Long Term Outlook For Exploration - Richard Schodde - Minex Consulting, July 2013.

- Gloom or Boom ?
Richard Schodde
Managing Director, MinEx Consulting
Adjunct Professor, University of Western Australia
Geological Society of South Africa

GeoForum 2013 Conference
2nd – 5th July 2013, Johannesburg
MinEx Consulting Strategic advice on mineral economics & exploration

Overview: Gloom or Boom?
1. Trends in global exploration spend
Forecast future spend out to 2020 & financing issues for Junior Companies
2. Trends in discovery rates
Where were the discoveries made? Current “Hot Spots” for exploration
3. Trends in discovery performance
Which Regions did better? Factors impacting on discovery performance
4. Trends in the types of exploration methods used
Geophysics versus geochemistry versus “nearology”
5. Trends in discovery costs
Unit discovery costs ($/oz, c/lb) are rising
6. Are we finding enough metal?
To be sustainable we need to find enough to replace what we mine
7. Conclusions
MinEx Consulting Strategic advice on mineral economics & exploration 2

Exploration expenditures reached an all-time high in 2012

Exploration expenditures: World
by Commodity : 1975-2012
Spend is at an $29.4B
2012 US$ billion
all-time high in 2012
$30
$25
10x real increase
$20 in the last decade
Other Bulk
Coal
$15
Iron Ore
$7.9B Other
$10 in 1997 Diamonds
$2.9B
Uranium
$5 in 2002
Base Metals
Gold
$0
1975 1980 1985 1990 1995 2000 2005 2010
Sources: MinEx Consulting estimates © April 2013, based on

data from ABS, NRCan, MLR (China), OECD and MEG SNL

by Commodity : 1975-2012 Major increase in
spend on Bulk
Minerals
Percentage of total spend Other - Bulk 1%
100%
11% Iron Ore
14% Coal
80%
Diamonds 13% Other – Non Bulk
2%
60% Uranium 3%
Base Metals
(Cu, Ni, Zn, Pb)
23%
40% Gold continues
Gold to be the main
20% 34% target
0%
1975 1980 1985 1990 1995 2000 2005 2010
Sources: MinEx Consulting estimates © April 2013, based on

data from ABS, NRCan, MLR (China), OECD and MEG SNL

by Region : 1990-2012
2012 US$ billion

$30
Rest of World
$25 Expenditures
are very FSU + E Europe
cyclical China
$20
Western Europe
$15 Africa
Pacific / SE Asia
$10 Latin America
USA
$5 Canada
Australia
$0
1975 1980 1985 1990 1995 2000 2005 2010
Note: “Rest of World” refers to, Mongolia, Middle East and Sources: MinEx Consulting estimates © April 2013, based on
South West Asia (including India and Pakistan) data from ABS, NRCan, MLR (China), OECD and MEG SNL

Exploration expenditures: World China spends more
by Region : 1990-2012 on exploration than
any other country in
the World
Percentage of total spend
100% 3%
6% Rest of World
14% FSU + E Europe
80%
2% China
15% Western Europe
60% Africa
6%
Pacific / SE Asia
21%
40% Latin America
7% USA
20% 13%
Canada
Australia
13%
0%
Can+USA+Aus
1975 1980 1985 1990 1995 2000 2005 2010
market share has
halved in the last 2
decades
Note: “Rest of World” refers to, Mongolia, Middle East and Sources: MinEx Consulting estimates © April 2013, based on
South West Asia (including India and Pakistan) data from ABS, NRCan, MLR (China), OECD and MEG SNL

Exploration spend is closely linked to commodity prices
World gold exploration expenditures versus gold price
Exploration Expenditures Gold Price

(June 2012 US$m) (June 2012 US$/oz)
$12,000 $2,400
Exploration Brokers
Spend (<LHS) Forecasts
$10,000 (June 13) $2,000
Gold Price Since 1990s there has
(RHS>) been a strong correlation
$8,000 between Gold Price and $1,600
Exploration Spend
$6,000 See a similar trend $1,200

for other metals
$4,000 $800
$2,000 $400
$0 $0
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Source: MinEx Consulting © July 2013

Forecasts from Consensus Economics © June 2013

Forecast exploration expenditures: World
by Commodity : 1975-2020
$29B Down
2012 US$ billion in 2012
$30 35%
Other
$25 Coal
Iron Ore $19B
Uranium in 2020
$20
Base Metals
$15 Gold
Spend on uranium is
$10 projected to increase
$5
Forecast
Gold is projected to
$0 fall the most
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Note: Forecast based on a Multiple-Regression analysis of data Source: MinEx Consulting estimates © July 2013, based on
from 1997-2012 with R2 = 0.95 commodity price forecasts from Consensus Economics June 2013

Forecast exploration expenditures: World
by Region : 1975-2020 CAUTION:
Forecast assumes no
change in Country Risk
$29B Down and tax rules
2012 US$ billion in 2012
$30 35%
FSU + EE + ROW
$25
$19B China
in 2020
$20 Western Europe
Africa
$15 Pacific / SE Asia
Latin America
$10
USA
$5 Canada
Australia
$0
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Note: “Rest of World” refers to, Mongolia, Middle East and Source: MinEx Consulting estimates © July 2013, based on
South West Asia (including India and Pakistan) commodity price forecasts from Consensus Economics June 2013

The Junior sector is facing severe funding problems. This will
most felt in-terms of reduced “money into the ground”
Cash and Expenditures for the MEDIAN Australian Junior company: 1998-2012r
Funding dried up during

June 2012 A$ Million the GFC. To preserve
(annualised basis) Large amount of funds cash, Junior Companies
raised in 2006-2007 severely cut back on
$5 expenditures in the field
Funding dried up again

$4 in 2012. Key problem is
Cash Funds at that the starting cash
end of Quarter reserves are low
$3
Because of
this …
$2
Exploration + Development Costs The 2013 “bust”
could be more
$1
severe than the
Administration Costs 2008 GFC
$0
Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12
Source: MinEx Consulting © February 2013

Note: Expenditure data is reported on a Quarterly basis, but has been based on Quarterly Reports to the ASX
annualised to be comparable with Cash Reserves

Exploration expenditures reached an all-time high in 2012

Number of deposits found each year – by Region
Mineral deposits# found in the World: 1975-2012
China+FSU+EE+ME
Number Western Europe
100 Africa
N = 2161
Pacific / SE Asia
80 Latin America
USA
60 Canada
Australia
40
Caution:
Incomplete data in
recent years
20
0
1975 1980 1985 1990 1995 2000 2005 2010
Due to delays in reporting of
discoveries, expect the final
number to be 2-3x larger
Note: # Discoveries are for deposits >0.1 Moz Au, >5 kt U3O8, >10 kt Ni, >0.1 Mt Cu-equiv
Excludes satellite deposits within existing Camps
Excludes bulk mineral discoveries Source: MinEx Consulting © July 2013

Number of deposits found each year – by Region
Mineral deposits# found in the World: 1975-2012
China+FSU+EE+ME
Share of discoveries made Western Europe
100% Africa
Pacific / SE Asia
80% Latin America
USA
60% Canada
Australia
40%
Caution:
Incomplete data in
recent years
20%
0%
1975 1980 1985 1990 1995 2000 2005 2010

Tier 1, 2 & 3 discoveries in the world: 2002-Present
Saskatchewan Far East
(Uranium) Russia
Alaska/Yukon Northern
Ontario
China
SW USA/ Mexico
West Africa
Latin America Central Africa
Au Base U3O8 Other Australia

Metal
Tier 1 Ten current
Tier 2 “Hot Spots”
Tier 3

Spend & performance by Region: 2003-12
Region Exploration Number of Tier 1+2
Spend (2012 $b) Discoveries # Discoveries
Australia $12 (10%) 83 (16%) 13 (15%)
Canada $22 (18%) 65 (12%) 16 (19%)
USA $9 (8%) 20 (4%) 9 (10%)
Latin America $28 (23%) 118 (23%) 15 (17%)
Africa
Pacific / SE Asia $6 (5%) 23 (4%) 2 (3%) performed
the best
Africa $17 (14%) 116 (22%) 19 (22%)
Western Europe $3 (3%) 22 (4%) 1 (1%)
China+FSU+EE+RoW $22 (19%) 77 (15%) 11 (13%)
----- ------- ------ -------- ------ --------
TOTAL $116 (100%) 524 (100%) 86 (100%)

Due to rising input costs and deeper targets It is become more expensive
to make a discovery

Discovery rate versus spend
Western World non-ferrous exploration spend and discoveries
Number of Discoveries 2012 US$ Billion

200 $18.5b $20
Estimated No of unreported discoveries
Number of Discoveries
Exploration Expenditures Even after adjusting for
150 $15 unreported discoveries , in
the last 5 years a large gap
Between 2002 & 2012 WW has opened up between
spend went up 8x and expenditures and number of
discovery rate up ~3x deposits found
100 $10
… Gap due to higher

input costs (labour,
50 $2.4b $5 drilling and admin)
Estimate
0 $0
1975 1980 1985 1990 1995 2000 2005 2010
Note: Excludes expenditures and discoveries for Bulk Minerals

Discoveries are for deposits >0.1 Moz Au, >5 kt U3O8, >10 kt Ni, >0.1 Mt Cu-equiv

Input costs for exploration have doubled
in the last decade
2000 2000 2012 % real
nominal real real increase
$ of the Day 2012 $ 2012$
Average Diamond Drilling Cost (US$/metre)

- Canada $84 $112 $210 88%
- Australia $77 $102 $229 125%
Average salary for an Exploration Manager

(US$ per annum)
- Canada $70,000 $93,000 $170,000 83%
$75,000 $100,000 $250,000 150%
- Australia
Median Administration Cost for a Junior

Exploration Company (US$m per annum)
- Australia $0.34 $0.44 $1.19 170%

Higher costs impact on the amount of drilling done
Exploration spend and drilling in Canada and Australia: 1997-2012
(2012 US$ Billion) (million metres)

$6 12
Canada Metres Drilled
$5
$4 7 Between 2002-2011,
$3 Expenditures rose 8.0x
$2 2 but drilling only rose 3.9x
$1 Exploration Expenditures
$0 -3
1997 2002 2007 2012
$6 Metres Drilled 12
Australia
$5
$4 7
Between 2002-2012,
$3
$2 2 Expenditures rose 9.3x
$1 but drilling only rose 2.4x
Exploration Expenditures
$0 -3
1997 2002 2007 2012
Data: NRCan, ABS

… and we are exploring under deeper cover
Depth of cover for Gold and Base Metal discoveries in the World: 1900-2012
Discovery Year
1900 1920 1940 1960 1980 2000 2020
0
500
It is difficult to find
1000 deposits under deep
cover
… end-result is that we
1500 have to drill more metres
per discovery
2000
Depth of Cover (Metres)
Note: Excludes satellite deposits within existing Camps
Excludes gold deposits in South Africa

Average depth of cover for discoveries - all metals
Western World: 2003-2012
Africa Latin W Rest Pacific

Average (excl Sth Africa) Am Europe Aust Canada of WW SE Asia USA
0 12
32
55
50 68
74
82
98
100
122 126
If you exclude South
150 Africa, the average
depth of cover falls from
55 to 12 metres
204
200
Metres
250
Note: Based on deposits >0.1 Moz Au, >5 kt U3O8, >10 kt Ni, >0.1 Mt Cu-equiv

There have been several innovations in the exploration tools used to
make discoveries

Trends in exploration methods
The preferred search method used varies by commodity type,
depth of cover and “scale”
Continental-Scale
Province-Scale
District-Scale
Project-Scale
MinEx has carried out a detailed Prospect-Scale
analysis of the discovery history of
1750 deposits at these two scales

Primary search method used at the project-scale
GOLD discoveries (>0.1 Moz) in the World: 1900-2012 ie What method was
used to decide where
to peg the leases
Percentage of total discoveries
100% Serendipity
Prospector
80% Other
Visual
60% Conceptual/Geological
Geological Mapping
40% Extrapolated from Known
Mineralisation
Geochem
20%
Geophysics + Geochem
Geophysics
0%
Note: Analysis based on detailed analysis of 993 gold projects (out of 1779 known discoveries)

Primary search method used at the prospect-scale
GOLD discoveries (>0.1 Moz) in the World: 1900-2012 ie What method was
to drill the first hole
100% Serendipity
Prospector
80% Other
Drilling (Sole Method)
60% Visual
Conceptual/Geological
40% Geological Mapping

Extrapolated from Known
Mineralisation
20% Geochem
0% Geophysics
Note: Analysis based on detailed analysis of 993 gold projects (out of 1779 known discoveries)

Primary search method used at the project-scale
BASE METAL discoveries (>0.1 Mt Cu-eq) in the World: 1900-2012 ie What method was
to peg the leases
100% Serendipity
Prospector
80% Other
Visual
60% Conceptual/Geological
Geological Mapping
40% Extrapolated from Known
Mineralisation
Geochem
20%
Geophysics
0%
Note: Analysis based on detailed analysis of 757 Cu+Ni+Zn+Pb projects (out of 1344 known discoveries)

Primary search method used at the prospect-scale
BASE METAL discoveries (>0.1 Mt Cu-eq) in the World: 1900-2012 ie What method was
to drill the first hole
100% Serendipity
Prospector
80% Other
Drilling (Sole Method)
60% Visual
Conceptual/Geological
40% Geological Mapping

Extrapolated from Known
Mineralisation
20% Geochem
0% Geophysics
Note: Analysis based on detailed analysis of 757 Cu+Ni+Zn+Pb projects (out of 1344 known discoveries)

Depth of cover and discovery method
Prospect-Scale BASE METAL Discoveries in the World: 1900-2012
Discovery Year
Over time we are

exploring under
progressively
Depth of Cover (Metres) deeper cover

Prospect-Scale GOLD Discoveries in the World: 1900-2012
Discovery Year


Prospect-Scale GOLD Discoveries in the World: 1900-2012
Discovery Year
Gold exploration is generally

done under shallower cover …
only because we don’t have any
good tools to look deep !!
EXCLUDING South Africa


The cost per unit of metal found has been rising

Exploration expenditures and amount of copper found
Primary copper deposits >0.5 Mt Cu-eq found in Western World: 1950-2012
Mt Cu-eq Expenditures (2012 US$B)
200 $5
Estimate
Western World Discoveries
$4
150
$3
100
$2
50
$1
0 $0
1950 1960 1970 1980 1990 2000 2010
Note: Estimate includes adjustments for deposits with no discovery year

and deposits missing from the database
Source: MinEx Consulting © June 2013

Until recently, copper discovery costs were fairly steady
Unit discovery costs for primary copper in the Western World: 1950-2012
US Cents per lb Cu-eq in 2012$

3 Year rolling average
# Equal to 3.0 ¢/lb
excluding by-product credits
Assume 2.5 ¢/lb # Cu-eq

going forward
1995-2005 Average
= 0.9 ¢/lb Cu-eq
Estimate

Gold exploration expenditures and ounces found
Primary gold found in the Western World: 1950-2011
Moz Expenditures (2012 US$B)

300 $10
Estimate $8
Western World Discoveries
200
$6
$4
100
$2
0 $0
1950 1960 1970 1980 1990 2000 2010

Discovery costs for gold are rising
Unit discovery costs for primary gold in the Western World: 1950-2011
Discovery Cost (June 2012 US$/oz)

$113

Assume $32/oz
going forward
1995-2005
Average = $25/oz
Estimate

Average discovery costs for uranium are rising
Unit discovery costs for uranium in the Western World: 1950-2011
Discovery Cost (US$/lb U3O8)

$11.09

1995-2005
Average = $1.63/lb Assume $2.50/lb
going forward
Estimate

For the industry to be sustainable it needs to replace what it mines
6. ARE WE FINDING ENOUGH METAL ?

Are we finding enough metal ?
• Key drivers
– Current discovery rates
– Conversion rates (not all discoveries turn into mines)
– Lag between discovery and development
– Conversion rate for Resources > Reserves
– Losses on mining
– Current and (more importantly) future demand for metal
Given the long delays to convert a

discovery into a mine, need to consider
the future size of the market
As a rule of thumb – to be sustainable we need

to find at least 2x as much as we mine

Mining & discovery rates for gold
Amount of gold found and mined in the World: 1950-2010
Outlook
Exploration Spend $ 
Moz Unit Discovery Costs 
400 Total Metal Found 
Discoveries
World Production Future Mine Production 
300 Discovery/Prodn Ratio in 2026 1.5x
200 “Tight”
Estimate
100
0
1950 1960 1970 1980 1990 2000 2010
Note: Chart include minor adjustment for deposits missing from the database Sources: MinEx Consulting © Nov 2011.
Is based on discoveries > 0.1 Moz Production data from USGS

Mining & discovery rates for copper
Amount of primary copper found and mined in the World: 1950-2011
Outlook
Mt Cu Exploration Spend $ 
Unit Discovery Costs 
160 Total Metal Found 
Discoveries - Estimated
140 Discoveries - By-Product Future Mine Production 
120 Discoveries - Primary Discovery/Prodn Ratio in 2026 1.7x

Mine Production
100
80 “in-Balance”
60
40
20
Estimate
0
1950 1960 1970 1980 1990 2000 2010
Note: By-Product metal refers to copper found in Ni, Au and Zn/Pb deposits
Source: MinEx Consulting © March 2012

Mining & discovery rates for uranium
Amount of Primary U3O8 found and mined in the World: 1950-2010
Outlook
Exploration Spend $ 
Discoveries
Unit Discovery Costs 
World Production
kt U3O8 Total Metal Found 
600 Future Mine Production 
Discovery/Prodn Ratio in 2026 2.0x
400
“in-Balance”
200
Estimate
0
1950 1960 1970 1980 1990 2000 2010
Note: Chart excludes Olympic Dam (Cu-U-Au deposit) found in 1975 – contains 2545 kt U 3O8
Note: Chart include minor adjustment for deposits missing from the database Sources: MinEx Consulting © July 2012
Is based on discoveries > 0.5 kt U3O8 Production data from USGS

Mining & discovery rates for zinc
Amount of Primary Zinc found and mined in the World: 1950-2011
Outlook
Mt Zn Unit Discovery Costs 
50 Discoveries - Estimated Total Metal Found 
Discoveries - Known
Future Mine Production 
Mine Production
40 Discovery/Prodn Ratio in 2026 0.7x
30
“Major Shortfall”
20
10
Estimate
0
1950 1960 1970 1980 1990 2000 2010
Sources: MinEx Consulting © Feb 2012

Production data from USGS

Mining & discovery rates for lead
Amount of Primary Lead found and mined in the World: 1950-2011
Outlook
Mt Pb Unit Discovery Costs 
30 Discoveries - Estimated Total Metal Found 
Discoveries - Known
Future Mine Production 
Mine Production
Discovery/Prodn Ratio in 2026 0.5x
20
“Severe Shortfall”
10
Estimate
0
1950 1960 1970 1980 1990 2000 2010
Sources: MinEx Consulting © Feb 2012

Production data from USGS

The industry is facing a number of challenges and opportunities
7. CONCLUSIONS

Conclusions: Gloom or Boom? [1/3]
Industry has gone
1. Trends in global exploration spend through a “boom”
– Over last decade world exploration spend rose from $2.9b to $29.4b
– Exploration spend reached an all-time high in 2012
– Due to lower commodity prices, exploration spend is forecast to drop 20% in
2013, with a further 15% out to 2020
– Junior Companies facing a cash-crisis. Expect a big cut-back on “money-in-
the-ground” until the situation stabilises
“Industry faces several
years of “gloom”
2. Trends in discovery rates
– Over the last decade industry spend $116b (in 2012$) and found
524 significant deposits, including 86 Tier 1&2 deposits
– The are currently ten “Hot Spots” for exploration around the world.
Two of those are in Africa (Central Africa and West Africa)
Good opportunities
still available

In terms of discovery,
Africa is “the place to be”
3. Trends in discovery performance
– In terms of bang-per-buck, Africa was the best Region. Over the last decade
it accounted for 14% of global spend and found 22% of the deposits.
– Even though non-ferrous spending in the Western world rose by x8 over the
last decade, the discovery rate only rose ~3x. This was due to a doubling in
the cost of drilling, staff and admin. Industry is also having to explore
under deeper cover.
Input costs should fall in medium term. The challenge of being able
to explore under deeper cover will get more severe
4. Trends in the types of exploration methods used

– Varies by commodity, scale and depth of cover. Even so, brownfields
exploration (i.e. “nearology”) and geophysics are becoming much more
important.
Innovations in geophysics, computing and drilling will
help boost discovery performance

5. Trends in discovery costs

– Unit discovery costs for all commodities has been rising - going forward
assume $32/oz Au, 3 ¢/lb Cu and $2.50/lb U3O8
6. Are we finding enough metal?

– To be sustainable industry need to find 2x as much as we mine.
– Taking into account, forecast exploration & unit discovery costs, and
future growth in mine production, it appears that uranium and copper are
“in-balance”, gold is “tight” and zinc & lead face major shortfalls.
In the longer term, industry needs to spend more on

exploration to meet future metal demand. Either
that or commodity prices will need to rise !!

Contact details
Richard Schodde
Managing Director
MinEx Consulting
Melbourne, Australia
Email: Richard@MinExConsulting.com
Website: MinExConsulting.com
Copies of this and other similar

presentations can be downloaded
from my website

Background data for assessing the sustainability of the mining industry
APPENDIX – ESTIMATED FUTURE MINE

PRODUCTION AND DISCOVERY RATES

How much metal do we need to find ?
To ensure no supply interruptions in the longer term the industry

needs to be finding at least 2x as much metal as it currently mines

Estimated Discovery/Production ratios
Gold Copper Uranium
Unit discovery costs ~$32/oz ~3 c/lb ~$2.50/lb
World exploration spend rate [A] = $5100m [A] = $2280m [A] = $680m
(2012 US$m pa) [P] = $9980m [P] = $4870m [P] = $1110m
[F] = $4400m [F] = $2800m [F] = $1500m
Expected amount of metal to
be found [F] = 138 Moz [F] = 42 Mt [F] = 270 kt
Mine Production 2011 = 84 Moz 2011 = 16 Mt 2011 = 64 kt

(in 15 years time) 2026 = 95 Moz 2026 = 25 Mt 2026 = 133 kt
Discovery/Production Ratios [F] [F] [F]

At 2011 Production Rate 1.6x 2.6x 4.2x
At 2026 Production Rate 1.5x 1.7x 2.0x
[A] = Average exploration spending rate over last decade (2003-12) Target is >2x
[P] = Peak exploration spending rate (in the last decade)
[F] = Forecast spend in 2020, based on June 2013 Consensus Economics commodity price forecast Source: MinEx Consulting © July 2013

Estimated Discovery/Production ratios
Zinc Lead Comments
Unit discovery costs ~3 USc/lb Actually refers to Zn-eq
World exploration spend [A] = $650m Assumes that FSU+China make
rate (2012 US$m pa) [P] = $1040m up 15% of total world spend
[F] = $1100m
Expected amount of metal Assumes that the Zn-eq is made
to be found [F] = 12.2 Mt [F] = 2.7 Mt up of 67% zinc, 16% lead and
17% other by-product credits
Mine Production 2011 = 12.4 Mt 2011 = 4.5 Mt Assumes 2% & 1% pa growth

2026 = 16.7 Mt 2026 = 5.2 Mt
Discovery/Production [F] [F]

Ratios
At 2011 Production Rate 1.0x 0.6x
At 2026 Production Rate 0.7x 0.5x Target is > 2x
Required for industry

[A] = Average exploration spending rate over last decade (2003-12)
to be sustainable
[P] = Peak exploration spending rate (in the last decade)
[F] = Forecast spend in 2020, based on June 2013 Consensus Economics commodity price forecast Source: MinEx Consulting © July 2013

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- Gloom or Boom ?

Geological Society of South Africa

MinEx Consulting Strategic advice on mineral economics & exploration

MinEx Consulting Strategic advice on mineral economics & exploration 2

MinEx Consulting Strategic advice on mineral economics & exploration 3

Sources: MinEx Consulting estimates © April 2013, based on

MinEx Consulting Strategic advice on mineral economics & exploration 4

Sources: MinEx Consulting estimates © April 2013, based on

MinEx Consulting Strategic advice on mineral economics & exploration 5

2012 US$ billion

MinEx Consulting Strategic advice on mineral economics & exploration 6

MinEx Consulting Strategic advice on mineral economics & exploration 7

Exploration Expenditures Gold Price

$6,000 See a similar trend $1,200

Source: MinEx Consulting © July 2013

MinEx Consulting Strategic advice on mineral economics & exploration 8

MinEx Consulting Strategic advice on mineral economics & exploration 9

MinEx Consulting Strategic advice on mineral economics & exploration 10

Funding dried up during

Funding dried up again

Source: MinEx Consulting © February 2013

MinEx Consulting Strategic advice on mineral economics & exploration 11

MinEx Consulting Strategic advice on mineral economics & exploration 12

MinEx Consulting Strategic advice on mineral economics & exploration 13

MinEx Consulting Strategic advice on mineral economics & exploration 14

Au Base U3O8 Other Australia

Source: MinEx Consulting © July 2013

MinEx Consulting Strategic advice on mineral economics & exploration 15

MinEx Consulting Strategic advice on mineral economics & exploration 16

MinEx Consulting Strategic advice on mineral economics & exploration 17

Number of Discoveries 2012 US$ Billion

… Gap due to higher

Note: Excludes expenditures and discoveries for Bulk Minerals

MinEx Consulting Strategic advice on mineral economics & exploration 18

Average Diamond Drilling Cost (US$/metre)

Average salary for an Exploration Manager

Median Administration Cost for a Junior

Source: MinEx Consulting © July 2013

MinEx Consulting Strategic advice on mineral economics & exploration 19

(2012 US$ Billion) (million metres)

Data: NRCan, ABS

MinEx Consulting Strategic advice on mineral economics & exploration 20

MinEx Consulting Strategic advice on mineral economics & exploration 21

Africa Latin W Rest Pacific

MinEx Consulting Strategic advice on mineral economics & exploration 22

MinEx Consulting Strategic advice on mineral economics & exploration 23

MinEx Consulting Strategic advice on mineral economics & exploration 24

MinEx Consulting Strategic advice on mineral economics & exploration 25

40% Geological Mapping

MinEx Consulting Strategic advice on mineral economics & exploration 26

MinEx Consulting Strategic advice on mineral economics & exploration 27

40% Geological Mapping

MinEx Consulting Strategic advice on mineral economics & exploration 28

Over time we are

MinEx Consulting Strategic advice on mineral economics & exploration 29

Depth of Cover (Metres)

MinEx Consulting Strategic advice on mineral economics & exploration 30

Gold exploration is generally

EXCLUDING South Africa

Depth of Cover (Metres)

MinEx Consulting Strategic advice on mineral economics & exploration 31

MinEx Consulting Strategic advice on mineral economics & exploration 32

Note: Estimate includes adjustments for deposits with no discovery year