Wednesday, 23 December Finders Resources. Copper and Spice - Initiation. Analysts Matthew Keane Patrick Chang. Event & Impact Positive

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1 BUY Current Price Target Price Ticker: Sector: $0.13 $0.23 FND Materials Shares on Issue (m): Market Cap ($m): Net Cash est ($m): Enterprise Value ($m): wk High/Low: $0.17 $ m Av Daily Vol (m): 0.20 Key Metrics 14A 15F 16F P/E (x) EV/EBITDA (x) Financials: Revenue (A$m) EBIT (A$m) NPAT (A$m) Net Assets (A$m) Op CF (A$m) Per Share Data: EPS (cps) DPS (cps) NA NA NA Div Yield NA NA NA CFPS (cps) In A$ unless otherwise stated Share Price Graph $0.20 $0.18 $0.16 $0.14 $0.12 $0.10 $0.08 $0.06 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec Wednesday, 23 December 2015 Finders Resources Copper and Spice - Initiation Analysts Matthew Keane Patrick Chang Quick Read Argonaut initiates coverage of Finders Resources (FND) with a BUY recommendation and a $0.23/sh target price. The Company s 25ktpa copper cathode Wetar project (72% FND) in Indonesia is nearing completion. While the development lead time has been drawn out in the permitting and financing phases, the project is due to commence commissioning in Q1 CY16. FND provides an attractive alternative to the limited number of ASX listed copper producers, boasting respectable production of 28ktpa (incorporating a 3ktpa demonstration plant) at an all-in sustaining cost (AISC) of <US$1.50/lb. Wetar has a Reserve of 8.9Mt at 2.4%, making one of the highest grade open pittable copper development projects globally. Event & Impact Positive Wetar nearing completion: FND is nearing completion on the 25ktpa Cu cathode plant on Wetar Island, Indonesia. Commissioning is expected in February CY16. The current project is effectively a brown field expansion of the existing 3ktpa heap leach solvent extraction electrowinning (SX-EW) demonstration plant. DFS capex was estimated at US$132.4m with LOM cash operating costs of US$1.05/lb. Argonaut forecasts ~A$110mpa EBITDA at steady state enabling a <1.5 year payback on capital. Project outline: Ore will initially be sourced from the Kali Kuning pit then incorporate the Lerokis pit from year three. Mining will be carried out via conventional open pit methods and hauled to the processing facility to be crushed, agglomerated and stacked on heap leach pads. Copper in leached solution is collected and extracted using standard SX-EW technology to produce copper cathode. Cathode is transported ~6km to an established port then sold as >99% LME Grade A product. Near mine exploration upside: Based on current Reserves of 8.9Mt at 2.4% Cu, Wetar has a 10 years mine life with ~6.5 years at steady state production. However, tangible exploration upside exists from a number of near-mine targets including Meron (1km from leach pads) and Karkopang (2km from leach pads). The former contains massive sulphides with historic copper intercepts. It is drill ready and the Company has placed an exploration target of 5-10Mt on the prospect. Regionally on Wetar Island, FND has a number of underexplored leases with both copper and gold potential. Indonesian risk: In recent times, Indonesia has been a difficult jurisdiction for foreign mining companies. Foremost, project ownership issues and export restrictions have severely impacted both prospective and established miners. FND has established national project partners which mitigates ownership risk. Also, by producing a refined copper product, FND is not subject to unprocessed mineral exports restrictions. Recommendation Argonaut assigns a BUY recommendation with a $0.23 target price. Corporate Advisers Stockbroking & Research Special Situations Financing Page 0

2 US$/lb Finders Resources Equities Research Analyst: Matthew Keane Recommendation BUY Sector Metals & Mining Current Price $0.13 Issued Capital (m) Valuation $0.23 Market Cap (m) $82.7 Date 23-December Profit & Loss (A$m) 31 December 2014E 2015F 2016E 2017E Financial Summary 2014E 2015F 2016E 2017E Sales revenue Reported earnings +Other income Net profit (US$m) (13.0) Operating costs EPS (A$cps) (2.0) Exploration and evaluation PER (x) (5.7) Corporate and Social Development Normalised earnings -Other Net profit (US$m) (10.0) EBITDA EPS (A$cps) (1.5) D&A EPS growth (%) NA NA EBIT PER (x) (59.0) Impairments Cashflow -Finance costs Operating cashflow ($m) (17.3) (52.6) Operating profit GCFPS (A$cps) (2.9) (10.5) Tax expense PCF (x) (4.3) (1.2) Other Dividend +FX Gain/Loss Dividend (A$cps) NA NA NA NA NPAT Yield (%) NA NA NA NA -Non-controlling interests Attributable NPAT Underlying NPAT Financial Ratios 2014E 2015F 2016E 2017E Balance Sheet Ratios Cash Flow (A$m) 31 December 2014E 2015F 2016E 2017E Total Debt / Equity (%) Operating Cashflow Interest cover (x) Capex Acid test ratio (x) NA Exploration & evaluation Asset purchases (+ asset sales) Profitability Ratios + Other Net profit margin (%) Free Cashflow Return on assets (%) Dividends Return on equity (%) Equity raised Debt drawdown (- repaid) Finance Costs Net Change in Cash Effects of exchange rate Valuation Summary (13% Discount Rate) A$/sh A$/sh Cash at end Wetar Corporate Valuation Balance Sheet (A$m) 31 December 2014E 2015F 2016E 2017E Cash and Cash Equivalents Exploration Upside Total assets Hedge Book Current Debt Non Current Debt Cash est Total liabilities Debt est Shareholders funds NAV Production and Assumptions 2014E 2015F 2016E 2017E Assumptions Copper Price (US$/lb) E AUD/USD FX Wetar Production Directors Copper Cathod (kt) Gary Comb Non-Executive Chairman Barry Cahill Managing Director Costs 2012EChristopher Farmer Executive Director - Indonesia C1 Costs (US$/lb NA Gavin Caudle Non-Executive Director All-in Sustaining Cost (US$/lb) NA Gordon Galt Non-Executive Director Wetar Reserves & Resources (Attributable) Mt Cu % Cont. Cu (kt) Reserves Wetar (72% FND) % Resources 34 Substantial Shareholders % Wetar (72% FND) % Taurus Resources 12.9% Provident Minerals 12.2% Ojolali Gold-Silver Resource (Attributable) Mt Au (g/t) Ag (g/t) Cont. Au (koz) Resource Capital Funds 10.9% Ojolali Gold (72% FND) Saratoga 9.1% Acorn Capital 9.1% 30 Production 3.00 REALISED PRICE AND AISC COST PROFILE F 2016E 2017E F 2016E 2017E Copper Cathode Production All-in Sustaining Cost (US$/lb) Copper Price (US$/lb) Corporate Advisers Stockbroking & Research Special Situations Financing Page 1

3 The Wetar project is located on the Wetar Island in Indonesia along a copper/gold porphyry belt that stretched from Indonesia to Papua New Guinea Project overview Copper and spice The Wetar copper project (~72% FND) is located on the Wetar Island of Indonesia. FND is currently operating a 3ktpa expanded demonstration plant (commissioned in April 2014) which has produced ~2.4kt copper cathode to date grading up to 99.9% purity. Processing involves heap leaching of transitional and fresh sulphide ore followed by solvent exchange electrowinning (SX-EW) to produce copper cathode. FND acquired the Whim Creek SX-EW plant from Straits Resources and transported it to Indonesia in Once recommissioned, the plant is set to produce an additional 25ktpa Cu cathode. Wetar Island is mountainous and heavily forested. It has a population of ~9000 people who live mainly on the flat coastal plains relying predominantly on subsistence agriculture and spice exports. Figure 1: Wetar project location The project boasts a high grade, open pittable Reserve High grade, low strip copper The Wetar deposit boasts high grade, near surface open pittable Cu. The BFS is based upon ore from two open pits, namely Kali Kuning and Lerokis. Copper ore has been largely exposed by the historic extraction of the overlying gold ore by previous owner Billiton (now BHP Billiton), thus reducing the average strip ratio to 0.9:1. The life of mine feed grade is 2.4% Cu with AISC <US$1.50/lb. near surface from VMS deposits Geology The geology of Wetar Island is composed entirely of Neogene volcanic rocks and minor oceanic sediments. Kali Kuning and Lerokis are Volcanic Massive Sulphide (VMS) deposits. Mineralisation has been classified into three units; an upper leached zone generally rich in gold and barite, a transition zone which hosts the majority of the leachable copper sulphides and a primary massive sulphide. Copper is hosted in massive Corporate Advisers Stockbroking & Research Special Situations Financing Page 2

4 The project will produce a copper cathode, removing penalty contaminants pyrite (70-85% by mass) and the copper minerals are generally chalcopyrite and in secondary covellite. The ore contains moderate to high contaminant minerals such as mercury and arsenic. It is the high proportion of penalty bearing sulphide minerals which make the deposit unamenable to flotation and sales of a concentrate. These contaminants do not transfer through to a cathode product. Figure 2. Regional geology (left) and exposed sulphide ore at Kali Kuning (right) The 8.9Mt Reserve will support a 10 year mine life Resources and Reserves Wetar has 9.2Mt in Resources and 8.9Mt in Reserves (100% basis) at 2.4% copper. Table 1: Wetar Ore Reserves (100% Basis) Pit Category Tonnes (Mt) Grade (%) Contained Cu (kt) Kali Kuning Proved % cut-off Probable Sub-Total Lerokis Proved % cut-off Probable Sub-Total Combined Proved Probable Total FND has a 72% economic interest in Wetar and has sufficient Indonesian partnership to meet the country s divestment laws Ownership structure FND holds a 75.9% interest in an Indonesian subsidiary PT Batutua Tembaga (BTR) which is a limited liability foreign capital investment company (PMA). Daewoo hold the remaining 24.1% of BTR. As a PMA, BTR is able to manufacture copper under Indonesian law. BTR holds 70% of PT Batutua Kharisma Permai (BKP) which is the registered holder of mining tenements. The remaining 30% is held by Finder s local partners Gabriel and Henry Mbatemooy. There is an Ore Sales and Purchase Agreement in place whereby BKP sells ore to BTR. BTR earns revenue from both BKP and BTR which amounts to a 95% economic interest (pro rata 72% FND). This local partnership satisfies Indonesian Foreign Divestment Laws out to 2021 (Law No. 25, 2007), after which, FND is obligated to divest further equity in BKP so Indonesian Corporate Advisers Stockbroking & Research Special Situations Financing Page 3

5 ownership moves to from 30% to 51%. At this stage the BTR s economic interest decreases to ~92% (FND pro rata ~70%). The first two mining pits are fully permitted out to 2031 Fully permitted and funded Wetar is fully funded and fully permitted to mine Kali Kuning and Lerokis. BKP holds a 20 year exploitation permit (abbreviated as an IUP in Indonesia) till BTR holds the processing and refining licence and the forestry use permit (Pinjam Pakai) also out to The Company also holds exploration IUPs for Wetar. and first production is expected in mid-february 2016 Heap stacking has commenced Timeline to development Development of the 25ktpa Wetar plant is well advanced with commissioning expected in mid-february In the current quarter, ore is being stacked on the first heap leach pad and site earthworks, including pouring of foundations and coastal infrastructure (inc. airstrip, camp and concrete plant), are advancing. Nameplate production is also expected within Q Figure 3: Stacking of heap leach pads Figure 4: Processing plant overview as at December 2015 and plant infrastructure is well advanced Corporate Advisers Stockbroking & Research Special Situations Financing Page 4

6 Argonaut derives a NAV 13 valuation of $0.23/sh..with a $321m valuation on the Wetar Project and a significant hedge book valued at $56m Valuation Argonaut derives a sum of parts NAV 13 valuation for FND of $0.23/sh. This incorporates $321m for the Wetar project ($231m attributable), $30m for regional exploration and $56m for hedged sales. FND has 40.7kt of production between July 2016 and March 2019 (26% of LOM production) forward sold at an average price of US$2.69/lb. Some diesel is also hedged. Net debt of $156.5m is estimated off maximum debt draw down of US$112m in Q1 CY16. It is expected that FND will draw down on a US$15m VAT facility in 2016, however this debt is nullified by VAT credits in our valuation. Minimal value is ascribed to the Ojolali gold/silver exploration project in southern Sumatra, however this project could provide significant upside in time. Our valuation of $0.23/sh applies maximum dilution (674m shares) following conversion of US$5.5m unlisted convertible bonds in March 2018 (mandatory convert to Standard Bank Plc). Table 2: Wetar Ore Reserves (100% Basis) Valuation Summary Single Mine Valuation AUD M AUD / Share Wetar (72% FND) Corporate Valuation (24.2) (0.04) Exploration Upside Hedge Book Cash est Debt est. (156.5) (0.23) NAV Target Price 0.23 Figure 5 depicts project sensitivities. A 10% change to with copper price and Fx has the biggest impact. Due to the high margins on the project Figure 5: Valuation sensitivities to ±10% changes to key model inputs Mine Life Capex Opex a ±10% increase in opex and copper price have a mild impact on value FX Cu Price Valuation $(A) Source: Argonaut FND released a revised BFS in 2013 highlighting strong economics including a ~50% EBITDA margin Positive BFS FND released a revised BFS in November Key metrics are outlined in Table 3 below. Wetar benefits from low consumable production and low labour rates. The Revised BFS returned a post-tax NPV 10 of US$195m at US$2.72/lb copper price. Argonaut derives a similar valuation applying the same discount rate and copper price (US$193m). The project generates ~50% EBITDA margins and we model steady state FCF of ~A$90mpa. Corporate Advisers Stockbroking & Research Special Situations Financing Page 5

7 Argonaut has modelled Wetar largely in line with the BFS with marginally higher C1 costs and copper prices Table 3: FND project metrics and comparison to Argonaut s assumptions Mine No. 1 Metrics Unit BFS Est. Argonaut Est. First Production Qtr Q Q Throughput Rate (2 plants) Mtpa Mine Life Yrs Recovery % 74% 74% Production Rate (2 plants) ktpa Capex US$m LOM average C1 cash cost US$/lb Realised Price (applied) US$/lb Project EBITDA (steady state) A$mpa EBITDA Margin (steady state) % ~50% ~50% NPV 10 US$m IRR (BFS reported) % 52% 53% Source: Argonaut, FND Wetar should achieve lowest quartile C1 costs of US$0.95/lb when producing at effective rates Processing is via heap leach then SX-EW Low cost producer With C1 cash costs of US$0.95/lb at effective production rates (>1.5ktpa), Wetar is the lowest cost quartile. LOM C1 costs remain low at US$1.05/lb. The Company also runs a lean head office in Perth, whereby costs are largely covered by project management fees. Argonaut conservatively models $5mpa for head office administration, incorporating social development expenses. Costs above C1 are also minimal with marketing largely cancelled out by sales premiums (to LME spot), resulting from low transport costs as the product is sold into the local South East Asian market. All-in sustaining costs are estimated at US$1.20/lb. This will escalate in the future to ~US$1.50/lb as more distal, unstripped (by previous gold mining) pits are brought on line. Processing Wetar follows a standard heap leach process incorporating; crushing, agglomeration, stacking (8m heaps) and acid leaching. As the host rock contains high sulphur levels, heaps are acid generating (~ph1) after water irrigation and heat generating. Leachate is collected, stored then copper is extracted via SX-EW to produce >99.7% Grade A copper cathode. Heap residue is treated in a neutralisation plant which sources lime locally. Importantly, two of the higher cost reagents, namely acid and lime, do not need to be imported to the island, thus reducing reagent costs. Best results from heap testing returned ~80% recovery after 645 days. Figure 6: Heap leach test results with up to 80% recovery from the heap after 645 days Corporate Advisers Stockbroking & Research Special Situations Financing Page 6

8 Some infrastructure exists from historic Infrastructure Roads to Kali Kuning are in place as well as camp facilities (originally 450 person, now expanded to 1,100 person), administration buildings and a landing wharf. As part of the expansion a Minas Heavy Oil (MFO) power generator will be installed along with associated power infrastructure. Additional accommodation and an emergency access airstrip are also being constructed. No tailing storage facility is required for the project. Wetar has tangible exploration upside with a smaller Resource likely from the Meron prospect Exploration upside Wetar has tangible exploration upside from a number of near-mine targets including Meron and Karkopang (1km and 2km from leach pads respectively). Meron contains massive sulphides and is drill ready. The prospect is smaller than Kali Kunning, on limits defined to date, but sulphide mineralisation remains open. The exploration target is 5-10kt of metal sulphides with a prospective inventory of 2-5kt of copper sulphide, adding up to three years of potential life extension. Figure 7: Pit locations proximal to plant sites Island wide, there is high potential for other VMS deposits with the possibility of underlying porphyry mineralisation Regionally on the Wetar Island, FND has a number of underexplored exploration leases with both copper and gold potential. Historical exploration, primarily by previous owner Billiton, was focussed on gold mineralisation. It is anticipated that the island will yield a small camp of 1-8Mt VMS sulphide deposits. As the project lies on the trend of massive copper and gold porphyry deposits (namely, Grasberg, Batu Hijau) stretching from Papua New Guinea through Indonesia, there is potential for an underlying or adjacent porphyry ore body. Indicative porphyry style peripheral mineralisation has been identified near the project. Corporate Advisers Stockbroking & Research Special Situations Financing Page 7

9 Regional targets on Wetar island Figure 8: Exploration upside from regional targets Exploration is likely o be reinvigorated in 2016 following JV approval on strategy Exploration strategy Securing further tenements over the island (and potentially on adjacent islands) will be key to expanding the exploration footprint. FND is currently reprocessing and reviewing historic EM surveys to define targets. Argonaut expects FND to re-initiate an exploration program in 2016, funded by operating cashflow. The BTR joint venture is due to agree on its exploration strategy mid-q1 2016, after which, FND will likely announce targets and the scale of the program. Wetar is fully funded with max secured debt estimated at US$114m 100% of Wetar production at the 28ktpa rate is committed into marketing contracts Financing FND secured US$165m from a bank syndicate (BNP Paribas, CBA, HSBC and Societe Generale) in May 2014 to provide senior secured loan facilities to fund the expansion to ~28ktpa Cu. This comprises a US$130m primary facility (since revised to US$127m), a US$20m overrun facility and a US$15m VAT working facility. In addition, Daewoo International Corporation provided US$45m via project level equity and a strategic relationship. At 30 September FND had A$39m cash, A$77m drawn debt, US$108m in undrawn facilities and US$5.5m convertible notes (converting to 12.2m shares in March 2018). The Company s copper and diesel hedge book was valued at US$31m (at 30 September). Argonaut estimates maximum draw down on the secured facility of US$114m and complete draw down on the VAT facility. The latter is expected to be reimbursed from a VAT refund over 18 months. Debt is amortised out to March 2020 with a 5% margin over LIBOR. Offtake and marketing Consumables and products are transported to and from the island via large landing craft at a specifically designed wharf facility. To date, cathode from the demonstration plant has been sold to China, India and Thailand and has achieved premiums up to US$90/t over LME spot. The premium is primarily driven by lower shipping rates due to the close proximity of customers. More recently, this premium has narrowed to ~US$10/t. Argonaut does not apply any premiums to our model. Daewoo will have marketing rights for 20% of production at prevailing market prices and the two parties have an understanding to partner on future opportunities. Tennant Metals have a sales contract for 40% of the full-scale project product and Standard Bank has a sales contract for an additional 40%. Argonaut applies 98% payability to account for marketing fees. Corporate Advisers Stockbroking & Research Special Situations Financing Page 8

10 CuEq Production pa Comparatives On comparative metrics, FND is fairly valued on EV/Production, EV/Reserve and EV/EBITDA basis relative to production and near production peers. However, the stock is a standout of C1 costs, grade and mine life which justifies a relative premium and is currently trading at a 43% discount to our NAV. On a grade basis, Wetar is comparable to Avanco Resources (AVB) Antas project with high grade open pittable ore. The production profile of Wetar ranks in line with Tiger Resources (TGS) Kapoi project and Aeris Resource (AIS, formally Straits Resources SRQ) Tritton operations. This is in the second tier of producers behind prominent midcaps Sandfire Resources and OZ Minerals. When compared to near term development projects, Wetar has the lowest capital intensity, however the modest contained copper resource highlights the need for near mine exploration. EV/Production ($/t) EV per t Cu Reserve ($/t) 14, ,500 Reserve Resource 12,000 10,000 2,000 8,000 1,500 6,000 4,000 2,000 1, SFR TGS FND OZL AIS AVB HGO ABY 0 SFR AIS FND TGS OZL HGO ABY EV/EBITDA (2016 / FY16) C1 Cash Costs (A$/lb) ABY AIS TGS SFR FND OZL HGO AVB 0.00 ABY HGO AIS TGS AVB SFR FND OZL Mine Life (Yrs) Grade (% Cu Eq.) 6.0% Reserve Resource 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% TGS OZL FND AVB SFR HGO ABY AIS SFR AVB FND ABY AIS TGS HGO OZL 2016 / FY17 Production (ktpa Cu) Capital Intensity OZL SFR TGS FND AIS ABY HGO AVB Bubble size represents Resource contained Cu Eq. metal FND: Wetar TGS: Kipoi AVB: Antas OZL: Carrapateena, High Grade RXM: Hillside HCH: Productora BTR: Kitumba OZL: Carrapateena, Base Case MNC: Los Calatos - 5,000 10,000 15,000 20,000 25,000 Capital intensity (US$/tpa) Source: Argonaut, Bloomberg, company reports Note: AVB development and production metrics based on Stage 1 Antas only Corporate Advisers Stockbroking & Research Special Situations Financing Page 9

11 Key opportunities include exploration upside potential for production expansion sulphide roast to improve Cu recovery and unlock by-products and development of gold assets Opportunities Exploration upside Argonaut sees exploration success as the key opportunity for the Wetar project. Each additional year s production adds 18% to our NAV valuation. We believe there is tangible upside from prospects such as Meron. Expansion We consider the Wetar project to be scalable and exploration success is fundamental to additional mining inventory. Increased production should offer better economies of scale and could position FND as the third largest ASX listed copper producer. Roasting to release by-product metals Wetar contains significant minority metals including barium, zinc, lead, gold and silver. A preliminary desktop study by the Company indicates that pyrite roasting could generate substantial sulphuric acid would could be used to improve leach recovery rates. There is also potential to extract by-product metals. Kali Kuning and Lerokis contain ~330koz gold and 15Moz silver. Development of gold assets The Ojolali Project (72% FND) is an advanced gold-silver prospect in Lampung Province of southern Sumatra covering a 13km 2. This project has a defined oxide gold resource of 175koz at from the Jambi deposit and is proximal to numerous >1Moz ounce deposits. FND recently attained two key environmental permits and a completed evaluation of the Operation Production permit is expected before the end of FND has a 72% interest in the Ojolali Project in Sumatra Figure 9: Ojolali Project location in southern Sumatra and regional resources which is situated amongst numerous >1Moz deposits Corporate Advisers Stockbroking & Research Special Situations Financing Page 10

12 FND s hedge book could be monetised to reduce debt Sale of hedge book to reduce debt FND has considerable value (~$56m) in forward sales contracts. Argonaut believes the Company could sell part of all of this hedge book to significantly reduce debt. This opportunity would become more prominent if the copper price declines further. Key risks include Jurisdictional risk in Indonesia the impact of heavy rainfall on heap leaching general ramp up risk and balance sheet risk during ramp-up Risks Country Risk Argonaut considers project jurisdiction as the greatest risk for the Wetar project. In recent times, Indonesia has proven to be a challenging country for international Resource companies. Foremost, project ownership laws, export duties/taxes and the restrictions on part processed or unprocessed mineral exports have impacted international miners. FND has an established national project partner which largely mitigates ownership risk. Also, by producing a refined copper product, FND is not subject to unprocessed mineral exports restrictions. Argonaut applies a conservative 13% discount rate to account for jurisdiction risk. Heap leach in high rainfall region Wetar is in a tropical rainfall location. Excessive rainfall events have the potential to impact heap leach operations by diluting heap ph. As the rocks are naturally acid generating, we regard this a lower risk compared to projects which rely on irrigated acid to stimulate leaching. Ramp up Risks to project ramp up include achieving designed recovery rates, production disruptions, plant design faults and accurate reconciliation to the Reserve. As Wetar has operated a successful 3ktpa demonstration plant, we believe the leach process is well understood and relatively derisked. However, unforeseen ramp up issues are common for mining projects and cannot be dismissed for Wetar. Balance Sheet Maintaining sufficient working capital is a common risk prior to steady state cash flow. Argonaut s model shows a low cash balance of ~$12m prior to first production. We note that FND will have undrawn debt of ~US$13m on the senior debt facility at this time. Corporate Advisers Stockbroking & Research Special Situations Financing Page 11

13 Appendix 1. Board (Modified from the FND website) Gary E Comb Non-Executive Chairman [BE (Mech), BSc, DipEd] Mr Comb has over 35 years experience in the mining industry, most recently as Managing Director of Jabiru Metals Ltd where he oversaw the acquisition, feasibility study and construction of the Jaguar copper/zinc mine in Western Australia as well as the successful sale of the company to Independence Group NL. He is currently a Non- Executive Director of Aurelia Metals Limited and Ironbark Zinc Ltd. Barry J Cahill Managing Director [BE (Mining), MAusIMM, MAICD] Mr Cahill is a mining engineer with over 25 years experience in exploration, operational mining and management throughout Australia. Key skills include regional exploration, resource drilling, underground and open pit mining, ore processing facilities, both as a mining contractor and an operator. He has also had particular experience in the management of project development and construction from initial exploration drilling phase right through to project funding and then onto project commissioning and development. Mr Cahill has been an executive director of a number of public companies including Operations Director of Perilya Limited, MD of Australian Mines Limited and MD of Norseman Gold Plc (AIM and ASX listed). Christopher B Farmer Executive Director, Indonesia [BSc (Hons), MBA, PhD] Dr Christopher Farmer has over 20 years international experience in all aspects of exploration, with an emphasis on business development. After graduating from the University of Southampton, he completed a PhD at the Royal School of Mines in London. His previous positions include Vice-President Australasia and Chief Geologist, Phelps Dodge Exploration Corporation and Senior Geologist with both Highlands Gold (Indonesia) Pty Ltd and Billiton Indonesia BV. Dr Farmer was formerly MD of FND. Gavin A Caudle Non-Executive Director [BCom, CA] Mr Gavin Caudle has over 20 years experience in the finance and investment sectors in Australia, Singapore and Indonesia. He was previously a partner in the Arthur Andersen Jakarta office and Country Head for Indonesia of the Investment Bank, Salomon Smith Barney. Since 2003, together with his partners, Mr Caudle has developed numerous successful businesses including Tower Bersama Group (a telecommunications infrastructure business) and Provident Agro (a plantation business) with assets valued at more than $1 billion. Gordon T Galt Non-Executive Director [BE (Mining)] Mr Gordon Galt is a mining engineer with over 40 years experience. He is currently a Principal of Taurus Funds Management, Chairman of Delta SBD Limited and Nucoal Resources Limited. He was formerly Chairman of Discovery Metals Limited and Managing Director of Newcrest Mining Limited among other roles. Corporate Advisers Stockbroking & Research Special Situations Financing Page 12

14 RESEARCH: Ian Christie Director, Industrial Research ichristie@argonaut.com Philipp M-O Kin Analyst, Oil & Gas Research pkin@argonaut.com Patrick Chang Analyst, Metals & Mining Research pchang@argonaut.com Matthew Keane Analyst, Metals & Mining Research mkeane@argonaut.com Helen Lau Analyst, Metals & Mining Research hlau@argonaut.com INSTITUTIONAL SALES - PERTH: Chris Wippl Executive Director, Head of Sales & Research cwippl@argonaut.com John Santul Consultant, Sales & Research jsantul@argonaut.com Damian Rooney Senior Institutional Dealer drooney@argonaut.com Ben Willoughby Institutional Dealer bwilloughby@argonaut.com INSTITUTIONAL SALES HONG KONG: Travis Smithson Managing Director - Asia tsmithson@argonaut.com Glen Gordon Institutional Research Sales ggordon@argonaut.com CORPORATE AND PRIVATE CLIENT SALES: Glen Colgan Executive Director, Desk Manager gcolgan@argonaut.com Kevin Johnson Executive Director, Corporate Stockbroking kjohnson@argonaut.com James McGlew Executive Director, Corporate Stockbroking jmcglew@argonaut.com Ian Dorrington Director, Corporate Stockbroking IDorrington@argonaut.com Geoff Barnesby-Johnson Senior Dealer, Corporate Stockbroking bj@argonaut.com Rob Healy Dealer, Private Clients , rhealy@argonaut.com Tony Locantro Dealer, Private Clients , tlecantro@argonaut.com Cameron Prunster Dealer, Private Clients cprunster@argonaut.com James Massey Dealer, Private Clients jmassey@argonaut.com Chris Hill Dealer, Private Clients , chill@argonaut.com Information Disclosure Each research analyst of this material certifies that the views expressed in this research material accurately reflect the analyst's personal views about the subject securities and listed corporations. 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