AIBC Summit, 20 May 2009, SydneyAIBC Summit, 20 May 2009, Sydney

BHUKIA Gold (-Copper) Deposit, Rajasthan, INDIABHUKIA Gold (-Copper) Deposit, Rajasthan, INDIA

Lessons Learnt from 5Lessons Learnt from 5 Years Years

Exploration of a Remarkable DiscoveryExploration of a Remarkable Discovery

AIBC Summit, 20 May 2009, Sydney

Start-up ConceptStart-up Concept

• Attracted by under-explored gold endowment in India

• Entry barriers coming down

• JV partner (NRI) with credentials & ‘connections’ and exciting exploration projects (incl. Bhukia)

• Sole-focus Newco set up late-2004

• 2-3 year drill-out Bhukia

• List on London-AIM, mark cap expectation A$+60 M

AIBC Summit, 20 May 2009, Sydney

PropertiesProperties

• Rajasthan main focus– Jagpura Project ,

Gold (70%)

• Applications pending elsewhere– Gold, b/metals,

diamonds (100%)

AIBC Summit, 20 May 2009, Sydney

OutcomesOutcomes

• Initial 2-3 year exploration success; rapid build-up in Gold Resources

• A$16.1 million private equity (31.36 M shares)

• JV partner runs into permitting problems; our ‘connections’ not as good as we had expected

• Irrational and illegal discretionary actions taken by Rajasthan Govt agency

• After $7 million spent, can’t get next level permits!

• New Rajasthan Govt. – a ray of HOPE!!??

AIBC Summit, 20 May 2009, Sydney

Drilling at BhukiaDrilling at Bhukia

at Panch Mahuri Zone

at Mahi Zone

AIBC Summit, 20 May 2009, Sydney

BhukiaBhukia

Ancient Workings

Panch Mahuri

Delwara

AIBC Summit, 20 May 2009, Sydney

BhukiaBhukia

Ancient Workings

Timran MataLargest Ancient Open Pit

in drainage gully

Person standing at

edge of open pit here

AIBC Summit, 20 May 2009, Sydney

Bhukia Ancient Workings

Mortar stone

PestleGold Tailings Mound

AIBC Summit, 20 May 2009, Sydney

Wealth Creation by Exploration…Wealth Creation by Exploration…BUTBUT

2004 2005 2006 2007 2008 2009

Gold Resource 1.74 Moz in

situUS$1.5 Billion

Exploration TargetPhase 1 is +5 Moz

Doldrums

3-Year PermitsExploration going well

Permitting delaysLegal

doldrums

Will there everWill there everbe a gold mine?be a gold mine?

AIBC Summit, 20 May 2009, Sydney

Our Experience ……. EnigmaticOur Experience ……. Enigmatic

• Legally granted permits

• 2-3 years positive exploration, $7 million spent

• Then Rajasthan Govt. reneges on next level of permits

• Unprincipled discretionary actions … Unbelievable!

• Tried reasoning and negotiation

• Legal challenge ………… new Govt………some hope now

AIBC Summit, 20 May 2009, Sydney

India Mining SectorIndia Mining Sector

• Slowly opening up from mid-1990s

• 100% FDI …..but……no foreign-run mine yet!

• Fragmented industry, State-run agencies can veto investment

• New National Mineral Policy still not legislated

• A principles-driven policy difficult to achieve – no political consensus

• Still some underlying resentment to private enterprise and FDI despite policy pronouncements to the contrary?

AIBC Summit, 20 May 2009, Sydney

What now for our JV?What now for our JV?

• Need Govt support, not more hurdles!

• India needs a minerals success story

• Our JV gold development project could provide choices for future generations ……

AIBC Summit, 20 May 2009, Sydney

Lessons Lessons LearntLearnt

• Spend slowly

• ‘Educate’ bureaucrats and politicians along the way to subdue expectations

• Don’t assume laws, natural justice, logic and reasonableness will prevail in permitting matters

• Process-driven business environment, outcomes appear secondary at times!

AIBC Summit, 20 May 2009, Sydney

BureaucracyBureaucracyThe system works…….just don’t hold your breath

AIBC Summit, 20 May 2009, Sydney

Road BlocksRoad Blocks

Expect them…….. They are a dead set certainty

Organized Chaos……..not to be confused with Disorganized Chaos!

AIBC Summit, 20 May 2009, Sydney

Infrastructure……….Infrastructure……….………………

Interrupted!Interrupted!

Things are improving ...but slowly

AIBC Summit, 20 May 2009, Sydney

Have Patience……Have Patience……..….and ..….and

PerseverancePerseverance

The Brits couldn’t really change India in 200 years

So what makes you think you can!?

AIBC Summit, 20 May 2009, Sydney

Many ThanksMany Thanks

RajasthanWonderful land of arid beauty and ancient palaces

IndiaExcellent untapped mineral potential

But…..

Plan B for IGLContinue to assert our legal rights………New Business outside of India to spread risk