Canaccord Genuity (Australia) Limited is the Australian affiliate of global capital markets group Canaccord Genuity Group Inc. (CF : TSX CF.

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1 AUS Sector Report 1 Metals and Mining Iron Ore Luke Smith luke.smith@canaccord.com.au Reg Spencer reg.spencer@canaccord.com.au Gary Watson gary.watson@canaccord.com.au Cameron Klutke cameron.klutke@canaccord.com.au Q1 14 COMMODITY UPDATE: IRON ORE Investment Perspective The quarterly review of CGAu iron ore price forecasts and exchange rates has again seen an increase to near term price assumptions. The iron ore market has continued to hold a somewhat surprisingly tight trading band above our forecast pricing. Compounding this positive performance is the weakened AUD:USD exchange rate which is having a material impact on cashflow for Australian iron ore producers. We have increased our CY14 Iron ore fines 62% Fe (CFR, China) from US$116/t to US$123/t and CY15 by US$6 to US$112/t. These price increases however are still below the current spot iron ore price (~US$130/t) which we forecast to fall 5-10% over the first half of We have also revised the nominal AUD:USD exchange rate used from 92c to 90c over FY14 and FY15 resulting in a positive move to forecast operating cashflow of the producers. Our long term forecasts remain unchanged. The Iron Ore market is likely to continue to fluctuate on newsflow and stories regarding China s growth and financial stability. However the underlying supply and demand growth through 2013 has shown to be moving closer to parallel than consensus had allowed for. Our revised forecasts have taken into account further supply coming from the relatively lower cost Australian producers into the seaborne market and therefore pushing the spot price closer to the marginal cost of production. Following our review of bulk commodity prices and currency forecasts, we have updated the financial forecasts of companies under our coverage. Our research coverage includes: BC Iron Limited ( BCI: ASX: A$4.77 BUY, TP A$5.89 ) remains our top pick in our iron ore sector. We see the company as generating among the best FCF yields in its sector, with low cost and steady production continuing at Nullagine. In additional we anticipate potentially upside risk following completion of the low grade beneficiation trial which was due to be completed in late Cape Lambert Resources Limited (CFE : ASX : A$0.13 BUY, TP A$0.35) de-risked its Marampa Iron Ore project significantly on December 24, 2013 following completion of a binding infrastructure agreement. The agreement with African Minerals Limited is for access to rail and port infrastructure allowing CFE to sell 2Mtpa (1.8Mtpa dry) of iron ore concentrate into the seaborne market utilising African Minerals rail and port. We believe the completion of this development milestone for Marampa will greatly assist in the sale of the asset. Centaurus Metals Limited (CTM: ASX: A$0.18 BUY, TP $0.61) is our top developer pick, on the back of its quality Jambreiro Iron Ore project in Brazil. CTM in early January announced receipt of the Mining License for the project clearing the path for financing and development. We continue to see Jambreiro as a high margin iron ore project which is potentially 12 months away from production. Venture Minerals Limited (VMS : ASX: A$0.165 BUY, TP $0.50 ) the project timetable for the Riley DSO Iron Ore Project continues to be thwarted by the approvals and appeals process with the latest a judicial review to be undertaken into the Federal Government s approval of the project. The final court hearing is expected shortly and should there be a successful outcome for VMS we would expect production to commence mid-year. We consider a positive outcome to the review and commencement of construction and then production to be catalysts for share price re-rating. Canaccord Genuity (Australia) Limited is the Australian affiliate of global capital markets group Canaccord Genuity Group Inc. (CF : TSX CF. : LSE) The recommendations and opinions expressed in this research report accurately reflect the 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 Disclosures at the end of this document.

2 AUS Sector Report 2 COMMODITY PRICE REVISION: IRON ORE We have revised our forward commodity price assumptions for iron ore which predominantly reflects the continued firm spot prices observed over the second half of 2013 and have continued into the first few weeks of Table 1: CGAu Iron Ore Pricing Assumptions Q1/14E Q2/14E Q3/14E Q4/14E 2014E 2015E 2016E Long term Iron Ore (US$/t) New Previous Change (%) 5.2% 5.5% 7.2% 7.2% 6.2% 5.2% 5.0% 0.0% Exchange Rate (AUD$/US$) New Previous Change (%) -2.2% -2.2% -2.2% -2.2% -2.2% -2.2% 0.0% 0.0% Source: Bloomberg & Canaccord Genuity estimates The quarterly review of CGAu iron ore price forecasts and exchange rates has again seen an increase to near term price assumptions. The iron ore market has continued to hold a somewhat surprisingly tight trading band above our forecast pricing. Compounding this positive performance is the weakened AUD:USD exchange rate which is having a material impact on cashflow for Australian iron ore producers. The Iron Ore market is likely to continue to fluctuate on newsflow and stories regarding China s growth and financial stability. However the underlying supply and demand growth through 2013 has shown to be moving closer to parallel than consensus had allowed for. Our revised forecasts have taken into account further supply coming from the relatively lower cost Australian producers into the seaborne market and therefore pushing the spot price closer to the marginal cost of production. VALUATION CHANGES The increase in iron ore forecasts combined with the forecast depreciation in the A$ has had an overall positive effect on three of the four covered iron ore companies. The changes in Table 1 have been incorporated into revised valuations for our iron ore coverage list with resulting changes provided in Table 2 below. Table 2: CGAu Coverage Universe: Iron Ore Producers and Developers summary of ratings and targets COMPANY CODE ANALYST PRICE MKT CAP RATING NAV/ SHARE P/NAV NEW TARGET OLD TARGET BC Iron BCI LS $4.77 $590m BUY $ x $5.89 $5.53 Cape Lambert Resources CFE GW $0.13 $86m SPEC BUY $ x $0.35 $0.35 Centaurus Metals CTM LS $0.18 $35m BUY $ x $0.61 $0.61 Venture Minerals VMS RS $0.17 $47m SPEC BUY $ x $0.50 $0.46 Source: IRESS & Canaccord Genuity estimates R Research restricted; UR Under Review; LS Luke Smith; RS Reg Spencer; GW Gary Watson; CK Cameron Klutke All amounts in AUD$ unless noted

3 AUS Sector Report 3 APPENDIX I COMPANY SUMMARIES Company ASX Code Page BC Iron Ltd BCI 4 Cape Lambert Resources Ltd CFE 6 Centaurus Metals Limited CTM 8 Venture Minerals Ltd VMS 10

4 AUS Sector Report 4 BC Iron Limited Luke Smith BCI : ASX BUY Target: A$5.89 luke.smith@canaccord.com.au COMPANY STATISTICS: Share Price (A$) Mth Hi-Lo (A$) Market Cap (A$m) A$591 Issued Shares (m) 124m Options (various) 1m Cash (31/12/13) est. A$175m Debt (31/12/13) est. A$36m Major Shareholders Australian Super 6.6% Ausbil Dexia 6.1% Jun Yr End 2014e 2015e 2016e Iron Ore Sales 5,921 5,915 5,915 C1 Cash Costs A$/t Iron Ore Price US$/t EBITDA (A$m) EV/EBITDA 1.5x 2.1x 3.0x P/CF 2.6x 4.5x 6.5x NPAT (A$m) EPS (A$) $1.45 $0.85 $0.51 Dividend Per Share $0.58 $0.43 $0.25 Dividend Yield 12% 9% 5% Source: Canaccord Genuity estimates SHARE PRICE PERFORMANCE: Source: Interactive Data Corporation COMPANY DESCRIPTION: BC Iron Limited (BCI:ASX) is an iron ore producer whose primary asset is the 75% owned Nullagine Iron Ore Project in the Pilbara, Western Australia. BCI's JV partner in Nullagine is Fortescue Metals Group (FMG) with FMG providing rail, port and marketing for the JV. Nullainge produces at a 6Mtpa throughput and currently has a seven year mine life with upside in the current resource base. All amounts are in AUD unless otherwise noted. INCREASE TO NEAR TERM IRON ORE PRICE FORECASTS Investment Perspective BC Iron Limited (BCI) remains our preferred Iron Ore Producer due to the robust FCF from the Nullagine Iron Ore Mine combined with a strong balance sheet and attractive dividend yield (CGAu est. FY14 12%). In addition we consider that the current trial beneficiation of low grade ore is likely to be successful. This may lead to possible mine life increases or an annualised production increase, and see this as a major catalyst for the shares. We maintain our BUY rating. Investment Highlights The quarterly review of CGAu iron ore price forecasts and exchange rates has again seen an increase to near term price assumptions. The iron ore market has continued to hold a tight trading band above our forecast pricing. Compounding this positive performance is the weakened AUD:USD exchange rate. We have increased our CY14 Iron ore fines 62% Fe (CFR, China) from US$116/t to US$123/t and CY15 by US$6 to US$112/t. We have also revised the nominal exchange rate used from 92c to 90c over the same period. Our long term forecasts remain unchanged. We forecast average iron ore (CFR) sales price for Bonnie Fines was US$119/t for the DecQ up 2% from the SepQ which is likely to have underpinned continued strong FCF. Should the current spot price of +US$130/t be maintained in the near term this would result in an increase to our current cashflow forecasts. The low grade iron ore beneficiation trial is currently testing 1,000tpd of material from existing low-grade stockpiles with the aim of producing a beneficiated product of similar quality to Bonnie Fines. We expect this trial to be completed in DecQ 13 which could extend the LOM and current reserves of 37.2Mt at 57.1% Fe. Alternatively, we can t rule out the NJV reaching agreement with FMG to increase capacity allocation on the rail and at port on the back of a successful beneficiation trial. Maintain BUY rating with target price increased to A$5.89 We maintain our BUY recommendation for BCI with our price target increased to $5.89 (previously $5.53). The price target is set using a blended NAV and 12-month forward free cashflow multiple. The NAV is predominantly made up of a DCF (10%) valuation of the Nullagine Iron Ore project.

5 AUS Sector Report 5 FINANCIAL SUMMARY BC Iron Limited ASX:BCI Date: 13/01/2014 Market Information Share Price A$ 4.77 Market Capitalisation A$m Month Hi-Lo A$ Issued Capital m Year End: Company Description BC Iron Limited (BCI:ASX) is an iron ore producer w hose primary asset is the 75% ow ned Nullagine Iron Ore Project in the Pilbara, Western Australia. BCI's JV partner in Nullagine is Fortescue Metals Group (FMG) with FMG providing rail, port and marketing for the JV. Nullainge produces at a 6Mtpa throughput and currently has a seven year mine life w ith upside in the current resource base. Options m 1.03 Profit & Loss (A$m) 2012a 2013a 2014e 2015e 2016e Fully Diluted m Revenue Operating Costs Valuation A$m Risk Adj. A$/share Royalties Nullagine Iron Ore 10% % 3.21 Corporate & O'heads Nullagine Resources Exploration (Expensed) Cash EBITDA Investments Dep'n Options EBIT Less: Debt (36.2) (0.29) Net Interest Less: Corporate & O'heads (11.2) (0.09) Tax (underlying) TOTAL NAV NPAT (underlying) Price:NAV 0.91 Abnormals Target Price (Blended NAV/FCF multiple) 5.89 NPAT (Reported) Assumptions 2014e 2015e 2016e Cash Flow (A$m) 2012a 2013a 2014e 2015e 2016e Iron Ore (62% Fe) US$/t* Cash Receipts * CFR Cash paid to suppliers & employees AUD:USD Tax Paid Net Interest Valuation Sensitivity Operating Cash Flow $10 Exploration and Evaluation Capex $9 Other $8 Investing Cash Flow $7 Debt Drawdown (repayment) $6 Share capital $5 Dividends $4 Financing Expenses $3 Financing Cash Flow $2 Opening Cash $1 Increase / (Decrease) in cash $0-30% -20% 10% 20% 30% FX Impact % 0% Iron Ore Opex Exchange Rate Change in input variable Closing Cash Target Price Production Metrics 2014e 2015e 2016e Balance Sheet (A$m) 2012a 2013a 2014e 2015e 2016e Nullagine Iron Ore (100% basis) Cash + S/Term Deposits Sales (kt) wmt 5,921 5,915 5,915 Other current assets C1 Cash Costs (A$/t) wmt $41 $49 $56 Current Assets Total Cash Cost (A$/t) wmt $56 $70 $76 Property, Plant & Equip Exploration & Develop Reserves & Resources Mt Grade Other Non-current Assets Nullagine DSO Iron Ore (30 June 2013) Fe( %) Payables Resources Measured Short Term debt Indicated Long Term Debt Inferred Other Liabilities Total Net Assets Reserves Proven Shareholders Funds Probable Reserves Total Retained Earnings Total Equity June Directors & Management Ratios & Multiples 2012a 2013a 2014e 2015e 2016e Name Position EBITDA Margin 33% 35% 53% 35% 24% Tony Kiernan NE Chairman EV/EBITDA 6.1x 4.8x 1.5x 2.1x 3.0x Morgan Ball Managing Director Op. Cashflow/Share $0.86 $0.71 $1.80 $1.07 $0.73 Mike Young NE Director P/CF 5.6x 6.7x 2.6x 4.5x 6.5x Andy Haslam NE Director EPS $0.51 $0.42 $1.45 $0.85 $0.51 Malcolm McComas NE Director EPS Growth nm -18% 248% -42% -40% Terry Ransted NE Director PER 9.4x 11.4x 3.3x 5.6x 9.4x Peter Wilshaw NE Director Dividend Per Share $0.15 $0.35 $0.58 $0.43 $0.25 Substantial Shareholders Shares (m) % Dividend Yield 3% 7% 12% 9% 5% Australian Super % Franking 100% 100% 100% 100% 100% Ausbil Dexia % ROE 38% 22% 55% 28% 15% ROIC 63% 26% 70% 34% 11% Debt/Equity 13% 48% 6% 0% 0% Net Interest Cover 21.0x 20.6x 152.4x 647.0x nm Book Value/share $1.27 $1.76 $2.64 $3.05 $3.31 Source: BC I & C anaccord G enuity estimates Price/Book Value 3.8x 2.7x 1.8x 1.6x 1.4x

6 AUS Sector Report 6 Cape Lambert Resources Limited Gary Watson CFE : ASX SPECULATIVE BUY Target: A$0.35 gary.watson@canaccord.com.au COMPANY STATISTICS: Share Price (A$) Yr Hi-Lo (A$) Market Cap (A$m) 87.9 Issued Shares Options (various) Cash est. $26.6m Debt (30/6/13) $0.0m Major Shareholders African Minerals 18% The Capital Group 9% Company Directors 7% JP Morgan 7% BlackRock Group 7% EARNINGS SUMMARY: Jun Yr End 2013e 2014e 2015e Profit from sales EBITDA (A$m) EV/EBITDA nm 1.2 nm P/CF NPAT (A$m) EPS (A$) PER DPS Yield (%) 0% 115% 0% Source: Canaccord Genuity estimates SHARE PRICE PERFORMANCE: INCREASE TO NEAR TERM IRON ORE PRICE FORECASTS Investment Perspective Cape Lambert Resources (CFE) continues progress the development of the Marampa iron ore project in Sierra Leone. CFE recently finalised a rail and port agreement with its major shareholder (African Minerals) to provide transport of up to 2Mtpa of ore onto the seaborne market. The mining license for Marampa was lodged in late November 2013 and is the final key permit required to commence iron ore exports. The completion of the infrastructure agreement and the granting of the mining license in the MarQ 14 are major milestones in advancing the sale of the Marampa project. We maintain our SPECULATIVE BUY rating. Investment Highlights The quarterly review of CGAu iron ore price forecasts and exchange rates has again seen an increase to near term price assumptions. The iron ore market has continued to hold a tight trading band above our forecast pricing. Compounding this positive performance is the weakened AUD:USD exchange rate. We have increased our CY14 Iron ore fines 62% Fe (CFR, China) from US$116/t to US$123/t and CY15 by US$6 to US$112/t. We have also revised the nominal exchange rate used from 92c to 90c over the same period. Our long term forecasts remain unchanged. Speculative BUY rating maintained; TP A$0.35/share Our target price for CFE is A$0.35/share and is derived from a sum of parts valuation formulated from a risked DCF 12% valuation of the Marampa project of A$169m and the sum of the estimated realisable value of assets and investments held by CFE (A$75m). Source: Interactive Data Corporation COMPANY DESCRIPTION: Cape Lambert Resources Limited (CFE) is a listed resource investment company based in Western Australia. The company has a diverse asset portfolio containing ready for sale assets, projects at various stages in development, debt and equity stakes in listed and unlisted vehicles, and royalty streams from completed transactions. All amounts are in AUD unless otherwise noted.

7 AUS Sector Report 7 FINANCIAL SUMMARY Cape Lambert Rersources Limited ASX:CFE Analyst : Gary Watson Rating: SPEC BUY Date: 13/01/2014 Price Target: $0.35 Year End: June Market Information Company Description Share Price A$ 0.13 Cape Lambert Resources Limited (CFE) is a listed resource investment company based Market Capitalisation A$m 87.9 in Western Australia. The company has a diverse asset portfolio containing ready for 12 Month Hi-Lo A$ sale assets, projects at various stages in development, debt and equity stakes in listed Issued Capital m and unlisted vehicles, and royalty streams from completed transactions. Options m Fully Diluted m Profit & Loss (A$m) 2012a 2013a 2014e 2015e Profit from Asset Sales Valuation Risk Adj. A$m A$/share Operating Costs Marampa 5Mtpa (NPV@12%) 80% Corporate & O'heads Investments Exploration (Expensed) Corporate (32.2) (0.05) EBITDA Options - - Dep'n Cash (est.) EBIT Debt - - Net Interest TOTAL NAV/ Price Target Tax Price:NAV 0.37 NPAT Abnormals Assumptions 2013a 2014e 2015e LT NPAT (reported) Gold Price (US$/oz) 1,605 1,314 1,326 1,406 Iron Ore (62% CFR) Cash Flow (A$m) 2012a 2013a 2014e 2015e AUD:USD Cash Receipts Cash paid to suppliers & emp Marampa Valuation Sensitivity (US$m) Tax Paid $ $ $ $ $0.00 -$ $ % -20% -10% 0% 10% 20% 30% Change in input variable Iron Ore Discount Rate Opex Capex Net Interest Operating Cash Flow Asset Sales/Acquisitions Exploration and Evaluation Capex Other Investing Cash Flow Debt Drawdown (repayment) Share capital Dividends Financing Expenses Financing Cash Flow Opening Cash Increase / (Decrease) in cash FX Impact Closing Cash Investment Portfolio Balance Sheet (A$m) 2012a 2013a 2014e 2015e Investments Valuation A$m A$/share Cash + S/Term Deposits Listed Investments 50% discount to Mark to Market Other current assets Unlisted Investments 50% discount to Carrying Value Current Assets Financial Assets Face Value Property, Plant & Equip Mayoko Royalty DCF Valuation Exploration & Develop Payables & Receivables Realisable Value Other Non-current Assets Development Projects Nominal Value Payables Total Short Term debt Long Term Debt Other Liabilities Directors & Management Net Assets Name Position Shareholders Funds Tony Sage Executive Chairman Reserves Tim Turner NE Director Retained Earnings Brian Maher NE Director Total Equity Ross Levin NE Director Ratios & Multiples 2012a 2013a 2014e 2015e EBITDA Margin 58% nm 81% nm Substantial Shareholders Shares (m) % EV/EBITDA 0.0x nm 1.2x nm African Minerals % Op. Cashflow/Share -$0.03 -$0.06 $0.05 $0.00 The Capital Group % P/CF -3.8x -2.1x 2.9x -44.7x Company Directors % EPS $0.03 -$0.21 $0.04 -$0.01 JP Morgan % PER 3.9x -0.6x 3.1x -15.9x BlackRock Group % Dividend Per Share $0.00 $0.00 $0.15 $0.00 Dividend Yield 0% 0% 115% 0% Source: CFE & Canaccord Genuity estimates ROE 6% -63% 18% -4% ROIC -17% 12% 39% 4% Debt/Equity 0% 0% 0% 0% Net Interest Cover nm nm x nm Book Value/share $0.55 $0.33 $0.23 $0.22 Price/Book Value 0.2x 0.4x 0.6x 0.6x

8 AUS Sector Report 8 Centaurus Metals Limited Luke Smith CTM : ASX BUY Target: A$0.61 luke.smith@canaccord.com.au COMPANY STATISTICS: Share Price (A$) Mth Hi-Lo (A$) Market Cap (A$m) 35m Issued Shares 196m Options (various) 11m Cash (30/9/13) $8.5m Debt (30/9/13) $0m Major Shareholders Atlas Iron 19.6% Liberty Mutal 12.8% EARNINGS SUMMARY: Dec Yr End 2014e 2015e 2016e Iron Ore Prod n ,014 Cash Costs US$/t Iron Ore Price US$/t EBITDA (A$m) EV/EBITDA nm 3.3x 2.5x NPAT (A$m) EPS (cents) -$0.02 $0.03 $0.04 Source: Canaccord Genuity estimates SHARE PRICE PERFORMANCE: Source: Interactive Data Corporation COMPANY DESCRIPTION: Centaurus Metals (ASX:CTM) is an iron ore exploration and development company whose primary asset is the Jambreiro Iron Ore Project in Brazil. CTM is targeting initial production of 1Mtpa moving to 2-3Mtpa of high grade (>66% Fe) iron ore for sale into the growing domestic market. INCREASE TO NEAR TERM IRON ORE PRICE FORECASTS Investment Perspective Centaurus Metals Limited (CTM) has received the Mining License for the Jambreiro Iron Ore Project in Brazil. The mining License finalizes all outstanding approvals for the project with CTM now in a position to finance the project and commence construction. The recently announced revised development strategy for Jambreiro provides a significantly more achievable funding scenario of US$47m capital cost. The new strategy is based on a 1Mtpa start-up operation and likely subsequent expansion to a 2-3Mtpa production base. Importantly the revised development scenario does not alter the commencement date for production of MarQ 15. Depending on the funding scenario, this new strategy should enable CTM to commence construction in parallel with the finalisation of an off-take agreement. We maintain our BUY rating. Investment Highlights The quarterly review of CGAu iron ore price forecasts and exchange rates has again seen an increase to near term price assumptions. The iron ore market has continued to hold a tight trading band above our forecast pricing. Compounding this positive performance is the weakened AUD:USD exchange rate. We have increased our CY14 Iron ore fines 62% Fe (CFR, China) from US$116/t to US$123/t and CY15 by US$6 to US$112/t. We have also revised the nominal exchange rate used from 92c to 90c over the same period. Our long term forecasts remain unchanged. Our forecast US$ denominated capital expenditure for CTM over the next 12 months of US$48m has offset the forecast increase in revenue for FY15 in the overall DCF of the Jambreiro Project. The changes to iron ore price and exchange rate have had a net zero effect on the NPV for Jambreiro resulting in no change to our valuation or price target. BUY rating maintained; TP A$0.61/share Our target price for CTM is A$0.61/share and is derived using a DCFbased (NPV 12% ) sum of the parts NAV. This valuation and price target includes dilution for project financing which we anticipate is likely to include a substantial equity component. All amounts are in AUD unless otherwise noted.

9 AUS Sector Report 9 FINANCIAL SUMMARY Centaurus Metals Limited ASX:CTM Date: 13/01/2014 Market Information Share Price A$ 0.18 Market Capitalisation A$m Month Hi-Lo A$ Issued Capital m Year End: December Company Description Centaurus Metals (CTM:ASX) is a iron ore exploration and development company w hose primary asset is the Jambreiro Iron Ore Project in Brazil. CTM is targeting initial production of 1mpta of high grade (>66% Fe) iron ore for sale into the grow ing domestic market. CTM has recently received environmental approvals for the project and a BFS completed in November Options m Profit & Loss (A$m) 2012a 2013e 2014e 2015e 2016e Fully Diluted m Revenue Operating Costs Valuation A$m Risk Adj. A$/share Royalties Jambreiro 12% % 0.33 Corporate & O'heads Jambreiro Compact Ore % 0.09 Exploration (Expensed) Jambreiro Regional Exploration EBITDA Other Projects Dep'n Cash EBIT Investments Net Interest Options - - Tax Future Equity Raised NPAT Less: Debt - - Abnormals Less: Corporate & O'heads (26.5) (0.06) NPAT (reported) TOTAL NAV/ Price Target Price:NAV 0.30 Cash Flow (A$m) 2012a 2013e 2014e 2015e 2016e Cash Receipts Cash paid to suppliers & employees Assumptions 2014e 2015e 2016e Tax Paid Iron Ore (65% Fe) US$/t* Net Interest paid * Brazil Domestic Price for Sinter Operating Cash Flow AUD:USD Exploration and Evaluation Capex Valuation Sensitivity Other $1.20 Investing Cash Flow Iron Ore Price Cash Costs Discount Factor Debt Drawdown (repayment) Exc hange Rate $1.00 Production Share capital Dividends $0.80 Financing Expenses Financing Cash Flow $0.60 Opening Cash Increase / (Decrease) in cash $0.40 FX Impact Closing Cash $0.20 Balance Sheet (A$m) 2012a 2013e 2014e 2015e 2016e $0.00 Cash + S/Term Deposits % -20% -10% 0% 10% 20% 30% Other current assets Production Metrics 2014e 2015e 2016e Current Assets Jambreiro Property, Plant & Equip Throughput (Kt) 0 2,300 2,600 Exploration & Develop Mass Recovery (%) na 39.0% 39.0% Other Non-current Assets Production (Kt) ,014 Payables Cash Costs incl royalty (US$/t) Short Term debt Reserves & Resources Mt Grade Long Term Debt Jambreiro Fe( %) Other Liabilities Resources (July 2013) Measured Net Assets Indicated Shareholders Funds Inferred Reserves Total Retained Earnings Reserves (Nov 2012) Proven Total Equity Probable Total Ratios & Multiples 2012a 2013e 2014e 2015e 2016e EBITDA Margin nm nm nm 42% 45% Directors & Management EV/EBITDA nm nm nm 3.3x 2.5x Name Position Op. Cashflow/Share -$0.01 -$0.02 -$0.02 $0.05 $0.06 Didier Murcia NE Chairman P/CF nm nm -9.8x 3.9x 3.1x Darren Gordon Managing Director EPS -$0.04 -$0.05 -$0.02 $0.03 $0.04 Peter Freund Executive Director EPS Growth nm nm nm -259% 42% Richard Hill NE Director PER nm nm -11.0x 6.9x 4.9x Mark Hancock NE Director Dividend Per Share $0.00 $0.00 $0.00 $0.00 $0.00 Steven Zaninovich NE Director Dividend Yield 0% 0% 0% 0% 0% ROE -17% -29% -10% 14% 16% Substantial Shareholders Shares (m) % ROIC -8% -11% -4% 9% 10% Atlas Iron % Debt/Equity 0% 0% 15% 0% 22% Liberty Mutal % Net Interest Cover nm nm -6.6x 12.0x 24.0x Lujeta Pty Ltd % Book Value/share $0.23 $0.18 $0.16 $0.19 $0.22 Acorn % Price/Book Value 0.8x 1.0x 1.1x 1.0x 0.8x Source: C entaurus & C anaccord G enuity estimates

10 AUS Sector Report 10 Venture Minerals Limited Reg Spencer VMS : ASX SPEC BUY Target: A$0.50 reg.spencer@canaccord.com.au COMPANY STATISTICS: Share Price (A$) Yr Hi-Lo (A$) Market Cap (A$m) 47.4 Issued Shares Options (various) Cash (30/9/13) A$9m Debt (30/9/13) A$0m Major Shareholders Republic Investment Mgt 10% Molton Holdings 8% EARNINGS SUMMARY: Jun Yr End 2014e 2015e 2016e Fe Prod n (t) C1 Costs (A$/t) Total Costs (A$/t) Fe Price (US$/t) EBITDA (A$m) EV/EBITDA 1.7x -0.1x -1.0x P/CF 3.9x 1.2x 1.2x NPAT (A$m) EPS (US$) $0.04 $0.12 $0.08 PER 3.8x 1.4x 1.9x Source: Canaccord Genuity estimates SHARE PRICE PERFORMANCE: INCREASE TO NEAR TERM IRON ORE PRICE FORECASTS Investment Perspective Venture Minerals Limited (VMS) continues to be on the cusp of commencement of construction at its Riley DSO Iron Ore Project in Tasmania. The project timetable continues to be thwarted by the approvals and appeals process with the latest a judicial review to be undertaken into the Federal Government s approval of the project. The final court hearing is expected shortly and should there be a successful outcome for VMS we would expect production to commence mid-year. We consider a positive outcome to the review and commencement of construction and then production to be catalysts for share price re-rating. We maintain our SPEC BUY rating. Investment Highlights The quarterly review of CGAu iron ore price forecasts and exchange rates has again seen an increase to near term price assumptions. The iron ore market has continued to hold a tight trading band above our forecast pricing. Compounding this positive performance is the weakened AUD:USD exchange rate. We have increased our CY14 Iron ore fines 62% Fe (CFR, Chin a) from US$116/t to US$123/t and CY15 by US$6 to US$112/t. We have also revised the nominal exchange rate used from 92c to 90c over the same period. Our long term forecasts remain unchanged. SPECULATIVE BUY rating unchanged; TP revised to A$0.50/share Following the iron ore price forecast revisions and exchange rate revisions we have revised our DCF-based (NPV 10% ) target price to $0.50/share (previously $0.46/share). Source: Interactive Data Corporation COMPANY DESCRIPTION: Venture Minerals Ltd (VMS:ASX ) is a mineral exploration and development company. Its primary assets are the BFSstage Mt Lindsay tin/tungsten project, and Rileys/Livingstone DSO Iron Ore project in NW Tasmania. Rileys is anticipated to commence production in in early 2014, producing up to 1 Mtpa of DSO haematite iron ore. All amounts are in AUD unless otherwise noted.

11 AUS Sector Report 11 FINANCIAL SUMMARY Venture Minerals Limited VMS:ASX Analyst: Reg Spencer Rating: Date: 13/01/2014 Target: Year End: June Market Information Company Description Share Price A$ 0.17 Venture Minerals Ltd (VMS:ASX) is a mineral exploration and development company. Its primary Market Capitalisation A$m 47.4 assets are the BFS-stage Mt Lindsay tin/tungsten project, and Rileys/Livingstone DSO Iron Ore Enterprise Value A$m 38.0 project in NW Tasmania. Rileys is anticipated to commence production in early2014, producing up 12 Month Hi-Lo A$ to 1 Mtpa of DSO haematite iron ore. Issued Capital m Options m Profit & Loss (A$m) 2013a 2014e 2015e 2016e Fully Diluted m Revenue Operating Costs Valuation A$m A$/share Royalties Rileys/Livingstone DSO 10% Corporate & O'heads Mt Lindsay Exploration (Expensed) Corporate (18.5) (0.06) EBITDA Cash Dep'n Debt - - EBIT TOTAL Net Interest Price/NAV 0.33x Tax NPAT Abnormals Assumptions 2013a 2014e 2015e 2016e NPAT (reported) Fe Price (US$/t) Tin (US$/t) 21,464 22,046 21,495 20,944 Cash Flow (A$m) 2013a 2014e 2015e 2016e AUD:USD Cash Receipts Cash paid to suppliers & employees Valuation Sensitivity Tax Paid $1.05 Net Interest $0.90 Operating Cash Flow $0.75 Exploration and Evaluation $0.60 Capex Other $0.45 Investing Cash Flow $0.30 Debt Drawdown (repayment) $0.15 Share capital $ % -20% -10% 0% 10% 20% 30% Dividends Change in input variable Financing Expenses Iron Ore Price AUD:USD Financing Cash Flow Opening Cash Production Metrics 2013a 2014e 2015e 2016e Increase / (Decrease) in cash Rileys/Livingstone DSO FX Impact Iron Ore Production (kt) Closing Cash C1 Costs (A$/t) Total Costs (A$/t) Balance Sheet (A$m) 2013a 2014e 2015e 2016e Cash + S/Term Deposits Other current assets Reserves (100%) Current Assets Rileys/Livingstone Mt % Fe Property, Plant & Equip Iron Ore % Exploration & Develop Other Non-current Assets Mt Lindsay Mt Grade % Tonnes Payables Tin % 30,000 Short Term debt Tungsten % 16,000 Long Term Debt Other Liabilities Resources (100%) Net Assets Rileys/Livingstone Mt % Fe Shareholders Funds Iron Ore % Reserves Retained Earnings Mt Lindsay Mt Grade % Tonnes Total Equity Tin % 82,000 Tungsten % 37,000 Ratios & Multiples 2013a 2014e 2015e 2016e EBITDA Margin nm 43% 43% 34% Directors EV/EBITDA nm 1.7x -0.1x -1.0x Name Position Op. Cashflow/Share -$0.01 $0.04 $0.14 $0.13 M Ashton Chairman P/CF -22.9x 3.9x 1.2x 1.2x H Halliday Managing Director EPS -$0.01 $0.04 $0.12 $0.08 A Radonjic Exec Director EPS Growth nm -492% 173% -29% B McFadzean NE Director PER -14.8x 3.8x 1.4x 1.9x J Jetter NE Director Dividend Per Share $0.00 $0.00 $0.00 $0.00 Dividend Yield 0% 0% 0% 0% ROE -5% 18% 33% 19% Substantial Shareholders Shares (m) % ROIC -9% 18% 47% 34% Republic Investment Mgt % Debt/Equity 0% 0% 0% 0% Molton Holdings % Net Interest Cover x 108.8x nm nm Elphinstone Holdings % Book Value/share $0.20 $0.24 $0.36 $0.45 Price/Book Value 0.8x 0.7x 0.5x 0.4x CHange in Target Price Source: Canaccord Genuity Estimates SPEC BUY $0.50

12 APPENDIX II INVESTMENT RISKS AUS Sector Report 12 The typical risks associated with any mining investment include commodity and exchange rate risk, permitting, geographical, and technical (development/operating) risk. Further information on the methodologies used to derive our price targets, and the risks that could impede achievement of these targets, is available upon request. Disclosure information for all Canaccord Genuity research coverage can be found at

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