Ann: Progress on Scoping Study for La Demajagua Mine, Cuba, page-46

Thanks H8tey.

I am confident in the geology but I think the arbitration is key to valuation.

If AAU are awarded anything north of $20m and it is paid this year, then that takes away funding risk for the holes into El Pilar and means we can throw a few drill metres around. A major miner will want to see both grade and scale before entering a partnership. A couple of holes can show grade but it takes a lot of drilling to prove scale and the arbitration money is key to unlocking that.

If we prove scale and grade then I think a major might sign on to earn 30% by spending $100 million on drilling and study, with an option to go to 51% by purchasing some more of AUU share for say 250 million.

If the Cubans let us go to 70% ownership now, then those maths leave us with 19% and $250 million cash a few years down the track. I think that could easIly make the company worth $500mil, plus whatever retained profits and valuations are attached to the mining operations.

However if we don’t get the arbitration money, life will be much harder. We will afford 6 holes to 500m depth which is only half of the suspected depth of the system and it’s hard to think we could nail all the best bits in only 6 holes. So we would need another discounted capital raise or wait for mining income which could be a couple of years. On the back of 6 holes we are more likely to give away more for less funding which will pare back share price gains.

Either way I think we will make some coin, but much more so if we are funded.