RCR RMM Review 3Q10 Abridged

Rare and Minor Metals Company Review
Exploration, Development & Production

September Quarter 2010
Resource Capital Research
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7 September 2010
Rare and Minor Metals Company Review

September Quarter 2010
Resource Analyst (Rare and Minor Metals): Dr Trent Allen
Resource Analyst: Dr Tony Parry

Resource Analyst: John Wilson
Suite 1306
183 Kent Street
Sydney, NSW 2000
Tel: +612 9252 9405

Fax: +612 9251 2859
Email: info@rcresearch.com.au
Web: www.rcresearch.com.au

ACN 111 622 489
Contents
Contents .............................................................................................................................. 2
Overview and Investment Comment ........................................................................................ 3
RCR September Quarter 2010 Featured Company Summary ....................................................... 4
[Explorers‟ Development Cycle Chart ........................................................................................ ]
[Comparative Charts ............................................................................................................... ]
Financial Data ....................................................................................................................... 5
Company Statistics ................................................................................................................ 5
Reserves, Resources and Historic Mineralisation ........................................................................ 6
Valuation and Performance Data ............................................................................................. 6
Exploration, Development and Production Companies
[Alkane Exploration Limited ........................................................................................... ]

Arafura Resources Limited ............................................................................................ 7
[Avalon Rare Metals Inc ................................................................................................ ]
Globe Metals & Mining Limited ...................................................................................... 9
[Greenland Minerals & Energy Limited ............................................................................. ]
[Gippsland Limited ....................................................................................................... ]
Gunson Resources Limited .......................................................................................... 11
Galaxy Resources Limited ........................................................................................... 13
Icon Resources Limited .............................................................................................. 15
[King Island Scheelite Limited ........................................................................................ ]
[Rodinia Lithium Inc ..................................................................................................... ]
TNR Gold Corp .......................................................................................................... 17
Market Update: Lithium........................................................................................................ 19

Market Update: Niobium ...................................................................................................... 21
Market Update: Tantalum ..................................................................................................... 23
Market Update: Tungsten ..................................................................................................... 25
Market update: Rare Earth Elements ...................................................................................... 27
Market Update: Zirconium and Zircon .................................................................................... 29
[Selected rare and minor metal price data and production statistics .............................................. ]
[Exchange rates of some rare and minor metals, producers and consumers. .................................. ]
[Rare and Minor Metal Company Share Performance Tables ......................................................... ]
Report Contributors ............................................................................................................. 31

Disclosure and Disclaimer ..................................................................................................... 32
[This is the Abridged Report version of the September Quarter RCR Rare and Minor Metals Company Review.
The purchase price of RCR‟s September quarter Subscriber Reports (uranium, gold, rare and minor metals, and
iron ore; copper (out soon)) is A$110. The annual rate for RCR reports – commodities covered may vary from
quarter to quarter – is A$440. Purchase details and research services for institutional investors can be found at
www.rcresearch.com.au]
Rare and Minor Metals Company Review, September 2010. Disclaimer and disclosure attached. Copyright© 2010 by Resource Capital Research Pty Ltd. All rights reserved. 2
Overview and Investment Comment

The outlook for rare and minor metals
Analyst: Dr Trent Allen
Demand for the rare Rising rare and minor metal (RMM) demand and prices over the coming 4-5
and minor metals years should be met with increased supply from new and existing mineral
should increase in projects. RMM deposits can take 5+ years to develop as mines, sometimes
the next 4-5 years … due to their geochemical complexity, and the challenge of financing
projects that are considered to be outside the resources mainstream.
… which could This provides an opportunity for companies with relatively low-risk
benefit current and projects, and which are advanced or can be fast-tracked, to gain RMM
near-term producers. market share and potentially substantial returns on investment.
Some examples of commodities with a stable to strong outlook for the next
several years:
 Lithium: Increasing intensity of use is expected to require additional

supply beyond 2014.
 Niobium: Industry forecasts are for FeNb consumption growth of ~15%
Strong medium to per annum to 2014.
long term market  Rare earth elements (REE): Forecasts are for 20-30% compound
and price growth is annual growth in prices to 2014. Reported prices up 355% year-on-year.
likely for many RMMs  Tantalum: A supply shortfall is expected to hand a competitive
… advantage to companies that provide a long-term supply of ethically
produced tantalum.
 Tungsten: Supply shortages are indicated from 2013.
 Zircon/zirconium: A lack of greenfields projects could create supply
shortages and boost prices problems in the near to medium term (1-3 yrs).
… driven by These forecasts are based on expectations of increasing intensity of use in

increasing intensity new or high-tech applications across all manufacturing sectors, and on
of use for high-tech related concerns about security of supply for manufacturers in view of
and energy efficient China‟s dominance of some metal markets (e.g. ~97% of REE) and its
applications. policy of mining restrictions and tariffs (e.g. 20% tariff on ferrotungsten).
Equity performances
Share price performances of 358 exchange-listed companies with one or

more RMM projects (in lithium, REE, tungsten, zirconium, niobium and
tantalum) have been tabulated. The unweighted average performance of
Share prices of rare these stocks over 1 month (to September 7) was +13%, compared to 0%
and minor metal for Australia‟s ASX S&P200 (ASX:XJO). Three-month performance was
companies have +19% (XJO 6%) and 12-month was +42% (XJO 3%).
outperformed the
ASX 200 over the Globally, RMM stocks have on average outperformed the ASX by a
past year, with significant margin in the past 12 months. Despite this, the average share
+42% annual price is 42% below its 12-month high – but also 114% above a 12-month
growth. low. The best performing stocks in the past one month are those with
tantalum projects (+14%), which have benefitted from international efforts
to stop illegal tantalite supplies from the Congo (DRC). REE stocks have
also lifted (+12%) due to tightening of Chinese export quotas, especially
on the light REE. All six groups have outperformed over the quarter; the
flattest was Li (3%), for which the price has been comparatively stable.
Rare and Minor Metals Company Review, September 2010. Disclaimer and disclosure attached. Copyright © 2010 by Resource Capital Research Pty Ltd. All rights reserved. 3
RCR September Quarter 2010 Featured Company Summary

AUSTRALIA
Company Code Commodities Comment
Alkane Exploration Limited ALK Gold, Rare Earths, Definitive Feasibility Study
Zirconium, Base The world class Dubbo Zirconia Project (DZP) could be producing Zr, Nb and REE by 4Q12; with
Metals base-case throughput of 400ktpa, mine life is +100 years. A Definitive Feasibility Study of 840koz
Au Tomingley is expected in 3Q10. Shares have gained 116% in three months.
Arafura Resources Limited ARU Rare Earths, Bankable Feasibility Study

Phosphorus, ARU's share price has jumped 110% in the past 3 months due to surging REE prices (up +255%
Uranium, Gold since 4Q09). A Bankable Feasibility Study of the globally significant Nolans Rare Earths-Phosphate-
Uranium Project (NT) is ongoing, and the project is on track for first production in 2013.
Globe Metals & Mining Limited GBE Niobium, Tantalum, Bankable Feasibility Study
Rare Earths, The 60Mt Kanyika Niobium Project (Malawi) had a recent 77% increase in Measured and Indicated
Uranium, Fluorine resources. A mine plan is expected 3Q10, a Bankable Feasibility Study in 2011. Share price has
jumped 80% in 3 months due to strong rare metals market.
Greenland Minerals & Energy Limited GGG Rare Earths, Pre-Feasibility Study
Uranium, Zinc, Trading in GGG has resumed after a long suspension: news is, the Greenland Government
Sodium Fluoride maintains its zero uranium tolerance, for now. The feasibility stage Kvanefjeld Project is forecast to
be a major provider of REE (43.7kt/yr) and uranium (3.9kt/yr U3O8).
Gippsland Limited GIP Tantalum, Tin, Gold Bankable Feasibility Study

Delays at the world class Abu Dabbab (Egypt) tantulum-tin project are being addressed, by the re-
negotiation of a current 10-year offtake agreement. A resolution could trigger debt and equity
financing for the A$200m project, and production in 2013.
Gunson Resources Limited GUN Zircon, Titanium, Definitive Feasibility Study

Copper, Gold, GUN's 100% owned ~A$170m Coburn Zircon Project in WA is now looking strategically attractive
Nickel (DFS completed) with a zircon supply deficit looming. This will boost GUN's plans to bring in a big
brother, which if succesful could lift the share price.
Galaxy Resources Limited GXY Lithium, Tantalum, Commissioning

Manganese, Iron With the Mt Cattlin Spodumene Mine expected to start production in 4Q10, and the A$55m Jiangsu
Lithium Carbonate Plant under construction near Shanghai, Galaxy could soon be one of the world's
major producers of battery grade lithium chemicals.
Icon Resources Limited III Tungsten, Gold, Scoping Study

Base Metals, PGE Icon expects tungsten production at Mt Carbine (QLD) from as early as December 2010. Treatment
of tailings, stockpiles could be followed by mining in 2013. A resource upgrade (from 9.6mt @
0.22% WO3) is expected in September 2010.
King Island Scheelite Limited KIS Tungsten, Copper, Definitive Feasibility Study
Gold Having doubled resource and reserve grades in 2Q10 and changed the mine plan from open cut to
underground, KIS could produce +3kt/yr WO3 from 4Q12 at the King Island tungsten project, with
the backing of Hunan Nonferrous Metals Corp (HNC).
CANADA
Avalon Rare Metals Inc AVL Rare Earths, Pre-Feasibility Study
Niobium, Tantalum, A Pre-Feasibility Study of the Nechalcho REE Project (Canada) has shown its technical and
Zirconium economic viability. The project, which has the second largest REE and third largest Nb resources in
the world, has a Bankable Feasibility Study expected in 2Q12 and could be in production in 2015.
Rodinia Lithium Inc RM Lithium Early-Mid Exploration

After a recent name change to reflect its focus on lithium, Rodinia is anticipating initial resource
statements in 4Q10 at two Li brine projects in the US and Argentina. The strategy is to explore
salars in areas with known high grade Li and pre-existing infrastructure.
TNR Gold Corp TNR Gold, Copper, Early to Advanced Exploration

Lithium, Rare TNR is focused on early stage exploration for gold, and rare and minor metals. A TSX spin-out of
Earths International Lithium Corp (ILC) in 3Q10 should add value to the Li and REE assets: priority Li
targets include Mariana (ARG), where C$1m drilling is planned from 4Q10.
Financial Data
2
Listed Fully M arket Enterprise
C OM P A N Y Aust Canada USA Europe other options Share Price (LC$/share) 3 Diluted Cap Book Value
1 2 2
Code Status Yr End Exchanges 52 week Current Shares Opt+W C. Notes Shares (undiluted) Cash Debt Value (Undiluted)
7 Sept ember 2010 Hi Low (m) (m) (m) (m) (LC$m) 3 (LC$m) 3 (LC$m) 3 (LC$m) 3 (LC$m) 3
AUSTRALIA (A$)
Alkane Exploration Limited Equinox

ALK M inAZXls
E Limited
Dec ASX ARUO 0.71 0.23 0.62 249 0 0 249 153 6.7 0.0 46 153
Arafura Resources Limited ARU E June ASX 1.29 0.38 0.85 291 17 0 308 247 17.2 0.0 63 247
Globe M etals & M ining Limited GBE E June ASX 0.38 0.12 0.27 99 3 0 102 27 1.5 0.0 17 27
Greenland M inerals & Energy Limited GGG E Dec ASX GGGO 0.94 0.30 0.40 232 174 0 407 92 5.8 0.0 50 92
Gippsland Limited GIP E June ASX GIX 0.09 0.03 0.04 545 56 0 601 23 0.5 0.0 5 23
Gunson Resources Limited Uranex
GUN NL E June ASX 0.17 0.06 0.09 174 4 0 178 15 0.5 0.0 25 15
Galaxy Resources Limited GXY P June ASX GXYO 2.40 0.91 1.16 191 23 0 214 222 6.5 0.0 102 222
Icon Resources Limited III I June ASX 0.15 0.06 0.07 104 23 0 127 7 0.0 0.0 6 7
King Island Scheelite Limited KIS I June ASX 0.37 0.14 0.18 62 5 0 67 11 2.2 1.7 29 13
Total : (A$) 41.0 1.7 342.0 798
CANADA (C$)
Avalon Rare M etals Inc AVL E Aug TSX OTCQX 4.24 1.89 3.30 79 10 0 89 261 4.4 0.0 39 261
Rodinia Lithium Inc RM E Dec TSX.V OTCQX 0.70 0.26 0.29 66 25 0 91 19 4.9 0.0 15 19
TNR Gold Corp TNR E Dec TSX.V 0.38 0.18 0.22 123 35 0 158 26 4.7 0.0 20 26
Total : (C$) 14.0 0.0 74.4 306
(1) P: Producer; E: Explorer; I: Imminent - includes companies with bankable feasibility studies and likely to be in production within 3 years (2) Fully Diluted (shares, options + warrants (opt. + w), convertible notes (Conv. N), other obligations)
(3) L.C. - Local Currency unit; Sep '10F (4) AUD/USD: 0.89; CAN/USD: 0.94
Company Statistics
C OM P A N Y
Code Land Drilling ('000 m) (A) Exploration (L.C.$m) (B) Corporate (L.C.$m) (A)/(A+B) %
7 S e pt e m be r 2 0 10 ('000 ha) Jun-10 Sep-10 2009 2010 Jun-10 Sep-10 2009 2010 Jun-10 Sep-10 2009 2010 Sep-10 2009 2010
AUSTRALIA (A$)
Alkane Exploration Limited ALK 181 2.1 3.8 25.0 21.2 2.3 2.0 8.1 7.3 0.3 0.3 1.0 1.2 89 89 86
Arafura Resources Limited ARU na 15.0 6.3 0.0 15.0 2.8 3.8 10.9 13.2 0.7 1.8 5.1 6.0 68 68 69
Globe M etals & M ining Limited GBE 279 5.0 5.0 12.0 20.0 2.4 0.3 3.6 5.4 0.2 0.4 1.7 1.0 46 67 84
Greenland M inerals & Energy Limited GGG 211 1.0 1.0 10.0 8.0 2.9 2.5 11.0 9.1 1.2 1.4 4.0 6.0 65 73 60
Gippsland Limited GIP 1,330 0.0 0.0 2.0 2.0 0.1 0.1 1.2 0.3 0.5 0.5 2.4 2.4 16 32 10
Gunson Resources Limited GUN 273 0.6 0.5 0.6 4.9 0.7 0.3 1.7 2.2 0.2 0.1 0.6 0.6 71 75 79
Galaxy Resources Limited GXY 145 5.0 5.0 15.0 21.8 0.9 1.0 4.8 7.1 3.1 2.0 1.8 8.9 33 73 44
Icon Resources Limited III 441 2.0 1.0 0.0 8.0 0.9 0.3 1.3 2.2 0.1 0.1 0.3 0.3 80 80 88
King Island Scheelite Limited KIS na 0.0 0.0 0.0 0.0 0.1 0.3 1.0 0.7 0.3 0.2 1.4 1.1 53 41 38
2,859 30.7 22.5 64.6 100.8 13.0 10.6 43.5 47.4 6.5 6.7 18.5 27.4 58 66 62
CANADA (C$)
Avalon Rare M etals Inc AVL 4 5.0 5.0 10.3 22.2 3.0 3.0 6.8 11.9 0.5 0.5 3.2 2.1 86 68 85
Rodinia Lithium Inc RM 31 0.6 0.6 0.2 2.3 0.8 0.8 1.4 3.1 0.4 0.4 1.3 1.6 67 53 65
TNR Gold Corp TNR 34 0.3 1.0 0.0 2.3 0.5 0.7 1.1 2.2 0.4 0.3 1.0 2.6 73 53 46
Total or Average: 69 6 7 10 27 4 4 9 17 1 1.2 5.5 6.3 75 58 65
Prepared by Dr Trent Allen
Reserves, Resources and Historic Mineralisation

2 2 2
C OM P A N Y Reserves (Equity) Resources (Equity) Historical/M ineralised M aterial (Equity)
Code Status1 Focus commodity Contained Other Focus commodity Contained Other Focus commodity Contained Other
7 S e pt e mbe r 2 0 10 Element Mt oxide% kt oxide Element Mt oxide% kt oxide Element Mt oxide% kt oxide
AUSTRALIA
Alkane Exploration Limited ALK E REE 0.0 REE 73 0.75 549.0 2.8moz Au 0.0
Arafura Resources Limited ARU E REE 0.0 REE 30 2.80 848.0 3.9mt P2O5 0.0
Globe M etals & M ining Limited GBE E Nb 0.0 Nb 60 0.29 174.0 8.4kt Ta2O5 0.0
Greenland M inerals & Energy Limited GGG E REE 0.0 REE 279 1.07 2982.8 177mlb U3O8 0.0
Gippsland Limited GIP E Ta 15 0.026 3.9 16.5kt Sn Ta 72 0.018 12.5 20.4kt Sn 0.0 20.2kt Sn
Gunson Resources Limited GUN E Heavy mins 308 1.20 3700 [see note 3] Heavy M ins 979 1.26 12300 366kt Cu 0.0
Galaxy Resources Limited GXY P Li 11 1.05 119.4 1.7kt Ta2O5 Li 16 1.08 171.5 2.5kt Ta2O5 0.0
Icon Resources Limited III I W 0.0 W 12 0.20 25.0 29.8kt Cu 0.0
King Island Scheelite Limited KIS I W 1.1 1.17 12.9 W 6 0.89 50.7 0.0
CANADA (C$)
Avalon Rare M etals Inc AVL E REO 12 1.7 204.2 REE 176 0.43 1958.0 0.0
Rodinia Lithium Inc RM E 0.0 Li 0.0 0.0
TNR Gold Corp TNR E 0.0 Li 0.0 0.0 490koz Au
(1) P: Producer; E: Explorer; I: Imminent - includes companies with bankable feasibility studies and likely to be in production within 3 years; IHC: Investment Holding Company
(2) Reserves, resources and mineralised material published by the relevant company.
The applicable mineral resource codes are by country: Australian: JORC, Canadian: NI 43-101.
(3) The Coburn Zircon Project reserve, contained heavy mineral tonnage, includes 23%zircon and 48%ilmenite
Valuation and Performance Data
C OM P A N Y EV-Cash EV-Cash Production Share Price Performance Current Share Price

Code P/Book P/Net Cash /Reserves /Res'v+resources Commencement (%) %off 12 month
7 S e pt e m be r 2 0 10 (x) (x) US$/kt 1 US$/kt Year 1 month 3 month 6 month 12 month Hi Lo
AUSTRALIA
Alkane Exploration Limited ALK 3.3 22.8 na 0.24 na 48 116 86 52 13 167

Arafura Resources Limited ARU 3.9 14.4 na 0.24 na 13 110 39 13 34 124
Globe M etals & M ining Limited GBE 1.6 17.2 na 0.13 na 32 80 35 -4 29 135
Greenland M inerals & Energy Limited GGG 1.8 15.8 na 0.03 na -7 4 -19 -39 58 32
Gippsland Limited GIP 4.6 44.5 5.17 1.59 na 27 45 5 5 54 56
Gunson Resources Limited GUN 0.6 29.2 0.00 0.00 na 27 19 -6 2 46 59
Galaxy Resources Limited GXY 2.2 34.3 1.60 1.12 2010 -2 18 0 -36 52 28
Icon Resources Limited III 1.2 355.2 na 0.24 4Q10 2 -18 -33 -34 56 6
King Island Scheelite Limited KIS 0.4 22.9 0.72 0.18 2012 -3 na 3 -3 53 25
Total/Total Average 14 41 11 -4 39 63
CANADA
Avalon Rare M etals Inc AVL 6.7 59.6 1.18 0.12 na 27 67 28 -5 22 75
Rodinia Lithium Inc RM 1.3 3.8 na na na -10 -20 -51 -49 59 10
TNR Gold Corp TNR 1.3 5.6 na na na -7 -7 -10 -19 43 19
Total/Total Average 3 10 -8 -18 31 26
(1) EV-Cash / Reserves or / Resources applies to kt of focus commodity

Prepared by Dr Trent Allen
ARU.AU
Arafura Resources Limited
A$ 0.85
Arafura Resources Limited
7 September 2010 ARU's share price has jumped 110% in the past 3 months due to surging
Rare Earth Elements, Phosphorus, Uranium, Gold REE prices (up +255% since 4Q09). A Bankable Feasibility Study of the
Australia
Bankable Feasibility Study globally significant Nolans Rare Earths-Phosphate-Uranium Project (NT)
Exchanges: ASX:ARU is ongoing, and the project is on track for first production in 2013.
Capital Profile Production and Financial Forecasts

Share price (A$) 0.85
YEAR END: June Jun-10a Sep-10F 2009a 2010F 2011F
52 week range (A$/share) 0.38 to 1.29
Number of shares (m) 290.6 Exploration and evaluation (A$m) 2.82 3.85 10.92 13.25 11.35
Options and warrants (m) 17.0 Corporate (A$m) 0.69 1.84 5.12 5.99 7.09
Convertible notes (m) 0.0 Exploration/(Expl.+ Corporate) (%) 80 68 68 69 62
Fully diluted (m) 307.6 Funding duration at current burn (years) na na 0.7 1.2 0.4
Market capitalisation (undiluted) (A$m) 247.0 Shares on issue (pr end) (m shares) 290.6 290.6 173.7 290.6 291.0
Debt (A$m) - Sep 10F 0.0 Drilling - RAB (m) 0 0 0 0 0
Enterprise value (A$m) 247.1 Drilling - Other/Diamond (m) 15,000 6,250 0 15,000 25,000
Major shareholders: ANZ Nominees (30.2%) Land holding ('000 ha)* 0 0 0 0 0
East China Min Expl & Devel Bureau (ECE, 22.4%) Tenement costs ($k per year) - - - - -
Avg monthly volume (m) 33 Capital raisings (A$m) 0.00 0.00 19.08 33.92 1.96
Cash (A$m) - Sep 10F 17.2 Funding from JV partners (A$m) 0.0 0.0 0.0 0.0 0.0
Price/Cash (x) 14.3 Cash (A$m) 23.5 17.2 11.1 23.5 6.9
Price/Book (x) 3.9 Cash backing (Ac/share) 8.1 5.9 6.4 8.1 2.4
Listed company options: No Net asset backing (Ac/share) 22.1 21.6 20.1 22.1 20.6
Quarters refer to calendar year.
Investment Points Company Comment

World-class rare earth element (REE) deposit at Nolans Introduction: Arafura‟s flagship is the Nolans Rare Earths-Phosphate-Uranium Project (NT), 135km NNW of Alice
Springs. The deposit has a JORC qualifying resource of 30.3mt containing 848kt of rare earth oxides (REO),
Project, with total resources of 30.3mt and production 3.9mt of phosphate (P2O5), and 13.3mlbs of uranium (U3O8). A Bankable Feasibility Study (BFS) is in progress.
expected in 2013. Mining is planned for 2013, when the Nolans Project could supply ~10% of the global rare earths market. ARU
2
also holds +5,000km of grassroots to advanced exploration +projects (REE, Au, Fe, Ni) in the NT.
Nolans project valuation of A$929m and NAV Nolans Project: Planned annual production from Nolans is 20kt REO, 80kt P2O5 (as phosphoric acid), 0.5mt
CaSO4 (gypsum) and 0.33mlbs U3O8, with 400kt CaCl2 as residue that could be recycled into the chemical
A$3.10/share (10% nom, exchange 0.8, pre dilution) at process. Mining rate, by open cut, will be 1mtpa with mine life +20 years. Processing will be in three broad stages:
REO blend value US$20/kg, current is +US$40/kg. concentration; acid leaching for separation into RE/uranium and phosphate streams; and downstream production
of final commodities. Key inputs are chloralkali and sulphuric acid. Forecast capital costs are US$420m. Opex
Good access to infrastructure (railway, gas, highway). could be US$150mpa, or US$150/t ore at 1mtpa. Infrastructure, includes an existing railway and gas pipeline.
Road distance to rail is 90km; rail distance to Darwin is 1200km. On-site concentrate production would precede
transport to a chemical plant, a decision on the site for which is expected in 2H10.
Mine life of +20 years with annual production of 20kt rare Valuation: NAV is highly sensitive to REO prices. Based on a conservative value for the Nolans REO blend of
earth oxides (REO), plus phosphoric acid, uranium and US$20/kg, with U3O8 at US$50/lb and phosphate at US$750/t, revenue would be US$476.5m/yr. At opex
gypsum. US$150/t, and with a 30% pre-BFS discount, Nolans NPV is A$929m (10% DR, AU/US 0.8), or A$3.10/share
(fully diluted) for the company; even with dilution from raising 50% of US$420m at a nominal A$1/share, NAV is
A$1.88/share. At late August 2010 prices of ~US$40/kg, this increases to A$4.63/share.
REO blend has high proportions of valuable REE, e.g. Corporate: ARU has a major foreign investor, the East China Mineral Exploration and Development Bureau
neodymium (21.2%), europium (0.4%). Blend value was (ECE), which paid A$22.94m for a 24.9% equity position in ARU (current 22.2%). In 1Q10, A$17.5m was raised at
US$43/kg in mid August 2010, up 255% since Dec '09. A$0.62/share from institutional and sophisticated investors. A 1:10 rights issue at the same mark raised A$2m.
Development schedule: ARU‟s focus is on completing the Nolans Bankable Feasibility Study in 4Q10. Expected
announcements in 2H10 include a Mine Optimisation Study with mining reserves, and design and engineering
Project risk decreasing: chemical plant site selection, studies of the Nolans beneficiation plant (Lycopodium, ASX:LYL). Groundwater studies began 2Q10 ahead of an
mining reserves, mine site EIS and BFS final technology EIS for the mine site. De-risking of the chemical process is at an advanced stage, with work on the RE/REO
demonstration all expected in 2H10. stream (ANSTO, Bateman) and acid recycling (Aker Solutions). Piloting and demonstration plants for process
testing have commenced. Subject to financing, construction could begin in 2012 and production in 2013.
Investment Comment: Tight Chinese export quotas have led to soaring REO values (a +255% increase since
4Q09) have boosted investor confidence and led to a 110% jump in ARU‟s share price over three months. This
ARU - Arafura Resources Limited
momentum could continue as ARU reaches its 2010 project milestones, which should address and finalise all the
mining, industrial and environmental aspects of Nolans. Other value drivers could include a resource upgrade at
1.4
Nolans after drilling in 2H10, and in the medium term, project financing and offtake agreements. Above all else,
the force driving Nolans to production will continue to be increasing rare earths demand (7%-9%pa) over the next
1.2
5 years, against a background of supply constraint and export quotas in China, the major (+95%) REE producer.
Share Price ($/Share)
1
Reserves and Resources/Mineralised Material
0.8 Code for reporting mineral resources - Australian: (JORC)
Rare Earth Elements Classification Project Ore REO c/off REO U P2O5
0.6 Equity Mt % REE % kt mlb mt
Reserves 0.0 0.00 0.0

0.4
Resources
0.2 Nolans Project Measured 100% 5.1 3.20 1.0 163 2.9 0.7
" Indicated 12.3 2.80 1.0 344 5.3 1.6
0 " Inferred 12.8 2.60 1.0 333 5.6 1.7
Jan-10
Jun-10
May-10
Mar-10
Oct-09
Apr-10
Jul-10
Nov-09
Dec-09
Aug-10
Sep-09
Nolans Total 30.3 2.80 1.0 848 13.3 3.9
Mt Porter Indicated, inferred 100% (Au) 0.355 3 g/t Au 1.7 g/t Au 34.2koz Au
Source: Bloomberg
Mineralised Material (est., non compliant with JORC) 0.0 0.0 0.0
Contacts Directors Key Projects

Dr Steve Ward I Laurance (Chairman) Ownership/ JV Target Process Project
Managing Director, CEO S Ward (MD, CEO) Project Option Metal Partner Type Route Status Location
Tel: +61 (0) 8 6210 7666 M Muir (Non Exec) Nolans 100% REE, P, U none Vein Leach Feasibility Aust (NT)
Perth, WA, Australia I Kowalick (Non Exec) Aileron / Reynolds 100%/(40%) REE, P, Fe (Ngalia) Various na Early Expl. Aust (NT)
www.arafuraresources.com.au T Jackson (Non Exec) Mt Porter / Frances Ck 100% Au none M'morphic na Adv Expl. Aust (NT)
L Shasha (Exec) Kurinelli 100% Au none Reef na Early Expl. Aust (NT)
Analyst: Dr Trent Allen A Losada-Calderon Hammer Hill 100% Ni,Cu none Sulphide na Mid Expl. Aust (NT)
trentallen@rcresearch.com.au (Non Exec) Jervois 100% Fe, V none M'morphic na Mid. Expl. Aust (NT)
A free, in-depth report about Arafura Resources Ltd, dated 18 December 2009, is available from w w w .rcresearch.com.au, as are recent quarterly updates
Nolans Project valuation: economics are sensitive to the REO price, with US$20/kg
shown in blue. The NAV at this value is A$3.10/share, or A$1.88/share with dilution to
raise 50% of capital costs (US$420m). Current REO blend value is +US$40/kg.
ARAFURA RESOURCES VALUATION
Target Valuation Sensitivity

Price (Low) (High)
Equity REO Valuation A$m A$m A$m
Projects (kt) US$/kt
+ Nolans Resource 100% 848 0.88 929 25 1278
+ Regional Exploration 100% 20 10 50
Sub Total 949 35 1328
+ Cash 17.2 17.2 17.2

+ Tax Losses 0.0 0.0 0.0
- Debt 0.0 0.0 0.0
- Corporate 13.4 13.4 13.4
Sub Total 3.9 3.9 3.9
ARU NET ASSET VALUE 953 39 1332
Capital Structure
Shares 290.6 290.6 290.6
Fully Diluted Shares 307.6 307.6 307.6
ARU NET ASSET VALUE PER SHARE :A$/share 3.28 0.13 4.58
ARU NET ASSET VALUE DILUTED :A$/share fully diluted 3.10 0.13 4.33
NOLANS PROJECT (NPV based on current resource, October 2007 PFS and August 2009 BFS update)
Equity Sensitivity
LONG TERM PRICE FOR NOLANS' REO BLEND :US$/kg 10 20 30 40 50
EXCHANGE RATE :AUUS 0.80 0.80 0.80 0.80 0.80
NOLANS NPV @ 10% NOMINAL* :A$m 100% 25 929 1628 2327 3025
NOLANS NPV @ 10% NOMINAL* :US$m 100% 270 743 1302 1861 2420
NPV/SHARE (fully diluted) :A$/share 0.08 3.02 5.29 7.56 9.83
* Includes a pre-BFS project discount of 30% of the project valuation: 30%

*Assumes constant long term prices f or phosphoric acid, of US$750/t; and uranium, of US$50/lb
NOLANS RARE EARTHS-PHOSPHATE-URANIUM PROJECT, KEY ASSUMPTIONS*
RESOURCE ESTIMATES
Current JORC Measured, Indicated and Inferred resource (1% REE cut-of f ) Ore REO P2O5 U3O8
Mt % % lb/t
30.3 2.80 12.900 0.44
Contained metal, kt 848 3900 5.9 (=13.3mlbs U3O8)
MINING METHOD Open Pit
PROCESS METHOD On site heavy media separation and flotation

Hydrochloric acid leach removing phosphate as liquid
From liquid: phosphoric acid, calcium chloride; from solid, production of REE, uranium
Year 1 Year 20
PRODUCTION RATE :mtpa 0.5 1.0 Production ramp up: 25-75% yr1, 75% yr 2; 100% yr3
:ktpa REO 10 20 Head grade and blend are same as resource grade
:tpa P 2O5 50 80
:mlbspa U308 0.17 0.33
:strip ratio 1.0 1.0
CAPITAL COSTS :US$ 420m Sustaining capex 4%pa
RECOVERIES TO CONCENTRATE :% 90 Heavy media recovers 90% of apatite and REE minerals
DOWNSTREAM RECOVERY :% 86 For REO; 85% phosphoric acid; 80% U3O8
OPERATING COSTS :$USm/yr 150
TAX :% 30
ROYALTY :% 3
MINE LIFE :Years 20+
COMMISSION DATE : 1Q13
* These figures are preliminary in nature and are intended to provide only a general indication of project potential scale and economic robustness.
Considerable refinement may result from Bankable Feasibility study, expected in 4Q10.
GBE.AU
Globe Metals & Mining Limited
Globe Metals & Mining Limited A$ 0.27
7 September 2010 The 60Mt Kanyika Niobium Project (Malawi) had a recent 77%
Rare Metals, Uranium, Fluorine increase in Measured and Indicated resources. A mine plan is
Malawi, Mozambique
Bankable Feasibility Study (BFS) expected 3Q10, a Bankable Feasibility Study in 2011. Share price
Exchanges: ASX:GBE has jumped 80% in 3 months due to strong rare metals market.

Number of shares (m) 94 Exploration and evaluation (A$m)* 2.38 0.30 3.58 5.36 1.80
Performance Shares (m) 5 Exploration/(Expl.+ Corporate) (%) 93 46 67 84 56
Fully diluted (m) 102 Funding duration at current burn (years) 0.9 2.4 0.5 0.4 0.6
Enterprise value (A$m) 25.4 Drilling - Other/Diamond (m) 5,000 5,000 12,000 20,000 20,000
Major shareholders: ANZ Nominees Ltd (10.7%) Land holding ('000 ha)* 279 279 275 279 279
Ragusa Investments Ltd (6.7%), National Nom. (5.8%) Tenement costs ($k per year) - - - - -
Listed company options No Net asset backing (Ac/share) 17.9 17.7 17.0 18.1 17.8
* Exploration June 2010 includes JV contribution Quarters refer to calendar year.

Introduction: Globe Metals & Mining listed on the ASX in December 2005. It is an African-focused rare
Valuation gap: Globe NAV (10% nom, 3Q10) based on metals resource company. Its main project is the multi-commodity Kanyika Niobium Project. Globe also
scoping/feasibility study is A$299m or ~A$0.63/share post has exploration projects focused on rare metals, fluorite and uranium projects.
development funding - current market cap A$25.4m. Kanyika (uranium, central Malawi): GBE is targeting rare metals (niobium, tantalum), zirconium and
uranium mineralisation in an alkalic granitoid in central Malawi. The main ore minerals are disseminated
pyrochlore (Nb, Ta, U) and zircon (Zr). GBE aims to bring Kanyika into production in late 2012, or 2013.
Kanyika Project BFS results expected 2011. Scoping Resource and grade – The current resource is 60mt, with a recent 77% increase in Measured and
Study (Jun '08, Coffey; update May „09) - 4ktpa Nb as Indicated tonnes (now 23Mt). The resource is defined to 300m width, 250m depth and 2.3km of ~3.8km
FeNb, opex US$13/kg-US$20/kg Nb, capex US$155m. known strike within 5 zones: 60mt @ 0.29% Nb2O5 (174kt), 0.009% U3O8 (11.9mlbs), 0.014% Ta2O5
(18.5mlbs) and 0.5% ZrSiO4. There is a high-grade resource at 3,000ppm Nb2O5 cut-off, of 21mt with
0.41% Nb2O5 of which 10mt is M&I grading 0.47% Nb2O5 The deposit is open along strike in both
Key economic driver is niobium, used in steel. Nb price is
directions (N-S). There is a high-grade Exploration Target of 40-50Mt @ 0.37-0.4% Nb2O5.
extremely stable, LT forecast US$39/kg in FeNb, current Metallurgy – GBE aims to produce ferro-niobium (FeNb) for the steel industry, as well as oxides of
US$41/kg. Nb 70-85% revenue; tantalum 15-30%. niobium, tantalum and uranium, and possibly magnetite (iron oxide) and zircon. Studies commenced in
2008: two initial Phases reported encouraging costs and recoveries, and work is entering Stage 3 (bulk
testing pilot program. Studies were on hold due to a dispute with a former JV partner (Thuthuka Group);
Kanyika resource of 60mt has 174kt Nb2 O5 grading however, concentration and hydrometallurgical testing could recommence from 3Q10 and 4Q10.
0.29%, with 18.5mlbs tantalum as Ta2 O5 and 11.9mlbs Mining Potential - the deposit could be mined open-pit with low strip ratio of 0.5-0.9. Higher-grade, near
surface Measured and Indicated resources could be targeted first (critical for early payback of capex). A
U3 O8 , with 23mt Measured and Indicated. Scoping Study (Coffey, Jun ‟08; updated May „09) examined 4ktpa Nb production as FeNb alloy, with
59tpa Ta2O5 and 11.4-13.7ktpa ZrSiO4 (processing 2.2-3.5mtpa) with a 20yr LOM. Uranium would report
to aluminous slag for potential future processing. Current (revised) model prefers mining 1.5mt-2.5mtpa,
MOU's for offtake covering 45% of forecast production. for 3,000tpa Nb and 192tpa Ta2O5 over life-of-mine. Capex US$155m, opex US$40.3/t. A Bankable
Feasibility Study (BFS) is in progress, and a pit design should be completed in 3Q10 (Coffey Mining).
Portfolio of exploration projects in Africa. Drilling results Other Projects: GBE has exploration projects in Malawi and Mozambique that could provide positive
expected from Machinga Project (REE,Nb,Ta). newsflow in the near term. The main focus is on Machinga (Southern Malawi), for pegmatite-hosted
REE-Nb-Ta-Zr. Trenching in 2Q10 included 10m @ 1% TREO (total REO) and 0.5% Nb 2O5, with 0.34%
HREO. Drilling results expected Sep „10. The Mount Muambe Fluorite Project could be drilled in 3Q10.
GBE - Globe Metals and Mining Limited Investment Comment: Based on our NAV for Globe of A$299m (@10% nom), GBE‟s share price could
pass A$0.50 as Kanyika milestones are reached, including the BFS and permitting. Other potential value
0.4 drivers: exploration success in Malawi and Mozambique (Nb-Ta, REE, F, U); establishing ore reserves at
Kanyika; successful project funding in 2011; and increasing demand and prices for niobium, tantalum and
0.35
potentially zirconium. The exit of Thuthuka as a Kanyika JV partner, while a setback for the BFS, has
returned 100% control of the project to GBE. The company has a good technical understanding of
0.3
Kanyika and it could move forward without a partner until project financing is required. Increasing investor
0.25 confidence and the strong rare metals market has seen an 80% share price rise in 3 months.
0.2 Reserves and Resources/Mineralised Material

Code for reporting mineral resources - Australian:
(JORC)
0.1 Nb, Ta, U Classification Project Ore Nb2O5 c/off Ta 2O5 U3O8 Nb2O5
Equity Mt % Nb2O5% % % kt
0.05
0 Reserves 0.0 0.0 0.0 0.00 0.0

May-10
Jun-10
Mar-10
Feb-10
Oct-09
Apr-10
Jul-10
Nov-09
Dec-09
Aug-10
Sep-09
Resources
Kanyika Meas, Ind, Inf* 100% 60.0 0.29 0.15 0.014 0.009 174.0
Source: Bloomberg
Mineralised Material (est., non compliant with JORC) 0.0 0.0 0.0 0.00 0.0
*5Mt measured, 18Mt Indicated, 37Mt Inferred

Mr Mark Sumich M Sumich (Exec Chair, MD) Ownership/ JV Target Process Project
Managing Director D Sumich (Non Exec) Project Option Metal Partner Type Route Status Location
Tel: +61 (0) 8 9486 1779 J Stephens (Non Exec) Kanyika 100% U (Nb,Ta) none Granitoid Acid leach BFS MW
West Perth, WA, Australia W Hayden (Non Exec) Machinga 0%/80% REE ASX:RSL Pegmatite na Mid Expl MW
www.globemetalsandmining.com.au Salambidwe 100% REE ASX:RSL Pegmatite na Early Expl MW
Mount Muambe 0%/90% F none Carb'tite na Early Expl MZ
Livingstonia 100%/20% U ASX:RSL S'stone na Adv Expl MW
trentallen@rcresearch.com.au
Kanyika Project Valuation: economics are sensitive to the niobium price, with target set at
US$39/kg Nb in ferroniobium (current is ~US$40/kg). The fully diluted share price target
is A$0.63/share allowing for dilution at A$0.25/share.
GLOBE METALS AND MINING VALUATION
Target Valuation Sensitivity

Price (Low) (High)
Equity Niobium Valuation A$m A$m A$m
Projects (kt) US$/kg
+ Kanyika Resource 100% 174.00 1.01 220 26 736
+ Kanyika exploration 100% 160.00 0.37 74 3 52
+ Regional exploration 100% 5 1 10
Sub Total 299 30 798
+ Cash 1.5 1.5 1.5

+ Tax Losses 0.0 0.0 0.0
- Debt 0.0 0.0 0.0
- Corporate 2.0 2.0 2.0
Sub Total -0.5 -0.5 -0.5
GBE NET ASSET VALUE 299 30 798
Capital Structure
Shares 94 94 94
Fully Diluted Shares 102 102 102
GBE NET ASSET VALUE PER SHARE :A$/share 3.18 0.31 8.48
GBE NET ASSET VALUE DILUTED :A$/share fully diluted 2.93 0.29 7.82
With dilution at A$0.50/share to raise 50% of US$150m :A$/share fully diluted 1.03
With dilution at A$0.25/share to raise 50% of US$150m :A$/share fully diluted 0.63
KANYIKA SPECIALTY METALS PROJECT (NPV based on June 2010 resource, June 2008 Scoping Study and May 2009 update)
Equity Sensitivity
LONG TERM NIOBIUM PRICE (per kg in FeNb alloy)^ :US$/kg 25 35 45 55 65
EXCHANGE RATE :AUUS 0.80 0.80 0.80 0.80 0.80
KANYIKA NPV @ 10% NOMINAL* :A$m 100% 26 204 381 559 736
KANYIKA NPV @ 10% NOMINAL* :US$m 100% 21 163 305 447 589
NPV/SHARE :A$/share 0.28 2.17 4.06 5.94 7.83
* Includes a pre-BFS discount of 30% of the project valuation: 30%

^Niobium prices are modelled as f lat line f rom start of production. Long term FeNb is US$39/kg (Nb), Ta 2O5 US$65/lb, U3O8 US$46/lb
GBE's equity assum ed to be 100%; how ever, Govt of Malaw i could hold 15% in return for fiscal trade-offs such as tax and royalty reductions
KANYIKA SPECIALTY METALS PROJECT KEY ASSUMPTIONS*
RESOURCE ESTIMATES
Current JORC Indicated and Inferred resource (1,500ppm Nb2O5 cut-of f ) Ore Nb2O5 Ta 2O5 ZrSiO4 U3O8
Mt % % % %
Model does not include zircon production 60 0.29 0.014 0.50 0.009
Contained metal, mlbs 383.6 18.5 661.4 11.9

Contained metal, kt 174.0 8.4 300.0 5.4
MINING METHOD Open Pit
PROCESS METHOD Dedicated Specialty Metals Plant

Concentrate: crush, gravity (incl. seperation of zircon and magnetite), flotation.
Downstream: weak then strong acid leaches, calcining (Nb, Ta, U), smelting with Fe (FeNb).
Year 1 Year 10
PRODUCTION RATE :mtpa 1.72 2.3 Head grade falls from 0.38% Nb2O5 to 0.29% Nb2O5
:tpa Nb 3,000 3,000
:strip ratio 0.6 1.9
CAPITAL COSTS :US$ 155m Excludes working capital; sustaining capex $4mpa.
RECOVERIES TO CONCENTRATE :% 65 All products (Nb, Ta, U)
DOWNSTREAM RECOVERY :% 69
OPERATING COSTS :US$/t 40 to 43 (Includes US$2.80/t mined, US$26 to 34/t milled)
TAX :% 30 Company tax in Malawi
ROYALTY :% 3 ASX:PDN at Kayelekera pays 1.5% for first 3 yrs, then 3%
MINE LIFE :Years 10+
COMMISSION DATE : June 2012
* These figures are preliminary in nature and are intended to provide only a general indication of project potential scale and economic robustness.
Considerable refinement may result from bankable feasibility study, expected in 2011.
GUN.AU
Gunson Resources Limited
A$ 0.089
Gunson Resources Limited
7 September 2010 GUN's 100% owned ~A$170m Coburn Zircon Project in WA is now
Zircon, Titanium, Copper,Gold,Nickel looking strategically attractive (DFS completed) with a zircon
Australia
DFS, Advanced Exploration supply deficit looming. This will boost GUN's plans to bring in a big
Exchanges: ASX:GUN brother, which if succesful could lift the share price.

Number of shares (m) 173.5 Exploration and Development (A$m) 0.69 0.25 1.70 2.23 1.50
Convertible notes (m) 0.0 Exploration/(Expl.+ Corporate) (%) 82 71 75 79 87
Fully diluted (m) 177.9 Funding duration at current burn (years) 0.2 0.1 0.3
Enterprise value (A$m) 15.4 Drilling - Other/Diamond (m) 524 500 554 4,850 2,000
Major shareholders: John Tillbrook (9.2%), HSBC Nominees (2.4%), Land holding ('000 ha) 273 273 273 273 273
Bruce Birnie P/L (2.3%), Directors (2.3%). Tenement costs ($k per year) - - - - -
Avg monthly volume (m) 6 Capital raisings (A$m) * 0.00 0.60 1.01 2.55 2.10
Cash (A$m) - Sep 10F * 0.5 Funding from JV partners (A$m) 0.2 0.2 0.2 1.7 1.0
Listed Company options: No Net asset backing (Ac/share) 15.1 14.6 16.1 15.1 14.9
* A$0.6m w as raised at A$0.06/share in July 2010. * Assumes nominal A$1.5m further equity capital raised in1Q11.

Overview: GUN (originally a spin-off of mineral assets from Stuart Petroleum NL) was listed on the ASX
GUN has spent ~10 years and nearly A$20m bringing in May 2000. GUN‟s two key assets at listing – the Coburn Zircon Project and the Mount Gunson Copper
the Coburn Zircon Project ("CZP") in WA to DFS stage. Project have been the primary focus of GUN‟s subsequent development expenditure and have both
reached an advanced stage.
2
CZP estimated capital expenditure is ~A$170m, quoted Coburn Zircon Project (100%): GUN‟s Coburn tenements cover ~1,200km of fossil coastline
approximately 700km north of Perth. GUN has spent nearly A$20m on this advanced project since
NPV is A$163m which is ~A$1.00/share. commencing drilling in 2000. The Coburn Zircon Project (“CZP”) is mainly located on granted mining
leases with government environmental approvals. A DFS was completed in 4Q09 and GUN is now
CZP is strongly underpinned by positive price outlook for seeking to bring in a development partner (possibly an end user through establishing offtake agreements)
zircon (67% of revenue). to support a project financing and conceivably bring it into production by the end of 2012. GUN has
appointed RFC as its advisor in this process. A number of significant parties have expressed interest in
the CZP and have entered a more detailed data assessment phase. The DFS was based on 17.5mtpa
CZP could be in production by 4Q12 if GUN finds a mining rate (17.5 year mine life), dedicated wet concentrator and mineral separation plant to produce
development partner by end 2010. 40ktpa zircon, 90ktpa ilmentite and 9ktpa rutile. Capex is estimated at A$169m (not incl. working capital).
Quoted NPV (at 8% DR) was A$163m (~A$1/share), ungeared IRR 16.8%. Assumed A$/US$ long term
is 0.72. GUN believes that the outlook for ilmentite prices, and zircon prices in particular, is very positive
Xstrata exploring for deep IOCG Olympic Dam style
with negligible identifiable new zircon supply sources in the next 2-3 years. This positive view is shared by
deposits at Mount Gunson (SA),(49% GUN). Iluka, and bodes well for GUN‟s efforts to attract a development partner.
2
Mount Gunson Copper Project (49%): This 1,320km project area is located in the 500km long Olympic
GUN looking to get small scale copper operation (~8ktpa copper-gold belt in South Australia, which currently hosts ~75% of known copper resources in Australia
Cu) started at Mount Gunson 100%-owned ground with the world class Olympic Dam, Prominent Hill and Carrapeteena deposits. Xstrata has earnt a 51%
JV interest (A$3.5m spent). Xstrata can earn a further 24% by expenditure of A$6.5m over three years.
(MG14-Windabout). Xstrata drilled two very deep diamond core holes (1,100-1200m depth) in 3Q09, and got tantalising „sniffs‟
of high grade copper mineralisation, but widths were narrow (e.g. 7m @ 2.2%Cu from 974m). Xstrata will
GUN looking for partners to progress MG14-Windabout conduct geophysical surveys in the remainder of CY10, drilling to recommence 1H11.
BFS and move to production in ~2 years. Mount Gunson Copper Project – Excised Area (100%): In 3Q09 GUN completed a PFS on treating
only the shallow flat sheet-like MG14 deposit (19kt Cu resource). This indicated a two year mine life
(550ktpa treatment of 1.1mt resource) and full capital pay-back assuming 67% copper recoveries,
GUN is suffering from small company-large project US$2.70/lb Cu price, A$/US$ = 0.86. The plan would be then to proceed to treat the larger, deeper
syndrome. If it finds a development partner for the CZP, Windabout deposit (187kt Cu resource) using underground mining. GUN is seeking development partners
then we see major share price upside. to fund a BFS over the next 12 months and potentially take equity in the project
Investment Comment: The market often has trouble valuing small companies with potentially big
projects. This seems to be the case with GUN and its ~A$170m capex Coburn Zircon Project. GUN is
GUN - Gunson Resources Limited capitalised at only ~A$15m, putting little value on this project, plus its potential copper mine and copper
exploration. We could see huge price upside if GUN is successful in attracting a development partner.
0.16
0.14
Code for reporting mineral resources - Australian: (JORC)
0.12
Copper Classification Project Ore Cu Cut Off Cu Cu Cu Eq

0.1 Equity mt % % kt mlb kt
0.08 Reserves 0.0 0.0 0.0
0.06 Resources
Mount Gunson - MG14 Indicated 100% 1.1 1.70 1.0 19 8 19
0.04 Mount Gunson - Windabout Indicated 100% 18.7 1.00 0.5 187 85 187
0.02 Mount Gunson JV Inferred 49% 25.1 1.31 0.5 328 149 161
Total Resources 44.9 1.19 534 242 366
0 Note: MG14 & Windabout contain 0.04% and 0.05% Cobalt respectively
May-10
Mar-10
Feb-10
Oct-09
Apr-10
Jul-10
Nov-09
Dec-09
Sep-09
Aug-10
Heavy Minerals Equity Ore mt HM% Cut Off HM mt Zr %* Ilm. %*

Coburn Zircon Project Resource - M & I 100% 979.0 1.26 0.80 12.3
Source: Bloomberg Coburn Zircon Project Reserves - Pr & Prob 100% 308.0 1.20 0.80 3.7 23 48
* Zr % and Ilm. % are the % of total contained heavy minerals that are zircon and ilmentite respectively

Mr David Harley W Cunningham (Chairman) Ownership/ JV Target Process Project
(Managing Director) D Harley (MD) Project Option Metal Partner Type Route Status Location
Tel: 61 (0) 8 9226 3130 P Harley (Non-Exec Dir) Coburn 100% Zr, Ti none Hvy Mins Gravity DFS Aust(WA)
West Perth, WA, Australia Mount Gunson JV 49%/25% Cu,Co Xstrata IOCG Flotation Mid Expl. Aust(SA)
www.gunson.com.au Mt Gunson MG14/W'about 100% Cu,Co none Flotation BFS underway Aust(SA)
Fowlers Bay Nickel 100% Ni none na Early Expl. Aust(SA)
Analyst: Dr Tony Parry Tennant Creek 100% Cu,Au none IOCG na Early Expl. Aust (NT)
tonyparry@rcresearch.com.au
GUN’s project portfolio is headlined by the advanced Coburn mineral sands project in WA (zircon is the
key mineral) and the Mount Gunson copper exploration project in SA’s Olympic Dam territory, where GUN
has a small scale production project BFS underway. Fowler’s Bay is early stage nickel exploration, and
Tennant Creek early stage copper gold exploration.
The Mount Gunson Copper project (49% GUN) is situated in the 500km long Olympic Copper Gold Province
in South Australia which contains ~75% of the known copper resources in Australia – including the
Olympic Dam, Prominent Hill and Carrapeteena deposits. The latter, potentially containing >4mt Cu (drilled
by Teck Cominco), is only 20km east of GUN’s tenements.
GXY.AU
Galaxy Resources Limited
Galaxy Resources Limited A$ 1.16
7 September 2010 With the Mt Cattlin Spodumene Mine expected to start production in
Lithium, Tantalum, Manganese, Iron 4Q10, and the A$55m Jiangsu Lithium Carbonate Plant under
Australia (WA), China (Shanghai), Mongolia
Comissioning construction near Shanghai, Galaxy could soon be one of the world's
Exchanges: ASX:GXY major producers of battery grade lithium chemicals.

YEAR END: December Jun-10a Sep-10F 2009a 2010F 2011F
Number of shares (m) 191 Exploration and evaluation (A$m) 0.94 1.00 10.49 3.39 4.00
Options and warrants (m) 23 Corporate (A$m) 3.05 2.00 4.54 10.15 8.00
Convertible notes (m) 0 Exploration/(Expl.+ Corporate) (%) 24 33 70 25 33
Fully diluted (m) 214 Funding duration at current burn (years) 4.6 2.2 5.6 0.2 0.4
Enterprise value (A$m) 221.1 Drilling - Other/Diamond (m) 5,000 5,000 27,130 19,630 20,000
Major shareholders: Creat Resources Holdings Ltd (19.9%), Land holding ('000 ha) 145 145 145 145 145
HSBC Custody Nominees (12.6%), R Healy (5.8%), National Nom (5.1%) Tenement costs ($k per year) - - - - -
Cash (A$m) - Sep 10F 6.5 Funding from JV partners (A$m) 0 0 0 0 0
Listed company options: GXYO Net asset backing (Ac/share) 58.5 53.3 53.6 52.1 48.4
Quarters stated on calendar year basis.

Overview: Galaxy Resources plans to become one of the world‟s leading producers of lithium. It has two Li
A near term producer of lithium and tantalum minerals in
projects under construction, the Mt Cattlin Mine in WA and a value-adding Li carbonate plant at Jiangsu in
Australia, and lithium carbonate in China. Target market China. Li is an essential component of some batteries, of the type used to power electric and hybrid vehicles.
is the Li-ion battery industry (29% growth 2007-2008). Mt Cattlin Spodumene Project (Li, Ta; WA):: will be the world‟s second largest hard rock producer of
lithium. The mine is 2km north of Ravensthorpe (WA). Mineralisation is spodumene (LiAlSi2O6) and tantalite
Mt Cattlin (WA): set to be the world's second-largest in a flat lying pegmatite. Mining will be open cut, to produce a spodumene concentrate and tantalite by-
product. Ore processing will be at a rate of 1mtpa averaging 1.1% Li2O (or 3.4mtpa including waste at strip
hard rock lithium operation, producing 137ktpa of 6% ratio 2.4:1) and produce 137ktpa of spodumene concentrate at 6.0% Li2O (upgrade x6) and 56klbspa of
Li2 O concentrate, 56klbspa Ta2 O5 . Mining has started. contained tantalum (Ta2O5) in concentrate. Mine life is 16 years, with a reserve of 11.37mt @ 1.05% Li2O and
147ppm Ta2O5. Capital cost is A$79m and cash operating cost is expected to be A$41/t (DFS revenue
projection A$71/t ore). Spodumene concentrate to be shipped via Esperance to China, for processing at the
Jiangsu Lithium Plant (China): will process Mt Cattlin company‟s lithium carbonate plant (see below). Tantalum concentrate shipped from Fremantle. The plant
concentrate into lithium carbonate; will be the largest Li was commissioned in September ‟10 and the first shipment is expected in November, with pre-strip and ROM
producer in China. Under construction. ore stockpiling under way. There is resource and exploration upside in the project area. Recent results
include 26m @ 1.61% Li2O within the pit area: potential to extend pit to +100m depth.
Jiangsu Lithium Plant (China): Designed to add value to the Mt Cattlin spodumene concentrate, the plant
Offtake agreements signed for all Jiangsu output (17ktpa will be close to the Zhangjiagang Port in Jiangsu Province near Shanghai. Nameplate output will be 17ktpa
Li Carb), customers are Chinese cathode „EV‟ battery grade (99.9%) lithium carbonate (Li2CO3), plus some „EV Plus‟ grade (99.99%) making GXY the
manufacturers and Mitsubishi Corp. largest lithium producer in China. Capex is expected to be A$55m (DFS estimate), to be finalised in Oct ‟10.
Site and slab prep has commenced.
Offtake agreements: These are in place for 100% of Jiangsu output. Customers are Chinese Li cathode
Both projects financed (equity and debt), capex A$145m. producers and Mitsubishi Corporation. GXY says the former are increasing capacity over the coming 12-24
Galaxy estimates pre-tax NPV (@8% real, exchange months, and appreciate the security of supply offered by Jiangsu. Terms are commercially confidential.
0.9) as A$425m or A$1.98/share, IRR 36%. Corporate: A share issue to Creat Resource Holdings in April 2010 raised A$33m, in addition to A$65m
raised in HK in October 2009. A project loan facility of A$130m (US$105m) was granted from Austrian Bank
RZB and the China Development Bank in December 2009, which could be drawn down in Sep ‟10 subject to
final documentation. Conditions precedent (including Jiangsu permitting) were met in June 2010.These funds
GXY - Galaxy Resources Limited are sufficient to cover GXY‟s estimated capital costs for Mt Cattlin and Jiansu of A$145m (including working
capital). A new board member, Ivo Polovineo, is the former CFO of Sino Gold (sold in 2009 for $2.4bn).
2.50 Investment Comment: Galaxy‟s projects are 100% owned, advanced and well-funded, with secure offtake
agreements and healthy profit forecasts. Its share price is highly leveraged to the price of battery grade (i.e
high quality) lithium carbonate. Lithium prices are forecast to increase due to advances in long life batteries
2.00 and electronics, and strong environmental policies in China. Li-ion battery output increased 29% year-on-year
from 2007 to 2008. World Li Carb demand is ~100ktpa, with 20-25ktpa in China; price is US$5,500-$6,000/t,
or higher for better grades (added US$3k/t for 99.9% pure). GXY estimates revenue from the Cattlin-Jiansu
1.50
operations will be A$143mpa for 16 years, with pre-tax net of A$69mpa. At capex A$145m, GXY est NPV
(@8% real, exchange 0.9) is A$425m with IRR 36%. Fully diluted market cap is A$248m. Further progress at
1.00
Jiangsu, shipments from Mt Cattlin and an increase in Li prices could see the stock approach A$1.50.

Iron (Fe) Classification Project Ore Li2O Cut off Ta2O5 Li2O
Equity Mt % % ppm kt
0.00
Reserves
May-10
Jun-10
Mar-10
Feb-10
Oct-09
Apr-10
Jul-10
Sep-09
Nov-09
Dec-09
Aug-10
Mt Cattlin Proved, probable 100% 11.367 1.05 0.4 147 119.4

Resources
Source: Bloomberg Mt Cattlin Meas, Ind, Inf 100% 15.875 1.08 0.4 161 171.5
Mineralised Material (est., non compliant with JORC) 0.0 0.0
Contact Directors Key Projects

Mr Iggy Tan C Readhead (Chairman) Ownership/ JV Target Process Project
(Managing Director) I Tan (MD) Project Option Metal Partner Type Route Status Location
Tel: 61 (0) 8 9215 1700 R Wanless Mt Cattlin Spodumene 100% Li, Ta na Pegmatite Crush, HMS Construction Aus (SA)
West Perth, NSW, Australia I Polovineo Jiangsu Li Carb Plant 100% Li na na na na China
www.galaxyresources.com.au Y Zheng Shoemaker 50%/20% Fe, Mn GMC BIF na Mid Expl Aus (WA)
X Ren (Alt) Ravensthorpe 100% Li/Ta,Mn,Au na Various na Early/Mid Expl Aus (WA)
Analyst: Dr Trent Allen Ponton 100% U,REE,Base na Palabora na Early Expl Aus (WA)
trentallen@rcresearch.com.au
Plan of Mt Cattlin Spodumene Mine: this diagram shows the proposed pit outline, lithium resource blocks
and recent drill intercepts. Pre-strip has commenced, plant construction is underway and the mine is
expected to be producing spodumene mineral concentrate grading 6% Li 2O from 4Q10.
Plant construction at Mt Cattlin: lithium concentrate will be shipped from the mine and converted to 17ktpa
battery grade lithium carbonate at the Jiangsu Lithium Plant in China. Offtake agreements are in place for
100% of the Mt Cattlin/Jiangsu output.
III.AU
Icon Resources Limited
Icon Resources Limited
A$ 0.07
7 September 2010 Icon expects tungsten production at Mt Carbine (QLD) from as

Tungsten, Gold, Base Metals, PGE early as December 2010. Treatment of tailings, stockpiles could be
Australia (QLD, NSW, TAS)
Scoping Study followed by mining in 2013. A resource upgrade (from 9.6mt @
Exchanges: ASX:III 0.22% WO3) is expected in September 2010.

YEAR END: June Jun-10a Sep-10F 2009a 2010a 2011F
Number of shares (m) 104 Exploration and evaluation (A$m) 0.88 0.30 1.31 2.20 0.90
Options and warrants (m) 23 Corporate (A$m) 0.11 0.08 0.33 0.30 0.30
Fully diluted (m) 127 Funding duration at current burn (years)0.0 0.1 0.2 0.0 1.5
Enterprise value (A$m) 6.9 Drilling - Other/Diamond (m) 2,000 1,000 0 8,000 4,000
Major shareholders: Land holding ('000 ha)* 441 441 420 441 441
L Pretorius (12.6%), S Bartrop & Assoc (7.8%) Tenement costs ($k per year) - - - - -
Listed company options: No Net asset backing (Ac/share) 5.3 5.3 6.3 5.3 6.5
Quarters stated on calendar year basis.

Overview: III listed on the ASX in June 2006. Its flagship project is the historic Mt Carbine tungsten
Owns 100% of the historic Mt Carbine Project (QLD), deposit in QLD. It also has a diverse portfolio of exploration tenements in eastern Australia.
formerly Australia's largest tungsten mine. Mt Carbine (W, QLD, 100%): 120km from Cairns. Prior to its closure in the mid 1980s, Mt Carbine was
Australia‟s largest tungsten producer. A total of ~13.1mt was mined by open cut; production of ~0.8-
1.2kt/yr WO3 was in the form of high-grade, low impurity concentrates of wolframite and scheelite from
Mt Carbine: resources total 25kt WO3 . Open pit 1.1mt @ sheeted veining. There was no recovery of <75 micron material, which was lost to tailings. III is targeting
0.2%, target 15mt @ ~0.2% WO3. Increase due Sep '10. a bulk tonnage operation focused on the existing granted Mine Leases (ML), with a three-stage
development program. This involves retreating the mine tailings (JORC inferred resource 1.6mt @ 0.1%
Region prospective for W-Sn, Cu, with historic workings. WO3) in a two year operation; re-opening the open pit (1.05mt @ 0.2% WO3) and potentially waste
dumps (non-JORC estimate ~18mt @ ~0.1% WO3); and, later, re-opening the underground development
Three-phase mine plan: tailings, open pit and/or (resource 9.6mt @ 0.22% WO3 accessible by a 500m decline). There is an exploration target for the
underground material in the range of 55-60mt at 0.07- 0.09% WO3, based on historic drilling. A
underground. Hard rock production expected early 2013. significant resource increase is expected in Sep „10. In 2Q10, two exploration permits (EPM, 210km )
2
surrounding the ML were acquired. These have historic W-Sn workings (e.g at Mt Holmes, 10km SE of
Early cash flow targeted from processing of tailings and Carbine) and are prospective for Carbine-style sheeted vein mineralisation, as well as alluvial tin and
tungsten deposits. Metallurgy: The historic mine used visual ore sorting technology, which has improved
stockpiles - concentrate production from Dec '10.
since that time, as have downstream metallurgical recoveries. An XRF sorter will be tested in 3Q10. This
beneficiation could reduce the concentrator throughput by 80%. Trials of gravity separation of tailings
Scoping Study of 5 year open cut project: pre-tax NPV @ recovered 50-53% to a ~65% WO3 concentrate, and 75% to a ~45% WO3 concentrate (centrifuge,
8% real of A$59m with potential for A$200m with grade flotation). Scoping Study: October 2009 (Mining One P/L); the study contemplates an open cut mine
with a 5 year life, producing 1.5mtpa grading 0.21% WO3 for 2,350t WO3 pa, mill recovery 75% (X-ray
increase, resource expansion; current mkt cap A$8.3m. ore sorters and gravity), capex A$60m, opex A$22.72/t. At A$250/mtu for a 70% WO 3 concentrate, the
study found pre-tax NPV (@8% real) to be A$59m; increasing grade 20% and tonnage 50% boosts NPV
Tungsten conc. price up 22% Y-O-Y, outlook is positive. to A$200m. The latter scenario is reasonable given the exploration potential at Mt Carbine. An update of
the hard rock mining model and project financial forecasts are expected in late 3Q or early 4Q10.
Eastern Australian Exploration (100%): Icon may divest or JV some assets, to focus on Mt Carbine. A
Fitzroy Cu/Zn Project (VHMS) to be subject of IPO in late current focus is on the Peel Fault Project (NSW), where III holds 75km strike over historic hard-rock gold
2010: includes resource of 1.75Mt @ 2.28% CuEq. workings and a chargeability anomaly. Drilling in 1H10 found 14m @ 1g/t Au from 137m. Other projects
include Fitzroy (Central Qld), which has an Indicated JORC resource 1.75Mt @ 1.7% Cu + 2% Zn, and
could be spun out in a separate ASX listing („Fitzroy Resources‟) in late 2010.
Investment Comment: In our previous research note on III, 2Q09, the company was within 6-12 months
III – Icon Resources Limited of being in tungsten production from the Mt Carbine tailings and waste heaps, and potentially ~2-3 years
0.16
from hard rock production. The GFC caused a 1 year delay to the operation but it now seems to be back
on track, with the same schedule. Recent share placements funded A$0.88m exploration in 2Q10 but
0.14 more funding may be needed in 2H10, ahead of possible early cash flow from the tailings operation.
Significant short to mid-term value drivers for III could include the expected resource upgrade (Sep „10),
0.12 a successful trial of the XRF ore sorter on ROM and waste dumps (2H10), commencement of the tailings
operation (Dec „10), and a strengthening tungsten market. The planned Fitzroy spin-off could unlock the
0.10 value of this VHMS project for III holders.
0.08
Tungsten Classification Project Ore WO3 Cut Off WO3 WO3 WO3 Eqty
0.04
Equity Mt % % kt M mtu kt
0.02 Reserves 0.0 0.0 0.0
Resources
0.00
Mt Carbine - tailings Inferred 100% 1.6 0.11 na 1.8 0.2 1.8
May-10
Mar-10
Oct-09
Dec-09
Sep-09
Aug-10
Mt Carbine - open cut Inferred 100% 1.1 0.20 na 2.1 0.2 2.1
Mt Carbine - u/ground Inferred 100% 9.6 0.22 na 21.1 2.1 21.1
Source: Bloomberg 25.0 2.5 25.0
Mineralised Material (est., non compliant w ith JORC) 0.0 0.0 0.0
Also Fitzroy (QLD), has total Inferred Resource: 1.75mt @ 1.7% Cu, 2% Zn, 8.5g/t Ag, 0.2g/t Au, cutoff 1% equiv Cu in Nov '07

Dr John Bishop L Pretorius (Chairman) Ownership/ JV Target Process Project
Managing Director J Bishop (MD) Project Option Metal Partner Type Route Status Location
Tel: +61 (0)2 9279 1252 S Bartrop Mt Carbine 100% W none Vein Grav, float Scoping Aus (QLD)
Sydney, NSW, Australia A White Peel 100% Au none Structural na Mid Expl. Aus (NSW)
www.iconresources.com.au Burketown 100% IOCGU,Ni none IOCGU na Early Expl Aus (QLD)
New Century 100% Zn,Pb none VHMS na Early Expl Aus (QLD)
Fitzroy 100% Cu,Zn none Sedex na Adv Expl Aus (QLD)
Analyst: Dr Trent Allen Constance Range 100% Fe none Ironstone na Mid Expl Aus (QLD)
trentallen@rcresearch.com.au Tara 100% Sn none Granite na Mid Expl Aus (NSW)
Mt Carbine Project location map: III is focused on this historic tungsten deposit (QLD), where it plans to
develop a tailings re-processing operation, followed by open-cut and underground mines. The two EPMs
around the Mining Lease are recent acquisitions, and are prospective for Carbine-style mineralisation.
Mt Carbine Project: As well as hard rock resources and mineralised dumps, the area has pre-existing
infrastructure, including a mining lease and 132KV power line. Tailings reprocessing is planned for late
2010 and hard rock mining for 2013. The original operation closed in 1986 due to weak tungsten prices.
TNR.CN
TNR Gold Corp
C$ 0.22
TNR Gold Corp
7 September 2010 TNR is focused on early stage exploration for gold, and rare and
Gold, Copper, Lithium, Rare Metals minor metals. A TSX spin-out of International Lithium Corp (ILC) in
Argentina, USA, Canada, Ireland
Early to Advanced Exploration 3Q10 should add value to the Li and REE assets: priority Li targets
Exchanges: TSX.V:TNR include Mariana (ARG), where C$1m drilling is planned from 4Q10.

Share price (C$) 0.22
Year End: December Jun-10a Sep-10F 2009a 2010F 2011F
52 week range (C$/share) 0.18 to 0.38
Number of shares (m) 123 Exploration and evaluation (C$m) 0.54 0.67 1.12 2.18 2.67
Options and warrants (m) 35 Corporate (C$m) 0.42 0.25 1.00 2.59 1.25
Fully diluted (m) 158 Funding duration at current burn (years) 1.2 0.7 0.9
Market capitalisation (undiluted) (C$m) 26.5 Shares on issue (pr end) (m shares) 123 133 107 133 144
Debt (C$m) - Sep 10F 0.0 Drilling - RAB (m) 0 500 0 1,000 2,000
Enterprise value (C$m) 21.8 Drilling - Other/Diamond (m) 300 500 0 1,300 1,500
Major shareholders: Management and insiders (48.5%, incl K Klip 23.5%), Land holding ('000 ha) 30 34 30 34 34
Institutional holders (20%, incl Barrick Gold, Pinetree Capital) Tenement costs ($m per year) na na na na na
Avg monthly volume (m) 2 Capital raisings (C$m) 0.0 5.0 5.0 5.1 5.0
Cash (C$m) - Sep 10F 4.7 Funding from JV partners (C$m) na na na na na
Price/Cash (x) 5.6 Cash (C$m) 0.3 4.7 2.6 3.2 3.6
Price/Book (x) 1.3 Cash backing (C¢/share) 0.3 3.5 2.4 2.4 2.5
Listed company options: No Net asset backing (C¢/share) 13.1 15.4 14.3 15.1 16.1
Quarters stated on calendar year basis. Years are financial.

Overview: TNR Gold Corp has early to mid-stage exploration assets, with 18 active projects held as three
Focused on exploration for precious and base metals
groups: Argentina gold-copper; lithium and rare metal projects; and Alaskan gold. A TSX spin-out of the Li-
with a strategic emphasis on high-demand rare and REM projects, as International Lithium Corp, is planned for July 2010. The Alaskan projects could follow.
minor metals, e.g. rare earth elements and lithium. Lithium-REM projects and corporate spin-off: TNR has nine early stage lithium brine and hard-rock lithium /
rare metal projects, commodities that are used in high-tech applications (e.g. batteries and magnets), and have
Business model is "Lead Project Generator”, acquiring a growing market in the automotive industry as it moves towards the production of electric vehicles. TNR plans
that these assets will be spun off as International Lithium Corp in 3Q10. The parent company and
early stage projects, and adding value by internal and JV shareholders should retain ~87% of ILC, and there will be a C$2.5m IPO. Year 1 exploration budget is
2
development (diversify cost, risk) or corporate spin-off. expected to be C$1m-$1.5m. The initial focus is on Mariana (ARG), which covers 160km among the Andean
Salars (ARG). Brine samples range 250-650mg/L Li – current producers range from 150-1500mg/L of Li. A
Lithium and REM asset spin off, as International Lithium resource could follow drilling in 4Q10 (up to 20 holes to 100m depth). ILC will also advance brine projects in
Nevada (5,285 hectares), in the area of Clayton Valley (producing Li since 1967). The pegmatite projects,
Corp, planned for TSX.V in 3Q10, mkt cap C$15m would prospective for lithium and the rare metals (e.g. tantalum, niobium and the REE) include Moose (CAN), which
make it undervalued compared to peers (see chart). lies 12km from Thor Lake (TSX:AVL) and is a past high-grade producer of Li and Ta (samples include 6.7m @
2.07% Li2O). The Mavis Lake Project (CAN) has channel samples including 5.3m @ 1.24% Li2O.
TNR holds early stage gold-copper (porphyry) projects in Argentina projects (Au-Cu-Ag): Among 5 active projects in San Juan Province, the primary focus is on El
Salto (13,300 hectares) and El Tapau, which are both early stage and have potential for bulk tonnage Au-Cu-
Argentina and Canada, including 50% of 920koz Au at (Mo) porphyry discoveries. El Salto has a 6 x 1.5km chargeability anomaly and limited drilling (incl 55m @
Shotgun. Significant potential for large-scale discoveries 0.21% Cu and 0.012% Mo). El Tapau has three target areas; exploration includes grab sampling averaging
2.2g/t Au over 4.5km strike, and limited drilling (incl 82m @ 0.49% Cu). Both projects will be the target of
Tight capital structure: TNR management and insiders geophysics and follow up drilling. TNR retains a 25 per-cent back-in right to certain of the properties at the Los
Azules Cu-Au-Ag deposit, which contains 11.2 billion lbs Cu grading 0.55%, with a high grade core of ~2.3blbs
own 48%, institutions 20%.
grading 1% Cu. The back-in terms are the subject of a legal dispute with Xstrata, which assigned its interest to
Minera Andes Inc. TNR served a back-in notice in April 2010 and has a C$5m loan facility that can be drawn
Highly experienced management and technical team. down to support Los Azules. Minera Andes rejected the back-in notice and the validity of the back-in notice is
the subject of a legal dispute with Minera Andes. The project has a high conceptual NPV: with capex
US$2.7bn, opex US$0.85/lb, and production 170ktpa (375mlbs) for 23.6 years, and applying no adjustment for
risk, the NPV is US$2.9bn, or US$725m for 25% (LT Cu US$2.50/lb, disc rate 10%).
Alaskan Projects (Au, Cu): TNR has 50% of Shotgun, a breccia-hosted Au target with a non compliant
TNR - TNR Gold Corp.
resource of 980koz Au grading 0.93g/t and drill ready gold targets. The Iliamna Project is < 80km from the
0.40 giant porphyry-hosted Pebble Deposit (18.8blbs Cu and 31.3moz Au), with which it has geological similarities.
Investment Comment: TNR has built its exploration portfolio to the point where discrete groups of projects
can be spun off as separate listed entities. This is a well tested strategy for unlocking the value of mineral
0.35 assets. If listed on the TSX with a starting market cap of C$15m, ILC should be seen as significantly
undervalued in comparison to its immediate peers (capitalised at C$15-C$150m). Further value should be
0.30 added to both TNR and ILC by ongoing exploration and resource definition, e.g. at Mariana, which bears early
comparison to the nearby Hombre Muerto (Fenix) mine of FMC, currently providing 14% of global lithium
supply. For TNR, a positive decision over the Loz Azules back-in would be a boost but is not vital – other share
0.25 price catalysts would be exploration success at El Salto and El Tapua.
0.20
Code for reporting mineral resources - Canadian: (NI43-101)
Gold Classification Project Ore Au c/off Au Au Eqty
0.15
Equity Mt g/t g/t t koz koz
0.10 Reserves 0.0 0.0 0.0

May-10
Jan-10
Jun-10
Mar-10
Oct-09
Apr-10
Jul-10
Sep-09
Nov-09
Dec-09
Aug-10
Resources * 0.0 0.0 0.0

Mineralised Material (historic, non NI43-101 compliant)
Shotgun Inferred 50% 33 0.93 0.50 30.5 980 490
Source: Bloomberg
* Los Azules Project has 922mt grading 0.551% copper for 5.08mt (11.2 bliiion lbs) metal; TNR claims a 25% back-in right
Contact Directors Key Projects

Mr Jerry Huang Gary Schellenberg Ownership/ JV Target Process Project
(Investor Relations) (Exec Chair, Pres, CEO) Project Option Metal Partner Type Route Status Location
Tel: +1 (604) 687 7551 Kirill Klip (Non Exec Chair) El Salto 0%/100% Au-Cu-Mo - Porphyry na Mid Expl S. Juan (ARG)
Toll free: 1800 667 4470 Paul Chung El Tapau 0%/70% of 75% Au-Cu Petra Porphyry na Mid Expl S. Juan (ARG)
Vancouver, BC, Canada Hari Varshney Mariana 0%/100% Li - Brine Pump Mid Expl Salta (ARG)
www.tnrgoldcorp.com Nevada 100% Li - Brine Pump Early Expl NV (USA)
Moose 100% Li-Ta - Pegmatite na Mid Expl NT (CAN)
Analyst: Dr Trent Allen Mavis Lake 100% Li- REM - Pegmatite na Mid Expl ON (CAN)
trentallen@rcresearch.com.au Shotgun 50% Au na Breccia na Adv Expl AK (USA)
TNR has 18 active projects worldwide, which can be divided into three broad groups: Argentinian gold-
copper; lithium and rare metals (REM); and Alaskan gold. TNR’s projects are in the exploration phase,
providing an opportunity for investors to benefit as value is added by further development.
The TNR lithium/REM assets could be spun out in 2H10, as International Lithium Corp, ILC:TSX. This chart
shows that ILC, with 60m shares at C$0.25 (mkt cap C$15m) and early stage projects, could be viewed as
good value relative to some comparable, if more advanced, lithium-focused companies.
Market Update: Lithium
Investment Comment
Lithium producers, Increasing intensity of lithium use could require new capacity beyond
current or near-term, 2014. Resources are ample but could be slow to bring online, due to
will be well placed to financial and technical hurdles faced by some projects. Relatively flat
take advantage of price forecasts represent stable revenue in a growing sector. There is an
forecast increases in Li opportunity for developers, with projects that are advanced or can be
price and demand. fast tracked, to gain market share as demand increases.
Pricing
Lithium carbonate is trading in the range US$5,500-US$6,000/t, having
Lithium carbonate is improved from the US$5,300/t average of 2009. The CAGR of Li
selling for ~US$5,500- carbonate 2005-2009 was 6.2%, with 2.0% forecast for 2010-2014
US$6,000/t. (Source: ASX:GXY). By 2015, nominal prices are expected to approach
those seen before the GFC (2007, US$6,731/t; 2015, US$6,757/t).
Chinese lithium carbonate export prices in US$/t 2000-2009,

plus forecast 2010-2015.
CAGR of 2% is
forecast for 2010-
2014.
Source: Galaxy Resources
Market: Supply and Demand

Li is produced from The main producers of lithium in 2009 were Chile (brines, 7.4kt Li),
brines and pegmatites, Australia (pegmatites, 4.4kt), China (2.3kt) and Argentina (2.2kt), with
with ~95kt Li a total 18kt Li, down from 25.4kt in 2008 (Source: USGS). Li converts to
carbonate in 2009. Li carbonate at ~5:1 by mass, i.e. LiCarb production in 2009 was ~95kt.
Global reserves are thought to be 9.9Mt Li, of which 76% are in Chile.
World consumption of Li by end use (t Li Carbonate; Roskill)
Other than batteries,

uses include ceramics
and glass, and
lubricants.
Li carbonate consumption in 2008 was ~120kt but fell 15% in 2009 due
Consumption of to the GFC. It is expected to recover by +11% to ~113ktpa in 2010 and
~113kt is expected in be ~148kt by 2013 (+31.5% from 2010). [Source: USGS, Roskill]. The
2010, for annual three main uses of lithium by industry sector in 2009 were ceramics and
growth of +11%. glass (31%), batteries (23%) and greases (9%-10%).
The USGS (US Geological Survey) publishes an annual commodity

The main growth area summary about Li. Important points from the 2010 edition:
for Li is battery
manufacture,  Batteries, especially rechargeables, are the market for lithium
especially for electric compounds with the largest growth potential.
and hybrid vehicles.  Automobile companies are developing lithium batteries for
The US has paid electric vehicles, although most such vehicles currently use other types.
US$940M to support  The US has invested $2.4B to help develop its domestic battery
its domestic lithium and electric vehicle industries. The Li-ion battery supply chain (material-
supply chain. manufacture-recycle) received ~$940M in grant money.
Li batteries are gaining favour due to low heavy metal content (e.g. Pb,
Cd, Hg), long life, fast recharge and high power/weight ratios compared
to traditional Pb acid, NiCad and Ni hydride rechargeables.
Galaxy Resources (after Market Avenue) reports that Li-ion battery

Li ion battery output increased 29% between 2007 and 2008, with sales of
manufacture increased US$8.03Bn. Strong demand is expected to continue, in line with global
29% in 2007-2008. demand for electric vehicles, especially in China.
Current and forecast total lithium carbonate demand versus

productive capacity, 2008-2020.
This rate of growth

could require new Li
carbonate capacity
from 2014 onwards.
Source: Roskill
Elemental Facts
Lithium‟s low mass Lithium is the lightest solid element, with atomic number 3. It is highly
and high electro- reactive, with a high electrochemical potential and specific heat
chemical potential capacity. These attributes make it especially useful for making batteries
make it useful for and ceramics/glass. The most commonly traded forms of lithium are
battery manufacture. mineral concentrates and refined lithium carbonate. Lithium is extracted
from pegmatites (igneous), brines (salar lakes) and hectorite clays.
Market Update: Niobium
Investment Comment
Industry forecasts are for ferroniobium (FeNb) consumption growth of
With 15% pa growth ~15% per annum to 2014. New niobium producers have a chance to
forecast, and a steady meet this increase in demand and find secure revenue in the form of
price, the outlook for long-term supply contracts. Prices should remain stable (RCR long term
Nb is strong. US$39/kg in FeNb) so long as CBMM does not feel its dominant market
position to be threatened, which is unlikely, as most advanced Nb
projects are of a much smaller scale than Araxa.
Pricing
All measures show that Nb prices have risen in the past several years,
and were quite resistant to the GFC, likely because Nb is only a small
portion of steel production costs, and the price is set by the main
producer, CBMM.
The current EU price in FeNb is ~US$41/kg, as it was in October 2008.

Prices were resilient The 2009 low, of US$34/kg, was reached in March 2009. This fall of
in the face of the ~21% compares favourably to declines in base metal prices of ~40% or
Global Financial more over the same period. RCR‟s long-term forecast for modelling
Crisis. purposes is US$39/kg Nb in FeNb, based on the apparent stability of Nb
prices at or near the current levels.
Ferroniobium import prices, Chinese yuan (66% Nb from Brazil)
400,000
Price (RMB/t of 66% FeNb, Brazil to China)
350,000
This was helped by 300,000

the refusal of CBMM
to lower its price, 250,000
which the steel mills 200,000

continued to pay.
150,000
100,000
50,000
0
Apr-08
Jul-08
Oct-08
Feb-07
Mar-09
Mar-10
Nov-06
May-07
Jan-08
Jan-09
Jun-09
Sep-09
Aug-07
Nov-07
Dec-09
May-10
Aug-10
Source: Metal Pages Lo Hi

The Nb market has
Over the period 2002-2007, the annualised rate of growth in global
grown at the rate of
production of FeNb (21%) was more than 2.5x the rate of growth in
7.9% per annum
between 1990 and steel production (8%). Long-term growth of Nb consumption has been
2007. 7.9% pa (1990-2007), compared to 4.1%pa for steel over the same
period.
FeNb consumption versus crude steel production
Ferroniobium
producer Niobec is
forecasting 15%
compound annual
growth rate (CAGR)
for FeNb consumption
in 2010.
Prior to the GFC, global production of FeNb was ~60kt (contained Nb).
Media reports in 2Q10 from the leading producer, CBMM of Brazil,
China consumes 20% indicate that volumes have recovered to ~80% of these levels and that
of FeNb but is the the market could be fully recovered by early 2011. Brazil is by far the
driving force behind largest producer of Nb, with 93.5% of world production (Source: USGS).
increasing intensity of
usage. China is a major force in consumption of the metal: it currently
represents ~20% of FeNb use and >50% of the growth in this market.
This gap could close over the next 20 years due to modernisation and
increasing sophistication of steel production in China and other
developing markets; over this period, the percentage of steel products
using niobium could increase from 10-12% presently to over 20%
(Sources: GBE and Roskill Information Services; RCR).
In terms of companies, there are currently three major producers of

ferro-niobium: industry leader CBMM (Araxa deposit, Brazil), and two
World Nb production „second tier‟ producers, Anglo American (Catalao mine, Brazil) and
is dominated by Brazil IAMGOLD (Niobec mine, Canada). CBMM currently holds 76% market
(93.5% in 2008) and share, with 6-8% each for the others. The Araxa reserve grade at 2.5%
specifically by one Nb2O5 is orders of magnitude higher than its competitors‟ (1.2%
producer, CBMM, Catalao, 0.6% Niobec) and at 500mt it is more than ten times as large
which sets the FeNb as the other two put together. In other words, CBMM dominates global
price. Nb production. In terms of new projects coming online, only Mabounié in
Gabon (Eramet) could threaten any of CBMM‟s market share (resource
350mt @ 1% Nb2O5) but the project must overcome poor recoveries and
high capex before it can enter production.
Elemental Facts
Niobium is used Approximately 90% of Nb is consumed as FeNb by the steel industry, in
primarily by the steel high-strength low alloy (HSLA) steel products for construction projects,
industry. Prices are oil and gas pipelines and the automobile and shipping industries.
decided by
negotiation of Niobium is not an exchange traded commodity: 95% of FeNb is sold
individual contracts. under individually negotiated contracts based on a benchmark price set
by the main producer, CBMM (Brazil).
Market Update: Tantalum
Investment Comment
A tantalum supply shortfall is expected to last until at least 2013. This
The supply deficit in could benefit companies that can provide a long-term supply of ethically
Ta markets could last produced tantalum. RCR‟s long-term price forecast, based on the
beyond 2013. assumptions of Ta industry participants (e.g. ASX:GBE) is US$143/kg
(US$65/lb) Ta2O5.
Pricing
The current price of Ta as tantalite (30% Ta2O5) is US$75-85/lb Ta2O5
Tantalum prices are (Metal Pages). This is (on average) 132% higher than the 2009 low
commonly reported as (August, 2009; US$33.00-36.00/lb Ta2O5), which was the lowest price
lbs of its main ore since March 2007 (US$32.22-34.33/lb Ta2O5).
mineral, tantalite.
The increase is recent and is due largely to anticipation of a supply
shortage as the market is starved of DRC tantalite. This shortage is
anticipated to last until at least 2013 (Source: Gippsland Minerals).
Tantalite basis 30% Ta2O5
90
80
70
Ta prices have soared
132% in the past 60
Price (US$/lb)
year, partly due to

50
international
measures taken 40
against the DRC,
30
which supplies
“conflict tantalum”. 20
10
0
Feb-08
Feb-09
Jul-09
Mar-07
Aug-08
Jan-10
Jun-10
Aug-06
Sep-07
Source: Metal Pages Lo Hi

Before the GFC, global Ta2O5 consumption was estimated to be 6mlbs
Ta consumers are per annum. Industry commentators suggest that the market is growing
manufacturers of at ~ 7% per annum (Sources: GBE, Gippsland Ltd).
advanced technology,
in Europe, Asia and Leading commercial consumers are HC Starck GmbH ( part of German
the USA. conglomerate Bayer AG), as well as Cabot Corporation (USA), Ulba OJSC
(Kazakhstan), Mitsui-Kinzoku (Japan) and Ningxia Non-Ferrous Metals
(China) plus various other Chinese groups.
Until recently, the state of play in tantalum production was quite

unclear. According to the USGS, world mine production of Ta metal in
2008 and 2009 was ~1.16kt-1.17kt. From 2005-2008, approximately
equal proportions were supplied as ores and concentrates, metal, and
scrap.
Brazil and Australia
For concentrates, 53% was supplied by Australia. The major Ta metal
were major producers
producer was Brazil (23%) and the biggest secondary producer (waste
of tantalum from
and scrap) was China (27%).
2005-2008 but the
latter has ceased
production. Until 2009, the major corporate producer of tantalum was Talison
Minerals from its Wodinga mine in WA‟s Pilbara. However, this closed
during the GFC. It is uncertain when or if this mine will re-open.
Obviously, the downturn in Ta-intensive industries during the GFC led to
Wodinga‟s closure and prevented any problems with undersupply.
The market is complicated by the considerable black market for Ta

DRC illegal production (about 20% of the global market), illegally supplied by artisanal mines
complicates the in the Democratic Republic of Congo (DRC) and allegedly used to fund a
market but the US civil war in that country, ie. “conflict tantalum”.
Conflict Minerals Bill
should remedy the In July 2010, however, the US Congress passed the Financial Stability
problem. Act, which requires US companies to disclose if their products contain
tantalum (and tin, tungsten or gold) that is sourced from the DRC or
adjoining countries. This should prevent the use of DRC material and,
due to the stringent supply chain reporting requirements of the Act, may
also turn buyers away from the adjoining countries (being Uganda,
Rwanda, Burundi, Kenya, Tanzania, Zambia, Angola, Republic of Congo
[Brazzaville], Sudan and the Central African Republic).
Elemental Facts
Tantalum is used in Tantalum is used in diverse high technology applications. It is resistant
high-tech applications to corrosion, has a low thermal coefficient of expansion, and a high
such as capacitors dielectric constant, so its main uses are in capacitors (e.g. for consumer
and alloys. electronics), chemical plant and equipment, aviation turbine blades and,
as tantalum carbide, for cutting tools. The majority of the world‟s
tantalum is sold via long-term offtake agreements.
Market Update: Tungsten
Investment Comment
Industry participants and commentators are bullish about the medium-
term outlook for tungsten. For example, Icon Resources (III:ASX)
Companies with recently stated: “The market price for [concentrates and APT] has
advanced tungsten improved from mid-2009 returning to pre-GFC levels. Recent market
developments analysis has projected longer-term strength for tungsten, particularly for
could benefit from non-Chinese supply beyond 2012, with supply shortages indicated from
elevated prices, 2013.” Annual Report 2010.
flowing from
Chinese control These forecasts are based partly on concern about security of supply for
(i.e. ~81%) over manufacturers, in view of China‟s policy of mining restrictions and tariffs
the current supply. (e.g. 20% on ferrotungsten), and its intent to boost manufacturing. This
scenario favours existing producers and companies with advanced
tungsten projects that can enter production within 2-3 years.
Pricing
Prices have recovered to pre-GFC levels, during which they had a
relatively soft landing due to simultaneous cuts in demand and
Prices held steady
production. For mine modelling, RCR has used a conservative
during the GFC due
US$150/mtu contained tungsten in 65% concentrate.
to synchronous
falls in supply and
The current price of ferrotungsten in Europe at 75% W is
demand.
US$386.60/mtu (of contained W), APT to China (FOB) is US$242-
Concentrate prices
247/mtu and concentrate in China is at 65% W is US$197/mtu
are up 23% Y-O-Y.
(contained W). These figures are typical of the value-add for increased
tungsten processing. Concentrate prices are up 23% year-on-year,
2009-2010.
Tungsten Industry Price Projections.
The outlook to
2013 is positive,
with further price
increases
predicted by most
commentators.
Source: Hazelwood Resources and CRU.

China is the metal's prime consumer. For example, global consumption
The world‟s largest of tungsten in 2007 was 62.9kt, of which China accounted for 31.6%, or
consumer of tungsten 19.8kt. Its consumption of the metal has more than doubled over the
is China, which used last decade. From 1998 to end-2007, global consumption of tungsten
31.6% of the 2007 grew at 5.8% per annum, with the other significant tungsten consumers
total of 62.9kt. being the U.S., Western Europe and Japan. Consumption fell below 60kt
in 2009 but is widely forecast to exceed 60kt in 2010, and approach
80kt in 2013 (e.g. CRU).
China dominated world tungsten production in 2009 (~81%).
Austria Bolivia
Canada Portugal
2% 2%
3% 2%
Russia
4%
Other
6%
Global 2009 mine
production was
~58kt, of which China
accounted for ~81%.
China
81%
Source: USGS.
Global tungsten metal production in 2008 was 55.9kt (USGS) and an

China increased estimated 58kt in 2009 (an increase of ~3.8%). Of the 2009 estimate,
production in the GFC, China accounted for 81%, producing 47kt. It was followed by Russia
while the rest of the (2.4kt), Canada (2kt) and Austria (1kt). The 2008-2009 increase was
world cut back. accounted for by China (+3.5kt), while the rest of the world decreased
output by 1.4kt due to the Global Financial Crisis.
Elemental Facts
Tungsten is the hardest metal, and has a high density (19.25g/cc;
The main application slightly less than gold, 19.3g/cc), melting point and tensile strength.
for tungsten is in Tungsten is mined from or adjacent to igneous rocks (e.g. in skarns). It
„hardmetal‟, as has two economically important minerals: wolframite ((Fe,Mn)WO4) and
tungsten carbide. In scheelite (CaWO4). The majority of the world‟s 2.8Mt economic reserves
China, steel-making are held by China (with 1.8Mt or 64%. Source :USGS).
accounts for the
highest % use. Tungsten is primarily used in wear-resistant cemented carbides aka
hardmetals (56%) and steel/alloys (20%), as well as in lighting,
heating, and welding applications. Tungsten chemical compounds are
used in catalysts, inorganic pigments, and high-temperature lubricants.
Tungsten is sold in five common forms – APT (ammonium
Ferrotungsten is used paratungstate), ferrotungsten, tungsten concentrate (usually 65%
for steelmaking, while WO3), and tungsten carbide and oxides. Prices are quoted in $US or
APT feeds into the RMB and the main units are mtu (metric tonne units, of 10kg WO 3, ie
cemented carbide and 7.9kg W) and kilograms. It is usually sold on long-term contract.
chemical stream.
Market update: Rare Earth Elements
Investment Comment
Industry forecasts are for 20-30% compound annual growth in prices to
2014. Given China‟s almost complete dominance of the REE market,
there is a significant opportunity for new producers to take advantage of
Companies with
booming prices and demand while ensuring security of supply to non-
advanced projects are
Chinese buyers. Rare earth projects, due to their chemical complexity,
well positioned to gain
can take a long time to develop, so only advanced or geochemically
from the rare earths
simple projects will be able to come online in the next 5 years.
boom.
Pricing
Recovery from the GFC, combined with China‟s decision to cut the REO
quota, has driven some prices to 10-year highs. This includes the LREE
which are more common and less valuable the HREE. For example, the
biggest gain has been cerium (Ce) over 12 months, up 860%. These
Some REO prices are
prices will only be sustainable to the extent they are driven by demand,
at 10 year highs.
and could vary according to China‟s export and production policies.
Changes in reported REO prices over 3 and 12 months
Current
June 7, September 7, 3mth % 12mth %
Rare Earth Oxide price
2010 2009 change change
US$/kg
Lanthanum 37.0 8.0 5.7 363 555

Cerium 36.0 6.1 3.8 490 860
Light Rare Earths Praseodymium 55.8 30.3 14.0 84 298
Neodymium 48.8 30.8 14.3 59 242
The average, Samarium 33.3 4.5 4.5 639 639
unweighted 12 month Europium 595.0 515.0 485.0 16 23

Gadolinium 40.0 7.7 6.3 423 540
price increase for the Heavy Rare Earths Dysprosium 288.0 190.0 109.3 52 164
REO shown in this Terbium 595.0 505.0 350.0 18 70
table is 355%. Yttrium 34.5 11.5 13.3 200 160
USD FOB ex-China per kilogram' 99% purity; price are bid-offer mid points.
Source: Metal Pages, RCR

The USGS estimates that world REO production in both 2008 and 2009
was 124kt, of which 120kt (96.8%) came from China. It also estimates
that China has 36% of the total global REO economic reserves of 99mt,
followed by the CIS (19%) and USA (13%).
China dominates the
global REE trade, with The main importer of REE metals and compounds in 2008 was Japan,
96.8% of the 124kt with a combined 34.3kt, while China exported 55kt (BGS). It is clear
production in 2009. that the majority of rare earths are both mined and consumed in China.
BCC Research forecasts 7-9% compound annual growth rate in global

REE demand over 5 years from 2009, which equates to a +60kt increase
in demand, against a supply increase of +40kt.
Demand for REE is
forecast to grow at 7- Looking forward to 2014, actual consumption is forecast to be 180kt
9% per annum over TREO (total rare earth oxides). However, more than this will need to be
the five years to 2014, produced, as the mined REO ratios do not match the spectrum of
against a 5% increase demand. Accordingly, it is forecast that supply will have to be in the
in supply. range of 200-210kt REO. This latter is termed the “Adjusted Global
Demand” in the graph below. Recently (August 2010) the China Society
of Rare Earths forecast global REO demand would reach 210kt in 2015.
This could create

severe undersupply of China could supply 160-170kt REO; sufficient to supply its own needs
some elements, (120kt) plus some exports, but 30-50kt short of forecast global demand.
especially the scarce
middle and heavy rare Rare earths, forecast supply and demand curves
earths.
This graph clearly

demonstrates the
looming supply issues
for the REE market.
Source: Arafura Resources Ltd; BCC Research
As a sign of growing demand, Metal Pages reported in early July that

China‟s REO export quota for 2H10 was 7,976t, a 64.2% decrease from
the 22,282t REO allocated in 1H10 to both Chinese and foreign-owned
China has dramatically companies and a 72% drop from the 28,417t allocated in 2H09. This
cut export quotas for brought the total export quota for 2010 down to 30,258t REO, a 40%
2H10. reduction from the total quota allocated in 2009.
In 2008, according to the British Geological Survey (after Kingsnorth,

2009), the five main uses of REO (rare earth oxides) were in magnets
REE have numerous (21%), catalysts (19%), alloys (18%), polishing (12%) and glass
high growth (10%).
applications.
Elemental Facts
The rare earth elements (REE) are the 15 lanthanoid elements (atomic
numbers 57 to 71). They are divided into the light rare earths (LREE,
The main REE minerals lanthanum to samarium) and heavy rare earths (HREE, europium to
are bastnäsite and lutetium). Many deposits are related to igneous rocks, such as trachytes
monazite or carbonatites. The large deposits in China, source of much of the
world‟s current REE supply, are laterites, i.e. weathered deposits.
REE are critical to many high-technology developments and in products

The REE‟s chemical associated with high growth sectors: energy, electronics and technology,
properties lend them and the environment. For example, they are a component in
to a variety of unique rechargeable batteries and the magnets in electric motors, of the type
applications, for which used in consumer electronics and hybrid motor vehicles. REE are also
few other metals can used as phosphors in energy-efficient light globes, and in the screens of
substitute. LCD displays.
Market Update: Zirconium and Zircon
Investment Comment
Price increases could
Currently, there are few greenfields zircon projects under development.
benefit near-term
This could create supply tightness in the near to medium term (ie 1-3
producers. A potential
years) and favourable market conditions- ie moderately to strongly
supply crunch would
increasing demand - for existing or near-term zircon suppliers.
provide the chance to
gain Zr market share.
Pricing
According to Iluka, consensus broker zircon price forecasts for 2010 to
2013 average US$861; US$906; US$927 and US$1,016, respectively.
The average broker forecast CAGR in pricing from 2010 to 2013 is 5.7%.
Zircon Prices in nominal dollars (FOB), historic and forecast

(August 2010).
Average CAGR broker

zircon forecasts 2010-
2013 is 5.7%.

The main producers of zircon in 2009 were Australia (510kt), South
Global zircon
Africa (395kt) and China (140kt), with a total estimate 1.23Mt (Source:
consumption in 2009
USGS), the majority from heavy mineral sands.
was ~1.23Mt, with
1.4Mt forecast for
Global consumption of zircon in 2012 could be an estimated 1.4Mtpa.
2012.
Of this, 18% or 250Ktpa will be for zirconia and Zr chemicals (Source:
TZMI, Alkane Resources).
As is the case with most commodities, consumption by China has a

China imports +80%
significant effect on demand. China imports more than 80% of its zircon
of the zircon it
– one of its highest material import dependencies.
consumes.
Australia‟s Iluka Resources (ASX:ILU) estimates that an appreciable
increase in current zircon prices would be needed to induce new supply.
Production could
This is partly because zircon production is closely associated with
remain at ~1.4-
titanium production, through heavy mineral sands (in which the current
1.5Mtpa through
zircon/TiO2 ratio is ~0.2), i.e. titanium prices would also need to rise in
2011-2015, even with
order to bring on new heavy mineral projects. Any increase in demand
a 50% price increase.
beyond ~1.4Mt-1.5Mtpa zircon in the period 2012-2014, even with a
50% price increase, could create a supply shortage.
Zircon demand by end use, 2000 to 2012.
Zircon and zirconia are

extremely hard; their
main use is in
ceramics and
refractory coatings.
The use of zircon for
ceramics is increasing
over time.
Zircon supply: induced new projects at 0%, 25% and 50%price

rises on 2008 levels (Source: Iluka).
Zr production from
mineral sands is
buffered by Ti
demand, and there is a
lack of grassroots
projects - so even big
Zr prices might see a
delay in new output.
Source: Iluka
Elemental Facts
Zirconium, as the Zirconium in economic concentrations occurs most commonly in the
mineral zircon, is silicate mineral zircon (ZrSiO4). Due to its hardness, zircon is resistant
primarily extracted to weathering and is often found in heavy mineral sand deposits, along
from heavy mineral with iron-titanium minerals such as rutile and ilmenite. It also occurs in
sands. Zirconium is hard rock rare metal deposits. According to the USGS: “Ceramics,
also found in hard rock foundry applications, opacifiers, and refractories are the leading end
rare metal deposits. uses for zircon. Other end uses … include abrasives, chemicals, metal
alloys, welding rod coatings, and sandblasting.” Metallic zirconium and
zirconia (ZrO2) are used by the nuclear and chemical industries.
Report Contributors
Trent Allen: Trent has a BSc (Hons) and a PhD from the University of Sydney, specialising in the
petrology, trace-element geochemistry and economic geology of alkaline igneous rocks. His
Australian mining industry experience includes several years with Newcrest‟s Cadia Valley
gold/copper mines, where he was engaged in resource definition and geotechnical engineering.
Trent has also worked as an exploration consultant, university lecturer in geology and civil
engineering, and as a journalist and newspaper editor.
Tony Parry: Tony has extensive experience in metallurgical process development, (working with MIM
Limited for five years) and in mining equity research, equity sales and mining corporate finance
(working in London for five years and subsequently Perth). He was a founding Director and CEO of
an ASX listed exploration company and has been engaged extensively as a strategic planning
consultant to many small-medium enterprises. Tony‟s qualifications include a BSc (Hons) in
Metallurgy and a PhD in Metallurgy from the University of NSW.
John Wilson: John has a background in mining, finance and equity research. He worked on Wall
Street for 6 years and has covered US, Australian and Latin American mining stocks. He has also
worked with BHP in their minerals division. Qualifications include an MBA from the Wharton School
of the University of Pennsylvania and a Bachelor of Engineering from the University of Sydney.
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Rare and Minor Metals Company Review

Exploration, Development & Production

This report is subject to copyright and may not be redistributed without

Rare and Minor Metals Company Review

Resource Analyst (Rare and Minor Metals): Dr Trent Allen

Resource Analyst: Dr Tony Parry

Resource Capital Research

Tel: +612 9252 9405

Resource Capital Research

Exploration, Development and Production Companies

[Alkane Exploration Limited ........................................................................................... ]

Market Update: Lithium........................................................................................................ 19

Report Contributors ............................................................................................................. 31

Overview and Investment Comment

Analyst: Dr Trent Allen

 Lithium: Increasing intensity of use is expected to require additional

… driven by These forecasts are based on expectations of increasing intensity of use in

Share price performances of 358 exchange-listed companies with one or

RCR September Quarter 2010 Featured Company Summary

Arafura Resources Limited ARU Rare Earths, Bankable Feasibility Study

Gippsland Limited GIP Tantalum, Tin, Gold Bankable Feasibility Study

Gunson Resources Limited GUN Zircon, Titanium, Definitive Feasibility Study

Galaxy Resources Limited GXY Lithium, Tantalum, Commissioning

Icon Resources Limited III Tungsten, Gold, Scoping Study

Rodinia Lithium Inc RM Lithium Early-Mid Exploration

TNR Gold Corp TNR Gold, Copper, Early to Advanced Exploration

Alkane Exploration Limited Equinox

Total : (C$) 14.0 0.0 74.4 306

Total or Average: 69 6 7 10 27 4 4 9 17 1 1.2 5.5 6.3 75 58 65

Prepared by Dr Trent Allen

Reserves, Resources and Historic Mineralisation

Valuation and Performance Data

C OM P A N Y EV-Cash EV-Cash Production Share Price Performance Current Share Price

Alkane Exploration Limited ALK 3.3 22.8 na 0.24 na 48 116 86 52 13 167

Total/Total Average 3 10 -8 -18 31 26

(1) EV-Cash / Reserves or / Resources applies to kt of focus commodity

Capital Profile Production and Financial Forecasts

Investment Points Company Comment

Reserves 0.0 0.00 0.0

Nolans Total 30.3 2.80 1.0 848 13.3 3.9

Contacts Directors Key Projects

ARAFURA RESOURCES VALUATION

Target Valuation Sensitivity

+ Cash 17.2 17.2 17.2

ARU NET ASSET VALUE 953 39 1332

* Includes a pre-BFS project discount of 30% of the project valuation: 30%

NOLANS RARE EARTHS-PHOSPHATE-URANIUM PROJECT, KEY ASSUMPTIONS*

MINING METHOD Open Pit

PROCESS METHOD On site heavy media separation and flotation

Capital Profile Production and Financial Forecasts

Investment Points Company Comment

0.2 Reserves and Resources/Mineralised Material

0 Reserves 0.0 0.0 0.0 0.00 0.0

Contacts Directors Key Projects

GLOBE METALS AND MINING VALUATION

Target Valuation Sensitivity

+ Cash 1.5 1.5 1.5

GBE NET ASSET VALUE 299 30 798

* Includes a pre-BFS discount of 30% of the project valuation: 30%

KANYIKA SPECIALTY METALS PROJECT KEY ASSUMPTIONS*

Contained metal, mlbs 383.6 18.5 661.4 11.9

MINING METHOD Open Pit