BLACK ANGEL MINING

1
THE BLACK ANGEL PROJECT
Presentation to the Shareholders of Angus
Ross plc 2nd July 2007
2
Presentation Outline

• Brief history of the Black Angel mine
• Summary of the last 2 years
• Current developments
• The future

3
The Black Angel Mine (ii)

• Brief History (i)
• Deposit discovered the 1930 when quarrying for
  marble (hence Maarmorilik)
• Major exploration in the 1960s by Cominco
• Black Angel Mine opened in 1973 after 18-month
  construction (resource estimate at that time was
  3m tonnes only)

4
The Black Angel Mine (iii)

• Brief History (ii)
• The mine had been in uninterrupted operation for
  17 years (13 by Cominco, 4 by Boliden)
• During that time nearly 12m tonnes of rich ore
  was extracted (averaging 12 Zn and 4 Pb)
• The mine closed in 1990 due to a combination of
  factors. About 2.4m tonnes were left behind.
• http//www.geus.dk/minex/go02.pdf

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The Black Angel Mine (iv)

• Brief History (iv)
• 2003 Angus Ross plc becomes the new owner of
  the Black Angel Mine
• 2005 Numerous visits to the site and the
  Copenhagen archive, Pre-Feasibility Study (PFS)
  Commissioned, licence area expanded from 13 to
  187 sq km
• 2006
• January PFS Delivered by Wardell-Armstrong
• June-September extensive exploration programme
  (9000m of new diamond drilling, 67 holes,
  20-person camp)
• November bulk sample metallurgical testing
  started
• December Results of 2006 exploration programme
  announced extra 2m tonnes

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The Black Angel Mine (v)
2007

• Exploration continues
• Preparation for mining under way

2008

• Start of mining planned
• First shipment of ore expected

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The Black Angel Mine (v)
2007

• Exploration
• 6000m diamond drilling program under way
• 20-men exploration camp
• Testing extensions of last years discoveries
• 2400m drilled till the end of June 2007, 100
  samples sent for assay
• Newly acquired ground to be explored as well

8
Current Activities (iii)
2005
September 2005 Discovery of a massive sulphide
outcrop as a result of the South Lakes Glacier
(SLG) retreating over 700m since the mine closure
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Black Angel Licence Area
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2006 Exploration Summary (ii)
2.3mt _at_ 9.3 Zn2.8 Pb
Total 4.3mt tonnes
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2007 Exploration Focus
ARK 7.45m _at_ 4.4 Pb 5.8 Zn 6.05m _at_ 0.3
Pb 7.1 Zn 7.43m _at_ 1.3 Pb 5.2 Zn
2007 Main Exploration Targets
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Exploration Mapping

• Extensive mapping of the new find has been done

13
Mine Reopening

• Project to be developed in two phases
• Phase One the old mine
• Phase Two new discoveries at South Lakes Glacier
  ARK
• Current activities concentrated on Phase One

14
Current Resources(JORC compliant)

• Reserves (in the mine) mostly in the pillars
• Proven 1,763k tonnes _at_ 9.7 Zn, 3.1 Pb
• Probable 585k tonnes _at_ 8.0 Zn, 2.0 Pb
• Source Pre-Feasibility Study by
  Wardell-Armstrong, Jan 2006
• Resources (in satellite deposits)
• Indicated 147k tonnes _at_ 7.2 Zn, 2.6 Pb
• Inferred 1,848k tonnes _at_ 4.6 Zn, 1.7 Pb
• Source Resource Evaluation Report by
  Wardell-Armstrong, Dec 2006

Phase 1
Phase 2
-------------------------- Total 4.3m
tonnes --------------------------
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Project Concept
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The Black Angel Mine (i)
Old mine entrance
Shipping facility
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The Black Angel Mine (ii)

• It is 4 km long inside the mountain

Proposed new entrance
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The Black Angel Mine (iii)

• Facilitating access to the mine is the top
  priority

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Project Concept
Phase 1
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The Rope-Con System
2009/10
1985
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Project Concept

• There is a significant infrastructure left in the
  mine

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Project Concept
Phase 1
Down in Maarmorilik
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Project Concept
Phase 1
Inside the mine

• Re-establishment of ventilation, power,
  transport etc.

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Pillar Mining

• Significant number of pillars can be taken when
  backfill is provided

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Mineral Processing
Phase 1
Initially high-grade (15-25 Zn) raw ore will be
shipped to a mill in N. America or Europe.
Anfo
DRILL
BLAST
SHIP
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Mineral Processing
Phase 1
With high-grade ore running out
pre-concentration will be required. Pre-concentrat
or will be built within 2 years since the start
of operations.
If the resource tonnage is high enough and zinc
prices remain high at the time of phase two start
up construction of a full mill on site may be
considered.
Phase 2
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Equally close to Europe and America
To N. America 4,000 - 4,700 km
To Europe 4,800 km
By comparison Peru to Europe (Zn) 11,300
kmChile to Europe (Cu) 13,000 km
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Where are we now?
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Current Situation (i)
ü

• Completed Pre-Feasibility Study (Jan 2006)
• Metallurgical Testing completed (March 2007)
• Completed Environmental Baseline Studies (Oct
  2006)
• Environmental Impact Assessment Study under way
• Bankable Feasibility Study under way (completion
  expected in November 2006)
• Construction of a cable car access to the mine
  under way (completion expected in March 2008)

ü
ü



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Current Situation (ii)

• Talks initiated with 5 mills with spare capacity
  (3 in Europe, 2 in N. America)
• Talks with the Ministry of Taxation and Bureau of
  Minerals and Petroleum in progress
• Steps taken with local law firms and accountants
  to establish a Greenlandic company
• Initial talks about off-take agreements

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Plans for 2007
Phase 1
Hoooray!!
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Current activities on the ground (i)

• Construction of the camp under way
• The devastated accommodation block from the 1980s
  has been refurbished

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Current activities on the ground (i)

• Camp for 44 persons to be completed in July 2007
• Expansion to be built in 2008/9 target capacity
  90 persons

June 2008 Camp construction
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Plans for 2007
ü

ü

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Current activities on the ground (ii)

• Team of 23 currently on site
• Exploration programme continues
• 2200m drilled in 2 weeks in June 2007 (10 diamond
  holes)
• 150m strike extension already established (i.e.
  700m150m)
• 100 samples already sent to the lab
• New licence areas added in 2007 to be explored
  for the first time (72 sq km)
• Exploration season to last till September
• Increase in resources very likely as a result of
  2007 field season

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2008 and beyond (i)

• Full Feasibility Study in 2007 (condition of
  bank financing)
• Permitting Process
• Procurement of mining equipment
• Procurement of processing equipment
• Construction of a second stage of the camp
• Construction of the rest of infrastructure
  (conveyor belts, shipping facility)

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Financing (i)

• 6 million already spent on the project
• 30 million debt financing facility agreed with
  Cyrus Capital LLP (subject to shareholders
  approval on 2nd July 2007)
• Cyrus also receives 37.5m warrants, which, if
  exercised over 3 years, would bring additional
  15m to the project
• At least 2 banks ready to provide bank finance on
  completion of the Bankable Feasibility Study

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Financing (ii)

• With the above financing in place the project is
  nearly completely financed

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Timeline
2007 Cable car Power ½ of the camp
Tunnel Feas. Study Financing
Permitting
2008 Procurement Mine React. ½ of the
Camp Mining from Nunngarut tunnel
Begin pillar mining First shipments
2009 advance to full production install
pre-concentration equipment
2010 Beginning of Phase 2
E X P L O R A T I O N
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Outlook for Zinc (i)

• Extraordinary price rally over the last two
  years for both metals

Zn

• Genuine shortage of metal

• Few new mines coming on stream (some in
  politically unstable areas e.g. Iran)

The world needs to discover another world class
(zinc) mine every year for the next five
years. Prof Ian Plimer (Mines Money
Conference 2006)
Pb
In Maarmorilik oreZinc accounts for 85 value
Zn
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The End

• Black Angel
• Blue Sky Potential in Greenland
• www.angusandross.com

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Board of Directors (ii)

• Richard Burt, Non-Executive Director (Mineral
  Processing Engineer)
• A graduate of the Royal School of Mines, Richard
  has over 35 years of experience in the mining
  industry working for Consolidated Tin Smelters
  and Cabot Corporation. He is a recognised world
  authority in the gravity concentration of
  minerals. He was awarded the Selwyn Block medal
  for services to Canadian mining in 1998.
• Tom Elder, Non-Executive Director (PhD in
  Geology)
• Over 40 years of international experience in
  exploration and mining in more than 20 countries,
  for precious metals, base metals and diamonds.
  His previous employment includes working for RTZ
  (now RioTinto plc), BP Minerals Ltd and Cominco.
  In 1966-67 he was the project leader in Greenland
  of the team that discovered what subsequently
  became the Black Angel mine. Tom is currently the
  President and the CEO of Mano River Resources.
• Malcolm Swallow, Non-Executive Director (Mining
  Engineer arctic zinc expert)
• Over 30 years experience in evaluation,
  development, permitting, construction and
  operation of underground and open pit mines. Ex
  Cominco. In the 1980s was responsible for the
  operations of the Black Angel mine. Former CEO of
  Anglesey Mining plc and Canadian Zinc
  Corporation. Currently Chairman of La Quinta
  Resources Corp., based in Vancouver.

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Pre-Feas Economic Case (i)

• Phase One removal of the pillars only
• Phase Two satellite deposits

at recent prices of 3400/t zinc and 1700/t
lead (2 February 2007)
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Pre-Feas Economic Case (ii)

• The most recent financial modelling
  produces following values
• Phase One
• NPV 71M (_at_8) IRR 141
• Phase Two
• Not calculated yet, as the concept for Phase II
  is still evolving

• Basic assumptions
• Capex required 38m
• Prices Zn 2500/t, Pb 1100/t, Ag 8/troz
• 50/50 debt/equity financing

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Project Concept
Phase 1
Estimated cost of Phase One 38m
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Project Concept
Phase 2