Aus(QLD)

Aus(QLD)

Productionvolcanics

Aus(QLD)

Twin Hills 60%

RouteProcessTarget

Partner

7.02.0

4.92.6

A$ 0.27

NQM focus is to grow its gold production (current~36kozpa) to become a mid tier (~100kozpa) producer.

NQM is 60% owner of the Pajingo gold operation -epithermal gold system (2.3moz production to date).

Pajingo production ~60kozpa, opex ~A$700/oz.

Option on new QLD gold project (Dotswood) and TwinHills purchase aimed at mining within 2 years, NQMproduction to ~100kozpa?

Dotswood ore treated 2Q09 - confirms Pajingo millexpansion potential to 500ktpa ore.

Twin Hills Project recently acquired - potential for majorhigh grade (7.5g/t) ore source to Pajingo.

New Pajingo style epithermal discovered at nearbyMoonlight.

11.1

198.95.5

Investment Points

18.0No

147.2 198.9

3.8

7.2

6.9

8.0

55.037.2

2.03.9

3.4

[email protected]

21 September 2009

53.7

16

Fully diluted (m)Market capitalisation (undiluted) (A$m)

0.0

Major shareholders: D Walker (27.2%), Newmont Capital Pty Ltd (10.3%)

6.8

100% naSn,Cu,Ag,In

Sn,Cu

60% 11.21.39

Analyst: Dr Tony ParryDotswood*

PajingoResources

53.7

7.9


Company Comment

CIP

384.0

0.0

Key ProjectsProject

60%

Ownership/

358.0

Cut Off

60%g/tMt

Yield (%)

23.016.6P/CF (x)

0

EPS (norm) (A¢/share)1.61.2

0.0

14.4

10.2 13.7


144.6

5.67.25.5

11.06.8

CFPS (A¢/share)1.8 3.0

NQM.AU

0.8Number of shares (m) 198.9Options and warrants (m)

Gold, Tin, Copper, Silver, Indium

Share price (A$)

0.0

Capital Profile

Australia (QLD)Production, Advanced Exploration

52 week range (A$/share) to

Exchanges: ASX:NQM

Convertible notes (m)

899


Revenue (A$m)

2010F

886 925834

2008a 2009a

12.4 31.5

North Queensland Metals Limited

NQM's has reported a solid full year profit of A$5.6m from the 60kozpaPajingo (QLD) gold operation (NQM 60%). Pajingo cashflow will driveNQM's strategy to grow to a mid tier gold producer (~100kozpa in 5 years)from satellite ore bodies such as Twin Hills and Dotswood.


2012F2011F

Pajingo

www.nqm.com.au

Type

M Tilley (Non Exec Dir)

D Walker (Non Exec Dir)B Kay (Non Exec Dir) 60% Au,Ag

naEinasleigh

100%

Option Metal

Equity

Brisbane, (QLD), Australia

Pajingo

HerbertonHeemskirk

JV

199.6 7.12

Classification Project

EBIT (A$m) 10.76Net Profit (norm) (A$m)

N Thomas (Non Exec Ch)

Drill Investments Pty Ltd (5.7%), Robin Scrimgeour (3.4%)

koz

0.08

3.73.9

5.0

PER (x)

6.7

20.63

4.0

61.2

2.02.63.9

Aut

Orekoz

102.0

adv expl. Aus(QLD)early expl.

Location

230.4

15.6

g/t

63.1

198.9

14.8

15.76

900

Au

9.65

49.512.5 56.436.3 42.8

NQM - North Queensland Metals Limited

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

Sep-

08

Nov

-08

Dec

-08

Feb-

09

Mar

-09

Apr

-09

Jun-

09

Jul-0

9

Aug-

09

Shar

e Pr

ice

($/S

hare

)

Source: Bloomberg

Overview: NQM was listed on the ASX in Dec ‘06. with a focus on tin/silver/indium deposits in N Qld, In2008 it joined the ranks of gold producer with the purchase 60% of the Pajingo mine. The strategy now isto extend minelife and expand production by bringing new regional resources into production. Pajingo Gold Mine: The Pajingo mine is 53km S of Charters Towers in Central QLD. Initially an open cut,it has operated as an underground mine (ave. grades 11g/t) since 1996, yielding 2.3moz. NQMpurchased a 60% stake from Newmont Australia in Dec ‘07 for A$18m (cash and shares). The Pajingoore body comprises a series of steeply dipping narrow epithermal quartz veins. Mining is by a series ofdeclines extending over 4km strike length. Ore is processed through a 500ktpa CIP plant. Currentreserves and resources are 2.01mt @ 7.5 g/t for 486 koz (21% in reserve category). Ore throughput rateis 300 ktpa. In the 2Q09 grades dropped and costs rose to A$853/oz, partly due to excessive dilution.NQM is rectifying this with improved mine planning and a shift to narrow vein mining equipment. Pajingo Resource Exploration: Mine life is ~5 years on current resource base. NQM plans to replaceresources, extend mine life by drilling defined ‘brownfields’ epithermal targets in the immediate vicinity.NQM believes the Pajingo field has strong potential to increase resources. Recent drilling at Moonlight(~2km S of existing mine) has confirmed a new gold mineralised system (veining similar to the Pajingoepithermal veining), 350-400m below surface. Promising results have also been generated at Janet G(14m @ 12.5g/t) and Ralph Porter (see map next page), potential open cut ore sources? Dotswood Gold Project Option: This is the first stage of a focused strategy aimed at becoming a midtier ~100kozpa producer within five years. In 1Q09 NQM announced it had secured a 6 month option over100% of the Dotswood Gold Project north of Charters Towers (80km by road). NQM describes Dotswoodas an ‘advanced’ gold exploration project, having a history of modest gold production (open pit in 1986-1987, and high grade underground 2000-2004). During 2Q09 NQM treated parcels of Dotswood oxide ore(2.1g/t grade) through the Pajingo mill with good results – confirming the mill could gear up to 500ktpatreatment rate. NQM is undertaking resource definition drilling, establish an initial resource statement andundertake a scoping study on production. Initial mining targeted in late CY10. Dotswood ore couldsignificantly boost gold output. NQM will pay the vendor A$1.9m in cash, 1 million NQM shares and a 1%LOM royalty (A$2.5m cash/share value plus royalty) to exercise option in 4Q09. Twin Hills: Could be a major boost to expansion plans, 190km S of Pajingo, this project has beenacquired by the JV partners for A$1.75m cash. NQM quote a non JORC ‘drill defined mineralisationtarget’ of 800-850kt @ 7.0-7.5g/t Au. NQM has commenced FS on trucking up to 200ktpa ore to Pajingo. Corporate; NQM recently raised A$3.9m net through a share placement 20.5c. and a SPP raised A$6.2mat 20.5c. This will ensure NQM’s project acquisition and exploration strategy is funded. Investment Comment: NQM’s strategy is to increase gold production from the highly prospectiveDrummond Basin. Our NPV of Pajingo stake (5%DR, 60% resource conversion, long term Au priceUS$850/oz) is A$54m, plus Dotswood, Twin Hills and Herberton tin/base metals gives NAV of A$0.38 pershare. Prospective P/E for FY10 is ~8x with plenty of future growth. Our 6 month share price target isA$0.35 if Dotswood delivers promising drilling results as expected.



NORTH QUEENSLAND METALS LIMITED VALUATION

Target^Price (Low) (High)

Equity Gold Valuation A$m A$m A$mProjects (moz) US$/oz

+ Pajingo Gold Project ^ 60% 0.48 146 54 44 60+ Baal Gammon Project 100% (2% of gross in ground value - multi metal resource) 8 3 15+ Herberton Regional Tin Expln 100% 3 2 5+ Twin Hills (major potential ore source, currently non JORC, @ ~7.5g/t) 5 3 10+ Dotswood Gold Project Option (Lower grade (~3g/t), potential open cut oxide ore) 4 0 8

Sub Total 74 52 98

+ Cash (Est Sep '09) 7.9 7.9 7.9+ Tax Losses 2.2 2.2 2.2- Debt 0.0 0.0 0.0- Forward Sales Discount 0.0 0.0 0.0- Corporate 7.7 7.7 7.7

Sub Total 2.4 2.4 2.4

NQM NET ASSET VALUE 76.4 54.2 100.4

Capital StructureShares (m) 198.9 198.9 198.9Fully Diluted Shares (m) 199.6 199.6 199.6

NQM NET ASSET VALUE PER SHARE :A$/share 0.38 0.27 0.51NQM NET ASSET VALUE DILUTED :A$/share fully diluted 0.38 0.27 0.50

^Pajingo target price based on NPV @ 5% DR, RCR long term gold price forecast of US$850/ounce, A$/US$ = 0.78

Valuation Sensitivity

NQM’s exploration of the Pajingo epithermal system is starting to show there is excellent potential for major additions to ore resources in areas such as Moonlight (underground ore potential) and Janet/Ralph

(open cut ore potential).




0.47


Avg monthly volume (m)

Cash (A$m) - Sep 09FPrice/Cash (x) Cash (A$m)

Price/Book (x) Listed company options: Net asset backing (Ac/share)

Quarters stated on calendar year basis.

Mineralised Material (est., non compliant w ith JORC)

Contacts DirectorsMr Rimas KairaitisChief Executive OfficerTel: +61 (0)2 6361 4700Orange, NSW, Australia

R Chambers (Non Exec)

Ausmindex, NMG Cobar na Mid Expl. Aus (NSW)

Doradilla Project tin resource is 7.8mt @ 0.28% for 49.2mlbs Sn

Porphyry

Pre-feasibility Aus (NSW)

ProjectLocation

Nymagee

70%100%

Hera 100%

Sn (W)100%

Au-base

Tallebung80% Au-base

Indicated + inferred 100% 1.8 6.70 2.5g/t AuEq 12.0

Cobar

385 385

Kadungle

Baldry

2.2

Hera (CBH, 2007) ^

Ownership/

Key Projects

12.8

G Zhang (Non Exec)www.ytcresources.com S Woodham (Non Exec)

Project

3.0

Investment Points

2.1

Focused on gold and base metal exploration in NSW,including recently acquired flagship, the Hera Gold andBase Metal Project near Cobar.

Hera Project and Nymagee JV: purchased 3Q09. Hera isan advanced stage, undeveloped gold and Cu-Pb-Zndeposit; current AuEq resource of 510koz Au.

Hera's Main Lens could provide 7 years undergroundproduction of 39kozpa Au, with natural hedge from basemetal co-product (e.g. Zn 6700tpa). Opex A$360/oz AuEq

NSW exploration portfolio includes early to advancedstage prospects for gold (Baldry, Kadungle) and tin.

Strategic alliance with China's Yunnan Tin Group (YTG) - world’s largest tin producer.

Cash Sep 09F is A$12.7m after A$22.6m shareplacement and ongoing spp. Possible A$1.5m fee forfacilitating 50% sale of Renison (ASX:MLX) to YTG.

0

Wenxiang Gao (Chair)A Wehby (Vice Chair)R Kairaitis (CEO)

Aus (NSW)

Aus (NSW)

4.2

0

5.9

koz

Aus (NSW)

Status

20,000

-

2.67

0.0

koz

11.78.2

Au Eqty

0.5

43.8

Au

185

4,000

0

Au

13.9

9.8

Adv Expl.Mid Expl

25.92

1.3

Aus (NSW)Aus (NSW)

180#####

100%

Sn, Ni

Giant's Den

100%

Doradilla

Sn (Au)Au, Ag

Skarn na

Mid Expl.Early Expl.none

none

Au, Cu

naGCP,SRL

Epitherm.

Equity Mt g/t

na

RoutePartner

3.3

na

na

Type

none

JV

nonena

Gravity/float

283

0.00.0 0.0t

8.8 283

5,000

0.0 0.0

g/t

154Options and warrants (m)

Classification(JORC)

Project

2.913.9

12.7


No

16

Fully diluted (m)

38.5

Funding duration at current burn (yrs)

Land holding ('000 ha)


Drilling - Other/Diamond (m)

159

Locksley Holdings Pty Ltd (7.5%), Smiff Pty Ltd (7.2%)

Exploration/(Expl.+ Corporate) (%)Convertible notes (m)

YEAR END: June0.25

0.08

Corporate (A$m)

0

toExploration and evaluation (A$m)

Share price (A$)

YTC.AU

5

Gold, Base Metals, SilverAustralia (NSW)Pre-Feasibility StudyExchanges: ASX:YTC

Capital Profile

52 week range (A$/share)

21 September 2009



Major shareholders: Yunnan Tin Aust. (25.8%), Yunnan Tin YTC Hold. (11)

25.8

23.16

5,000

185-

1802,0001,000

0.00

Option Metal

Reserves

Indicated + inferred

^Other metals: Cu 0.18%; Pb 2.72%; Zn 3.35%; Ag 15.13g/t. ^^Other metals: Cu 0.2%; Pb 2.5%; Zn 2.8%; Ag 14g/t

7.5% ZnEq

Hera (Triako, 2004) ^^

Cash backing (Ac/share)

20,000

2.760.00

00

-Tenement costs ($k per year) -


Capital raisings (A$m)

0.5

-166

5,000 15,000

40.043.8

12.7

Company Comment

Cut Off

13.2

1.7

Tin

2.9

AuOre

1.3

167.2

1.140.06


2010F

0.500.25

Sep-09F 2008aJun-09a

0.43 1.381.16

7845

1.00

67 6812

154.1


YTC plans to mine its A$12m acquisition, the Hera gold and basemetal project (NSW), from Jan ’11. This is subject to a DFS (expectedFeb ’10) and final permitting. Current gold-equivalent resource is~510koz Au, with infill and expansion drilling to commence Oct '09.

2.43 3.55

A$ 0.25

2009F

Analyst: Dr Trent AllenC Ng (Non Exec)

Mid Expl.

R Hill (Non Exec)

Target

Lode, alluv.

Process

Code for reporting mineral resources - Australian

[email protected]

Resources100%

Lode, porph.

Overview: YTC listed on the ASX May ’07. It is focused on the exploration and development of gold and base metal projects, especially tin, in the New England and Lachlan Fold Belts of New South Wales. Hera Project and Nymagee JV (Au, Ag, Pb, Zn, Cu): Located 100km SE of Cobar, central NSW, Hera is an advanced but undeveloped gold, silver and base metal (Cu-Pb-Zn) deposit. It is Cobar-style deposit consisting of 1-12m wide sub-vertical lenses. Known mineralisation extends from surface to +500m depth, and measures 800m (strike) by 300m (width). Hera was discovered by Pasminco (2001). Triako then held the project (2003), outlining a JORC resource (on Main and 1530 lenses) of 1.79mt @ 6.7g/t Au, plus significant Ag-Pb-Zn-Cu (e.g. 2.8% Zn). It also completed a PFS. When Triako was bought by CBH in 2006 for A$70m scrip (to obtain its Pb-Zn projects), Hera was its primary asset. CBH expanded the resource to 3.3mt @ 2.67g/t Au in 10 mineralised lenses (with a zinc-based cut off), and obtained a permit for a decline. Mining Evaluation: To date, YTC has evaluated the Main Lens (600m strike), which could be mined via conventional bench stoping (+150m depth). Some parts of the lens are high grade, e.g 16.7m @ 70g/t Au, 8.5% Pb, 11.1% Zn and 38g/t Ag (CNYDD017). YTC has defined a Mining Inventory for Main Lens of 1.14mt @ 6.7g/t Au, 14.9g/t Ag, 0.2% Cu, 2.27% Pb and 3.72% Zn. This could be mined over 7 years, with annualproduction 39koz Au as both bullion and in concentrate, along with concentrates containing Ag (77kozpa), Zn (6700tpa), Pb (3800tpa) and Cu (330tpa). Gold could be produced from a gravity circuit and as a concentrate either at Hera or, for example, at CBH’s Endeavour plant (150km by road, spare capacity ~75%). YTC estimates opex A$360/oz AuEq. Initial capex could be A$23.4m including A$5m for the DFS and exploration, A$11.8m underground development and A$3.5m for a gravity circuit. Of the 9 lenses other than the Main Lens, the 1530 Lens (drilled 22.8m @ 7.1g/t Au from 361.4m) and Far West Lens (drilled 7.8m @ 15.2g/t Au and including 12.5% Zn) could provide early mine life extensions. YTC plans to mine Hera, commencing Jan’11. A DFS and resource update are expected Feb ’10. Hera exploration: Resource infill and expansion drilling should commence Oct ’09. Hera is open below ~500m depth, and along strike. The 1km-distant Hebe Prospect has drilling 7m @ 3.26g/t Au and +2% Pb and Zn, while the underground Nymagee Copper Mine (Nymagee JV) produced 0.42mt @ 5.8% Cu in 1880-1917. The 5km Hebe-Nymagee strike corridor is underexplored. A gravity survey is planned (Oct ’09). Hera Valuation: At a gold price of US$850/oz, based on YTC’s parameters of the Hera Evaluation Study, and the Triako-defined resource (Main and 1530 lenses) we estimate Hera project NPV (5% discount rate) tobe A$108m, or A$0.68/share (fully diluted) including cash. This assumes a 30% pre-DFS discount. Corporate: YTC bought Hera and an 80% interest in the adjacent Nymagee JV from CBH Resources Ltd (ASX:CBH) for A$12m plus 5% royalty (Jun ’09) and is funded by a A$22.6m share placement (Aug ’09) and ongoing A$2.7m spp to existing shareholders. Investment Comment: YTC’s acquisition of Hera was the culmination of a 2 year search for an advancedproject that could be put quickly into production yet had good exploration potential. Based on the current (1.8mt) resource, our Hera-NPV (5% disc) is A$108m or A$0.68/share, which takes no account of the large NSW exploration portfolio. Based on the Mining Inventory, short-term target is A$0.50/share. Near-term price catalysts could include results of the Hera drilling program and a DFS and resource upgrade in 1Q10.



YTC plans to put the Hera Gold and Base Metal Project (western NSW) into production in early 2011. Exploration and resource infill drilling should commence in Oct ’09 as part of the DFS. The project already

has a permit for an exploration decline.

Hera Project valuation based on Triako’s JORC resource (2.5g/t Au cut off) is A$92m at US$850/oz Au, or A$0.68/share (fully diluted) including cash. As well as Hera, YTC has a large portfolio of exploration assets

in NSW, prospective for metals including gold, tin, silver and nickel.

HERA PROJECT VALUATIONEquity

LONG TERM GOLD PRICE^ :US$/oz 600 800 1000 1200 1400EXCHANGE RATE :AUUS 0.78 0.78 0.78 0.78 0.78LONG TERM GOLD PRICE :A$/oz 769 1026 1282 1538 1795

RESOURCE (MAIN + 1530 LENS) @ 5% NOMINAL** :A$m 100% 64 85 113 142 171RESOURCE (MAIN + 1530 LENS) @ 5% NOMINAL** :US$m 100% 50 66 88 111 133NPV/SHARE :A$/share 0.40 0.53 0.71 0.90 1.08

** Includes a pre-DFS discount of 30% of the project valuation: 30%^Gold price forecasts are US$950/oz in calendar 2009 to 2010, thence long term price indicated. Co-products held f ixed at US$800/oz Au Equivalent.

HERA PROJECT, KEY ASSUMPTIONS

RESOURCE ESTIMATES(Gold only)

Mt g/t koz koz

YTC Mining Inventory (Base Case) 1.1 8.8 324 246Rest of Hera Resource, Main+1530 Lens 0.7 8.8 185 388

Total 1.8 8.8 509

MINING METHOD Underground

PROCESS METHOD Separate gravity circuit, flotation (at third party plant)

PRODUCTION RATE :mtpa 0.16:kozpa Au 39 plus Ag 77kozpa, Zn 6700tpa, Pb 3800tpa, Cu 330tpa

CAPITAL COSTS :A$m 23.4 Plus A$20.2m sustaining for LOM

RECOVERY - GOLD :% 92 50% gravity, remainder as concentrate:% 95

CASH COSTS US$/oz 288 A$360/oz Au at US:AU 0.8

TAX :% 30ROYALTY :% 4 New South WalesMINE LIFE :Years 7+

Sensitivity

Gold Equivalent*

* These figures are early stage in nature and are intended to provide only a general indication of project potential scale and economic robustness. Considerable refinement may result from ongoing feasibility studies in 2009 and 2010.

Gold Targets

*Base case and Triako Resource use 2.5g/t Au Eq cut off . YTC metal price assumptions for Au Eq: Au = US$800/oz, Cu = US$4,000/t, Pb = US$1,300/t, Zn = US$1,300/t, Ag = US$12.5/oz



Selected Charts and Gold Sector Statistics Precious metal prices, interest rates, and oil price charts.

Gold Price (Spot US$/oz)

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Source: Bloomberg

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/oz)

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S$/o

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Source: Bloomberg

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(US$

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rel)

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US Federal Funds Rate (%)

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(%)

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Gold production by country (calendar year 2007).

Country t moz %China 280.5 9.0 11.3South Africa 269.9 8.7 10.9Australia 246.3 7.9 9.9United States 239.5 7.7 9.7Peru 169.6 5.5 6.9Russia 169.2 5.4 6.8Indonesia 146.7 4.7 5.9Canada 101.2 3.3 4.1Top 8 1,622.9 52.2 65.5

Rest of World 853.0 27.4 34.5

Total 2,475.9 79.6 100.0

Gold Mine Supply 2007

Source: Newcrest, GFMS

Gold production by producer, 4Q08 and calendar 2008

Company Company

Barrick Gold 2,100 Barrick Gold 7,663 Newmont Mining 1,337 Newmont Mining 5,180 AngloGold Ashanti 1,265 AngloGold Ashanti 4,979 Gold Fields 839 Gold Fields 3,329 Goldcorp 692 Goldcorp 2,323 Kinross Gold 550 Kinross Gold 1,840 Freeport-McMoRan 466 Newcrest Mining 1,751 Harmony Gold 392 Harmony Gold 1,661 Newcrest Mining 383 Freeport-McMoRan 1,255 Lihir Gold 315 Buenaventura 1,212

Total 8,339 Total 31,193

Top 10 4Q08 (koz) Top 10 2008 (koz)

Source: GFMS

Top ten gold producers by market capitalisation.

Company

Barrick Gold 22.9 Goldcorp 19.5 Newmont Mining 17.1 Freeport-McMoRan 14.1 AngloGold Ashanti 11.2 Kinross Gold 10.0 Newcrest Mining 9.5 Gold Fields 7.3 Agnico Eagle Mines 7.2 Yamana Gold 5.6

* as at March 12 2009

Market Capitalisation (US$ billion) *

Source: GFMS

China emerged as the world’s largest gold producer in 2007 – production 280.5t. The top 10 global producers’ output of 31.2moz in 2008 represents 40% of total global production (est. 77.7moz).



Report Contributors Tony Parry: Tony has extensive experience in metallurgical process development, (working with MIM Limited for five years) and in mining equity research, equity sales and mining corporate finance (working in London for five years and subsequently Perth). He was a founding Director and CEO of an ASX listed exploration company and has been engaged extensively as a strategic planning consultant to many small-medium enterprises. Tony’s qualifications include a BSc (Hons) in Metallurgy and a PhD in Metallurgy from the University of NSW. John Wilson: John has a background in mining, finance and equity research. He worked on Wall Street for 6 years and has covered US, Australian and Latin American mining stocks. He has also worked with BHP in their minerals division. Qualifications include an MBA from the Wharton School of the University of Pennsylvania and a Bachelor of Engineering from the University of Sydney. Trent Allen: Trent has a BSc (Hons) and a PhD from the University of Sydney, specialising in the petrology, trace-element geochemistry and economic geology of alkaline igneous rocks. His Australian mining industry experience includes several years with Newcrest’s Cadia Valley gold/copper mines, where he was engaged in resource definition and geotechnical engineering. Trent has also worked as an exploration consultant, university lecturer in geology and civil engineering, and as a newspaper editor with Fairfax in Sydney.



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