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Jim Taylor Metals and Mining -- Base Metals and Minerals

44.20.7050.6648

Caledon Resources plc


jim.taylor@canaccordadams.com

Nick Chalmers
44.20.7050.6636
nicholas.chalmers@canaccordadams.com
Reborn as Australian coal producer
BUY Acquires coking coal mine in Queensland
Caledon has acquired a 100% interest in the Cook coal mine in Queensland from
CDN : AIM : £0.07 (£0.36*)
Xstrata for the equivalent of around US$36 million. It also has an option to purchase
TARGET PRICE: £0.12 (£0.59*) the nearby Minyango coal exploration license area.
*Post 1-for-5 consolidation Production from Q1 2007
A US$15 million investment program is planned to allow production to recommence in
early 2007 and to build to a plateau of 1.8 million tonnes of coal per annum by mid-
2008. We estimate total operating costs at about US$54 per tonne, delivered FOB
Inside
Gladstone.
Executive summary ........................ 3
Background ..................................... 9
Steady-state operating cash flow of around US$29 million per annum
Our long-term average coal price for the 80% coking coal and 20% thermal coal mix
Project descriptions ..................... 15
likely to be produced at Cook is around US$70/tonne, giving a margin estimate of
Cook Coal Mine..............................15
US$16 per tonne, or an average operating cash flow estimate of around US$29 million
Minyango Coal Project...................28
Chinese Gold Assets......................31 per annum.

Appendix ........................................ 32 Valuation


Our target price is based on a risked sum-of-the-parts NAV calculation. We have used a
discount rate of 8%, which we consider appropriate once in production, to arrive at a
NAV equivalent to £0.15 per share. We have then applied assumed risk factors to this
Share price data COB 11 December 2006. figure to account for the risks that we see of recommencing production in line with the
company’s targets. This results in our risked NAV estimate of £0.12 per share.

Recommendation
We initiate coverage of Caledon Resources with a BUY recommendation and a target
price of £0.12 per share, or £0.59 per share on a post share-consolidation basis.

Risks
We note that our valuation is highly sensitive to assumptions of the future coal prices.
We also note that the valuation includes the option over the Minyango at cost. This
project has the potential to deliver significant value, should exploration confirm the
company’s expectations of coal quantity and quality.

Canaccord Adams is the global capital markets group of Canaccord Capital Inc. (CCI : TSX|AIM)
The recommendations and opinions expressed in this Investment Research accurately reflect the Investment Analyst’s personal,
independent and objective views about any and all the Designated Investments and Relevant Issuers discussed herein. For important
information, please see the Important Disclosures section in the appendix of this document.

12 December 2006 2006-243


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Company Statistics (pre-money) Price Chart

Symbol CDN : AIM


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Share Price £0.07
52-week Range: £0.08-0.03 7
Weekly Volume: 3.8M
Market Capitalisation: £24M US$47M
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Cash £8M US$16M
Long-term Debt £6M US$12M

GBp
5
Enterprise Value £22M US$43M
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Historical Financials 3

6 mts to 6 mts to 12 mts to


30-Jun-06 30-Jun-05 31-Dec-05 2

Explortn & admin costs £M -1.49 -0.96 -2.30 20


05 0 05
2 20
06
20
06
20
06
20
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20
06
20
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06 0 06
2 20
06
20
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2/ 2/ 1/ 1/ 2/ 2/ 3/ 3/ 4/ 4/ 5/ 5/ 6/ 6/ 1/
Other operating income £M 2.53 0.00 5.49 /1 / 1 / 0 / 0 / 0 /0 /0 /0 /0 /0 /0 /0 /0 / 0 / 1
07 21 09 23 06 20 06 20 03 19 04 18 02 16 30
Operating profit/loss £M 1.04 -0.96 3.19
Net earnings/loss £/shr 0.25 -0.36 0.67 Source: Bloomberg
Net current assets £M 6.77 3.61 6.78

Forecast Earnings Summary Company Description


Caledon Resources is an AIM listed mining company that
FYE Dec 2007e 2008e 2009e
owns 100% of the Cook Coking Coal Mine and some
Total coal production kT 853 1,473 1,748
associated infrastructure in Queensland's Bowen Basin. It
Average coal price US$/t 86 79 76
also has an option to purchase the adjacent Minyango Coal
Average cash cost US$/t 69 60 55 Exploration License. It plans to re-develop the Cook
CFPS £/shr 0.011 0.027 0.028 operation and to commence production at the end of 2006,
EPS £/shr 0.007 0.021 0.028 building to 1.8Mtpa coal from mid-2008.
Source: Canaccord Adams estimates; company reports

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EXECUTIVE SUMMARY
Caledon has surfaced from a period of restructuring as an emerging middle tier coking
coal producer, having previously focused on gold exploration in China. Through a series
of transactions, the company has acquired the Cook Coal Mine, located in Queensland’s
prolific Bowen Basin, and an option over the adjacent Minyango exploration license. It
has recently completed equity and debt financings, which have funded the acquisition
and the refurbishment of the mine and associated wash plant.

Caledon formally agreed in August to purchase the Cook Mine from Xstrata for A$45.6
million (approx US$36 million) in cash. The transaction is expected to close later this
month, subject to shareholder approval at an extraordinary general meeting scheduled
for 13 December 2006. The company plans to bring the mine back into production
around the end of this year or early 2007, and to ramp up to steady-state production of
1.8 million tonnes of coal per annum from mid-2008. We estimate total steady-state
costs of production, including royalties, at US$54 per tonne of coal delivered FOB
Gladstone.

The mine is expected to produce around 80% coking coal and 20% thermal coal, for
which our long-term forecast prices are US$74 and US$53 per tonne FOB respectively.
(Our forecast long-term price for Cook coking coal of US$74 per tonne represents a 7%
discount to Canaccord Adams’ long-term forecast for Australian hard coking coal,
reflecting market consultant McCloskey’s view that, as a premium semi-hard product,
Cook coal is likely to fetch an FOB price somewhere between the benchmark hard and
semi-hard price.) With an average coal product sales price of US$70 per tonne, the
indicated steady-state forecast gross margin would therefore be US$16 per tonne, or
US$29 million per annum.

Figure 1: Forecast coal production, price and cost profile


FYE Dec 2007e 2008e 2009e 2010e 2011e 2012e
Production
Coking coal kT 699 1,208 1,433 1,515 1,476 1,476
Thermal coal kT 154 265 315 332 324 324
Total coal production kT 853 1,473 1,748 1,847 1,800 1,800
Coking coal price US$/t 93 85 81 76 72 74
Thermal coal price US$/t 52 53 53 53 53 53
Average coal price US$/t 86 79 76 72 69 70
Average cash cost US$/t -69 -60 -55 -54 -54 -54
Source: SRK Competent Person’s Report (Oct 2006) and Canaccord Adams estimates

JORC compliant in-situ measured and indicated resources are 126 million tonnes, within
which recoverable run of mine reserves are 17 million tonnes, sufficient for the first 10
years of the operation. The likelihood of extensions to reserves beyond these levels was
pointed to by independent consultant SRK, which stated in its recent Competent Person’s
Report that it considers it highly likely that adequate accessible resources are available to
extend the reserve to and beyond 40 million tonnes of recoverable coal, which would
extend the mine life to over 20 years.

The total capital cost of Caledon’s refurbishment programme is estimated by the


company at approximately A$20 million (US$15 million), of which A$6 million has been

12 December 2006 Caledon Resources plc


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earmarked for the refurbishment of the mine and a further A$12-15 million for the coal
preparation plant. Estimates for working capital and other owner’s costs are A$12
million and A$8 million respectively.

Caledon’s development plan as outlined in its AIM re-admission document is to


outsource mining to South African contractor Magatar, which is an experienced operator
of the continuous mining equipment to be employed at the mine. The mining method is
to combine customised continuous-mining units with continuous-haulage equipment to
provide an efficient, flexible and highly productive mining system.

Caledon has yet to finalise contract negotiations, but SRK has assumed fixed mining costs
of A$33.50 per tonne of RoM coal for the Magatar operation in its Competent Person’s
Report, this figure being based on projections provided by Caledon. We note that given
the fixed-cost structure of the mining contract, any cost benefit of this new system
compared to conventional continuous miner/shuttle car systems would accrue to the
contractor, the benefit obviously being that any overrun would be borne by the
contractor. However, we also note that Caledon may seek to finalise a mining contract
which is not fixed cost, therefore allowing it to benefit from any cost-savings achieved by
the proposed continuous mining-haulage system. Given the potential for cost savings and
the economies of scale offered by the project, we feel the latter option would be the
optimum outcome for Caledon.

The coal processing plant washes and sorts the coal, on the basis of density, to reduce
the ash content and to produce separate coking and thermal coal products. These are
then loaded onto wagons using the existing rail loop that connects the plant with the
state owned rail system, which transports the coal the 200 kilometres to export terminals
on the coast. Queensland’s rail and port infrastructure is currently running at around its
annual capacity of approximately 140-150 million tonnes of coal. As a consequence of
the mining industry’s plans to increase production to 210 million tonnes of coal by 2010,
port and rail capacity is being expanded with the aim of removing the current bottleneck
within two years. In the interim, Caledon will have the right to part of Xstrata’s quota for
rail and port capacity. Marketing of the coal will be undertaken by Xstrata under an
agreement which lasts for two years.

There is potential for additional reserves on the Cook license itself and further potential
exists on the adjacent Minyango Exploration License, over which Caledon has an option
to purchase 100% for total payments of A$40 million (US$30 million). Minyango hosts
down-dip extensions of the coal being mined at the adjacent Blackwater and Curragh
open pit mines, and strike extensions of the coal being mined at Cook. Company
presentations refer to a non-JORC compliant global in-situ resource inventory of 500
million tonnes of coal and SRK quotes Queensland government estimates that in-situ
resources within two seams to less than 300 metres of overburden total 205 million
tonnes. We note, it is likely that only one of the two coal seams will be mined. Caledon’s
management believes Minyango has the potential to be brought into production within a
relatively short period, at a rate of up to two million tonnes per annum for over 20 years.
Caledon’s initial work will focus on additional seismic and drilling programmes to better
define the structural characteristics of the seams, coal quality and extent of resources on
the property.

Caledon has assembled an experienced management team for the project. This includes
Peter Seear, as chief operating officer, and Mark Trevan, as managing director of its
Australian subsidiary. Mr. Seear has almost forty years experience in the coal industry,

Caledon Resources plc 12 December 2006


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including time in coal contracting and equipment manufacturing. Mr. Trevan joins
Caledon after 25 years with Rio Tinto, where for the last nine years he was general
manager – marketing for Rio Tinto Coal Australia.

Finances
At the end of November, Caledon raised a total of US$52 million (£26.5 million) in equity
through the issue of 331 million shares at a price of £0.08 per share. Together with the
25 million shares to be issued in connection with the acquisition of MTP (the company
that owns agency rights to the use of the proposed mining system in Australia) this will
increase the (pre-consolidation) number of shares in issue from 338 to 694 million.
Caledon will also receive US$12 million (A$15 million) in vendor financing from Xstrata
in the form of a convertible loan note. Together with cash held at the end of June 2006 of
US$16 million (£8 million), this takes Caledon’s total financial resources to US$79
million.

Of this amount, US$36 million (A$46.5 million) will be paid to Xstrata for the purchase of
the Cook Mine, and around a further US$7 million will be paid in stamp duty, transaction
costs and financing fees. Approximately US$9 million is to be used for the deposit and
first option payment in relation to the acquisition of the Minyango exploration license.
(The next A$9.6 million option payment due in March 2007 is payable in shares or cash,
at Caledon’s option. The company intends to fund the final payment of A$20.4 million,
which is due by the end of 2007, from cash flow.) Including a cash payment of US$0.4
million as part consideration for the purchase of MTP takes the total initial cash outflow
to US$51 million, which would leave cash of US$27 million at the end of 2006.

Together with after-tax operating cash flow from Cook during the first year (2007),
which we estimate to be US$14 million net of corporate G&A, the remaining cash
balance will be used to fund the mine and plant’s refurbishment (US$15 million) and
associated working capital and owners costs (US$15 million). By our calculations this
would leave cash of around US$11 million, which we note would be insufficient to fund
the planned feasibility programme and US$15 million (A$20.4 million) final option
payment at Minyango. However, we note the potential for operating profit in 2007 to
come in higher than our forecast, particularly if coking coal prices were to remain
around current levels of US$115 per tonne, compared with our 2007 forecast price for
Cook coking coal of US$93 per tonne. We also note that the company states in the re-
admission document that, if necessary, it may seek to raise additional debt or equity to
meet the deferred Minyango payments and capital expenditure commitments over the
next 15-months as they fall due.

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Figure 2: Summary production and financial forecast


FYE Dec 2006e 2007e 2008e 2009e 2010e 2011e 2012e
Revenue US$M 73 117 132 132 123 126
Costs US$M -59 -88 -96 -100 -97 -97
Corp G&A US$M -6 -6 -6 -6 -6 -6
EBITDA US$M 8 23 30 27 21 23

DD&A US$M -1 -2 -2 -2 -2 -2
EBIT US$M 7 21 28 24 19 21

Interest US$M 0 0 0 0 0 0
Tax US$M -2 -6 -8 -7 -6 -6
Earnings US$M 5 15 20 17 13 15

Cash Flow
Operating cash flow US$M 0 8 19 20 17 13 15
Invested cash flow US$M -53 -45 -1 0 0 0 0
Cash flow from financing activities US$M 64 0 0 0 0 0 0
Net cash flow US$M 11 -37 18 19 17 12 14
Cumulative cash flow US$M 11 -27 -9 10 26 39 53

Cash balance US$M 27 -12 6 25 41 54 68


Source: SRK Competent Person’s Report (Oct 2006), Canaccord Adams estimates

Valuation
Given its status as a development company, we consider that a sum-of-the-parts
approach is the most appropriate valuation methodology for Caledon at this stage. We
have also compared the valuation with other listed coal companies to provide context.

Using a discount rate of 8%, which we would typically use for a non-precious metal
producer located in Australia, we derive an NPV for the Cook Mine of A$148 million
(US$116 million) for the first 10-years of operation, or A$230 million (US$181 million)
for the potential 20-year life as supported by SRK’s expectation that additional resources
will be converted to reserves (see summary cash flow model for Cook Mine in Figure 26).

To arrive at our target price we have reduced the value of the first 10-years by 20% to
take account of the risks that we believe are associated with achieving the targeted
production levels and cost structure. We have reduced the value of the second 10 years
of the project by 30% in recognition of the additional risks we believe are involved with
completion and resource conversion.

We have also allowed for the value of Minyango at cost (US$8 million first option
payment), Caledon’s Chinese exploration interests (nominally valued at US$5 million)
and the company’s stake in Dynasty Gold (US$2 million). We have also allowed for our
estimate of residual cash at end of 2006 and the convertible debt provided by Xstrata.

The following table gives a breakdown of our suggested valuation for Caledon.

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Figure 3: Valuation
8% Full value Risk Risked
discount rate A$M US$M Valuation
Cook (yrs1-10) 148 116 20% 93
Cook (yrs 11-20) 82 65 30% 45
Minyango 10 8 0% 8
Chinese gold assets 6 5 5
Dynasty stake 2 2 2
Enterprise Value 249 196 153
Net current assets 27 27
Long-term debt -12 -12
Net Asset Value 211 168

Pro-forma issued shares 730 730


US$ per share* 0.29 0.23
£ per share* 0.147 0.117
Post 1-for-5 consolidation 0.74 0.59
* Pro-forma, fully diluted 'in-the-money'
Source: Canaccord Adams estimates

With respect to this valuation, we note that the forecast operating costs are relatively
fixed (mining and processing are both contracted) and that capital costs are relatively
limited. As a result, even more than usual with this type of analysis, the main driver of
the valuation relates to revenue, both in terms of production and coal price.

With respect to the rate of production, we consider that the ability to control ground
conditions at the operation is the most significant factor. We note that the planned
mining method incorporates a revised bolting pattern which should allow mining in a
given area to be completed more rapidly than previous methods.

With respect to the coal price, we note that coking coal from Cook is categorised as being
between hard and semi-hard in quality. Coal consultant McCloskey suggests that, as an
independently-marketed product, it would sell at a discount of around 7% to McCloskey’s
long-term forecast price for premium hard coking coal. In our base-case valuation, we
have applied a similar discount to Canaccord Adams’ long-term forecast price for hard
coking coal, which we note is somewhat lower than McCloskey’s. We note that if
McCloskey’s suggested long-term price of US$84 per tonne for Cook coking coal was
applied to our model, our risked valuation would increase from £0.12 per share to £0.16
per share.

The following sensitivity table plots our risked NAV estimate for a range of coking coal
prices and discount rates. We would point out that this sensitivity table assumes coking
coal prices are flat from 2008 onwards, whereas in our base-case valuation our long-
term flat price of US$74 per tonne comes in at year 2012.

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Figure 4: Risked NAV sensitivity to coking coal prices


Coking coal price (US$/t)
55 60 65 70 75 80 85
5% 0.02 0.05 0.08 0.11 0.14 0.17 0.20

Discount rate
8% 0.02 0.04 0.07 0.09 0.11 0.14 0.16
10% 0.02 0.04 0.06 0.08 0.10 0.12 0.14
12% 0.02 0.03 0.05 0.07 0.09 0.10 0.12
15% 0.01 0.03 0.04 0.06 0.07 0.09 0.10
Source: Canaccord Adams estimates

We note that our risked valuation in Figure 3 does not take account of the potential for
additions to reserves, particularly from the Minyango license area, but also from Cook,
beyond the 40 million tonnes assumed in our model. Nor does it take account of the
potential to increase throughput at the coal plant, which was originally designed to
process 3.5Mtpa of coal, some 75% greater than the anticipated production rate. We note
that additional capital would be required to bring the plant up to its original design
capacity and to expand existing mine site infrastructure to cope with the increased
production rate.

We have assembled a table of Australian listed coal companies and their consensus cash
flow and earnings (Figure 28). This indicates that, on average, these companies trade on
multiples of earnings ranging from 5.4-20.6 times (average 12.6) 2008 earnings and
within the range of 3.8-17.4 (average 8.8) times 2008 cash flow. Applying these averages
to Caledon’s forecast earnings and cash flow would suggest a value of £0.12-0.14 per
share.

Investment Risks
The main risks to our target price, and rating, are attached to revenue (being a function
of coking and thermal coal prices), the Australian/US dollar exchange rate and
production volumes. The large amount of existing infrastructure and plant already on
site, together with the planned use of contract miners and plant operators, results in
relatively low budgeted capital costs and an operating cost structure that is largely fixed.

The key risk to our valuation is that the company may not achieve its targeted production
rate at the cost it has indicated should be possible, and we note that the valuation is
particularly sensitive to coal prices.

Risks relating to coal transport and marketing are limited by the two-year port and rail
access deal and marketing contracts negotiated with Xstrata, although longer-term we
note that the company will have to make its own rail and port arrangements.

We also note the significant potential for additional exploration on the Minyango coal
license area to better define coal resources, to establish the coking coal/thermal coal split
of the seams, and also to get a better understanding of the structural geology of the area.

Conclusion
We consider that the refurbishment of the Cook Mine offers the prospect of generating
significant cash flow in the short-term and the option over the Minyango license offers
the potential for an increase in reserves and production rate in the future.

We initiate coverage on Caledon with a BUY recommendation and a £0.12 per share
target price (or £0.59 per share on a post-consolidation basis). We note that achieving

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the operating targets at Cook would remove the risk factors that we have chosen to
apply, with the result that our calculated NAV would increase by around 30% to £0.15
per share.

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BACKGROUND
Overview
Caledon Resources plc was admitted to London’s AIM market in 2003, initially focusing
on four gold projects in Southern China. More recently, the company has taken equity
interests in a number of companies through private placements. This included minority
stakes in Afcan Mining Corp (owner of the Tanjianshan gold project in western China)
and Dynasty Gold.

However, mid-2005 brought a change of direction, with management agreeing to pursue


the acquisition of an advanced-stage mining asset with the potential for near-term
production and positive cash flow, with the intention of diversifying the company’s asset
portfolio and balancing the risks posed by the hitherto focus on China. This new strategy
was aided by a C$16.9 million (£8.5 million) increase in treasury funds following the
company’s disposal of its interest in TSX-listed Eldorado Gold Corp (ELD:TSX) towards
the end of last year (Eldorado had earlier acquired Afcan through an all-share
transaction that valued the latter at a 75% premium to Caledon’s initial investment).

The company’s search for an appropriate acquisition culminated in late 2005 with an
approach from a third-party proposing Caledon purchase the Minyango coal property, an
undeveloped brown-field coking coal asset in Queensland’s prolific Bowen Basin. Whilst
in preliminary discussions over Minyango, Caledon became aware of a competitive
tender for the adjacent Cook Mine by the latter’s owner, a subsidiary of Xstrata plc
(XTA:LSE). Management subsequently decided to proceed with both the Minyango and
Cook transactions, on the basis that Cook added existing production and supporting
infrastructure, plus an estimated resource base of over 100 Mt of high-quality coking
coal, to Minyango’s exploration potential.

In June 2006 Caledon signed a heads of agreement with Xstrata to acquire Cook for a
total consideration of A$45.6 million in cash, and the company’s shares were suspended
from trading (by virtue of its size the transaction was deemed a reverse takeover under
AIM’s rules). The principal acquisitions and disposals are scheduled to be completed
following an extraordinary general meeting on 13 December 2006, at which
shareholders will vote to approve the transactions and the recently completed £26.5
million equity financing. Assuming approval, the newly issued shares will be admitted for
trading on AIM the following day (14 December 2006).

In connection with the Cook and Minyango acquisitions, Caledon also agreed to purchase
a company called MTP, owner of certain intellectual property rights and revenue
royalties arising from mining technology that Caledon intends to use at Cook. A$5 million
of the A$8.5 million purchase price will be settled through the issue of new Caledon
shares at the placing price of £0.08 per share. A further A$3 million in shares will be
paid, at the then prevailing market price of the shares, on completion of the Minyango
acquisition, and the A$0.5 million balance of the total consideration will be settled in
cash. MTP’s principal directors, Peter Seear and Mark Syropoulo, introduced Caledon to
the Minyango and Cook acquisition opportunities, and will be appointed to Caledon’s
board of directors.

A summary of the transactions is presented in Figure 5 below. The company structure on


completion of these transactions is summarised in Figure 6.

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Figure 5: Transaction summary


Transaction Vendor/ Value Transaction Expected Assets
Acquirer A$M currency close
Acquisitions
Cook Coal Xstrata A$45.6M Cash Dec-06 Cook Coal Mine/Infrastructure, 132Mt coal resource.
Minyango Watami Trading A$42.0M Cash-plus-shares Dec-07 Minyango brown-field coal exploration property.
MTP Peter Seear A$8.5M Shares Dec-06* Intellectual property rights to mining method technology.
* The final A$3M in shares is payable on completion of all Minyango payments.
Source: Company press releases and AIM Re-admission Document

Figure 6: Post-transaction company structure

Source: AIM Re-admission Document, October 2006

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Share Structure
Caledon’s shares are listed on AIM under the ticker ‘CDN’. The shares were suspended
from trading on 19 June 2006 following the announcement of the proposed acquisition of
Cook, the transaction constituting a reverse takeover under AIM’s rules. Caledon had
338 million shares in issue prior to suspension, which at that time were trading at
£0.0588 per share.

During the suspension period, the company placed 331 million new shares at £0.08 per
share, raising gross proceeds of £26.5 million. The placing, plus a planned one-for-five
share consolidation to follow, is subject to shareholder approval at an extraordinary
general meeting scheduled for 13 December 2006. If approved, the new shares will be
admitted for trading on AIM the following day (14 December 2006).

A further A$5 million in shares will be issued as part payment under the A$8.5 million
MTP acquisition agreement. The company will therefore have approximately 139 million
post-consolidation shares in issue, giving it a market capitalisation of £56 million based
on the placing price. On a fully-diluted ‘in-the-money’ basis, Caledon will have 140
million shares outstanding.

Figure 7: Share structure


Shares Price Value
M £ £M US$M
At June suspension 338.2 0.06 19.9 38.4
Placing 331.2 0.08 26.5 51.2
MTP acquisition 25.0 0.08 2.0 3.9
On admission after 1-for-5 consolidation 138.9 0.40 55.6 109.2
Fully diluted 139.8 0.40 55.9 109.9
Source: Company reports, Canaccord Adams estimates

Caledon’s largest institutional shareholders (pre-admission of the placing shares) include


RAB Capital (9%), UBS Global (5%) and CIBC World Markets (3%). On admission of the
placing shares, management will hold just over 7% of the company’s issued share
capital.

Finances
Caledon had US$16 million (£8 million) of cash at its last balance sheet date of 30 June
2006. The US$36 million (A$45.6 million) Cook acquisition and initial deposit and option
payment under the Minyango acquisition agreement (US$9 million) will be funded using
the US$47 million (£23.7 million) net placing proceeds. The balance of the placing
proceeds, plus a further US$12 million (A$15 million) which is to be raised through the
issue of a convertible loan note to Xstrata, will be used to fund initial capital expenditure
requirements at Cook (US$15 million) and initial working capital and owners costs
(US$15 million). Caledon is still negotiating with Xstrata over the terms of the loan note,
but it is expected to have an annual coupon of 9% and to be convertible into Caledon
shares at a price equal to a 10% premium to the £0.08 per share placing price. The
principal amount is repayable after a year if the note has not by that date been converted
by Xstrata.

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The second, A$9.6 million option payment due in March 2007 is payable in shares or
cash at Caledon’s option. The company intends to fund the final payment of A$20.4
million, which is due by the end of 2007, from cash flow. However, we note that Caledon
states in its AIM re-admission document that, if necessary, it may seek to raise additional
debt or equity to meet the deferred Minyango payments and capital expenditure
commitments over the next 15 months as they fall due.

Figure 8: Estimated Cash and debt position at end of 2006


£M US$M A$M
Cash at 30 June 2006 8 16 20
Net placing proceeds 24 47 59
Cook acquisition cost -18 -36 -46
Stamp duty -1 -2 -2
Initial Minyango payments -5 -9 -12
MTP acquisition 0 0 -1
Xstrata loan proceeds 6 12 15
Est cash at end 2006 14 27 33
Xstrata convertible loan note 6 12 15
Debt 6 12 15
Source: Company announcements, Canaccord Adams estimates

12 December 2006 Caledon Resources plc


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BOARD/MANAGEMENT
Robert Alford - Executive Chairman
Mr. Alford joined Caledon as non-executive chairman in February 2005. He took up the
position of executive chairman in September 2006 in order to manage the company’s
transition from Chinese-focused gold explorer to Australian coal producer. Mr. Alford
previously spent over 20 years with Nelson Hurst Group plc, where he was latterly joint
managing director. He is a member of Lloyds.

George Salamis - Chief Executive Officer


Mr. Salamis is one of the founding shareholders of Caledon and has held the position of
managing director and chief executive officer since 2003. Prior to this, he has held senior
management positions with several well-established mining companies, most notably
Placer Dome Inc and Cameco Corp. His career in the mining industry spans over 20
years, involving assignments in many different regions of the world on various resource
commodities. In recent years, he has also played integral roles, both executive and non-
executive, in several large M&A transactions between major and junior miners, totaling
over US$ 0.5 billion in value, in addition to participating in various major financing
initiatives in the mining industry. Mr. Salamis holds a degree in geology from the
Universite de Montreal/Ecole Polytechnique.

Peter Seear - Chief Operating Officer (proposed)


Mr. Seear has been actively engaged in the coal mining industry since 1977. He achieved
chartered engineer status in the UK in 1983, and then proceeded to work for several
contract coal mining companies. Additionally, he spent time with underground coal
mining equipment manufacturers as an engineer, including 10-years with Joy Mining in
South Africa and North America. He was also engineering and chairman of Cutting Edge
Technology Pty Ltd in Australia for ten years. Mr. Seear holds a PMD degree from the
Harvard Business School.

Mark Trevan - Managing Director of Caledon Coal Pty Ltd (proposed)


Mr. Trevan joined Caledon in September 2006 following a 25-year career with Rio Tinto,
where he started as an accountant and progressed to hold senior executive roles in the
areas of marketing, general commercial, corporate strategy and project feasibility.
During his last nine years with the Rio Tinto group, Mr. Trevan was general manager –
marketing for Rio Tinto Coal Australia, during which time the latter company opened
two new coking coal mines. Caledon Coal is Caledon’s holding company in Australia.

Paul Ingram - Executive Director


Mr. Ingram has been based in south-east Asia for the past 15-years, during which time
he has managed several major mineral exploration programmes for Menzies Gold Ltd, a
company he joined in 1985 and with whom he has been managing director since 1989.
Mr. Ingram manages all operations from project assessment to corporate acquisitions
and financing, and has conducted project assessments in numerous countries including
Australia, Mexico, Greece, Thailand, Laos, China, Malaysia and Myanmar. His work
typically involves the design and implementation of innovative techniques for exploration
in remote areas. In the early 1980s Mr. Ingram was a geological consultant for EMS Pty
Ltd, where he advised clients throughout Australia on gold and base metal projects, a

Caledon Resources plc 12 December 2006


15

role which led eventually to the establishment of Menzies Gold. He is a member of the
Australian Institute of Mining and Metallurgical Society and a Member of the Mining
Industry Consultants Association.

Mark Syropoulo (proposed non-executive director of Caledon Coal)


Mr. Syropoulo has over 30 years’ experience in finance, much of it focused specifically on
the mining, oil and gas sectors. He has occupied the position of managing director of
Anglo Pacific Resources Plc, a diversified mining group with industrial mineral interests
in the UK and metal interests in Australasia. He has also held several positions with
various brokerage and financial institutions, dealing in corporate finance, broking and
mergers and acquisitions advisory.

Graham Mascall (non-executive director)


Mr. Mascall has over 35 years of commercial, financial and transaction experience in
mergers and acquisitions work, business development and project management in
mining and mining finance. Over the course of his career he has worked as an executive
for a number of mining and finance companies, including Billiton plc where in 2000, as
chief executive for mergers and acquisitions – base metals and new business, he led the
US$2.1 billion acquisition of Rio Algom Ltd. He has also worked for BHP Billiton plc,
Deutsche Morgan Grenfell, Outokumpu Metals and Resources and Barclays Bank.

Nicholas Clarke (non-executive director)


A graduate of the Camborne School of Mines and a Chartered Engineer, Mr. Clarke has
been involved in the mining industry since 1974 in a number of production and service
capacities. In 1996 he was made managing director of CSMA Consultants, which was
subsequently acquired by Wardell Armstrong International. During this period he
managed numerous technical studies on mineral projects in Africa, Europe and the
Former Soviet Union. He was author and project manager on a number of AIM and TSX
CPR’s during this period, and was most specifically involved in the economic valuation of
mineral assets. In 2004 Mr. Clarke joined Oriel Resources, an AIM and TSX quoted
company with nickel and chrome assets in Kazakhstan, and was appointed managing
director in 2005.

12 December 2006 Caledon Resources plc


16

PROJECT DESCRIPTIONS
COOK COAL MINE, QUEENSLAND
The Cook Coal Mine is located 30 kilometres south of the town of Blackwater in the
south-central part of Queensland’s Bowen Basin, one of the world’s great coal provinces.
The coal preparation plant (CPP) is located 14 kilometres north of the mine, at the site of
the abandoned Leichhardt colliery. The Cook property is bounded to the east by the BHP-
Mitsubishi owned Blackwater mine, one of Australia’s largest open-pit export-quality
coal mines.

There are currently 30 coal-mining operations in the Bowen Basin, collectively producing
approximately 115 Mt per annum of coking coal. Open pit and underground production
from the basin represents more than 50% of the world’s sea-borne coking coal. The vast
majority of underground coking-coal mines in the Bowen Basin are longwall mining
operations.

Figure 9: Cook Coal Mine Location

Source: AIM Re-admission Document (Nov 2006)

Cook acquisition
Prior to its acquisition by Caledon, Cook was part of Xstrata’s Queensland Coal
operations, which encompass two well-established mining complexes, Oakey Creek and
Newlands-Collinsville-Abbot Point. In June 2006, Caledon and Xstrata signed a heads of

Caledon Resources plc 12 December 2006


17

agreement for the sale of Cook to Caledon, and an asset-purchase agreement was drawn
up in August. A relatively small asset in the context of Xstrata’s overall coal portfolio,
Cook has suffered from underinvestment in recent years, and was placed on care and
maintenance prior to the sale negations with Caledon. Caledon is of the opinion that
Xstrata wished to divest the asset as it required a disproportionate amount of
management time, being the only small underground mine in the company’s Bowen
Basin portfolio.

The full A$45.6 million cash purchase price will be settled later this month, subject to
shareholder approval of the transaction and capital raising at an EGM scheduled for 13
December 2006. An initial A$5 million down-payment was paid in July from Caledon’s
existing cash reserves, and the A$40.6 million balance will be funded using the placing
proceeds.

The acquisition includes all mining rights to the Cook Mine resource, reserve, mine
infrastructure and mining equipment; sub-leases over haulage roads; and access to the
CPP, rail loop and load-out facilities. It also provides for a long-term rental agreement
allowing Caledon use of the CPP, and outlines the terms of marketing and off-take
arrangements for the sale of coking coal from Cook as well as rail and port access
guarantees for the first two years of operations.

Xstrata chose not to sell directly CRM, the company holding the Cook mining lease, as it
wishes to retain the undeveloped northern part of the property. CRM has instead granted
subleases to Caledon. All the other CRM assets described above were included in the
sale. Caledon considers that the northern portion of the Cook resource has little
commercial value without access to the remainder of the Cook property and the adjacent
Minyango property.

MTP acquisition
In connection with its Bowen Basin acquisitions, Caledon is also purchasing the entire
issued capital of Mining Technology Partnerships Pty Ltd (MTP), a company that owns
revenue royalties arising from the mining technology that Caledon intends to use at
Cook. The acquisition will be settled through a A$500,000 cash payment, the issue of
A$5 million in new Caledon shares at the £0.08 per share placing price, plus an
additional A$3 million in shares, to be issued at the then prevailing market price, on
completion of all staged payments under the Minyango acquisition (see page 29).

MTP and its principal directors, Peter Seear and Mark Syropoulo, introduced the
potential acquisition of Minyango to Caledon, which in turn led to the company’s interest
in Cook. Caledon proposed the acquisition of MTP in lieu of paying a direct introduction
fee to Messrs Seear and Syropoulo. However, MTP is also the exclusive representative in
Australasia of Magatar, the proprietor of certain intellectual property rights relating to
the continuous mining-haulage technology that Caledon plans to use at Cook. MTP is
entitled to receive revenue royalties equal to 5% of the per-tonne amount to be charged
by Magatar arising from the use of the mining technology by Magatar at any mining
contracts entered into in Australia (with the exception of Cook and Minyango), New
Zealand and Indonesia.

12 December 2006 Caledon Resources plc


18

Production history
Cook was established by Broken Hill Proprietary (BHP) in 1975 to replace production
from the failing Leichhardt Colliery to the north, which was eventually closed in 1982.
BHP’s operations focused on the Castor Seam, which when washed produces export-
quality coking and thermal coals.

In 1983 the mine was sold to McIlwraith McEachern, whom subsequently sold it to Arco
in 1989. Arco held Cook for four years, before selling to Oakbridge in 1993. Oakbridge
sold 50% to Resource Management & Mining (RM&M) and 50% to Glencore International
AG in 1994. RM&M sold their half share to Centennial Coal in 1997, and Xstrata took
over Glencore’s interest in 2002. Xstrata subsequently purchased Centennial’s 50% share
in April 2004, increasing its ownership to 95%. Tokyo Boeki Limited (TBL) purchased the
outstanding 5% from Glencore as part of its coal-purchasing strategy. Xstrata replaced
Centennial as the mine operator at this time.

Both longwall and continuous mining techniques have been employed at Cook in the
course of its operating history. Prior to placing the mine under care and maintenance,
Xstrata was operating a board and pillar underground mine in the Castor Seam, utilizing
conventional continuous mining equipment. Initial workings were also driven into the
Argo Seam below. Production has fluctuated widely over recent years, due mainly to
difficult geological and geotechnical conditions. Continuous miners have proved better
equipped to deal with these issues, as the performance of longwall mining units is
inhibited by the occurrence of extensive faulting in the area. Saleable coal production at
Cook has averaged around 400,000 tpa over the past five years, but declined to around
200,000 tpa in the year to June 2005 (Figure 10).

The coking coal product from Cook is currently railed 318 kilometer via the Blackwater
rail system to the port of Gladstone for export.

Figure 10: Cook historical production


700

600

500

400
kT

300

200

100

0
2001 2002 2003 2004 2005

RoM production Saleable production

Source: CRM

Caledon Resources plc 12 December 2006


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Geology and resources


The Cook Coal Mine lies in the southern part of the Bowen Basin, on the eastern limb of
the Comet Anticline. The strata dips gently (less than five degrees) to the east, and strikes
slightly east of north. The coal-bearing Rangal Coal Measures lie unconformably beneath
80-200 metres of claystones. The upper section of the Rangal group comprises four coal
seams interbedded with sandstones, siltstones and claystones. Two of these seams,
Castor and Argo, are of sufficient thickness for mining.

The Castor Seam has been the primary source of historic production from Cook, and is
encountered at a depth of approximately 170 metres from surface. The seam averages
2.8 metres in thickness and its product mix is approximately 55% coking quality and
45% thermal quality. The Argo Seam (which is actually a coalesce of two seams, Pollux
and Orion) is encountered at a depth of around 183 metres, and is the primary target
seam for mining by Caledon. Argo ranges in thickness from 2-6 metres, averaging
between 4.5-5 metres. There is limited data on the quality of Argo Seam coal, but initial
indications are that the coking/thermal split is higher in favour of coking coal compared
with the Castor Seam. Caledon indicates that the split could be around 80-85% coking
and 20-15% thermal, with the Pollux Seam material indicating higher coking-coal
qualities than the Orion Seam material.

Workings on the Castor Seam at Cook have been bounded by two major fault systems –
the Kennedy fault to the north and the Tannyfoil fault to the east. Many smaller faults
have also been identified through the progression of mine development, and the
structural geology of the seam is now well understood.

Figure 11: Cook Coal schematic cross-section

Source: SRK Competent Person’s Report (Oct 2006)

Over 3,000 boreholes have been drilled over the entire Cook and Leichhardt Collieries, of
which 1,400 holes cover Caledon’s Cook project area. The Castor Seam was intersected
by 1,350 holes, and the Argo Seam by 400 holes.

The most recent resource estimation for Cook was compiled by McElroy Brian Geological
Services (MBGS) in June 2005. Since calculation of that resource estimate, less than

12 December 2006 Caledon Resources plc


20

200,000 tonnes of coal has been mined from the Castor Seam, while none of the Argo
Seam has been depleted. As part of its due diligence review of Cook Coal, SRK reviewed
MBGS’ resource estimation and concluded that it satisfies the requirements of the JORC
Code for mineral resource reporting. SRK points out that the area to the northeast of the
Kennedy and Tannyfoil faults is not entirely included in the MBGS resource report, and
believes it is an area which may yield a significant amount of additional resources.

Figure 12: JORC compliant resources


South of Kennedy Fault North of Kennedy Fault
Category Seam Tonnes M Seam Tonnes M
Measured Castor 7.7
Argo 53.9
Pollux 3.9
Total Measured 65.5
Indicated Argo 12.0 Castor 20.3
Pollux 6.1 Argo 2.6
Pollux 20.0
Total Indicated 18.1 42.9
Total M&I 83.6 42.9
Inferred Argo 5.3
Total Inferred 5.3
Total Resources 88.9 42.9
Source: McElroy Brian Geological Services (June 2005) and SRK (October 2006)

SRK also prepared an independent estimate of reserves at Cook based on the MBGS
resource numbers and a 10-year mine plan prepared by SMG Consultants. The estimated
reserves are inclusive of the estimated coal resources, and are based on recovery factors
ranging between 32-50%, depending on the mining method and panel layout. SRK notes
that these extraction factors could possibly be optimised as more information becomes
available during the mining process, and states that adequate accessible resources are
available to justify 40Mt of ‘recoverable’ coal. No out-of-seam dilution has been applied
to the RoM numbers as Caledon plans to leave behind around 0.5 metres of hanging-wall
coal to support roof control. In-seam dilution is minimal. The reserves are reported as
‘saleable’ based on an overall yield of 89% from January 2008 onwards.

Figure 13: JORC compliant reserves


Category Seam Tonnes Ash Saleable*
M % M
Proved Argo 5.93 7 to 15 5.21
Probable Argo 11.15 7 to 15 9.92
Total Reserves 17.08 15.13
*Saleable tonnes at 89% yield (dry-basis)
Source: SRK (October 2006)

Coal quality
Coal quality data for the Argo Seam is scarce, and, based on currently available
information, SRK concluded that only broad assumptions can be drawn. The data
captured to date comes from two Xstrata boreholes, strip samples and a bulk sample
(Figure 14). We note that a significant amount of coal from Xstrata’s trial Argo Seam

Caledon Resources plc 12 December 2006


21

workings has been washed in the past, yielding approximately 80% coking-quality
product and 20% thermal-quality product.

According to MBGS, the down-hole geophysical trace of the Argo Seam shows a
consistent profile across the project area. MBGS concludes this indicates that the Argo
Seam has a tendency to be reasonably consistent in terms of coal quality attributes, and
that ash content and density could be expected to be regular across the project area.

Despite the lack of coal-quality data for Argo, SRK assumes in its competent persons’
report that the product mix will be 82% coking coal and 18% thermal coal. This
assumption is based on a coal-quality report by A&B Mylec published in September
2006. The moisture and ash parametres adopted by SRK (coking product 9.5% moisture
and 8% ash, thermal product 9% moisture and 15% ash) are assumptions based on
parametres shown in a frame agreement that Cook Colliery negotiated with the adjacent
Blackwater Colliery.

Caledon is currently testing a total of 32 data sources (drill core and bulk samples) for
coal-quality purposes.

Figure 14: Argo seam coal-quality database (MBGS)


Data Source Predicted Ash Predicted Ash Combined Ash Flotation Ash
coke % % thermal % % product % % product % %
Bulk samples 75.8 7.6 7.5 11.8 83.3 8.0 4.9 5.0
Strip samples 72.2 7.2 13.2 9.1 85.4 7.5 3.8 4.3
Bore core 73.0 8.6 13.2 11.4 86.2 9.0 4.3 5.0
Source: Cook Due Diligence Report (SRK, September 2006)

Mining
Caledon plans to increase Cook’s run-of-mine (RoM) production from its most recent
levels of 300,000 tpa to around 1.5 Mtpa by mid 2008, and to approximately 2 Mtpa over
the longer-term. The existing mine-transport infrastructure and CPP has a design
capacity of 3.5 Mtpa. The company envisages employing mining contractors, contract
mine managers and wash-plant managers to achieve its production targets. The total
initial investment required to upgrade the mine is estimated by Caledon at A$5.6 million
(US$4.2 million).

Caledon plans to resume underground unit mining operations at the Castor Seam by the
end of 2006 or early in 2007. However, in the longer-term mining will be focused on the
Argo Seam, which lies 10-20 metres below Castor. As mining will take place beneath the
existing Castor Seam workings, the likelihood of encountering unknown geological
structures which could adversely impact the proposed mining operations is deemed to be
minimal. However, SMG’s preliminary mine design report identifies the potential for an
adverse interaction between the Castor Seam and the proposed Argo Seam workings,
particularly at goaf edges between Castor-workings panels, and concludes that further
studies are needed to establish the probability, nature and extent of potential rib failure.

The base-case mining plan developed by SMG works off the estimated reserve of 17 Mt,
which would provide for a 10-year life of mine at the forecast RoM production rate of
approximately 430 kt for the financial year ending June 2007, 1,400 kt in financial year
2008 and 2,000 ktpa thereafter. However, we note that SRK considers that adequate

12 December 2006 Caledon Resources plc


22

resources exist to provide approximately 40 Mt of recoverable coal, which could extend


the life of mine to around 20 years at the currently forecast production levels.

The initial phase of production is scheduled to run from the end of this year to 2009, and
will be undertaken by Australian mining contractor Titan. Mining will focus on the
Castor Seam, making use of existing access points and mine infrastructure. Production
will come from two rented continuous miners, supported by a fleet of shuttle cars, and
will follow a conventional board-and-pillar method similar to that employed prior to the
recent cessation of operations.

The second phase of production is expected to commence during the second half of
calendar year 2007, and will be undertaken by South African-based mining contractor
Magatar. The proposed Magatar operation involves a partial-extraction mining method,
utilising a custom-built continuous-mining unit coupled with a Prairie continuous
conveyor system. This set-up is expected to provide the necessary flexibility required to
exploit the resource effectively. Magatar’s is a patented system, the agency rights to
which are held by MTP in Australia. Caledon believes the system can achieve
significantly higher productivity rates than the conventional continuous miner-shuttle car
system employed at Cook to date.

Figure 15: Continuous miner (top) and continuous haulage unit (bottom)

Source: Company presentation

We note that Cook will be only the second coal mine, and the first in Australia, to utilise
the proposed continuous haulage system. The first such system to be applied at a coal
mine is due to be in operation by year-end 2006 in South Africa. The technology was
developed in the potash mines of Canada, where eight of the systems are currently in
operation. The first such system has been in operation for more than a decade.

Caledon Resources plc 12 December 2006


23

Caledon has yet to finalise contract mining negotiations for the second phase of
production, but SRK has assumed fixed mining costs of A$33.50 per tonne of RoM coal
for the Magatar operation in its Competent Person’s Report, and we note that this figure
is based on projections provided by Caledon. As outlined earlier, Caledon may seek to
finalise a mining contract which does not have such a fixed-cost structure in order to
benefit from any costs savings which may arise from the proposed mining system. We
also note that Caledon would have the ability to ramp back up its conventional board-
and-pillar operation to make up for some or all of any shortfall from the Magatar
operation.

LD Operations (LDO), a company established to provide dedicated mine-management


services to the coal industry, will operate the mine under contract for Caledon.

Figure 16: Forecast RoM and saleable production

2,500

2,000

1,500
kT

1,000

500

0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

RoM production Saleable coal

Source: SRK (October 2006)

Processing
Caledon has entered into a long-term rental agreement with Xstrata for use of the latter’s
coal handling and preparation plant (CPP) at Cook. The CPP has a nameplate capacity of
500 tph, which equates to an annual capacity of 3.5 Mt. The plant has been in operation
since 1975 and employs standard coal-washing technology (jigs, dense media separation
and cyclones).

Figure 17: Simplified process flow-sheet

Source: CRM, Xstrata

12 December 2006 Caledon Resources plc


24

The condition of the CPP has deteriorated due to a lack of investment since its
construction, and requires a significant amount of repair work to return it to an
acceptable operating condition. In order to handle the increased volumes of RoM coal
feed envisaged by Caledon, a flotation circuit may also need to be installed to prevent the
fines circuit from overloading. This is particularly important given the higher proportion
of fines in Argo Seam coal, which is expected to have coking properties across the full
size range. SRK estimates that 17% of coal feed will be lost to fines pre-modification of
the CPP, and 6% post.

Caledon anticipates that a total investment of A$12-15 million (US$9-11 million) will be
required to upgrade the preparation plant, including the addition of a flotation circuit.
The planned upgrades essentially involve equipment add-ons, and so no significant
downtime is expected. We note that SRK recommends that a full review of the process
route is undertaken using representative size-by-size ‘washability’ data of the new Argo
Seam RoM feed.

Infrastructure
SRK concluded that the existing mine infrastructure is generally in an acceptable
condition, and is capable of sustaining continued operations at the current nominal
capacity and of permitting expansion as envisaged under Caledon’s longer-term
development plans. In terms of regional infrastructure, the Bowen Basin is host to four
heavy-haul railway systems and five ship-loading terminals. However, due to over-
capacity, rail and port access is severely constrained at present.

Under the Cook purchase agreement, Xstrata agreed to provide the necessary rail and
port access for Caledon’s production for the first two years of scheduled operations at
Cook, at a time when access to rail and port facilities is expected to be particularly
challenging. To the extent that Xstrata is unable to provide such access, Xstrata will
acquire Cook coal directly at market prices on an open-book basis. Caledon must source
its own rail and port access beyond the second year of operations (2009 onwards).

Caledon expects rail and port allocation constraints to ease beyond 2008, as the
Queensland Government has committed to make significant investment in infrastructure
over the intervening period. Gladstone Port is currently being expanded by 30 Mt, to an
annualised rate of 75 Mt, with work scheduled for completion by 2009. The rail-carrying
capacity is also being expanded over the same period to match the port expansion.

Despite these planned expansions, SRK recommends that scheduling of the upgrade of
the Cook CPP be linked to confirmation of future availability of additional rail and port
capacity. We note that Caledon believes that several producers in the region are over-
committed in terms of requested capacity use under Queensland’s ‘take-or-pay’ rail and
port capacity-allocation system, and the company is confident of receiving offers to take
up excess capacity as those producers seek to avoid penalty charges.

Caledon Resources plc 12 December 2006


25

Marketing
Xstrata is making its general marketing expertise available to Caledon on a take-or-pay
basis for the first two years of Cook’s operation. Under the terms of the agreement,
Caledon pays a marketing fee equal to the higher of 3% of gross revenue or US$2.75/t of
coal sold. Caledon and Xstrata have agreed a production schedule (Nominated Annual
Tonnage) of 900,000 tonnes of coal in 2007, escalating to 1.5 million tonnes in 2008.
Caledon is limited to this production level until 2009 due to the rail and port constraints
referred to above.

Caledon mandated coal market consultant McCloskey evaluated the likely market price
achievable for Cook coal, based on McCloskey’s forecast FOB prices for bench-mark
Queensland hard and semi-hard coking coal. McCloskey concluded that, being a
premium semi-hard product, Cook coking coal could achieve a price similar to or better
than the mid-point of its forecast future prices for hard and semi-hard coals (Figure 18).

Figure 18: McCloskey coal price forecasts


Coal Type Base-case forecast (US$/t FOB)
2007e 2008e 2009e 2010e 2012e 2014e 2016e
Hard 110 110 110 100 80 85 90
Cook 100 100 100 90 75 80 84
Semi-hard 90 90 90 80 70 75 78
Source: McCloskey, September 2006

Project parameters/valuation
We have used the CPR to guide the inputs to our cash flow model but have made a
number of adjustments, particularly with regard to coal prices and the US$/A$ exchange
rate, to reflect Canaccord Adams’ internal forecasts. We have based our production
profile and operating cost structure (Figure 19) directly on the numbers presented in the
CPR, which we note SRK based on estimates provided by Caledon. On this basis, we
calculate total cash costs (inclusive of Queensland’s 7% state coal royalty) at
approximately A$72 per tonne of saleable coal produced (US$54 per tonne)

Figure 19: Operating cost assumptions


Item Unit Value
Caledon mining costs A$/t mined 37.5
Magatar mining costs A$/t mined 33.5
Infrastructure A$/t mined 1.5
Mine-CPP haulage A$/t mined 2.75
CPP costs A$/t washed 4.25
G&A and insurance A$/t washed 2.43
Marketing - higher of % of revenue 3%
or US$/t product 2.75
Rail haulage A$/t product 10.7
Port handling A$/t product 3.3
Queensland State royalty % of revenue 7%
Source: Competent Persons’ Report (SRK, October 2006)

We have assumed initial capital expenditure of approximately US$15 million in 2007, in


line with company presentations, and have allowed for a further US$15 million in initial

12 December 2006 Caledon Resources plc


26

working capital and other owners costs. We note that Caledon’s estimated capex figure
includes 15% contingency.

To arrive at our base-case valuation we have used Canaccord Adams’ Australian forecast
FOB prices for Australian hard coking coal (Goonyella) and thermal coal, as presented in
Figure 20 below. As outlined on page 24, we note that Cook coal is a semi-hard product,
which McCloskey believes could achieve a long-term price equal to around a 7% discount
to its forecast long-term price for premium hard coal. We have therefore applied a
similar discount to our own long-term hard coking coal price forecast of US$79 per
tonne, which we note is somewhat lower than McCloskey’s long-term price forecast for
hard coking coal of US$90 per tonne.

Figure 20: Canaccord Adams coal forecasts


2007e 2008e 2009e 2010e 2011e LT est
Hard coking coal (Goonyella) US$/t 103.29 94.12 88.79 84.35 80.14 79.10
Implied Cook coking coal* US$/t 93.90 85.57 80.72 75.92 72.12 73.82
Thermal coal (Aus spot) US$/t 52.06 52.50 52.50 52.50 52.50 52.50
*Applying McCloskey’s Cook discount to Canaccord Adams coking coal forecasts
Source: Canaccord Adams estimates

The following chart compares the forecast coking coal prices, as suggested by McCloskey
against those of Canaccord Adams.

Figure 21: Comparison of McCloskey and Canaccord Adams coking coal price forecasts

Coking c oal pric e for ec as ts (US$/ton n e)

120.00

110.00

100.00
McCloskey hard coking
McCloskey suggested Cook
90.00 McCloskey semi-hard
Canaccord Adams hard coking forecast
Adjusted Canaccord Adams forecast
80.00

70.00

60.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: McCloskey

We also provide a chart showing our forecast of the breakdown of operating costs and
operating margin per tonne of coal sold, over the first 10-years of the operation’s life.

Caledon Resources plc 12 December 2006


27

Figure 22: Breakdown of average operating cost and operating margin per tonne
Forec as t operat i n g c os t s an d operat in g m argi n ( US $/t )

90 22

80
21
70

60 20

Cash margin (US$/t)


Cash margin
Cash costs (US$/t) 50 Marketing and royalty
19 Rail and port
40 On-site costs
Cash margin RH scale
30 18

20
17
10

0 16
2006 2007 20082009 2010 2011 2012 20132014 2015 2016

Source: CRM and Canaccord Adams estimates

A summary of our base-case cash flow model of Cook using our discounted internal
coking coal price forecasts is presented in Figure 26 in the appendix. The following
sensitivity tables (Figures 23 and 24) plot the 10-year and 20-year NPV of Cook
(assuming 100% equity funding and discount rates of 8% and 10%), against a range of
flat (from 2008) coking and thermal coal prices.

Figure 23: 10-year Cook NPV sensitivity tables


10-year NPV at 8% discount rate
Coking Coal price
50 60 70 80 90 100
20 -134 -31 49 122 194 266
Thermal Price

30 -112 -9 65 138 210 282


40 -89 8 81 153 225 298
50 -66 24 97 169 241 313
60 -44 41 113 185 257 329
70 -21 56 129 201 273 344

10-year NPV at 10% discount rate


Coking Coal price
50 60 70 80 90 100
20 -123 -30 43 108 174 239
Thermal Price

30 -103 -10 57 123 188 253


40 -83 6 72 137 202 267
50 -62 20 86 151 216 281
60 -42 35 100 166 231 295
70 -21 49 115 180 245 309
Source: Canaccord Adams estimates

12 December 2006 Caledon Resources plc


28

Figure 24: 20-year Cook NPV sensitivity tables


20-year NPV at 8% discount rate
Coking Coal price
50 60 70 80 90 100
20 -193 -33 88 200 312 424

Thermal Price
30 -158 -1 113 225 337 449
40 -123 25 137 249 361 473
50 -87 50 162 274 386 498
60 -52 74 187 298 410 522
70 -17 99 211 323 435 545

20-year NPV at 10% discount rate


Coking Coal price
50 60 70 80 90 100
20 -168 -32 72 168 264 359
Thermal Price

30 -138 -4 93 189 285 380


40 -108 18 115 210 306 401
50 -78 40 136 231 327 422
60 -48 61 157 252 348 443
70 -18 82 178 273 368 463
Source: Canaccord Adams estimates

Caledon Resources plc 12 December 2006


29

MINYANGO COAL PROJECT, QUEENSLAND


The Minyango property (EPC 699) is located in the immediate vicinity of the mining town
of Blackwater in south-central Queensland. The 78 square-kilometer exploration
tenement is bounded to the west by BMA’s (BHP Billiton-Mitsubishi Alliance) Blackwater
mining lease, to the north by the Westfarmers’ Curragh mine, and to the south by the
Cook property. The Blackwater open-pit mine has been in operation since 1968, and
produced over 10 Mt of coking and thermal coal in the last financial year from seams
which Caledon believes continue into the Minyango property. The Curragh mine has
been in operation since 1982, producing approximately 7 Mtpa of coking and thermal
coal from seams which are again thought to extend into the Minyango tenements.

Figure 25: Minyango project location

Source: AIM Re-admission Document (Nov 2006)

While there is no compliant resource at Minyango, Caledon believes, based on historical


coal data and adjacent mining properties, that the project can be developed into a
producing mine within a relatively short timeframe, and at relatively low capital cost,
utilising existing processing and transportation infrastructure at Cook. The company
plans to undertake advanced exploration studies on potentially underground mineable
portions of Minyango over the next 12-15 months, at the end of which it must have paid
the A$40 million acquisition cost in full in order to retain the property.

Local company QCoal Pty Ltd, which is affiliated to the vendor, has reserved rights to
develop near-surface, potentially open-pitable portions of the deposit, but only within a
limited defined area at one end of the property. QCoal also has the right to a 1.75%
royalty on any future coal production from Minyango.

12 December 2006 Caledon Resources plc


30

Acquisition Agreement
Title to the Minyango property is held by Blackwater Coal, a wholly-owned subsidiary of
BVI company Hazelhurst Holdings. Hazelhurst is in turn owned 100% by BVI company
Watami Trading, the ultimate vending party.

On 29 September 2006, Caledon signed an option agreement to acquire the entire issued
capital of Hazelhurst for a total consideration of A$40 million, payable over a 15-month
period. Caledon can exercise the option at any time during the option period, which ends
on the tenth business day following the fulfillment of certain conditions, including
shareholder approval of the transaction at the upcoming EGM.

As part of the total consideration due, a non-refundable option fee of US$1.5 million
(A$2 million) was paid to Watami in lieu of acquiring the option. The first staged
payment of A$10 million is due to be paid to Watami no later than 10-days after
admission of the placing shares. After this payment, Caledon has until six months and 45
days from the date of the acquisition agreement to undertake initial resource delineation
and coal-quality studies on Minyango.

Should Caledon decide to proceed with the project beyond this point, a further A$9.6
million is payable to Watami in cash, shares or a combination of the two (at Caledon’s
election). Upon payment, Caledon would then be free to proceed with more advanced
exploration studies on the project. Should it elect not to proceed with the project after
these initial studies, Watami has the right to buy back all the shares in Hazelhurst in
consideration for the full refund of all monies paid by Caledon to that date.

Within nine months of the second staged payment, Caledon must make the final payment
installment of A$20.4 million. This payment may be delayed by up to three months in the
event that Caledon has not completed its planned feasibility work. However, if the
company chooses not to proceed at this point and therefore declines to pay the A$20.4
million due, Watami has the right to buy-back 51% of Hazelhurst for a consideration
expected to amount to A$15 million less the aggregate amount of any third-party
borrowings of Hazelhurst and its subsidiaries at that time.

Geology and resources


Four coal seams within the Rangal Coal Measures occur in Minyango: Aries, Castor,
Pollux and Orion (in stratigraphic order from top to base). These four seams commonly
split and coalesce to form other seams, particularly towards the south where the Castor
and Pollux seams combine to form the Gemini Seam. To the west of Minyango the
Rangals are sufficiently shallow to be mined by open pit, as exemplified by BMA’s
adjacent Blackwater operation.

Of the four target coal seams, Caledon considers Aries, Castor and Pollux as offering
potential for delineation of resources and reserves. These seams are of sufficient
thickness to allow extraction via underground mining methods and, from the limited coal
quality data available, Caledon believes all three can produce a high-quality thermal coal
and an export-quality coking coal product.

Caledon Resources plc 12 December 2006


31

Exploration work to date suggests that the three coal seams of interest vary in seam and
interburden thicknesses as follows:

Aries Seam (1.3-9 metres)

Interburden (0-20 metres)

Castor Seam (1.5-11 metres)

Interburden (0-25 metres)

Pollux Seam (1.2-5.5 metres)

The thicker areas of the Aries Seam are interpreted as coalescing of the seam with the
Castor Seam, and the thicker intersections in the Castor and Pollux seams are thought to
reflect coalescing of these two seams to form the Gemini Seam. The overall interburden
thickness between Aries and Pollux ranges from 20 metres in the north to 50 metres in
the southern end of the property. The interburden sediments generally consist of
competent material suitable for underground extraction.

Company presentations make reference to a potential resource of 500 Mt of coal, which


is not JORC compliant and which we understand to be based on historical data
accumulated since the 1960s. A total of 22 deep stratigraphic boreholes were drilled on
the property between the 1960s and 1995, and a further 67 shallow boreholes were
drilled in 2005 to target areas with potential for open-pit mining. According to SRK,
many of the 22 deep drill holes did not intercept the coal seams and are therefore void of
any coal-quality analysis. Those holes that did core the coal seams were not logged by
wire-line geophysics, and therefore cannot guarantee core recovery of more than 95% as
required under the JORC reporting guidelines for coal resources.

Nevertheless, based on work completed to date and knowledge of coal quality from
resources on adjacent properties, Caledon believes Minyango coal could provide a mid-
volatile hard coking product and a thermal by-product after beneficiation. The company
expects a total yield of 70-85% providing mining dilution does not exceed 10% by weight.

Development plans
Caledon plans to undertake feasibility work on Minyango over the next 9-12 months at a
total cost of approximately US$2.5 million. The first stage of the work programme will
include preliminary-stage drilling (20 holes planned) and seismic studies to determine
coal-seam continuity, coking-coal quality, and to provide an initial idea of the potential
structural characteristics of the seams (faults and other potential disturbances). The
second phase of the feasibility programme will include in-fill drilling to delineate a set
volume of potentially underground mineable, drill-indicated material from within the 500
million tonne conceptual resource.

12 December 2006 Caledon Resources plc


32

CHINESE GOLD ASSETS


Prior to its move into the coal sector, Caledon was best known as a Chinese-focused gold
explorer, holding a number of gold exploration assets in the country’s Guangxi and
Yunnan provinces via various subsidiary companies and joint ventures.

Directly-owned gold assets


Caledon’s principal gold asset is an earn-in option on the Mojiang gold project in
southwestern Yunnan. Mojiang Mining Ltd Co (MMLC) commenced mining at the
property in 1980, establishing a mill and CIP plant in 1982 which has steadily produced
10,000 to 15,000 oz per annum, initially from underground high-grade ore and latterly
through lower-grade open-pit ore. Since 2002, MMLC has produced around 40,000 oz of
gold per annum from heap-leaching of oxide ore.

In 2004, Caledon signed an agreement with MMLC to earn a 70% equity interest in the
7.2 square kilometer Mojiang mining concession and surrounding exploration
tenements, as well as a 90% interest in exploration ground to be acquired in defined
counties in southern Yunnan Province, in return for funding US$1 million of exploration
expenditure over a three-year period and completing a feasibility study. Caledon
commenced drilling at Mojiang in February 2006, with a view to completing a resource
estimate by the end of the year.

In addition to Mojiang, Caledon holds majority interests in the Hengxian, Gaolong and
Badu exploration projects in Guangxi Province. These assets are held through subsidiary
companies Blackwatch Resources and Blackwatch Mining.

Dynasty Gold Corp


During 2005, Caledon acquired a total of 7.2 million shares in Chinese gold explorer
Dynasty Gold Corp (TSX.V:DYG), at a total cost of £1.1 million. Caledon’s interest
represents approximately 10.6% of Dynasty’s total issued shares, which at Dynasty’s
current share price has a market value of approximately C$2.1 million (US$1.8 million).

Dynasty owns three advanced gold exploration projects in northern China – Hatu, Wild
Horse and Red Valley. It has inferred resources of just under one million ounces of gold.
Other noteworthy shareholders in Dynasty include AngloGold Ashanti Ltd (AU:NYSE) and
Avocet Mining plc (AVM:AIM).

Caledon Resources plc 12 December 2006


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APPENDIX

Figure 26: Cook coal mine summary cash flow model

FYE Dec LoM Total 2007e 2008e 2009e 2010e 2011e 2012e 2013e 2014e 2015e 2016e 2017e
CC production kT 1,777 732 646 348 51 0 0 0 0 0 0 0
Magatar production kT 36,136 316 1,058 1,549 1,954 1,954 1,954 1,954 1,954 1,954 1,954 1,954
Total ROM production kT 37,913 1,049 1,703 1,897 2,005 1,954 1,954 1,954 1,954 1,954 1,954 1,954
Wash plant recovery % 92% 81% 86% 92% 92% 92% 92% 92% 92% 92% 92% 92%
Coking coal yield 82% kT 28,467 699 1,208 1,433 1,515 1,476 1,476 1,476 1,476 1,476 1,476 1,476
Thermal coal yield 18% kT 6,249 154 265 315 332 324 324 324 324 324 324 324
Coking coal price (FOB) US$/t 92.93 85.30 80.75 75.94 72.12 74.15 74.15 74.44 74.44 73.82 73.82
Thermal coal price (FOB) US$/t 52.06 52.50 52.50 52.50 52.50 52.50 52.50 52.50 52.50 52.50 52.50
Coking revenue US$M 2,142 65 103 116 115 106 109 109 110 110 109 109
Thermal revenue US$M 328 8 14 17 17 17 17 17 17 17 17 17
Exchange rate US$/A$ 0.75 0.75 0.75 0.75 0.75 0.75 0.75 0.75 0.75 0.75 0.75
Gross revenue A$M 3,294 97 156 176 177 165 169 169 169 169 168 168
Cash operating costs A$M -2,169 -68 -101 -109 -114 -111 -111 -111 -111 -111 -111 -111
Marketing fee A$M -127 -3 -5 -6 -7 -7 -7 -7 -7 -7 -7 -7
Queensland royalty 7% A$M -231 -7 -11 -12 -12 -12 -12 -12 -12 -12 -12 -12
Total cash costs A$M -2,526 -78 -118 -128 -133 -129 -129 -129 -129 -129 -129 -129
DD&A A$M -54 -1 -2 -3 -3 -3 -3 -3 -3 -3 -3 -3
Total operating costs A$M -2,580 -80 -120 -131 -136 -132 -132 -132 -132 -132 -132 -132
Pre-tax cash flow A$M 767 19 38 48 43 36 39 39 40 40 39 39
Taxation 30% A$M -214 0 -5 -14 -13 -11 -12 -12 -12 -12 -11 -11
Net operating cash flow A$M 553 19 33 34 31 25 28 28 28 28 27 27
Capex A$M -54 -39 -2 0 0 0 0 0 0 0 0 0
Project free cash flow A$M 499 -20 32 34 30 25 27 27 27 27 27 27
10-year NPV at 8% DR 8% DR A$M 148
US$M 116
20-year NPV at 8% DR 8% DR A$M 230
US$M 181
Source: Canaccord Adams estimates

Caledon Resources plc 12 December 2006


34

Figure 27: Caledon summary financials


FYE Dec 2007e 2008e 2009e 2010e 2011e 2012e 2013e 2014e 2015e 2016e 2017e
Production
Coking coal kT 699 1,208 1,433 1,515 1,476 1,476 1,476 1,476 1,476 1,476 1,476
Thermal coal kT 154 265 315 332 324 324 324 324 324 324 324
Total coal production kT 853 1,473 1,748 1,847 1,800 1,800 1,800 1,800 1,800 1,800 1,800
Coking coal price US$/t 93 85 81 76 72 74 74 74 74 74 74
Thermal coal price US$/t 52 53 53 53 53 53 53 53 53 53 53
Average coal price US$/t 86 79 76 72 69 70 70 70 70 70 70
Average cash cost US$/t -69 -60 -55 -54 -54 -54 -54 -54 -54 -54 -54

FYE Dec 2007e 2008e 2009e 2010e 2011e 2012e 2013e 2014e 2015e 2016e 2017e
Profit and Loss
Revenue US$M 73 117 132 132 123 126 126 127 127 126 126
Costs US$M -59 -88 -96 -100 -97 -97 -97 -97 -97 -97 -97
Corp G&A US$M -6 -6 -6 -6 -6 -6 -6 -6 -6 -6 -6
EBITDA US$M 8 23 30 27 21 23 23 24 24 23 23

DD&A US$M -1 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2
EBIT US$M 7 21 28 24 19 21 21 22 22 21 21

Interest US$M 0 0 0 0 0 0 0 0 0 0 0
Tax US$M -2 -6 -8 -7 -6 -6 -6 -7 -7 -6 -6
Earnings US$M 5 15 20 17 13 15 15 15 15 15 15

Cash Flow
Operating cash flow US$M 8 19 20 17 13 15 15 15 15 14 14
Invested cash flow US$M -45 -1 0 0 0 0 0 0 0 0 0
Cash flow from financing activities US$M 0 0 0 0 0 0 0 0 0 0 0
Net cash flow US$M -37 18 19 17 12 14 14 15 15 14 14
Cumulative cash flow US$M -27 -9 10 26 39 53 67 82 97 111 125
Source: Canaccord Adams estimates

Caledon Resources plc 12 December 2006


35

Figure 28: Comparable Australian coal producers (mixed coking and thermal)

Shares Mkt
Consensus
Price Out Cap EV Consensus EPS PE CFPS P/CF
Company Ticker Currency (local) (M) (US$M) (US$M) 2007e 2008e 2007e 2008e 2007e 2008e 2007e 2008e
Centennial Coal CEY AUD 2.75 302 653 1,183 0.15 0.27 18.2 10.1 0.53 0.67 5.2 4.1
Coal & Allied CNA AUD 78.00 87 5,311 5,465 3.17 3.80 24.6 20.6 4.15 4.49 18.8 17.4
Excel Coal* EXL AUD 9.50 215 1,606 1,786 0.54 0.81 17.6 11.7 1.04 1.42 9.1 6.7
Felix Resources FLX AUD 4.16 188 615 626 0.19 0.23 22.2 18.4 0.22 0.35 18.9 11.9
Gloucester Coal GCL AUD 4.03 79 249 262 0.45 0.41 8.9 9.7 0.64 0.53 6.3 7.6
Macarthur Coal MCC AUD 4.91 187 724 610 0.37 0.44 13.3 11.1 0.48 0.65 10.2 7.6
New Hope NHC AUD 1.30 808 823 493 0.07 0.09 18.2 13.9 0.11 0.12 12.0 11.1
Resource Pacific RSP AUD 1.34 194 204 237 0.05 0.25 27.9 5.4 0.09 0.35 14.9 3.8
Average 0.62 0.79 18.9 12.6 0.91 1.07 11.9 8.8
*Share price represents Peabody take-out price
Source: Company reports, Bloomberg

An analyst has visited the issuer’s main operations in Queensland, Australia and partial payment was received from the issuer for the related travel costs.

Caledon Resources plc 12 December 2006


36

Caledon Resources plc 12 December 2006


37

APPENDIX: IMPORTANT DISCLOSURES


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Distribution of Ratings: Coverage Universe IB Clients


Global Stock Ratings Rating # % %
(as of 1 December 2006) Buy 292 57.37% 43.84%
Speculative Buy 56 11.00% 67.86%
Hold 139 27.31% 30.22%
Sell 22 4.32% 13.64%
509 100.00%

Canaccord Ratings BUY: The stock is expected to generate risk-adjusted returns of over 10% during the next 12 months.
System: HOLD: The stock is expected to generate risk-adjusted returns of 0-10% during the next 12 months.
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Canaccord Research Disclosures as of 12 December 2006


Company Disclosure
Caledon Resources plc 1A, 2, 4, 5, 7

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12 December 2006 Caledon Resources plc


38

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Caledon Resources plc 12 December 2006


39

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12 December 2006 Caledon Resources plc


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Steven Butler, MBA, Toronto 1.416.869.7918 Life Sciences
Graeme Currie, Vancouver 1.604.643.7405 Karl Keegan, MPhil, PhD, London 44.20.7050.6633
Gary Lampard, MA, MBA, Toronto 1.416.867.6020 Mike Booth, DPhil, London 44.20.7050.6635
Jim Taylor, London 44.20.7050.6648 David Bouchey, Ph.D., Boston 1.617.371.3891
Orest Wowkodaw, CA, CFA, Toronto 1.416.869.3092 Neil Maruoka, Toronto 1.416.869.3073
Wendell Zerb, PGeol, Vancouver 1.604.643.7485 Joseph Pantginis, PhD, MBA, MSc, New York 1.646.264.6021
Nick Chalmers, Associate, London 44.20.7050.6636 Matthew Scalo, San Francisco 1.415.229.0649
Christopher Chang, Associate, Toronto 1.416.869.7299 Theresa Chu, Associate, San Francisco 1.415.299.0699
Gary Hon, Associate, Toronto 1.416.869.7376 Ben Sun, PhD, Sr Associate, Boston 1.617.788.1595
Nicholas Pickens, Associate, London 44.20.7050.6646 Guillaume van Renterghem, MSc, Associate, London44.20.7050.6650
Toni Wallis, PGeo, Associate Analyst, Vancouver 1.604.643.7551 Real Estate
John Vinnai, Associate, Toronto 1.416.869.7289 Jonathan Kelcher, CFA, MBA, Toronto 1.416.869.3260
Energy Shant Poladian, CA, CPA, Toronto 1.416.869.6595
Bruce McDonald, CFA, MA, Calgary 1.403.508.3806 Sandy Poklar, CA, Toronto 1.416.869.3060
Andrew Bradford, CFA, MA, Calgary 1.403.781.1611 Consumer
Irene Haas, Houston 1.713.353.4730 Robert J. Hastings, CFA, Vancouver 1.604.643.0177
Jim Joseph, London 44.20.7050.6645 Benoit Caron, MSc, Montréal 1.514.844.3708
Wendy Liu, CFA, Calgary 1.403.508.3890 Stephen Colbert, Boston 1.617.788.1573
Terry Peters, MBA, Toronto 1.416.869.6597 Martin Gagel, CFA, MBA, Vancouver 1.604.643.7718
Geir Sagemo, London 44.20.7050.6647 Chris Rankin, CFA, MBA, Toronto 1.416.869.7325
Richard Wyman, MBA, Calgary 1.403.508.3886 Scott Van Winkle, CFA, Boston 1.617.371.3759
Jeff Barber, MA, Associate, Calgary 1.403.781.1620 Diederik Basch, CFA, Sr. Associate, Boston 1.617.371.3764
Teju Akande, Associate, London 44.20.7050.6634 Yashwant Sankpal, Associate, Toronto 1.416.869.3643
Arthur Grayfer, Associate, Calgary 1.403.508.3884 Catherine Siu, CFA, Associate, Montréal 1.514.844.3108
Michael Deng, MBA, Associate, Calgary 1.403.508.3804
Stephanie Joe, Associate, Houston 1.713.353.4758 Industrial Growth
Asad Rawra, CA, CPA, Associate, Toronto 1.416.869.7397 Robert J. Hastings, CFA, Vancouver 1.604.643.0177
Lindsay Wheeler, Associate, Calgary 1.403.508.3862 Sara Elford, CFA, Halifax 1.902.442.3161
Technology Robert Fay, MBA, Toronto 1.416.869.3028
Jeff Rath, CFA, Toronto 1.416.869.3325 Martin Gagel, CFA, MBA, Vancouver 1.604.643.7718
Dushan Batrovic, MBA, Toronto 1.416.869.7399 Eric Glover, CFA, San Francisco 1.415.229.0669
Anthony Chow, MBA, London 44.20.7050.6637 Mark Thompson, MSc, CFA, London 44.20.7050.6649
Jonathan Dorsheimer, Boston 1.617.371.3875 Juan Plessis, MBA, CFA, Vancouver 1.604.643.0181
Steven Frankel, MBA, Boston 1.617.371.3711 John Quealy, CPA, Boston 1.617.371.3837
Colin Gillis, MBA, New York 1.646.264.6014 Chris Rankin, CFA, MBA, Toronto 1.416.869.7325
Catriona Hamilton, London 44.20.7050.6642 Jeffrey Leung, Associate, Vancouver 1.604.661.7861
Greg Harris, MBA, London 44.20.7050.6643 Mark Sigal, Associate, Boston 1.617.788.1591
Alan Howard, CFA, MA, London 44.20.7050.6644 Christy Taylor, Associate, Vancouver 1.604.643.7034
Avinash Kant, PhD, San Francisco 1.415.229.7166 Tom Varesh, MBA, Associate, Toronto 1.416.869.3189
Mark Kelleher, MBA, Boston 1.617.371.3726 Max Vichniakov, MBA, Associate, Toronto 1.416.869.7284
Michael Kern, Boston 1.617.371.3862 Portfolio Strategy
David Lambert, CFA, Toronto 1.416.869.6592 Nick Majendie, CA, MA, Vancouver 1.604.643.7005
Joanna Makris, MA, New York 1.646.264.6007 Michael Rudd, CFA, Associate, Vancouver 1.604.643.7421
Peter Misek, CA, CPA, CFA, Toronto 1.416.869.7920

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