chart, page-32

A reminder why I like AJM:

Summary NPV
DSO $205.3
Coal $37.2
Drilling $11.3
Cash $37.3 (Assuming exercise of all AJMOA)
Lithium $0.0
Uranium $0.0
Total $291.1
Number of Shares (m)468.170
Value Per Share $0.62
Current Price $0.22
Potential Return 283%

Altura Mining Limited (AJM/AJMOA): With a suite of projects that can deliver multiple sources of cash flow, Altura Mining has the potential to increase significantly this year. There are two projects of immediate interest. The Mount Webber Iron Ore project (30% interest) which is in a joint venture with Atlas Iron has the potential to move towards production with a scheduled start-up set for 2012 at a rate of 3mtpa of direct shipping ore. I see two possible scenarios here, the first being that AJM sells its minority stake in the project to Atlas for a substantial up front cash and or cash /equity payment to realize significant value from the asset immediately; and the second being that the project gets developed under the joint venture providing the company with significant cash flows commencing in 2012. The first news on the project is likely to come early in 2012 with drilling results aimed at converting resources into reserves.

The second project which should deliver significant cash flows is the Tabalong Coal Project which could conceivably commence production as early as this year. The company is currently seeking mining approvals which are expected to come through in coming months. Although the project is modest in size with annual production of 30K tonnes per month this would still deliver cash flows in the order of $9m per annum.

Altura also has a company which provides drilling services that generates net cash flows of around US$2.0m per annum.

The company has other projects which are prospective for uranium, gold and lithium. Exploration at the lithium project is scheduled to commence early in 2011. Given the previous results including 60m @ 1.65% Li2O from surface and 51m @ 1.77% Li2O from 5 metres the exploration program should attract some speculative interest to the stock. Altura has substantial cash reserves in the order of $15m which can be used to fund the company's expansion plans.

I have modeled the cash flows from Mt Webber, Tabalong and the drilling services company. The net present value of these projects plus the cash on hand equates to $0.63 per AJM share. This places no value on the company's other exploration projects which could provide blue sky to the valuation.