Below someinformation on what defines a Tier 1 gold project. By...

Below someinformation on what defines a Tier 1 gold project. By these metrics , Abujar, at least as it currently stands, is a Tier 2 project . It is possible that future exploration success could change that. But as it is now, it is probably too small to attract the interest of the gold majors ie. the Newmonts, Barricks , Polysus, Kinross etc.

However, it isperfect size to be acquired by any number of intermediate gold producers, andparticularly those already active in West Africa. Examples of this are Perseus, Endeavour , B2 gold, Nordgold, IAMGold, Teranga, West African , Roxgold and of course the Chinese . And the Russians.

Being a Tier 2project doesn’t mean that it is cannot be extremely profitable ,or that itcannot be highly successful.

West African’s Sanbrado mine is a good example , and their recent acquisition of Kiaka will double WAF’s gold production when operational.

My hope is thatno bid comes till we are a fully fledged gold producer , preferably after thefirst year of production is in.

TIE seems to betracking WAF’s success in many ways .

If so, then I believe we are looking at a 2-3 bagger in a 1-2 year timeframe !

Good luck to allfellow holders

“Barrick andRandgold will focus on Tier 1 assets, ones that produce 500,000 ounces of goldannually, have a mine life of more than 10 years and are low cost.”

TIERS

These measure the“quality” of the project.

Tier 1 deposits are “Companymaking” mines. They are large, long life and low cost.

Using long runcommodity prices it generates >$300-600m pa of revenue (i.e. >200 kt paCu or >800 kt pa Zn+Pb or >5kt pa of U3O8 or >250 koz pa Au) for>20 years and is in the bottom quartile of the cost curve. It has veryrobust economics and will be developed irrespective of where we currently are inthe business cycle and whether the deposit has been fully drilled out. Theresource is of a size/quality that it creates multiple opportunities forexpansion.

It is expected thatproject’s economics will easily exceed the Company’s Cost of Capital + CountryRisk Premium by at least 5 percentage-points … i.e. achieve a >12% IRRafter-tax in low-risk jurisdiction such as Australia or Canada. This willimpact on capital-intensity of the project.

Olympic Dam, BrokenHill and Cadia East are examples of a Tier-1 deposit.

As at Jan 2013,Tier 1 deposits have a risk-adjusted NPV at the Decision-to-Build Stage of>US$1000m. As a first-pass guess, for modelling purposes, the weightedaverage value of a Tier 1 deposit is notionally set at ~$2000m.

Tier 2 deposits are“Significant” deposits – but are not quite as large or long life or asprofitable as Tier 1 deposits. I.e., it only meets some of the Tier 1 criteria.

Typically Tier 2deposits are economically attractive/profitable in all but the bottom of thebusiness-cycle, but has limited “optionality” because of modest size and minelife.

It is noted thatover time, through additional delineation and/or changes in costs or businessrisk some Tier 2 deposits may ultimately become Tier 1 deposits.

Prominent Hill andNorthparkes are examples of a Tier-2 deposit.

As at Jan 2013,Tier 2 deposits have a risk-adjusted NPV at the Decision-to-Build Stage ofUS$200 – $1000m, with a weighted average value of around $500m.

Tier 3 deposits are small /marginal deposits (most deposits found fall into this category) While they canbe profitable – at best they don’t meet more than one of the Tier 1 criteria.

Typically. theseprojects only get developed during the top of the business cycle and/ordeveloped only if they are satellite operations to an existing business (i.e.they would never be developed as a stand-alone mine).

Hillside andHoneymoon (Uranium) are examples of a Tier-3 deposit.