Gold Sector Review 2Q11 Abridged - Baystreet · 2012. 4. 27. · Step out drilling at the flagship...

Uranium Sector ReviewExploration, Development & ProductionMarch Quarter 2009

Gold Company ReviewExploration, Development & ProductionJune Quarter 2011

Resource Capital Research


Suite 1306 183 Kent Street Sydney, NSW 2000

Tel: +612 9252 9405 Fax: +612 9251 2859 Email: [email protected]: www.rcresearch.com.au

Resource Capital Research ACN 111 622 489

Gold Company ReviewJune Quarter 2011

Resource Analyst (Gold): Dr Tony Parry

Resource Analyst: John WilsonResource Analyst: Murray BrookerResource Analyst: Khaled Sultan (Toronto)

This report is subject to copyright and may not be redistributed without written permission from RCR. The information contained in this report is for use by US and Australian residents only. Copies are available for purchase from RCR.

27 June 2011


June Quarter 2011 Disclaimer and disclosure attached. Copyright© 2011 by Resource Capital Research Pty Ltd. All rights reserved. 2

Contents Contents .............................................................................................................................. 2 Overview and Investment Comment ........................................................................................ 3 RCR June Quarter 2011 Featured Company Summary ................................................................ 4 Comparative Charts ............................................................................................................... 6 Financial Data ....................................................................................................................... 7 Company Statistics ................................................................................................................ 7 Reserves, Resources and Historic Mineralisation ........................................................................ 8 Valuation and Performance Data ............................................................................................. 8

Exploration, Development and Production Companies

Aphrodite Gold Limited ................................................................................................. 9 Bright Star Resources Limited ..................................................................................... 11 Castle Minerals Limited ............................................................................................. 133 [Cobar Consolidated Resources Limited ........................................................................... ] [Echo Resources Limited ............................................................................................... ] Gold Road Resources Limited ..................................................................................... 155 Gowest Gold Limited .................................................................................................. 17 Kingsgate Consolidated Limited * ................................................................................ 19 [Kingsrose Mining Limited.............................................................................................. ] [Morning Star Gold NL * ................................................................................................ ] [Mt Isa Metals Limited ................................................................................................... ] Norseman Gold Plc * .................................................................................................. 21 PepinNini Minerals Limited .......................................................................................... 23 Sumatra Copper & Gold plc ......................................................................................... 25 [West Wits Mining Limited ............................................................................................. ]

[Gold Market Fundamentals ..................................................................................................... ] Industry Trends .................................................................................................................. 27 Selected Charts and Gold Sector Statistics .............................................................................. 33 Report Contributors ............................................................................................................. 35 Disclosure and Disclaimer ..................................................................................................... 36

[This is the Abridged Version of the June 2011 Quarter RCR Gold Company Review. The Subscriber version of the Gold Company Review which includes all company reports and a review of gold market fundamentals (60 pages) can be purchased for A$110.00. The Subscriber versions of the RCR June quarter uranium report can also be purchased for the same price. Contents and purchase details can be found at www.rcresearch.com.au]

* Indicates companies with detailed financial projections and valuation available.



Overview and Investment Comment

Gold Price Outlook Gold has continued to set new records during the June 2011 quarter. Currently (June 27) it is trading at US$1,502/ounce, after an all time high of US$1,563.70/ounce (April 29). It started the quarter at US$1429/oz. Overall, the US dollar gold price is up 21% in the past twelve months. We think that the US dollar could arrest its long term decline, which is negative for gold. However, it is the Eurozone sovereign debt crisis that could be the key to ignite further investment demand for gold. At the very least, it will keep the focus on gold as a source of some ‘insurance’ during a very uncertain period for the global financial system. For this reason we maintain the position we have held in our past Reviews: although we have some concerns regarding the fundamentals for gold, it would be foolish to bet against the gold price in the short to medium term. The risk seems to be more on the upside than the downside for the next six months. In our last Review (March Quarter 2011) we forecast a gold price averaging US$1,450/ounce over the ensuing six months. We raise our forecast to US$1,550/ounce for the six months ahead. Longer term (beyond 2011), we are cautious on the outlook for gold. We are concerned about the recent outflows of gold onto the market from Exchange Traded Funds. We do not expect the US dollar to collapse (it, in itself, is a safe haven), and we consider inflation fears are over-stated. Eventually gold’s unique safe haven appeal could start to dissipate. Our guess (and it is only a guess!) is in the first half of 2012, particularly if we see signs of a recovery in equity and property markets and positive real interest rates in the US. Gold Equities Gold equities (as measured by the major gold share indices) have performed poorly in the past year, as is indicated in the table below. The five share indices detailed below have all significantly underperformed the US dollar gold price (and overall equity markets) in the twelve months since June 24 2010. Only the Australian share index is in positive territory (up 8%) despite the US dollar gold price rising by 21% in that period. Gold may have been a safe haven in uncertain times, but gold shares in the past year definitely have not been.

Current * 1 month 3 month 6 month 1 year

Gold Price Comex US$/oz na -1% 5% 9% 21%

USA S&P 500 Gold Index na -5% -4% -13% -11%

Canada S&P/TSX Gold Index na -5% -10% -13% -3%

Australia S&P/ASX200 Gold Index na -4% -8% -11% 8%

South Africa FTSE/JSE Gold Index na -12% -16% -14% -10%

FTSE Gold Index FTSE Gold Index na -1% -10% -11% 0%

World Markets (all sectors) Morgan Stanley World Index na -3% -4% 0% 18%

*Table data as at June 24 2011 Source: Bloomberg, RCR

In April gold set a new record of US$1,563.70/ounce, and is up 21% in the past twelve months. The US dollar’s trend and the Eurozone debt crisis are the key factors currently influencing investment demand for gold. Because of the Eurozone debt crisis, rather than a weaker US$, RCR is forecasting higher prices (US$1,550/oz) for the balance of 2011... …but we could be seeing the peak in the gold market in the next six months. Gold shares have significantly underperformed relative to physical gold over the past twelve months, failing to provide a similar safe haven.



RCR June Quarter 2011 Featured Company Summary

Company Summary

AUSTRALIA

Company Code Comment

Aphrodite Gold Limited AQQ Advanced Exploration, Scoping Study

AQQ has recently outlined a resource of over 1Moz at the Aphrodite Gold Project near Kalgoorlie. With acurrent EV/resource ratio of only A$9.20/ounce we see potential for a significant re-rating of the stock to levels

of around 2-3 times the current share price.Bright Star Resources Limited BUT Mid-Advanced Exploration

Tanzanian-focused BUT has already got its foot on 680koz of resource equity in this gold-rich country.

Exploration is planned which could increase resources rapidly, and drive a re-rating based on an enterprisevalue well below that of some African exploration peers.

Castle Minerals Limited CDT Early to Advanced Exploration

Another virgin discovery (Castle's third) of a potentially major mineralised zone at Baayiri, NW Ghana,highlights the huge potential of its 12,000km2 Ghana tenement position. This potential is not lost on neighbour

Azumah Resources, which has built a 13% stake in CDT.Cobar Consolidated Resources Limited (4)CCU Feasibilty Study, Advanced Exploration

With silver currently consolidating at around the US$36/ounce level and CCU's Wonawinta silver project in

NSW (51moz Ag resource) likely to be in production by 1Q12, our six month share price target as a silverproducer is A$1.00/share.

Echo Resources Limited EAR Advanced Exploration

Step out drilling at the flagship Julius deposit intersected quartz-muscovite-pyrite alteration in the shear zone.Results expected July 2011. Potential for >1moz gold if continuity is confirmed. 2010 drill grades suggest

open pit and underground potential.Gold Road Resources Limited GOR Advanced Exploration

GOR's discovery momentum and increasing focus on potential production should continue to drive share

price out-performance in 2H11, as the resource inventory builds from additional high grade zones in itsdominant position in the under-explored Yamarna Belt.

Kingsgate Consolidated Limited KCN Production, Advanced Exploration

KCN is vying for the number two spot for Australian-based gold producers with production growing to over300kozpa in FY13 and further potential growth to come from South America. The company's eventual aim is

>500kozpa to become a globally significant gold producer.Kingsrose Mining Limited KRM Production, Adv. Exploration

Ramp up of production from KRM's 85%-owned Way Linggo Au-Ag Indonesian operation (~60kozpa Auequiv)

is confirming strong cashflow with 1Q11 cash costs ~US$25/oz after Ag credits. Now the focus will turn toregional exploration, where there is excellent potential.

Morning Star Gold NL MCO Production

MCO has experienced on-going teething problems with ore hoisting and processing equipment at therecomissioned Morning Star Mine. As the company gets on top of this issues, we should see a lift in

production in 3Q11. An inaugural profit in FY12 is forecast.Mt Isa Metals Limited MET Early to Advanced Exploration

MET has a strategic land holding (4,000km2) in Burkina Faso and has delineated multiple prospects for follow

up in 2011. Nabanga Prospect discovered 1Q11 is defined over a 3.6km strike, shallow, and high grade (avg.lode intersection 4.6m @ 5.66g/t). Drilling 2H11.

Norseman Gold plc NGX Production, Advanced Exploration

NGX's 2011 production expansion plans have gone into reverse, resulting in falling gold output and losses inFY11. We expect to see a significant improvement in 2H11 as underground mine productivity improves andthe North Royal Open Pit hits higher grade ore.

PepinNini Minerals Limited PNN BFS, Advanced Exploration

With the Crocker Well Uranium BFS (60% SinoSteel, 40% PNN, 11.7mlb resource) on hold, PNN is targeting

high grade gold in QLD, Au-Cu potential in Argentina, a DSO iron ore resource in WA and large scalemagnetite deposits in the Curnamona Province (SA).

Sumatra Copper & Gold plc SUM Advanced Exploration, Exploration

PFS 3Q11 on the flagship Tembang deposit (>1moz Au, 13moz Ag). Potential to become a mid-tier producer(60-70koz) 4Q13. Newcrest JV on Tandai project (former mine - production 1.4moz @ 15.5g/t Au). Drilling onseveral projects (>2,000 m) planned in 3Q11.

West Wits Mining Limited WWI Advanced Exploration

WWI is acquiring a 50% interest in a high grade alluvial gold project in West Papua, with near term production

potential and intriguing exploration challenges to find a hard rock source. That, plus continued focus on SAfrican projects, should boost a drifting share price.

CANADA

Company Code Comment

Gowest Gold Limited GWA Early-Mid Exploration

GWA offers good exploration potential. Resource upgrade (June 2011) to 1.2moz of gold (+140% from0.5moz). With grades of +6g/t, the Frankfield East project (100% GWA) in Timmins, Ontario could bedeveloped as early as 4Q12. PEA expected 3Q11.



Explorers’ Development Cycle: Conceptual market capitalisation versus development stage; June Q 2011

Exploration Discovery

Resource expansion;

Economic assessment

Project

approvals;

Funding Construction Commis'g

High risk/

High return

Declining

exploration risk

AUS

ATN

EAR

CHZ

CNS

PNN

SAU

SGZ

CAN

AUS

AVQ

BCN

BUT

CDT

MET

WWI

CAN

AUS

KGL

RED

CAN

AUS

AAM

ADU

ALD

AVO

BCD

CAH

CTO

KCN

KRM

HEG

MLI

MUN

MCO

NAV

NGX

NQM

RRL

VGO

Production

AUS

AGD

ALK

AMX

AQQ

AZM

CHN

CRC

CVY

GDR

GOR

GRY

KAL

KOR

IGR

MAT

SUM

YTC

AUS

BTR

CCU

PRU

CAN

ATW

Share Price

CAN

GWA

SAC

XRC

FRG

CAN

FIU

IAU

NSU

UME

AUS

NMGTMX



Comparative Charts

Gold and Silver Companies,

% off 12-month High

(as at June 27 2011)0

20

40

60

80

100

Norseman Gold plc

PepinNini Minerals Ltd

Mt Isa Metals Ltd

Kingsrose Mining Ltd

Morning Star Gold NL

Sumatra Copper & Gold plc

West Wits Mining Ltd

Castle Minerals Ltd

Aphrodite Gold Ltd

Bright Star Resources Ltd

Echo Resources Ltd

Cobar Consolidated Resources

Ltd

Kingsgate Consolidated Ltd

Gowest Gold Ltd

Gold Road Resources Ltd

Percent

Gold and Silver Companies, 6-month

Share Price Performance

(as at June 27 2011)

-100

-80

-60

-40

-20 0

20

40

60

80

Norseman Gold plc

PepinNini Minerals Ltd

Morning Star Gold NL

Kingsgate Consolidated Ltd

Bright Star Resources Ltd

Gowest Gold Ltd

Sumatra Copper & Gold plc

West Wits Mining Ltd

Mt Isa Metals Ltd

Aphrodite Gold Ltd

Castle Minerals Ltd

Kingsrose Mining Ltd

Echo Resources Ltd

Cobar Consolidated Resources

Ltd

Gold Road Resources Ltd

Percent

Not a good six months for emerging juniors. Only two of the exploration and development companies in this Review are in positive territory over the past six months, while eleven companies have underperformed the Australian Gold Index, representing the shares of major producers, which is down by 11% in that period.

Most exploration companies’ share prices have retreated strongly from their twelve month highs as equity market gloom has pervaded the gold sector, notwithstanding record US$ gold prices. Only six of our sixteen featured companies are within 40% of their twelve month highs.



Financial Data

COMPANY Aus t

Canada

US

A

Euro

pe

oth

er

Lis

t ed

opt io

ns

Share Price (LC$/share)3

2 Fully

Diluted

Market

Cap Book Enterprise

ExchangesCode Status1

Yr End 52 week Current Shares Opt+W2 Other2 Shares (undiluted) Cash Debt Value Value

27 June 2011 Hi Low (m) (m) (m) (m) (LC$m)3 (LC$m)3 (LC$m)3 (LC$m)3 (LC$m)3

AUSTRALIA (A$)

Aphrodite Gold Limited AQQ E June ASX No 0.18 0.09 0.10 134 67 0 200 13 2.5 0.0 17 13

Bright Star Resources Limited BUT E June ASX BUTO 0.21 0.08 0.13 182 52 0 234 23 2.6 0.0 6 23

Castle Minerals Limited CDT E June ASX No 0.64 0.24 0.36 114 5 0 118 41 8.4 0.0 11 41

Cobar Consolidated Resources Limited (4) CCU I June ASX No 1.18 0.13 0.72 180 8 0 187 129 32.7 0.0 44 129

Echo Resources Limited EAR E June ASX No 0.30 0.04 0.18 72 2 0 74 13 1.8 0.0 3 13

Gold Road Resources Limited GOR E June ASX GORO 0.84 0.08 0.56 317 18 0 335 178 10.4 0.0 23 178

Kingsgate Consolidated Limited KCN P June ASX No 12.30 6.91 7.73 135 2 0 137 1046 30.7 47.5 353 1093

Kingsrose Mining Limited KRM P June ASX KRMO 1.97 0.88 1.32 264 33 0 297 349 19.3 9.8 49 359

Morning Star Gold NL MCO P June ASX No 0.51 0.24 0.26 284 0 0 284 73 8.0 0.0 20 73

Mt Isa Metals Limited MET E June ASX No 0.90 0.14 0.32 158 20 0 178 51 14.2 0.0 22 51

Norseman Gold plc NGX P June ASX AIM No 1.50 0.24 0.30 220 11 0 231 66 15.9 13.0 101 79

PepinNini Minerals Limited PNN E June ASX No 0.37 0.10 0.10 90 0 0 90 9 4.5 0.0 26 9

Sumatra Copper & Gold plc SUM I Dec ASX No 0.40 0.19 0.22 160 32 0 192 35 1.6 0.0 16 35

West Wits Mining Limited WWI E June ASX No 0.08 0.04 0.04 168 18 0 186 7 0.6 0.0 24 7

Total: Australia 153.2 70.2 716 2102

CANADA (C$)

Gowest Gold limited GWA E Oct TSX.V OTC FSE No 0.43 0.17 0.27 99 27 0 126 27 1.6 0.0 10 27

Total: Canada 1.6 0.0 10 27

Total: Global (US$)4 163 74 762 2235

(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) Fully Diluted (shares, options + warrants (opt. + w), convertible notes (Conv. N), other obligations)

(3) L.C. - Local Currency unit. Note: Cash & debt values for SUM are in GBP (4) AUD/USD: 1.04; CAN/USD: 1.03

Exchanges

Company Statistics

COMPANY

(A) Exploration (L.C.$m)3 (B) Corporate (L.C.$m)3Drilling ('000 m)Code Land (A)/(A+B) %

27 June 2011 ('000 ha)6 Mar-11 Jun-11 2010 2011 Mar-11 Jun-11 2010 2011 Mar-11 Jun-11 2010 2011 Jun-11 2010 2011

AUSTRALIA (A$)

Aphrodite Gold Limited AQQ 3 7.0 6.0 0.0 28.2 0.7 2.1 5.5 5.5 0.1 0.3 0.5 0.9 88.2 91.0 86.0

Bright Star Resources Limited BUT 63 0.0 3.0 4.0 3.0 0.1 0.3 0.2 0.4 0.3 0.3 0.8 1.4 45.5 21.5 24.1

Castle Minerals Limited CDT 1,200 15.0 18.0 18.0 58.0 1.4 1.0 1.8 4.0 0.2 0.2 0.3 1.0 87.0 84.5 80.9

Cobar Consolidated Resources Limited (4) CCU 127 3.0 8.0 13.0 11.0 1.2 0.9 2.5 3.5 0.6 0.6 0.5 2.2 62.1 82.0 61.5

Echo Resources limited EAR 50 0.0 3.5 2.0 5.5 0.2 0.2 0.7 0.8 0.0 0.1 0.3 0.3 66.7 72.9 76.5

Gold Road Resources Limited GOR 500 20.0 45.0 29.4 96.0 1.0 2.9 2.1 6.6 0.6 0.4 0.9 1.7 89.2 69.4 79.7

Kingsgate Consolidated Limited KCN 130 57.0 57.0 223.0 228.0 4.0 6.0 18.0 18.0 2.0 2.0 9.7 13.8 75.0 65.1 56.6

Kingsrose Mining Limited KRM 0 0.0 0.0 8.0 0.0 2.3 2.5 8.0 9.4 0.8 0.8 4.5 4.1 75.8 64.1 69.7

Morning Star Gold NL MCO 24 1.3 1.3 2.0 4.5 2.0 2.6 1.5 7.8 0.6 0.5 1.1 2.6 83.9 58.9 75.4

Mt Isa Metals Limited MET 800 7.5 7.5 0.0 15.0 0.9 1.3 2.7 4.1 0.5 0.2 2.1 1.5 86.0 56.4 73.6

Norseman Gold plc NGX 161 20.0 20.0 40.0 80.0 1.5 1.5 5.7 6.0 1.5 1.0 5.5 5.9 60.0 51.0 50.5

PepinNini Minerals Limited PNN 1,607 4.8 8.5 17.1 23.5 0.7 0.8 4.9 3.5 0.5 0.2 1.0 1.4 80.0 82.8 71.3

Sumatra Copper & Gold plc SUM 322 3.5 3.5 4.0 14.0 1.1 1.1 3.0 4.8 0.2 0.2 1.6 0.8 85.9 64.9 85.6

West Wits Mining Limited WWI 10 0.0 1.5 6.7 4.5 0.1 0.2 1.4 0.6 0.3 0.3 1.7 1.3 41.7 45.3 30.6

Total: Australia 139.0 182.8 367.2 571.2 17.0 23.4 57.9 75.2

CANADA (C$)

Gowest Gold Limited GWA 60 4.5 4.5 0.0 0.0 2.3 1.2 1.6 1.6 0.3 0.3 0.6 0.6 80.0 73.8 73.8

Total: Canada 4.5 4.5 0.0 0.0 2.3 1.2 1.6 1.6

Total: Global (US$)4 18 25 61 79

(6) To convert hectares to acres, multiply by 2.47; eg 100 thousand hectares ('000 ha) = 247 thousand acres ('000 ac)

(A) Exploration (L.C.$m)3 (B) Corporate (L.C.$m)3Drilling ('000 m)



Reserves, Resources and Historic Mineralisation

COMPANY

Code Status1

Silver Other Silver Other Silver Other

27 June 2011 koz t moz koz t moz koz t moz moz t

AUSTRALIA

Aphrodite Gold Limited AQQ E 0 0.0 1,033 32.1 0 0.0 1,033 32.1

Bright Star Resources Limited BUT E 0 0.0 680 21.2 0 0.0 680 21.2

Castle Minerals Limited CDT E 0 0.0 158 4.9 136mt Fe 0 0.0 158 4.9

Cobar Consolidated Resources Limited (4) CCU I 0 0.0 14.0 64kt Pb 0 0.0 51.0 212kt Pb 0 0.0 0 0.0

Echo Resources Limited EAR E 0 0.0 99 3.1 99mlb Cu 0 0.0 99 3.1

Gold Road Resources Limited GOR E 0 0.0 1,067 33.2 6.2mlb U3O8 0 0.0 1,067 33.2

Kingsgate Consolidated Limited KCN P 2,350 73.1 5,270 163.9 29.9 0 0.0 5,270 163.9

Kingsrose Mining Limited KRM P 0 0.0 141 4.4 0 0.0 Zn/Pb tailings 141 4.4

Morning Star Gold NL MCO P 0 0.0 910 28.3 0 0.0 910 28.3

Mt Isa Metals Limited MET E 0 0.0 4 0.1 24kt Cu 0 0.0 4 0.1

Norseman Gold plc NGX P 420 13.1 3,800 118.2 0 0.0 3,800 118.2

PepinNini Minerals Limited PNN E 0 0.0 0 0.0 5mlb U3O8 0 0.0 0 0.0

Sumatra Copper & Gold plc SUM I 0 0.0 1,000 31.1 13.1 0 0.0 1,000 31.1

West Wits Mining Limited WWI E 59 1.8 427 13.3 0 0.0 427 13.3

Average: Australia

CANADA

Gowest Gold Limited GWA E 0 0.0 1,187 36.9 0 0.0 1,187 36.9

Total/Total Average 2,829 88 15,775 491 94 0 0 15,775 490.7

(1) P: Producer; E: Explorer; I: Imminent - includes companies with bankable feasibility studies and likely to be in production within 2 years; IHC: Investment Holding Company

(2) Reserves, resources and mineralised material published by the relevant company. Mineral resource estimates are inclusive of the mineral reserve.

The applicable mineral resource codes are by country: Australian: JORC, Canadian: NI 43-101, South Africa: SAMREC

(3) RCR Assesed NAV is based on nominal NPV at 5% discount rate except for EKM and WWI. See individual reports for key assumptions. "L.C." - Local Currency Unit. "nc" - Not Calculated.

Assumed long tem gold price for NPV calculations is current RCR long term forecast (US$900/oz) and current spot (~US$1,540/oz). See company reports for specific assumptions.

(All Au Mineralisation)

Total Gold (Au)

Gold (Au) Gold (Au) Gold (Au)

Reserves (Equity)2 Resources (Equity)2 Historical/Mineralised Material (Equity)2

Valuation and Performance Data

COMPANY EV-Cash EV-Cash EV-Cash

Code P/Net Cash /Reserves /Res'v+resources /Total Au

27 June 2011 (x) 1540 900 1540 900 US$/unit US$/unit US$/unit 1 month 3 month 6 month 12 month Hi Lo

AUSTRALIA

Aphrodite Gold Limited AQQ 5.4 nc nc nc nc na 11.1 11.1 -9 -20 -13 na 43 16

Bright Star Resources Limited BUT 8.8 nc nc nc nc na 31.1 31.1 -11 -26 -22 56 40 64

Castle Minerals Limited CDT 4.8 nc nc nc nc na 215.2 215.2 20 -3 -11 -14 44 50

Cobar Consolidated Resources Limited (4) CCU 4.0 1.13 0.58 64% 124% 315.0 87.0 87.0 -18 -24 47 407 39 466

Echo Resources Limited EAR 7.2 nc nc nc nc na 118.3 118.3 -31 -3 -3 283 40 350

Gold Road Resources Limited GOR 17.1 nc nc nc nc na 164.6 164.6 -7 18 65 433 33 575

Kingsgate Consolidated Limited KCN -62.2 12.97 9.47 60% 82% 474.7 211.7 211.7 -3 -14 -26 -24 37 12

Kingsrose Mining Limited KRM 9.1 nc nc nc nc na 481.7 481.7 -5 -19 -6 26 50 6

Morning Star Gold NL MCO 9.1 0.69 0.44 37% 58% na 74.5 74.5 -15 -34 -45 -33 50 6

Mt Isa Metals Limited MET 3.6 nc nc nc nc na na na -16 -46 -14 123 64 123

Norseman Gold plc NGX 22.1 0.99 0.17 30% 176% 157.5 17.4 17.4 20 -59 -71 -67 80 28

PepinNini Minerals Limited PNN 2.0 nc 0.24 nc 42% na na na -26 -46 -55 -33 73 5

Sumatra Copper & Gold plc SUM 21.4 nc nc nc nc na 35.2 35.2 -17 -18 -17 10 45 16

West Wits Mining Limited WWI 12.1 nc nc nc nc 115.0 15.9 15.9 -22 -28 -14 -24 44 2

Average: Australia 265.6 122.0 122.0

CANADA

Gowest Gold Limited GWA 16.7 nc nc nc nc na 22.2 22.2 -13 -33 -21 50 36 59

Average: Canada na 22.2 22.2

Total/Total Average 265.6 114.3 114.3 -10 -24 -14 85 48 119

(4) CCU EV/reserve and EV/resource ratios based on gold equivalent reserves/resources at a gold;silver price ratio Au:Ag = 44

P/NAV (%)

Discounting USD

Long Term Gold

Price (%)

Share Price Performance Current Share Price

% off 12 month

NAV (L.C. $m)3

Discounting USD

Long Term

Gold Price



Aphrodite Gold Limited

0.09

Debt (A$m) - Jun 11F

Enterprise value (A$m)

Avg monthly volume (m)

Cash (A$m) - Jun 11F *

Price/Cash (x) Cash (A$m)

Price/Book (x)

Company options: Net asset backing (Ac/share)

*Tenements applied for or granted. ** Nominal capital raising FY12, A$6m @ A$0.08/share assumed.

Aphrodite - Oxide - O. Pit

Aphrodite - Trans - O. Pit

Aphrodite - Primary - O. Pit

Aphrodite - Primary - U.G.

Total

Mineralised Material (est., non compliant with JORC)

Contacts DirectorsMr Leon Reisgys

Director, Exploration & Development W Ryder (Exec Finance)Tel: 61 (0) 8 9389 4421

www.aphroditegold.com.au * Scotia JV is currently at Heads of Agreement stage

No

101

-

0.18 1.34

0

0

6.0

Status

Aus (WA)

0.2

27 June 2011

5.1

Investment Points

0.7

12.7

7.2

Major shareholders: Mousse Partners (13.2%), Land holding ('000 ha)*

Tenement costs ($k per year)

259.0

613.0

Mid Expl Aus (WA)

Analyst: Dr Tony [email protected]

The 1Moz gold resource at the Aphrodite Gold Project (ave

3.19g/t) is predominantly a refractory ore body.

Scoping Study planned in 2H11 to address metallurgical

treatment issues and the planned initial open pit mining.

Defining ore treatment options to achieve profitable

production is the key to achieving a re-rating.

The Aphrodite Gold Project (65km NNE of Kalgoorlie) haspotential regional toll treatment options.

The toll treatment option suggests a low-capex start to

open pit mining could be achieved in 2H13, .

Further on-going exploration focusing on strike extensions

is expected to increase the total resource.

Scotia JV could open up potential new ore sources to the

NE, continuity of mineralised structures likely.

Based on an expected re-rating as an emerging producer,

our six month share price target range is A$0.18-

A$0.23/share, with further upside as the project gets closer

to production..

100% 3.48

Indicated & Inferred

Gold

Code for reporting mineral resources - Australian: (JORC)

Ore

Mt

2.5

Reserves and Resources/Mineralised Material

Key Projects

100%

3.19

H Sandercock (Non Exec)K Jackson (Non Exec Dir)

Au

8.0100%

ASX:BRW

8.0

1,033

19.1 613.0

na

4.8

Au

Porphyry

Porphyry na

toll treat?

0.0

2.31 0.5 8.0

6.35 3.0

259.0

32.1

13.0 12.812.8

8.82.5

3.6 6.6

4.8

2.0

2.5

TargetJV

1,033

0.0 0.0

Au

Au Eqty

Type

Process

Partner Route

0

Cash backing (Ac/share)

Reserves

Resources

1.6

W Perth, WA, Australia

100%

Ownership/W Staude (Non Exec Ch)

Scotia Project * 0/51/80%

Project

L Reisgys (Exec - Expl'n)Option

Aphrodite Gold Project

133.6

0.2

28,233

208.6

00

28,000

0.0

-

15.8

3

t

12.9

Company Comment

1.9

Au

Drilling - RC/Diamond (m)

Eagle Eye Metals Ltd (9.0%), Directors (5.0%).

0.0

12.7Market capitalisation (undiluted) (A$m)

0.0

Shares on issue (pr end) (m shares)

0Drilling - RAB (m)

0

0.0

Funding from JV partners (A$m) 0

0.0Capital Raisings (A$m) **

0

0.0

3

-

52 week range (A$/share)

0

6,000

Jun-11F

133.6

Options and warrants (m)

Fully diluted (m) 200.4

14.2

88 95

0.28

91

-

0

3

1.5

0

2011F

Production and Financial Forecasts

2012F2010a

0.54 0.90

7,000

82

0.14

133.6

0.4

133.6133.6

to

Exchanges: ASX:AQQ

Capital Profile

Exploration/(Expl.+ Corporate) (%)Convertible notes (m)

Number of shares (m)

Corporate (A$m)66.8

Funding duration at current burn (years)

0.095

0.18

Share price (A$)Mar-11aYEAR END: June

AQQ.AUGoldAustralia (WA)

Advanced Exploration, Scoping Study

Aphrodite Gold Limited

AQQ has recently outlined a resource of over 1Moz at the Aphrodite Gold

Project near Kalgoorlie. With a current EV/resource ratio of only

A$9.20/ounce we see potential for a significant re-rating of the stock to

levels of around 2-3 times the current share price.

5.470.65 2.10Exploration and evaluation (A$m)

A$ 0.095

5.53

Metal

koz

1.12

3

0.0

6.00

0.9

-

Equity g/t

Classification Cut OffProject

g/t

Au

koz

0.0

153.0 153.0

Sc. Study

Project

Location

1.40 0.5

0.5

Indicated & Inferred 100% 3.40

10.06

Indicated & Inferred 3.00


AQQ - Aphrodite Gold Limited

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

Jul-1

0

Aug

-10

Sep

-10

No

v-10

Dec-1

0

Jan

-11

Feb

-11

Apr-

11

May-

11

Jun

-11

Sh

are

Pri

ce (

A$/S

ha

re)

Source: Bloomberg

Overview: AQQ was listed on the ASX in July 2010, as a single project company, focused on the advanced Aphrodite Gold Project (“AGP”) 65km north of Kalgoorlie. Resource Status: Total resources at the AGP now stand at 1.03Moz contained in two steep plunging lodes – Alpha and Phi. Of this 420koz (ave.1.85g/t) is classified as potential open pit ore (



Our valuation for AQQ is based on a medium term (6 months) target share price range (A$0.18 – A$0.24/share) using peer group exploration company EV/resource multiples. The target valuation could

then progressively increase towards a producer’s multiple as AQQ get closer to production.

Medium Term - Valued as an Exploration Company Low High

Gold Resource Resource (Low) (High) (Low) (High)

Equity Resource Valuation Valuation A$m A$m A$m A$m(moz) A$/oz A$/oz

+ Aphrodite Gold Project * 100% 1.03 15 25 15.5 25.8

+ Exploration Potential 100% 0.50 10 15 5.0 7.5

20.5 33.3

Longer Term - Valued as a Potential Production Company(Valuation: EV = A$1.00 per kozpa) ^

Low High

+ Aphrodite Gold Project * 100% 30 50 30.0 50.0

+ Exploration Potential 100% 5.0 7.5

35.0 57.5

+ Cash (Est Jun '11) 2.5 2.5 2.5 2.5

- Debt (Est. Jun '11) 0.0 0.0 0.0 0.0

Sub Total 2.5 2.5 2.5 2.5

AQQ NET ASSET VALUE 22.9 35.7 37.5 60.0

Capital StructureShares (m) 133.6 133.6 133.6 133.6

Fully Diluted Shares (m) 200.4 200.4 200.4 200.4

AQQ NET ASSET VALUE PER SHARE :A$/share 0.17 0.27 0.28 0.45AQQ NET ASSET VALUE DILUTED :A$/share fully diluted 0.18 0.24 0.25 0.37

* Production range is for possible initial open pit production commencing in FY13* If underground mining of primary ore is established, 0.5mtpa mining and ore treatment would yield ~70kozpa Au in concentrates.

^ Future production valuation based on conservative A$1m/kozpa - see text

Valuation Sensitivity

Valuation

APHRODITE GOLD LIMITED VALUATION RANGES

Valuation Sensitivity

Production Range *

kozpa

Exploration

Valuation

Production

Of the total 1,033koz gold resource, (l.h. chart)

872koz (84%) is primary ore, 15% is transition ore

and 1% oxide.

259koz (62%) of the 420koz resource (r.h.

chart) that is currently classified as open pit is

also primary ore.

Contained Gold - Total Resources

(ounces, % of total)

8, 1%

153, 15%

259, 25%613, 59%

Oxide Transition

Primary - Open Pit Primary - Underground

Contained Gold - Open Pit (A$350/t based on

current gold price of US$15,540/oz, A$/US$ = 1.05) than the oxide, transition and shallower

primary ore.

0

50

100

150

200

250

300

350

400

Oxide Trans Primary - o/p Primary - u/g

Resource Classification

Gro

ss C

onta

ined G

old

Valu

e (A

$/t)



Bright Star Resources Limited

0.21



Major shareholders: Golden Cross Resources Ltd (12.2%)


Cash (A$m) - Jun 11F


Price/Book (x)

ASX-listed company options: Net asset backing (Ac/share)

*

Reserves

Contacts Directors

Mr Geoff GilmourManaging Director

Tel: +61 (8) 9430 9966Fremantle, WA, Aust

Barry Bolitho (Non Exec Dir)Mid Expl. Aus (QLD)none


290

Miyabi JV 0/50/75% g'stone na Mid Expl. Tanzania

Placer

2.00

Project

Kitongo Project Inferred 100% 4.40

1.48

Gravity

naqtz vein

na

Process

Resources

koz

0.00.0

g/tg/t t

Classification Au Eqty *

0.5

1.0 8.8 290

Funding from JV partners (A$m)

0.27

Tenement costs ($k per year) -

0

0

Capital raisings (A$m) *

182.1

63

A$ 0.13

63

45

3,000

0

182.1

Tanzanian-focused BUT has already got its foot on 680koz of resource

equity in this gold-rich country. Exploration is planned which could

increase resources rapidly, and drive a re-rating based on an enterprise

value well below that of some African exploration peers.

0.21 1.850.440.08Exploration and evaluation (A$m)


1.390.750.30

22

2012FJun-11F 2010aMar-11a 2011F

3.2

0

0.00

50

3.1 2.6

122.6

2.05

2,000

22

0.4

0 Exploration/(Expl.+ Corporate) (%)

BUT.AU

50

GoldTanzania, Australia (Qld)

Mid-Advanced Exploration

ASX: BUT

Capital Profile

52 week range (A$/share) to

27 June 2011

1.20

Share price (A$)

Number of shares (m) 182


0.13

0.08

Corporate (A$m)

0.25

YEAR END: June



Land holding ('000 ha)

Drilling - RAB (m)


Ore

Directors (15.0%).

0.0

Market capitalisation (undiluted) (A$m)

73

182.1

24

-

0.2

Convertible notes (m)

2,000

1.4

63

-

3,000

-

182.1

0

63

Au

4

Fully diluted (m)

22.8

Gold explorer in Tanzania - rich Lake Victoria Goldfields.

Tanzania - third largest gold producing country in Africa

after South Africa and Ghana.

Flagship Kitongo Project (100%) - advanced Tanzanian

gold project with existing 290koz JORC resource.

Recent JV formed for BUT to earn up to 75% interest in

MIyabi Project - 520koz resource.

BUT resource equity now 680koz assuming 75% JV

interest, deposits are shallow, broad mineralised zones.

Excellent address with strong regional exploration potential

- major regional projects include Bulyanhulu (Barrick,

17Moz), Geita (Anglo, 11Moz).

Kitongo and Miyabi resource expansion drilling programs

planned, potential for rapid resource increase.

BUT enterprise value only ~A$26m (~A$38/oz) - looks

undervalued compared to other similar African explorers.

Company Comment

22.8

232

22,000

12,000

-

2.6

0

Code for reporting mineral resources - Australian:

Analyst: Dr Tony Parry

AuCut Off Au

Early Expl. Tanzania

Adv. Expl. Tanzania

3.8

0.6

3.2

12.40

16.80

(JORC)

Au

Cash backing (Ac/share) 1.4 0.4

Location

1.7

3.4 2.6

0.3 1.4

Gold

0.4

W Gilmour (Exec Chair)

8.8

Investment Points

3.9

BUTO

0.00

0

3.60

0 0

0.00

100%

Option

Miyabi Project

G Gilmour (MD)

G Clatworthy (Non-Exec)P Payne (Ex Dir)

www.brightstarresources.com.au

[email protected]

Kitongo Project

Project

Maji Moto/Nyamgombie 100% Au

Miclere 100% Au

Au African Eagle

none

Status

0.0

1.30

0.0 0.0

RouteType

810

Key Projects

68024.9

520

0.0

390

Bright Star Resources Limited


Sub Total

2.6


Project

g'stone

Metal

Mt

none

Partner

75%

JV

Equity*

* Miyabi project equity assumes 75% is earned as per JV agreement

Ownership/

koz

16.1

Target

BUT - Bright Star Resources Limited

0.00

0.05

0.10

0.15

0.20

0.25

Ju

n-1

0

Au

g-1

0

Se

p-1

0

No

v-1

0

De

c-1

0

Ja

n-1

1

Fe

b-1

1

Ma

r-1

1

Ma

y-1

1

Ju

n-1

1

Sh

are

Pri

ce

($

/Sh

are

)

Source: Bloomberg

Overview: Listed on ASX in Dec ’07 (as Tasman Goldfields Ltd) with gold exploration properties in Australia, NZ, PNG. New board (4Q09) has changed focus to Tanzania, divested most other assets. Tanzania: Tanzania has been relatively overlooked amongst all the hype regarding West African Gold exploration, but it is a major gold producing country (Africa’s no. three), a stable mining-friendly democracy. Barrick is a major player, dominating Tanzanian production. Also Anglogold and Resolute. Kitongo Project, Tanzania (100%): BUT sees Kitongo, the flagship project, as a near-term production opportunity with excellent exploration potential. The 128km

2 project area is located in the Lake Victoria

Goldfields region of Tanzania. Looks like a pretty good address with several multi-million ounce gold projects on the rich Senza-geita greenstone belt within ~50km radius, including Bulyanhulu (>15Moz), Nyanzaga (4.2Moz), and Golden Ridge (2.2Moz). Previous owner estimated a 290koz JORC resource (2.0g/t grade) in a 800m long zone, to 135m depth. The majority of current resource is oxide. The exploration potential of this project looks excellent. Kitongo Exploration Program: The first RC drilling program (3,000m) should be underway during 3Q11, aimed at extending the Main Zone oxide resource with step-out drilling (what BUT describes as ‘easy ounces’), plus looking for additional deeper sulphide ore, and addressing high priority prospective regional exploration targets where limited scout drilling has produced some very promising intercepts. A Scoping Study for fast track Main Zone development could well follow from the 3Q11 program. Miyabi Project, Tanzania (earning up to 75%): Miyabi (252km

2) is ~150km SW of Kitongo and ~30km

from Resolute’s Nyakafuru project (1.1Moz). In Apr ’11 BUT entered into a JV to earn an initial 50% from nickel-focused African Eagle Resources plc (AIM:AFE) by spending US$3m over 30 months, and a further 25% by completing a feasibility study. Miyabi has a current JORC resource of 520koz at average grade of 1.3g/t, in five deposits, all relatively shallow broad mineralised zones. Miyabi Exploration Program: BUT has recently commenced a 10,000m RAB campaign. The priority target is the full length of a 5km long granite/greenstone contact zone which hosts two resources (totaling 225koz). The drilling will be on 200m spaced lines along the 5km length. Most of the contact zone, which exhibits numerous gold and magnetic anomalies, is untested. Challenger (NSW): ‘Brownfields’ Au project, recently sold for A$1.75m cash, staged payments. Miclere (Qld): Paleochannel alluvial gold system in historic Clermont goldfields. Being reviewed. Investment Comment: This is a new era for BUT shareholders with some of the team who brought you Andean Resources now on board. A revitalised African exploration focus is now getting up to speed with two frontline exploration projects leveraging on established resources at Kitongo and Miyabi. A strong 2H11 newsflow expected. Based on the current very modest resource valuation of only ~A$38/ounce (see next page) and a resource increase at Kitongo likely within 6 months, we see potential for the stock to double in the next six months if we look at EV/resource ratings of comparable West African explorers.



Bright Star’s projects in Tanzania are in a

greenstone belt that hosts numerous major deposits (e.g. Barrick’s 17moz Bulyanhulu mine - 260koz production in 2010), and have excellent

exploration upside. Tanzania is the third biggest African gold producing country, with Barrick, Anglo

and Resolute as lead players

The priority target at Miyabi is a largely untested 5km granite/greenstone contact zone (top picture). The mineralised zones are characterised by very

broad mineralised zones (e.g. Faida – lower picture).

We have revisited our comparison of EV/resource ratios of three West African junior explorers (PIR – Mali, WAF – Burkina Faso and MET – Burkina Faso) with BUT. This still shows that the Tanzanian explorer looks

significantly undervalued, even more so if exploration success drives the Kitongo/Miyabi resource base beyond the modest additional 0.5moz medium term target we have assumed.

Enterprise Values (as at June 15 2011)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

PIR WAF MET BUT

En

terp

rise V

alu

e (

A$m

)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

PIR WAF MET BUT

En

terp

rise V

alu

e (

EV

) p

er

reso

urc

e o

un

ce

(A$/o

z)

Current Med. term resource target

WAF & MET have no

current resources

Notes

COMPANY ASX CODE PRICE (A$) * EV (A$m) ^ Current Med. term target

Papillon Resources Ltd PIR 0.57 147.0 0.827 1.4 Med term target is RCR estimateWest African Resources Ltd WAF 0.39 95.0 0.0 0.75 RCR estimate - assumes 0.75Moz potential in 12-18 months

Mt Isa Metals Ltd MET 0.3 39.0 0.0 0.75 RCR estimate - assumes 0.75Moz potential in 12-18 months

Bright Star Resources Ltd BUT 0.13 25.9 0.68 1.18 Med. term target assumes Kitongo/Miyabi equity resources inc. by 0.5Moz* Share price data as at June 16 2011 ^ EV is based on ful;y diluted share capital, cash as at March quarter 2011 report.

Equity Gold Resources (Moz)



Castle Minerals Limited

0.64




Cash (A$m) - Jun 11F *


Price/Book (x)

Listed company options: Net asset backing (Ac/share)

* Shares and forecast cash includes Jun '11 A$4.8m proposed capital raising. *Gold prospective tenements only, both held and under application. Quarters stated on calendar year basis.

Reserves

Resources

Julie West (Wa Project) Ind + Inf

Akoko (Nth and Sth) Ind + Inf


*Also has iron ore, 136mt at Opon Mansi Project

Contact Directors

Mr Michael Ivey(Executive Chairman, MD)

Tel: 61 (0) 8 9322 7018

West Perth, WA, Australia

Bondaye Gold

100%

5.0 158 158.2

4.2 10.41

100% 2.04 1.6

Shear na Grassroots

Project

na

0

JV

Partner

Target

Exploration Ghana

Ghana

Shear na

na

[email protected]

koz

Eqty

Reserves and Resources/Mineralised MaterialCode for reporting mineral resources - Australian: (JORC)

Gold Classification


100%

100%

na Scoping

Au

Shear

Au

Antubia Shear na

Opon Mansi 100%

102.03.3 102.0

5.0

5.0

7.2

7.4

Location

Ghana

Status

-

5.64

9.5

0.0 na

9.35

8.4

A$ 0.36

Mar-11a

Castle Minerals Limited

1.36


2012F

90

0.15

1,200

60,00043,000

84

1,200

20,00015,000

3.7

1,200

2011F2010a

Gold, Iron Ore

GhanaEarly to Advanced Exploration

Exchanges: ASX:CDT

Capital Profile

Share price (A$)

CDT.AU


YEAR END: June0.36

0.24

Corporate (A$m)

0


52 week range (A$/share) to

5

4.80

87Exploration/(Expl.+ Corporate) (%)

- -

1,200

99.6 113.5

1,200

Number of shares (m) * 114 Exploration and evaluation (A$m)

27 June 2011 Another virgin discovery (Castle's third) of a potentially major mineralised

zone at Baayiri, NW Ghana, highlights the huge potential of its 12,000km2

Ghana tenement position. This potential is not lost on neighbour Azumah

Resources, which has built a 13% stake in CDT.

1.00 1.77 4.002.50

Jun-11F

117.0

72

1.1

113.5

2.4118

0.16

83

0.950.33 0.80

10,000

5,000

96.0

13,000

05,000

18,000

0.51

Au

7

Fully diluted (m)

40.9

100%

No

Capital raisings (A$m)

Bluestar Res (6.1%), Seamans Cap Mgt (5.7%), M Ivey (5.6%)

3.8 Cash backing (Ac/share)




Land holding ('000 ha)*

Drilling - RAB (m)


0.0

40.9Market capitalisation (undiluted) (A$m)


8.4

4.8

g/t

Au

8.1

Ore

6.4 9.5

Auc/offProject

koz

0.0

g/t

-

5.28.4

4.5

1.23

7.4

9.9

Type

Key Projects

0.0

Metal

na

Au

Company Comment

Mt t

Process

Ghana

Scoping

00.0

-

0.0

Ghana

www.castleminerals.com

Equity

[email protected]

M Ashforth (Non Exec)

Ownership/

-

-

Investment Points

-

-

Wa Gold

100%Akoko Gold

Au

0.0

100% focus on gold in Ghana, which has +110moz Auresources and produces +3moz Au/yr.

Numerous targets in +12,000km2 holding, in the vicinity ofknown gold-bearing regional structures and big deposits -i.e. strong "nearology".

Discovery momentum is now increasing with 80,000m drill

program underway.

Neighbour Azumah Resources (ASX:AZM) building a stakein CDT, likes what it sees.

Major new discovery at Baayiri - broad disseminatedmineralised zones - potential for substantial deposit inunexplored corridoor.

Kandia discovery - new 2.5km zone - potential for bulk

tonnage sediment hosted gold.

Current market cap. ~A$40m, >A$8m cash to fund drilling,suggests excellent share upside as strong newsflow fromdrilling continues.

Option

Major shareholders: Azumah Resources (13.3%), D Harper (7.6%),

Route

M Ivey (Exec Chair, MD)C Ansell (Non Exec)

7.8

0.0

Project

Exploration

na Adv Expl

Shear

- Shear Ghana

100% Au -

Banso Gold

1.7 56.2 56.2

Fe

CDT - Castle Minerals Limited

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Jun

-10

Aug

-10

Sep

-10

Oct-

10

No

v-10

Dec-1

0

Jan

-11

Mar-

11

Apr-

11

Ma

y-1

1

Sh

are

Pri

ce

($

/Sh

are

)

Source: Bloomberg

Overview: Castle Minerals listed on the ASX in 2006. It is focused on exploration in Ghana, West Africa, where it has six main projects and is the largest landholder among mineral explorers (+12,000km

2). It made

two greenfields gold discoveries in 2008, Akoko and Julie West, and defined an initial Au resource in 2009. Wa Gold Project (Ghana, 10,000m2): covers an area 180km long by 30-80km wide. Target geology is twoBirimian aged greenstone belts (250km strike) and associated shears, which are of a type known to host gold in west Africa. Castle’s neighbours here, to the west and north, include Ampella Resources (ASX:AMX) and Azumah Resources (ASX:AZM), which have a combined ~3.5moz Au resource inventory. Part of CDT’s exploration model is that known gold-hosting structures continue onto its own tenements. The four main prospect corridors are the relatively unexplored Julie-Jang trend, the exciting Kandia trend, and further south, 80km of the Wa-Lawra Greenstone Belt and the WA South Prospect, a 60km extension of the Batie West Shear Zone, which to the NW has yielded 2.2moz for AMX (at Konkera). Baayiri Discovery: In what could be CDT’s most significant virgin discovery to date, and one which seems to underpin the potential of CDT’s massive Ghana tenement position, CDT has recently announced the discovery of a broad, shallow potentially large scale disseminated mineralised gold zone in a totally unexplored region of the Julie-Jang trend (Wa Project area). First pass RC drilling of the 12km x 6km Baayiri anomalous zone has produced some spectacularly wide intercepts including 55m @1.82g/t from 15m and 20m @ 0.55g/t from 10m, 5m @ 6.64g/t from surface). Further results are due soon, and the RC rig has now commenced a 30,000-50,000m follow up campaign to further test beneath and along strike of the discovery hole, plus further wide spaced drilling along the rest of the trend. Kandia Prospect: In 2Q10, Castle found a 600m long artisanal goldfield over a granite/sediment contact, 10km SE of Julie West. The work defined a 25km gold anomaly, including 9 high priority targets on 12km strike. Initial drilling included 10m @ 1.44g/t Au from 35m, 20m @ 0.53g/t Au from 15m (Feb ’11) on a new 2.5km trend. In May ’11 further very encouraging intercepts were confirmed including 15m @ 2.39g/t and 20m @ 1.05g/t from surface, indicating potential for bulk tonnage of sediment hosted gold. At the Bulenga Prospect, west of the Kandia Trend, trenching has returned 19m @ 1.14g/t Au (Feb ’11) in near-surface bedrock. Drilling is planned. At the Wa South Prospect, close to the intersection of Wa Lawra and Batie West, has numerous regional (ie 2-20km) scale gold anomalies with aggregate strike length of 60km. Azumah Resources (ASX:AZM) Strategic Stake: There probably can be no better demonstration of the upside in CDT’s Ghana exploration than NW Ghana neighbour and production hopeful (1.2moz resource) AZM recently accumulating a 15.2% stake in CDT, diluted to 13.3% after recent placement. Say no more! Corporate: Share placement announced 24 June will raise A$4.8m at A$0.35/share. Investment Comment: Significant new discoveries are continuing to flow from Castle’s extensive (80,000m) current drilling program on its +12,000km2 holding in Ghana. CDT’s market cap. is sitting at~ A$40m (with ~A$8.4m cash) so there is considerable upside when compared with other ASX-listed gold companies in Ghana (with less exploration ground) who have advanced further along the track to production (e.g. Azumah [ASX:AZM], mkt cap A$154m; and Adamus [ASX:ADU], mkt cap A$266m). With major drilling programs driving discovery momentum, we expect to see CDT’s resource inventory grow strongly in the next 1-2 years, and its market cap. could start to push up towards these peer company levels.



The recent Baayiri discovery in Castle’s 10,000km2 Wa Project area, NW Ghana, is in the Julie-Jang trend, ~15km NW of the existing Julie West resource. The disseminated mineralisation appears intrusion-related.

Some existing major gold intrusive deposits in Ghana include Ayanfuri (6moz) and Ahafo (17moz).

The initial discovery holes at the Baayiri Prospect indicate very broad zones of disseminated mineralisation (LH graphic). The aeromag. image (RH graphic) suggests that the Baayiri discovery sits

near cross cutting structures on the NW trending Baayiri fault zone, that extends for over 30km.



Gold Road Resources Limited

0.84






Price/Book (x)

Company options: Net asset backing (Ac/share)

* assumes all 30 June 2011 A$0.07 options are exercised ** Jun-11F shares on issue assumes 7c options fully converted in 2Q11.

Reserves

Yamarna - Central Bore

Total Resources

Contacts Directors

Mr Ian Murray

Executive Chairman

Tel: 61 (0) 8 9486 4144West Perth, WA, Australia

www.goldroad.com.au

none

Route

16.1100%

h.g.vein

Early Expl.

gravity/CIP

ox/sulp heap leach Adv. Expl.

Early Expl.

36,000

Eqty mlb

U3O8 Cut Off U3O8

kt

koz

Cut Off Au EquityAu

t

Gold

Resources

ProjectClassification

koz

[email protected]

TargetJV

Type

Project

9.20

Process

Cash backing (Ac/share) 3.9


10.5

0

A$ 0.57

YEAR END: June


2012FJun-11F 2010aMar-11a

Gold Road Resources Limited

GOR's discovery momentum and increasing focus on potential

production should continue to drive share price out-performance in2H11, as the resource inventory builds from additional high grade zones

in its dominant position in the under-explored Yamarna Belt.

to

0.57Corporate (A$m)

89

1.04Exploration and evaluation (A$m)

2011F

1.680.94

69

6.602.13

27 June 2011

0.6

317.2

2.98

500 410

GOR.AU

17.6

Gold, Uranium

Australia (WA)

Advanced Exploration

Exchanges: ASX:GOR

Capital Profile

Share price (A$)

Number of shares (m) * 317.2


Major shareholders: Directors (7.1%), Perth Select Seafood (4.0%),

180.8


334.8

0.0

Options and warrants (m) *

0.57

0.0852 week range (A$/share)

Exploration/(Expl.+ Corporate) (%) 65


1.45Capital raisings (A$m) **

273.8



Drilling - RAB (m)

Shares on issue (pr end) (m shares) **

Tenement costs ($k per year) -

18,90010,000

10,0000.0

500

30,000 60,000

195.8

2.67

7.93.4

-

3.6

10,500

17.36

10.4

500

Au,U none

U

35

Fully diluted (m)

180.8

Inferred

Geiger Counter Fund (3.1%), HSBC Nominees (3.0%).

0.01.3

500

- -

317.2317.2

72,000

48,000

104

10.4

88

-

15,000

1.400.35

2.90

1.8

8.2

GOR's holds a strategic position (~5,000km2) in remote

under-explored Yamarna greenstone belt Eastern

Goldfields, WA. Exploration budget ~A$9mpa.

Total Yamarna resource 1.07Moz, likely to continue to

increase with multiple high grade zones.

Central Bore discovery - 150kz at 7.86g/t grade. Includes

high grade Imperial Shoot, 57koz @ 23.1g/t. Recent

deeper drilling confirms high grade depth extension.

Cluster of multiple parallel high grade zones discovered in

just 6km2

around Central Bore: Justinian, Hann, Central

Bore North and new targets.

New Justinian zone at least 500m long, looks like high

grade with widths > Central Bore. Initial JORC resource

expected early 1Q11.

GOR is assessing possible fast track low capex on-site

production or trucking/toll treatment option.

With continued discovery momentum and resource

tonnage and grade likely to build, we have raised our six

month target to A$0.72/share.

7.3

17.4

Investment Points

7.9

GORO

Equity

Company Comment


Uranium Resources Mt

100%

Meas., Ind. & Inf.

3.3

Thatcher Soak

Yamarna - Attila Meas., Ind. & Inf.


19.82

na

na

Alk. Leach

100% noneAu

Au noneYamarna - Gold regional

Calcrete

Golden Sands 100%

Yamarna: Thatcher Soak 100%

100% ox/sulp

ox/sulp

10.4


Key Projects

1,067

Au

Mt

7.2

Yamarna - Central Bore

0.0

0

Adv. Expl. Aus (WA)

Adv. Expl.

6.2

0

0.00

0 0

g/t g/t

(JORC)

Equity

Ore Au

0.9


Z Lubieniecki (Exec Dir)

R Davis (Non Exec Dir)

M Pyle (Non Exec Dir)K Hart (Non Exec Dir)

Project Option Metal Partner

Ownership/I Murray (Exec Chairman)

0.0

mlb

0.0

1.44 0.50

4.7

0.0

%

U3O8

1000.017

Aus (WA)

Location

Aus (WA)

Aus (WA)

U3O8

0.1

0.0

1,067

6.22.7

ppm

1500.60

0.0

0.0

20.4 1.63

1507.86 1.00100%

28.5 917 917

Aus (WA)

33.2

Project

Status

Yamarna - Atilla 100% Au none

GOR - Gold Road Resources Limited

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Jun

-10

Aug

-10

Sep

-10

Oct-

10

No

v-10

Dec-1

0

Jan

-11

Mar-

11

Apr-

11

May-

11

Jun

-11

Sh

are

Pri

ce (

$/S

ha

re)

Source: Bloomberg

Overview: GOR listed on the ASX July ’06 as Eleckra Mines Ltd. Its focus is the Yamarna greenstone belt where it has now established >1Moz gold resources, and a 6.2mlb shallow calcrete U3O8 resource. Yamarna Project (WA): GOR’s exploration focus is on the under explored remote Yamarna greenstone belt - a regional scale mineralised trend considered potentially to be WA’s fifth major greenstone belt. Central Bore (“CB”): Discovered in 2009. CB is a linear steeply dipping high grade carbonate narrow high grade vein system. The JORC resource is 595kt @ 7.9g/t for 150koz along an 800m strike length, to a depth of ~400m. RAB drilling indicates the mineralisation may extend up to 1.1km to the north (CB North) and 1.2km to the south. Importantly the high grade Imperial Shoot contains 57.1koz @ 23.1g/t. Parallel Discovery Zones: The cluster of four additional zones discovered in the last 18 months in an area of only 6km2 around CB have been a revelation that has transformed thinking about the Yamarna Belt. Justinian (200m E of CB), is an exciting high grade discovery (7m @ 27.2g/t incl. 1m @ 102g/t) indicating broader mineralised zones than CB. A recent single diamond core hole (5m @ 8.28g/t) confirmed this is potentially a high grade structure wider than CB – a very significant result. Recent RAB programs indicate a potential strike length of at least 500m. The Hann anomaly (2.4km W of CB) is 4.3km length after soil geochem sampling. Recent shallow drilling (8,000m RC) in 2Q11 confirmed mineralisation over a 660m strike length in the S portion. Central Bore North, suggests the start of the next high grade zone 500m N of CB. Byzantium, exhibits 2 anomalies ~1km long. Atilla Resource (3.7km W of CB): The ‘original’ resource - 917koz @ 1.44g/t - which occurs in multiple zones along a 33km strike length. GOR will go back and drill gaps and high grade shoots previously identified. Excellent potential to prove up higher grade zones, which will be drill tested 4Q11. Next Steps: GOR is increasing its planned drilling from 37,000m CY10 to a planned ~100,000m in CY11. It now has three rigs operating, plus an auger rig. At Central Bore GOR is following up with a 50 hole RC program in the anticipation of finding additional high grade shoots to the N and S of the current CB resource, as well as confirming depth extensions of CB A recent hole (deepest to date) intersected 13m @ 40.1g/t from 426m, which is very encouraging for higher grades at depth. At Justinian, the second RC rig is now undertaking a follow up program to define the extent of the high grade zone. We would anticipate an initial JORC resource in early 1Q12. RAB drilling of other new target areas should produce a pipeline of targets for RC follow up in 2H11, plus drilling at Atilla targeting high grade shoots. Fast Track Development Potential: GOR is undertaking scoping study assessment for potential production from CB (on site gravity processing or trucking), but likely to expand to include Justinian. Golden Sands (WA): (1,500km2, gold) Largely unexplored tenements north of the Tropicana gold project (5Moz resource). Deep sand cover, scout drilling (1 hole) and 2 holes Dorothy Hills planned. Investment Comment: The share price has already broken into our target range of A$0.48/share to A$0.56/share from our March Quarter Review. The key to maintaining share price out-performance for GOR will be continuing exploration success in the new target zones being drilled in 2H11, thereby maintaining ‘resource momentum’. If that is achieved, we see the share price in the next six months heading towards the upper level of our revised target range of A$0.63-A$0.72 (fully diluted)



The stepped up 2H11 drilling campaign, focusing on Central Bore strike and depth extensions, Justinian, Attilla high grade shoots and other parallel zones near Central Bore suggests that the upper level of our

A$0.63 – A$0.72/share target valuation range could be coming into focus if the good results keep flowing.

GOLD ROAD RESOURCES LIMITED - VALUATION

Target

Gold Resource Low * Mid** High ^

Equity (moz) A$m A$m A$m

Projects

+ Atilla existing resource (current 0.92Moz valued @ A$50-A$60/oz) 100% 0.92 45.9 55.0 55.0

+ Central Bore (current 0.15Moz high grade resource valued @ A$200-A$$250oz) 100% 0.15 30.0 37.5 37.5

+ Justinian, Hann, Byzantium, CB North - likely new parallel high grade zones 100% 30.0 56.3 75.0

+ Thatcher Soak uranium resource (6.2Mlb @ A$0.50/lb) 100% 3.1 3.1 3.1+ Yamarna 4,000km

2 Regional Expl'n (excellent potential for further h.g. zones) 100% 30.0 40.0 50.0

+ Other Exploration (Uranium potential, Golden Sands Au) 100% 2.0 3.0 5.0

Sub Total 141.0 194.9 225.6

+ Cash (est Jun '11) 10.4 10.4 10.4- Debt (est. Jun '11) 0.0 0.0 0.0

Sub Total 10.4 10.4 10.4

GOR NET ASSET VALUE 151.4 205.3 236.0

Capital Structure

Shares - 30 June 2011F (m) ^^ 317.2 317.2 317.2

Fully Diluted Shares (m) 334.8 334.8 334.8

GOR NET ASSET VALUE PER SHARE :A$/share 0.48 0.65 0.74GOR NET ASSET VALUE DILUTED :A$/share fully diluted 0.47 0.63 0.72

* Low valuation assumes little 2H11 exploration success - new high grade parallel discovery zones valued at 100% of Central Bore valuation.

** Mid valuation assumes modest 2011 exploration success - new high grade parallel discovery zones valued at 50% premium to Central Bore valuation.^ High valuation assumes continued 2011 exploration success - multiple new high grade parallel discovery zones valued at a 100% premium to Central Bore.

^^ Shares on issue assumes 100% conversion of June 2011 A$0.07 options by 30 June 2011.

Valuation Range

The longer term upside for GOR is underlined by the fact that the new high grade discovery zones occur in a small 6 km

2 segment, out of GOR’s total ~5,000 km

2 Yamarna greenstone belt tenements, which remain

relatively unexplored due to remoteness and soil cover.



Gowest Gold Limited

0.43

Debt (C$m) - Apr 11F

Enterprise value (C$m)

Major shareholders:


Cash (C$m) - Apr 11F

Price/Cash (x) Cash (C$m)

Price/Book (x)

Listed company options: Net asset backing (Ac/share)

Contacts Directors

Greg Romain

President & CEO

Tel: 416 363 1210 ext. 20

Toronto, ON, Canada

Frankfield East

Target

0.0

StatusProject Option

ProcessJV

Can (ON)

LocationMetal

none

Partner Type

Eqty

0.0

Analyst: Khaled Sultan (Toronto)

Mineralised Material (est., non compliant with NI 43-101)

6.7

Cut Off

0.0

kt koz

J Niemi (Non Exec Dir)

F Elliott (Chairman)

G Romain (CEO)

E Mason (Non Exec Dir)

[email protected] L Phillips (Non Exec Dir)

0

1.1

Au

koz

1.6


Early-Mid. Expl.

Key Projects

1,187

Ownership/

5.50

1.5

Frankfield East Project

6.0

2.6

3.0

Au

12.3

Frankfield East Project5.96

100% 4.34

100%

No

Inferred

Company Comment

13.5

Reserves

Classification Project

-

100%

Au

231.2

Fully diluted (m)

The company is exclusively focused on gold exploration ina stable jurisdiction - Ontario, Canada.

Key project - Frankfield East (100% GWA): 1.2moz gold

(+6g/t), in prolific Timmins/Abitibi gold district.

Frankfield underground development potential: PEA

expected 3Q11. DFS 2H12. High grade material (+6g/t)increases the probability of economic extraction.

GWA has had good success with its historic drilling, where

a higher proportion of recent holes (>90%) haveintersected mineralization. Finding cost ~US$10/oz.

Good exploration potential along strike and at depth.

Resource defined to ~800m depth. Drilling 2011(18,000m). Resource upgrade expected 1Q12.

Resource potential at depth well defined in region (athigher grades), eg: Macassa mine (Kirkland, 25g/t Au)2.2km deep; Hoyle Pond mine (Goldcorp) 1.5km deep.

Gold

2.6

18,000

16.7

Investment Points

60

-

0

Ore Au

82

134.496.3

0 0 0

0.2

8088 83

18,000

60

114.4

0.0

60

28.2

0.4


New Textmont (15%), Management (12.0%)

0.0

Market capitalisation (undiluted) (C$m) 28.2

0

2.27

Corporate (C$m)

1.20

0.300.30

Drilling - RAB (m)


0.27

0.1752 week range (C$/share)


Drilling - Other/Diamond (m)


Code for reporting mineral resources - Canadian:

2.8

2.75

98.1

Number of shares (m) 98.9


Exploration/(Expl.+ Corporate) (%)

125.8


GWA.CN

26.9

Gold

Canada (ON)

Early-Mid Exploration

Exchanges: TSX.V:GWA, US:OTC:GWSAF, FSE:1GW

Capital Profile

to

27 June 2011

Share price (C$)

0.0

1.62 3.0

6.2838.6

84.1

3.2

0

76

2.7

1.200.92 1.20

0.0

7.75

0.7

-

Capital raisings (C$m)

C$ 0.27


2012F2010a 2011FYEAR END: Oct Apr-11FJan-11a

Gowest Gold Limited

GWA offers good exploration potential. Resource upgrade (June 2011)

to 1.2moz of gold (+140% from 0.5moz). With grades of +6g/t, the

Frankfield East project (100% GWA) in Timmins, Ontario could be

developed as early as 4Q12. PEA expected 3Q11.

2.95 5.605.87Exploration and evaluation (C$m)

6.43

1.6

0

0.0

Equity g/t g/t

20,000

2526

-

4,500

8.3

-

9.8

2.7

Cash backing (Ac/share)

Funding from JV partners (C$m)

10.5

1.6

Indicated

4,500

NI 43-101

Mt

0.50

0

347.9

36.9

10.8

3.0 26.1 838.6

0

Route

Project

347.9

1,187

[email protected]

Resources

GWA - Gowest Gold Limited

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

Ju

l-10

Au

g-1

0

Se

p-1

0

Oct-

10

De

c-1

0

Ja

n-1

1

Fe

b-1

1

Ma

r-1

1

Ap

r-11

May-1

1

Sh

are

Pri

ce (

$/S

hare

)

Source: Bloomberg

Overview: Gowest Gold Ltd. is a Toronto based exploration and development company listed on the TSXV over 20 years ago. It was restructured May 2008, and is exclusively focused on the Frankfield gold project (100% GWA) located in Timmins, Ontario, Canada. The company was known as Gowest Amalgamated Resources before changing its name to Gowest Gold Ltd in April 2011. Frankfield East Project (ON): The company's sole project is situated 40 km from the town of Timmins within the prolific Abitibi Greenstone Belt, which has been historically well endowed with gold. The 24 km

2 project area comprises 42 claims and is open along strike (~850m) and at depth (~1000m). GWA

has an agreement with Transition Metals to explore and eventually earn an interest (up to 75% withexpenditure of C$3.2m over 5 years) in an additional 34km

2 in the adjacent Porcupine mining district

Updated Resource: The company announced (June 2011) a significant resource upgrade to 1.2moz (up 140% from 0.5moz previously). The NI 43-101 estimate contains an indicated resource of 1.62mt with a grade of 6.7g/t and an inferred resource of 4.34mt grading 6.0g/t at a cut-off of 3g/t. The resource envelope is approx 750m strike averaging about 800m depth. Exploration Upside: GWA is making reasonable progress with its Phase 3 drilling program (2Q11-1Q12) – infill and testing for depth extensions to ~1,000m, and recent exploration continues to demonstrate the down dip continuity of the mineralized zone to a depth of ~900 m. The latest hole intersected 5.1m @ 4.1g/t (GW1096, down to 996m depth), and although this is well below the currentresource grade, the extension of higher grade ore to depth is welcomed news. Further depth extension drill results pending. There are also numerous areas within the mineralised resource envelope that are not included in the resource due to wide drill spacing - these are currently being infill drilled. Next resource update 4Q11 or 1Q12. The company also has regional exploration targets. The Frankfield East deposit has not been thoroughly tested below the 1000m level, although it is situated in a district known to host higher grade material well below that depth (Lake Shore’s Bell Creek mine and Goldcorp’s Hoyle Pond mine - 1.5 km elevation). Being able to go beyond the 1.5km mark like neighbouring Kirkland Lake’s Macassa mine (2.2km) is possible but we think unlikely, given the much higher grade that would have to be found at that level to enable for economical extraction. Macassa has a reserve grade north of 25.0g/t. Next Steps: A preliminary economic assessment (PEA) is underway and is due to be completed in 3Q11. The study is contemplating a 1,400tpd operation producing 100kozpa exclusively as an underground operation. Given positive results from the PEA, the company could begin mine development in 2012. The company will continue drilling with a planned 18km of drilling in 2011. Investment Comment: Despite having more than doubled its resource ounces to 1.2moz from a previous 0.5moz, GWA has not been fully rewarded by the market for the recent positive results. Although this has been a general trend amongst gold companies, which have witnessed ~20% relative underperformance to the bullion YTD. We believe the ~16% drop in GWA's shares since its updated resource announcement (June 1, 2011) is unwarranted. Not only is the company demonstrating an ability to find more ounces at the Frankfield project, it's doing so quite inexpensively at $10/oz. At a share price of C$0.30, GWA’s adjusted EV/resource ratio is ~US$30/oz, suggesting good potential for rerating, particularly if the PEA demonstrates favourable economics 3Q11. Other key catalysts includean update resource statement expected by 1Q12.



Abitibi Greenstone Belt: GWA's early-mid exploration stage gold project (Frankfield) is situated in the

highly prospective Timmins gold camp. The area is home to a number of producing mines including Lake Shore's Bell Creek mine, and Goldcorp's Porcupine mine (Dome, Hoyle Pond, Palmour, Hollinger).

The Frankfield East deposit has been drilled down to the ~ 1000m depth level, and hosts a 1.2moz indicated and inferred resource with an average grade of 6.2g/t. Mines in close proximity are known to be

home to mineralization that reach depths of 1.5 – 2.2km, highlighting GWA’s exploration potential.



Kingsgate Consolidated Limited *

12.3





Price/Cash (x) Drilling - RAB (m)

Price/Book (x)

Listed company options: Land holding ('000 ha)

Note: Net profit is before forex losses and exchange differences on translation.

(JORC) Reserves and Resources as at 29 July 2010

$11M exploration budget for 2008.

Experienced board and management.

Resources (includes proved and probable reserves) *

Dominion - Challenger Resources: 4.37mt @ 6.8g/t for 950koz


* Note: Contained silver is 29.9moz (0.5moz Au equiv.), resource grade is 7.3g/t Ag.

Contacts Directors

Mr Gavin Thomas

MD, Chief Executive Officer G Thomas (MD)Tel: 61 (2) 8256 4800 P McAleer (Non Exec Dir)

Sydney, NSW, Australia C Carracher (Non Exec Dir)P Alexander (Non Exec Dir)

130,000

48.7

3.3%

4.09

80,000

130

0

PER (x)

Exploration and Evaluation (A$m)

Production

1,30040.2

140

155,000

147.1

107.7

none

Au none

Au

69%/100% noneAu, Cu

100%Suwan

g/t

1.13

0.79

0.97

100% 5.60

61.7

9.2

48.0

epithermal

epithermal

Au

50.3100%

100%

epithermal

www.kingsgate.com.au

Stockpiles

Total

Chatree South

R Smyth-Kirk (Chairman)

Total

Chokdee 100%

4.4

0.0

4,320

0.0

100%

Meas+ind+inf

Meas+ind+inf 117.6

4,320

5.6

173.5

0.79

22.2

100%

Chatree 100%

Project

Chatree North

Option

Ownership/

Dividends (A¢/share)

32.5

CFPS (A¢/share)

EPS (norm) (A¢/share)

Net Profit (norm) (A$m)

34.3

88,000

Stockpiles Meas+ind+inf

Reserves

Chatree North

86,000

Chatree North


Au

Proved & Probable

P/CF (x)

EV/EBITDA (x)

Yield (%)

Company Comment

2430

15.6

130

140,000135,000

4.87

24

3.3%

86,000

18

30

192.7

40

7.1 6.0

4.0

3.9%

0.4 290

Auc/off

5.2%

4.7

Eqty

100%

Au

Mt


8.1Proved & Probable

130

Classification

Chatree South

Gold


46.60.4

g/t tEquity

OreProject

290100%

130

15.1

10.2

25

88,000

12.76

18

Share price (A$)

to

7.62

6.91

11.04

10.5

7.3

25

KCN.AUGold, Silver

ThailandProduction, Advanced Exploration

27 June 2011

23.20

0.0%

Exchanges: ASX:KCN

Capital Profile

52 week range (A$/share)

47.5


1078.3

1030.8

135.3

Options and warrants (m) 1.6

137Fully diluted^ (m)

Convertible notes (m) 0.0

Number of shares (m)

Major shareholders: Blackrock Inv. Mgt (7.8%),

KCN is an unhedged mid tier gold producer in a strong

growth phase.

Production 121koz in FY11 growing to 264koz FY12,

334koz FY13 with Chatree expansion and DOM merger.

Efficient low cost operation at Chatree, Thailand. Total

cash costs 1Q11 US$425/oz despite low 1.0g/t grades.

Chatree expanding to >200kozpa production by 1Q12.

DOM underground production is higher cost, US$814 in

1Q12, limited mine life being addressed with exploration.

Entry into South America (Chile, 1.1moz resource)foreshadows Scoping Study for production and further

exploration for major deposits.

KCN's push to become Australia's standout number two

producer behind Newcrest makes sense.

Our valuations (A$9.47/share US$900/oz long term gold,

US$12.97/share using spot gold) suggest further re-rating

likely as Chatree expansion bites in 2H11.

DOM underground production is higher cost, merger will

increase shares by 31% for +50% gold output.

15

33.6

Investment Points

2.9

No

UBS AG Nominees (5.0%), Directors (4.6%).

30.7

140

1,300

2,88089.4

1404.4

1,93060.1 1,930

2,880

Location

as above

ThailandProduction

Thailand

Aust (SA)

Thailand

none

na

IOCG100%ChallengerAnalyst: Dr Tony Parry

na

Process

0.4

Route

0.77

epithermal

Target

epithermal

CIP

[email protected] ChileMid Expl.Production

Arqueros

A$ 7.62

67.7

2012F

172.9

KCN is vying for the number two spot for Australian-based gold

producers with FY13F production growing to >300kozpa and further

potential growth to come from South America. The company's eventual

aim is >500kozpa to become a globally significant gold producer.

121.4

Kingsgate Consolidated Limited

264.1

na

Key Projects

Metal

JV

Partner Type

Au

none

Au

Thailand

none

CIL 2.4mtpa

0.4

0.4

0.40.76

0.80

0.97

127.1

Early Expl.

Mid Expl.

Project

Status

0.0

1,490

140,000

koz

130

2009a 2013FYEAR END: June

34.9

334.5

EBIT (A$m)

132.6Equity Production (koz)

104.0

83.7 196.7

73.1 60.4

74.5


2010a 2011F

93.0

50.672.5

134.0

173.6

161.5

koz

140

1,490

Dominion - Challenger Reserves: 2.31mt @ 5.7g/t for 420koz Au

KCN - Kingsgate Consolidated Limited

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

Jun

-10

Aug

-10

Sep

-10

Oct-

10

No

v-1

0

Dec-1

0

Jan

-11

Feb

-11

Mar-

11

Ma

y-1

1

Jun

-11

Sh

are

Pri

ce

($/S

ha

re)

Source: Bloomberg

Overview: KCN re-listed on the ASX in 1988, focused on gold mining and exploration in Thailand. KCN’s Chatree mine commenced production in 2001. It is a low cost, efficient SE Asian gold mining operation. Chatree Performance: In 1Q11 grades were still low due to access issues (1.0g/t), production dipped to 16.8koz. Access issues have recently been resolved which will allow access to all areas including C North, meaning grades should recover in 3Q11. Despite lower grades cash costs were outstanding (C1 cash cost US$308/oz after silver credits, C3 total cost US$534/oz). We have reduced our forecast to 80koz FY11 production, (as per company guidance) before the plant expansion kicks in. 2Q11 has been affected by unscheduled production downtime. Plant Expansion: The ~A$130m plant expansion (from ~2.6mtpa to ~5.3mtpa) is under constructionwith commissioning in 3Q11, full speed by Dec ‘11. Our F

Gold Sector Review 2Q11 Abridged - Baystreet · 2012. 4. 27. · Step out drilling at the flagship...

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