Memorandum on the reading of statements from the Government of...

Memorandum on the reading of statements from the Government of Greenland re-
garding the addition to the standard terms for exploration for mineral resources

Date:

20 September 2010

1
Introduction
The purpose of this memorandum is to provide a short outline of the potential differences in the
public information regarding the newly approved addition to the rules which regulate exploration
for mineral resources (these additions have not yet been made available by the Bureau of Minerals
and Petroleum).

The parties involved are (i) the Government of Greenland, (ii) the licensed company, Greenland
Minerals and Energy (Trading) A/S (�GME�), and (iii) its main shareholder, Greenland Minerals
and Energy Limited (�GGG�).

2
Executive summary
Based on a comparison between the statements from the Government of Greenland on 9 September
2010 and 11 September 2010, respectively, and the company announcement from GGG on 10 Sep-
tember 2010 distributed through ASX, the Australian Stock Exchange, it is our view that the word-
ing of the company announcement can be interpreted as misleading and includes factual inaccura-
cies.

The first government statement on 9 September 2010 does not explicitly state that the zero toler-
ance policy for uranium remains unchanged, but it should be clear (and certainly was to GME, cf.
GME�s press release of 10 September 2010) that the addition of the standard terms for exploration
licenses state that a license to complete such environmental impact assessments etc. does not give
right to a license to explore for radioactive elements.

The second statement of 11 September 2010 clarifies the first statement and explicitly states that the
current zero tolerance policy regarding uranium remains unchanged.

None of the above can be concluded from the company announcement from GGG, which was pub-
lished on 10 September 2010.

Also, the GGG company announcement gives the impression that the possibility for exploitation of
radioactive minerals is now available under the condition that the necessary approval can be ob-
tained on standard terms and that there is no regulatory obstacle towards the exploitation of radio-
active minerals in Kvanefjeld. These assumptions can not be concluded from the government press
releases as radioactive projects are explicitly prohibited in Greenland.

On this basis, the company announcement from GGG can be interpreted as misleading.

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3
Statements from the Government of Greenland
The Government of Greenland published a statement on 9 September 2010 regarding the approved
addition to the regulatory rules on exploration. Subsequently, the statement was followed by an-
other statement clarifying the addition to the rules. This second statement was issued as a conse-
quence of the public debate and the various press releases and company announcements from the
parties involved.

3.1
Statement published 9 September 2010
The background for the changes is that the existing standard terms are too restrictive for an effi-
cient exploration and exploitation of minerals in Greenland.

Under the regulatory framework any exploitation of minerals should be terminated immediately if
radioactive emission above background level is detected. This is a consequence of the Greenlandic
zero tolerance policy regarding uranium. Hence, Greenland will not accept any commercial usage of
uranium or other radioactive minerals in Greenland.

However, the addition to the rules implies that companies which have found and demarcated min-
eral resources containing radioactive elements can apply for a license to prepare assessments of the
environmental impact and social sustainability caused by the exploitation of the non-radioactive
minerals.

Thus, investigations can now be continued and need not be terminated provided that an approval
can be obtained after a hearing of the relevant parties.

This first government statement does not explicitly state that the zero tolerance policy for uranium
remains unchanged.

3.2
Statement published 11 September 2010
The first statement from the Government of Greenland caused publication of official press releases
and company announcements from GME and GGG. Further, the Greenlandic newspaper Sermitsiaq
AG on 10 September 2010 commented on the information issued and concluded in an article that
the Government of Greenland had implemented a new policy on uranium.

As a response to the above published information, the Government of Greenland found it necessary
to stress that the �zero tolerance policy for uranium remains unchanged� and on 11 September
2010 issued a second statement.

In this statement it is underlined that the license to continue and complete an environmental im-
pact assessment does not automatically give the right to explore or exploit radioactive elements on a
later stage.

The statement concludes that �Greenland�s uranium policy remains therefore unchanged and the
zero tolerance for exploration and exploitation of radioactive minerals continues intact�.

4
Press release from General Minerals and Energy A/S
On 9 September 2010 GME published a press release as an immediate response to the addition to
the standard terms for exploration of minerals in Greenland.

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In general, the wording of the press release is underlining the new possibilities for evaluating new
findings containing radioactive substances and that the addition provides for new opportunities to
begin an extensive exploration of the mine at Kuannersuit.

The press release from GME is relatively loyal to the statements from the Government of Greenland
and highlights that an obstacle has been removed for exploration of new findings of rare earth met-
als.

Finally, it is also underlined in the press release that GME is aware that the zero tolerance policy for
uranium has not been changed.

5
Company announcement release from General Minerals and Energy Limited
On 10 September 2010 GGG published a company announcement in continuation of the newly pub-
lished addition to the standard terms for exploration licenses in Greenland (GGG also published a
press release on 10 September 2010. The press release is shorter and, strangely, more loyal to the
government and GME press releases).

These following key points are included in the company announcement:

�Amendments allow for, upon application approval, the inclusion of radioactive elements as
exploitable minerals for the purpose of thorough evaluation and reporting.� (Our accentuation)

This statement leaves the impression (but does not strictly state) that the possibility for exploitation
of radioactive minerals is now available under the condition that the necessary approval can be ob-
tained on standard terms. This is, however, not correct as an exploitation of radioactive minerals is
still not possible as the zero tolerance policy regarding uranium is intact. That the zero-tolerance
policy is upheld does not transpire from the company announcement from GGG.

�Company now has a clear path for the continued development of the Kvanefjeld rare earth and
uranium projects��

GGG concludes that there is no regulatory obstacle towards the exploitation of radioactive minerals
in Kvanefjeld. Further, it appears as if projects regarding uranium have already been established.
This can not be true as these radioactive projects are explicitly forbidden under the current regula-
tory framework.

Also, this is in contrast to the official statement of 11 September 2010 from the Government of
Greenland saying that a license to complete such an environmental impact assessments does not
give a right to explore for or exploit radioactive elements.

�This critical development now provides a clear framework for the Company's Kvanefjeld multi-
element project (rare earth elements, uranium and zinc) to proceed to development via the com-
pletion of a definitive feasibility study (bankable) conducted in close cooperation with the
Greenland government and stakeholder groups.�

In this part of the company announcement exploitation of uranium is mentioned at the same level
as other minerals. This is (as previously mentioned) not true as the new addition does not allow ex-

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ploitation of radioactive minerals.

��if the government is satisfied that all health, safety and environmental requirements can be
met, then an exploitation license can be issued to develop an operation that will produce REEs,
uranium and zinc.�

The addition to the standard terms does not allow issue of an exploitation license on radioactive
minerals even if the Government of Greenland is satisfied with the health safety and environmental
impact.

�The Company is primarily focused on advancing the Kvanefjeld multi-element project (rare
earth elements, zinc, and uranium) toward development.� (Our accentuation)

The stated focus of GME is contradicting the policy of the Government of Greenland. The exploita-
tion of Kvanefjeld exclusively allows investigations and exploitation in occurrences where the actual
goal is other metals than the radioactive ones.

6
In conclusion
Based on the above it is clear that there are a number of factual misleading wordings and essential
omissions in the company announcement from GGG in comparison to the statements from the
Government of Greenland.

Essentially, the company announcement leaves the impression that the regulatory framework for
exploration and mining of minerals is now allowing exploitation of radioactive minerals in the very
near future. This does not correspond with the statements from the Government of Greenland al-
beit that the 9 September 2010 government statement does not explicitly state that the zero-
tolerance policy is upheld.

The GGG company announcement even states that commercial usages of radioactive metals are
now permitted under the new addition. This is not correct as the change in official policy only im-
plies that discovering radioactive metals is no longer prohibiting further exploration.

Regardless of any ambiguity (if any) in the first statement from the Government of Greenland, no
subsequent press release or company announcement has been published by GGG to clarify the in-
terpretation of the addition to the standard terms.

7
Post Scriptum
Today it appears from the GGG home page that a statement (undated but subsequent in time to the
above discussed) has been made, which indirectly refers to the zero-tolerance policy being still in
force. The statement is part of an apparent interview with Roderick McIllree (please see
http://ggg.gl/News/Breaking-the-ice.htm).

Henrik Lind

946435 Some other new nathanblake. I am just passing it on enjoy