Investor Presentation. March 2013

Transcription

1 Investor Presentation March 2013

2 Disclaimer Forward Looking Statements These materials include forward looking statements. Forward looking statements inherently involve subjective judgement and analysis and are subject to significant uncertainties, risks and contingencies, many of which are outside the control of, and may be unknown to, the company. Actual results and developments may vary materially from that expressed in these materials. The types of uncertainties which are relevant to the company may include, but are not limited to, commodity prices, political uncertainty, changes to the regulatory framework which applies to the business of the company and general economic conditions. Given these uncertainties, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, the company undertakes any obligation to publicly update or revise any of the forward looking statements, changes in events, conditions or circumstances on which any such statement is based. Competency Statement The information in this report relating to Open Pit Ore Reserves is based on information compiled by Mr Mark Jewell who is a member of the Australasian Institute of Mining and Metallurgy and who has sufficient experience which is relevant to the styles of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Jewell is a consultant and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this report relating to Mineral Resources is based on information compiled by Mr Marcelo Batelochi who is a member of the Australasian Institute of Mining and Metallurgy and has sufficient exploration experience which is relevant to the various styles of mineralisation under consideration to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Batelochi is a consultant and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this report relating to Exploration Results is based on information compiled by Mr Robert Watkins who is a member of the Australasian Institute of Mining and Metallurgy and has sufficient exploration experience which is relevant to the various styles of mineralisation under consideration to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Watkins is a full time employee of Beadell Resources Ltd. Mr Watkins consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Reporting on Exploration Targets Statements or information relating exploration targets are based on information released publicly on the 12 May A target range of between 19 and 32 Mt at 1.5 to 7 g/t gold at Tucano is conceptual in nature and there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource. 2

3 Corporate Overview Corporate Information ASX Code BDR Shares on issue 742.2M Options 19M Share Price (13Mar13) $0.930 Market Cap $690M Monthly Volume (shares) 80-90M Directors and Senior Management Craig Readhead Ind Non-Exec Chairman Ross Kestel Ind Non-Exec Director Mike Donaldson Ind Non-Exec Director Peter Bowler Managing Director Rob Watkins Executive Director Geology Included in the ASX 200 Index Cash + Bullion (31Dec12) $6.2M Greg Barrett Jim Jewell Silvano Andrade CFO/Company Secretary Technical Services Manager General Manager Brazil Shareholder base by location 31 December 2012 Shareholder base by type 31 December 2012 Australia 55% Unknown 11% North America 18% Europe & UK 13% Asia 3% Other 0% Institutional Investors 58% Brokers 5% Employees 5% Private Stakeholders/ Investors 11% Hedge Funds 8% Corporate Stakeholders 2% Unallocated/ Unanalysed 11% 3

4 Share Price Performance Relative performance rebased to Year Share Price Movement 6 months Share Price Movement 140 BDR = $ m = +15.5% 1y = +26.5% 120 BDR = $ XGD 6m = (19.1%) 1y = (31.5%) 40 13/3/12 13/4/12 13/5/12 13/6/12 13/7/12 13/8/12 13/9/12 13/10/12 13/11/12 13/12/12 13/1/13 13/2/13 13/3/13 BDR.ASX XGD.ASX 4

5 This is Brazil s Decade Brazilian Real Gold Price up 5% over 1 year compared with $US down 3% and $A down 2% (as at 13Mar13) Monetary policy favoring exporters Tax policy encourages investment in Amapa, i.e. SUDAM incentive scheme 15.75% Corporate Tax Rate Low gold royalty of 2% From 2014, full hydro power is expected at US$ / kwh Low wages linked to CPI. 5.3% increase awarded on 01Nov2012 5

6 Tucano Low Risk/Long Life / Low Cost 5.1 million ounce resource, 1.9 million ounce open pit reserve 12 year mine life from open pits Forecast production of over 200,000 oz p.a. of gold for CY2013 including Duckhead Iron Ore Agreements signed with Anglo Ferrous Amapá Iron Ore by product revenues from agreements will drive gold cash costs significantly lower Mining fleet fully operational for Owner Mining Experienced and energetic site personnel Top 10 Brazilian Gold Mines Annual Gold Production (oz) Rank Company Mine Production 1 Kinross Gold Paracatu 453,396 2 AngloGold Ashanti Corrego do Sitio 1 361,275 3 Beadell Resources Tucano +200, Yamana Gold Chapada 135,347 5 AngloGold Ashanti Crixas 133,166 6 Yamana Gold Jacobina 121,675 7 Vale S.A. Sossego 90,000 8 Jaguar Mining Turmalina 61,400 9 Yamana Gold Fazenda Brasileiro 55, Jaguar Mining Caete 54, Mining complex covering Cuiaba and Corrego do Sitio mines. 2. Estimated production for CY2013 including Duckhead 6

7 Tucano Gold Plant Performance Mining Indicator Unit YTD - 12Feb2013 Budget Actual % Total Material Moved t 1,430,555 1,702, % Total Gold Ore t 248, , % Production Drilling m 5,117 11, % Crushing - circuit performing above expectations with abundant capacity SAG Mill - throughput continues to improve with a consistent feed rate significantly over nameplate of 3.5 million tonnes per annum with incremental increases ongoing. Currently drawing under 3MW with design capacity at 5.2MW. Carbon in Leach Tanks Surplus tankage available as 70-80% of the gold is being extracted in the first of the six tank cluster. Gold elution circuit - Is now performing well with resultant strong gold pours. Gold pour capacity is estimated at between 20-25,000 ounces per month. Gold pour at the Tucano Gold Project 7

8 Agreements signed with Anglo Ferrous Amapá 1. Duckhead Agreement - Regulates access to all gold at Duckhead. 100% economic benefit to BDR 2. Iron Ore Concentrate Off take Agreement - Mine gate Iron Ore Concentrate off take agreement locked in. 3. Joint Operating Agreement (JOA) - Cost recovery on iron ore in gold pits to materially reduce strip ratio 4. Amended and Restated Exploration Agreement - Clarity of access rights for both iron ore and gold for the mutual benefit of both parties. IRON ORE Subject to JOA GOLD ORE Subject to Iron Ore Concentrate Off Take Agreement Tap AB1 Looking South 8

9 Duckhead Development... Development timetable November 2012 Engineering and Design to define maiden reserve November 2012 to March 2013 Regulatory and Anglo Ferrous approval process April 2013 Commence open pit mining Mining Concession Plan showing location of Duckhead 9

10 Duckhead High Grade Drill Results and Starter Pit Combined Main Lode and Hangingwall Starter Pit 342, g/t for 96,000 oz gold High grade starter pit ounces without addition of Hangingwall pit 70, g/t for 68,000 oz gold Maiden Duckhead Hangingwall Starter Pit Reserve 272, g/t for 28,000 oz gold Maiden Duckhead Hangingwall Lode Resource 584, g/t for 71,000 oz gold Duckhead High Grade Drill Results Main Lode: FVD g/t gold New Lode Discovered: FVD g/t gold Hangingwall Lode: HW g/t gold Duckhead plan showing location of new RC results and starter pit 10

11 Duckhead Resource Results and Expanded Starter Pit Duckhead long-section showing location of new RC drill results and starter pit 11

12 Iron Ore Concentrate Plant and JOA Iron Ore Concentrate Plant Iron Ore Concentrate plant at the back end of CIL Gold plant to extract high grade iron ore from the CIL tailings Extensive test work indicates production ~500,000 tonne per annum of iron concentrate (~65% Fe) Off-take agreement signed Net income from agreement at current iron ore prices is expected to reduce gold cash operating costs by up to US$100 per ounce*, dependant on global iron ore prices Iron Ore Concentrate Plant 3D Image Cap Ex ~US$12 M Operating costs ~US$5 per tonne Commissioning date: late April 2013 Joint Operating Agreement Iron ore mined (i.e. gold pit waste) in the gold pits will be cost reimbursed. Expected to reduce gold cash costs marginally, dependant on annual tonnes mined *Spot Fe prices (65% Fe CFR North China) as at February 2013 = US$160/dmt Construction of Iron Ore Concentrate Plant as at 7 Feb

13 Expanding Open Pit Reserves and Resources Reserve and Resource Estimate (30Jun12) Based on US$1,200/oz Au Price Category Tonnes ( 000) Grade g/t Au Ounces ( 000) Measured & Indicated Resources 58, ,936 Inferred Resources 54, ,191 Total Resources 113, ,127 Total Oxide and Primary Open Pit Reserves 32, ,634 Total Stockpiles 8, Total Reserves 40, ,862 Extensive resource and reserve delineation drilling in progress using T685 Schramm RC drill rig. Over 50,000 m of drilling planned in Resource and Reserve increases from Duckhead ongoing. T685 Schramm RC Drill Rig 13

14 5.1 Moz Resource Targeting Growth to 7 Moz Tucano Long Section 2 Moz* exploration target on top of existing 5.1 Moz resource is being aggressively pursued along the 7 km Tucano zone Gold mineralisation at Tucano is structurally controlled along a 7km long north striking fault zone, hosted predominantly within banded iron formation * The potential quantity and grade related to Exploration Targets in this report is conceptual in nature as there has been insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource. Refer to Disclaimer page Mining Concession Plan Showing Duckhead 14

15 Urucum Deeps Future U/G Reserves Potential underground expansion to take forecast future steady state annual production over 200,000 oz pa. Early success at Urucum Deeps, g/t gold and g/t gold Width and geometries favorable for underground mining, ~2,000 ounces per vertical metre Urucum Long Section Urucum Deeps Cross Section 99840N Looking North 15

16 Very Large Ground Position Mostly contiguous tenure covering 2,500 km² *Regional exploration target ranging between 10 to 20 Mt at between 1.5 and 2.5 g/t gold Only 120 km from Beadell s advanced exploration project, Tartaruga Tartaruga 10,000 m RC Drilling campaign commencing February km long soil anomaly at Sucuriju showing similar footprint to Tucano deposits *The potential quantity and grade related to Exploration Targets in this report is conceptual in nature as there has been insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource. Refer to Disclaimer page Beadell Regional Tenure 16

17 In Australia, Tropicana East Continues to Excite 15 km gold trend discovered 60 km along strike from 7.9 Moz Tropicana Deposit. Airborne Spectrem survey defines strong conductive anomalies interpreted to be sulphide bodies. Large drilling campaign planned for the second quarter Tropicana East plan showing location of SPECTREM anomalies on a background composite of late channel conductance contour map SPECTREM flight line inversion section showing location of a strong late channel conductor adjacent to the Atlantis prospect 17

18 Outlook CY 2013 Incremental CIL Plant optimisation and improvements will be ongoing throughout the year targeting an annualised throughput rate of 4.5mtpa, 28% above nameplate Open pit gold reserve increased in % to 1.86 Moz. Improvements to the Reserve ounces expected via further optimisation of Duckhead and the Duckhead Hangingwall Lode with additional drilling on Beadell s own tenements Gold resource increased in % to 5.14 Moz. Targeting a 1,000,000 ounces resource addition in CY 2013 Exploration budget and two large RC Rigs to facilitate reserve/ resource extensions Highly supportive local community, federal, state and local governments = Low geopolitical risk High Brazilian currency gold price due to monetary policy strongly favoring exporters Gold production will be high with ~200,000 ounces of gold forecast for CY 2013, including an allowance of production from Duckhead Sale of high grade iron ore concentrate and mining iron ore from within Tucano s gold pits via JOA will reduce gold cash costs by ~US$100 per ounce* once in production in May 2013 Tropicana East - early stage gold discovery in Australia continues to excite. Large drilling campaign planned for the second quarter *Spot Fe prices (65% Fe CFR North China) as at February 2013 = US$160/dmt 18

19 Greg Barrett CFO & Company Secretary Telephone:

20 Cap Ex Funding Project financing facility of US$110M. A total of 195,000 ounces hedged over 3 years or 40% of annualised production which represents only 11% of current reserves. Flat forward hedge price of US$1600 per ounce with US$160 million of Brazilian Reals (BRL) also hedged at a flat forward of USD1:BRL The hedging program results in 100,000 ounces effectively hedged at BRL$3,124 per ounce with the remaining 95,000 ounces hedged at US$1,600 per ounce. Call options sold over 48,485 ounces of gold at a strike price of US$1,700 per ounce and an expiry date of 31 December Additional call options sold over 20,250 ounces of gold at a strike price of US$1,400 per ounce and an expiry date of 31 December Separate machinery lease facility which was drawn to US$18.9M out of the US$20 million limit at 31 December Completed CIL Tanks, Gold Room and Elution Room 20

21 Resource Statement As at 30 June 2012 Brazil Tonnes Measured Indicated Inferred Total Grade g/t Au Ounces Tonnes Grade g/t Au Ounces Tonnes Grade g/t Au Ounces Tonnes Grade g/t Au Ounces Urucum Oxide 1, , , , Tap AB Oxide 3, , , , Tap C Oxide , , Tap D Oxide , Duckhead Oxide Total Oxide 4, , , , ,319 Urucum Primary 1, , ,372 19, , ,294 Tap AB Primary 1, , , , Tap C Primary , , Tap D Primary , Total Primary 2, , ,720 30, ,447 64, ,302 Urucum Total 2, , ,531 33, ,175 64, ,834 Tap AB Total 4, , , , ,378 Tap C Total , , , Tap D Total , , Duckhead Total Total Oxide and Primary 6, , ,297 49, ,912 99, ,620 High Grade Stockpile Low Grade Stockpile 2, , Spent Ore Stockpile 5, , Total Stockpiles 8, , Tartaruga , , Total Brazil 14, , ,297 54, , , ,127 21

22 Reserve Statement As at 30 June 2012 Tucano Tonnes Proven Reserve Probable Reserve Total Mineral Inventory Grade g/t Au Ounces Tonnes Grade g/t Au Ounces Tonnes Grade g/t Au Ounces Cut off g/t Urucum Oxide 1, , , Tap AB Oxide 2, , , Tap C Oxide 2, , Duckhead Oxide Total Oxide 3, , , Urucum Primary 1, , , Tap AB Primary 1, , , Tap C Primary Total Primary 2, , , , Urucum Total 2, , , Tap AB Total 3, , , Tap C Total 2, , Duckhead Oxide Total Oxide and Primary 5, , ,292 32, ,634 High Grade Stockpile Low Grade Stockpile 2, , Spent Ore Stockpile 5, , Total Stockpiles 8, , Total Brazil 13, , ,292 40, ,862 See Appendix 1 22

23 Appendix 1 Reserve Parameters for Tucano Deposits. Whittle pit optimisation software was used to generate the final pit designs. The pit optimisation was based on Definitive Feasibility Study (DFS) geotechnical slope recommendations, which included allowances for the placement of haul roads and geotechnical berms. The geotechnical recommendations assume drained or partially drained slope conditions that include pit dewatering and depressurisation measures. These measures are considered technically possible considering the site conditions but have not yet been proven in the field. The mining model used a 5% mining dilution and a 5% mining loss to generate the diluted gold grades.. Iron ore revenue from mining of coincident iron ore has been factored into the open pit optimisation based on agreed compensation rates under the Joint Operating Agreement with Anglo Ferrous. Iron ore production and revenue from iron concentrate produced from gold ore has been estimated based on metallurgical testwork from each of the deposits and based on the revenue under the terms of the Iron Concentrate Agreement with Anglo Ferrous. Densities were based on lithological modelling and derived from an extensive database of specific gravity measurements. Mining costs were estimated for an owner operator scenario, guided by the April 2011 DFS study cost estimates. The processing costs and processing recoveries were provided by Ausenco and allocated by material type for the pit optimisation purposes. The gold recoveries for this Ore Reserve were based on test work data trends for 80% passing sizes of approximately 115 microns for the initial 3.5 years and 100 microns thereafter. The operating costs for the 3.5 Mt/y throughput, used for this Ore Reserve, were calculated based on the unit cost and methodology outlined in the Tucano Definitive Feasibility Study for the 3 Mt/y plant but adjusted as fixed and variable costs for the higher throughput. Measured and Indicated Resource material blocks were assigned revenue value to drive the pit optimisation shell. Inferred Resource material blocks were classified as waste for pit optimisation purposes. No final pit designs were created for this Ore Reserve update. The pit shell inventories were factored to allow for a conversion of the pit shells to final pit designs. The conversion factors were guided by the April 2011 DFS study conversion factors, based on the comparison of the DFS final pit designs to the final pit shells, as well as taking into account the enlarged final pit shells for the September 2012 work. The Proven and Probable Ore Reserve are based on the factored pit shell inventories as described above. Overall an ore tonnage factor of 94.6 % was used to convert the pit shell ore tonnage to the Ore Reserve number. An overall metal tonnage factor of 94.8% was used to convert pit shell gold metal to the Ore Reserve number. Base gold revenue for the pit optimisations excluding was US$1,200 per troy ounce gold. A 2% royalty charge was deducted from this base revenue as selling costs. A US$ 2 per troy ounce charge was used for refining charges. Resource Parameters for Tucano Deposits. Gold mineralisation at Urucum, Tap C and Tap AB occurs over a 7 km strike length and is associated with the subparallel intersection of a north-south shear zone and a BIF (Banded Iron Formation) unit which also host significant quantities of friable iron ore. Higher grades are associated with the more intensely hydrothermally altered rocks, particularly within the BIFunit. Deep oxidation has produced near-surface saprolitic mineral deposits overlying the primary sulphide mineralization. Additional oxide gold occurs in an overlying colluvium layer up to 10 metres thick. Primary mineralization consists of a series of sulphide-bearing lenses which strike north and north-northwest, and dip 60 to 80 o east except for the western zone in Tap AB1 pit which dips shallowly west. Individual lenses achieve a thickness of between 5m and 33m. Sulphide content ranges from 5% to 10% and is mostly pyrrhotite and pyrite. 23

24 Appendix 1 (cont.) A summary of the drill holes in each Tucano Mineral Resource is tabulated below Deposit Diamond Diamond RC RC Auger Auger Total Total Holes Metres Holes Metres Holes Metres Holes Metres Tap AB , ,785 1,556 6,496 2, ,441 Tap C , , ,955 Tap D 80 7, , ,479 Urucum , , ,022 1,247 87,493 Tap AB, Tap C, Tap D and Urucum resources are reported above a 0.4 g/t gold lower cutt off grade. Tartaruga and Reedy Creek are reported above a 0.5 g/t gold lower cutt off grade. RC Holes of 3 inches diameter were angled to the east and west at generally minus 60 o. Entire samples are taken every metre, dried and split on site to 600g. 300g split of this sample is then pulverised to -100 um and a 100g pulp shipped for offsite analysis. The diamond drill holes commence with HQ size in the colluvium/saprolite, reducing to NQ size in hard rock. Core is half cut to a maximum length of 1m, crushed (- 2mm) and split to 600 g. 300 g of this sample is then pulverised to -100 um and a 100 g pulp shipped for offsite analysis. All gold determinations were carried out by standard 50g fire assay at SGS laboratories in Belo Horizonte. Pulps are retained on the mine site for storage. Diamond holes have been surveyed by techniques unaffected by magnetism such as Maxibore and more recently Deviflex methods. Drillhole collar locations and elevation are surveyed by total station. The resources have been drilled up to 700 vertical metres below surface on a 40 m x 20 m drill pattern with infill drilling (ongoing) down to a 20 x 20 m pattern. Bulk densities have been measured on wet samples at irregular intervals in the oxide (where reasonable intact core can be collected) and every metre in the fresh material. Dry densities have been back-calculated for the oxide material at the modelling stage using the moisture content of various lithology types established from wet vs dry drill core density and insitu tests within the open pits at Tucano. Block model densities have been estimated using nearest neighbour technique and constrained within lithological, hardness and oxidation domains. For both RC and Diamond, a lab duplicate, field duplicate and certified standard are inserted every 20 th sample. A blank is inserted at the start of every batch. Standard results are routinely checked to ensure values are within tolerance and the whole batch submitted for reanalysis if this is exceeded. Tap AB and Urucum models have been modelled separately in Isatis and imported into a sub-blocked Datamine model. Blocks 2m x 5m x 1m (x,y,z) were defined and ordinary kriging was used to estimate block grades within individual lode wireframes. Blocks 8 m x 20 m x 4 m were defined to estimate blocks using ordinary kriging outside the lode wireframes. Tap AB, Tap D and Urucum were modelled using conventional 3D wireframes to constrain the 0.3 g/t mineralisation boundary. Tap C was constrained by using a Leapfrog wireframe on a nominal 0.25 g/t envelope. Block gold grades were estimated in Isatis by ordinary kriging using a block size of 8 m x 20 m x 4 m and then imported into a block model with sub-blocking of 2 m x 5 m x 1 m. Leapfrog was also used to constrain a low grade / waste 0.1 g/t gold envelope surrounding the wireframe lodes at Tap AB and Urucum. Anomalously high grades were controlled in the Tap C estimation by using grade and distance thresholds. Where a composite grade exceeded the grade and search distance threshold, the composite was top-cut to the grade threshold. Where a composite grade exceeded the grade threshold but not the distance threshold, the composite was included at its full value. The distance threshold was set at 20 m. For the Tap C lode domains, the grade threshold chosen was 20 g/t, and for the Tap C colluvium domains the grade threshold was 10 g/t. Oxidation, colluvium and resistance surfaces were modelled for each deposit. Geological domains were wireframed. Drill hole samples have been composited to 2 m intervals for the resource calculation. For Tap AB and Urucum various top cuts were applied depending on the statistical distribution of gold within each lode or domain for each deposit. 24

25 Appendix 1 (cont.) Gold mineralisation at Duckhead occurs on a sheared contact between a BIF (Banded Iron Formation) unit which also host significant quantities of friable iron ore. Higher grades are associated with the more intensely sheared and hydrothermally altered rocks. Extremely deep oxidation along the lode has produced abundant near-surface saprolitic mineral deposits. Additional oxide gold occurs in an overlying colluvium layer up to 10 metres thick. No primary mineralization has been intersected to date, however the high grade lode maintains a primary lode orientation of steeply south west dipping and steep plunge to the Westsouthwest. The mineralisation's shows widespread similarities to the Tap AB2 high grade shoot at Tucano located on the same geological contact to the northwest. A summary of the drill holes at Duckhead is tabulated below. Deposit Diamond Holes Diamond Metres Duckhead resource is reported above a 1.5 g/t gold lower cut off grade. RC Holes of 5 and quarter inch diameter were angled to the northeast at generally minus 60o. Entire samples are taken every metre, dried and split on site to 600g. 300g split of this sample is then pulverised to -100 um and a 100g pulp shipped for offsite analysis. The diamond drill holes commence with HQ size in the colluvium/saprolite, reducing to NQ size in hard rock. Core is half cut to a maximum length of 1m, crushed (-2mm) and split to 600 g. 300 g of this sample is then pulverised to -100 um and a 100 g pulp shipped for offsite analysis. All gold determinations were carried out by standard 50g fire assay at SGS laboratories in Belo Horizonte. Pulps are retained on the mine site for storage. Diamond holes have been surveyed by techniques unaffected by magnetism such as Maxibore and more recently Deviflex methods. Drillhole collar locations and elevation are surveyed by total station. The resources have been drilled up to 140 vertical metres below surface on a 20 m x 20 m drill pattern. Densities were based on lithological modelling and derived from an extensive database of specific gravity in situ pit measurements. For both RC and Diamond, a lab duplicate, field duplicate and certified standard are inserted every 20th sample. A blank is inserted at the start of every batch. Standard results are routinely checked to ensure values are within tolerance and the whole batch submitted for reanalysis if this is exceeded. The Duckhead resource was modelled and estimated using conventional 3D wireframing and block modelling within Surpac software. The high grade Duckhead zone was defined using a 2 g/t Au mineralisation boundary. Ordinary Kriging was used to estimate block grades into parent cells of 5m x 10m x 2m (xyz) within individual lode wireframes. Sub-blocks of 0.625m x 2.5m x 1m (x,y,z) were defined for volume resolution. A top cut was applied to two individual intervals, cutting the grade to 250 g/t gold. Oxidation, colluvium and resistance surfaces were modelled. Geological domains were wireframed. Drill hole samples have been composited to 1 m intervals for the resource estimation. RC Holes RC Metres Total Holes Total Metres Duckhead 13 1, , ,545 25

26 Appendix 2 Estimation Parameters for Tucano Iron Ore Deposits. The iron mineralisation occurs mainly as folded banded iron formations (BIFs) metamorphosed to amphibolite grade, hosted by the Vila Nova Group, a sequence of metamorphosed volcanic and sedimentary rocks. The BIFs typically form ridges with a NW-SE or N-S alignment. Fe enriched itabirites, which are banded iron rocks, have been metamorphosed to amphibolite grade. Colluvium occurs at the top of the stratigraphic sequence. Pegmatite intrusions cross cut the itabirites. This resulted in a package of hydrothermally altered rocks. It is postulated that in some areas the iron mineralisation was remobilized and enriched at the contact between the pegmatites and the itabirites. The itabirites have been subjected to weathering processes which leached away portions of quartz resulting in enriched friable iron ore. The granitic intrusions and the intense hydrothermal alteration are also responsible for introducing some of the deleterious elements such as Al2O3 and Mn into the ore bodies. For each deposit a wireframe surface marked the base of colluvium and current topography. These models were extended to match the limits of the resource block models by maintaining a locally consistent depth below the topographic surface. Wireframe models representing the boundary between oxide and fresh material referred to as "W3. A "R4 hardness surface was also supplied, as the boundary between R3 and R4. Where R4 material occurred above the W3 surface this was classified as transitional (i.e. friable oxide but too hard to free dig). When required, the W3 and R4 surfaces were extended to the block model limits. When good continuity of logging could be identified during a 3D inspection of the data, a deterministic or traditional wireframe modelling technique was employed. This generated BIF and Carbonate models for Tap Norte and intrusive models for Tap Norte. The modelling employed the implicit modelling technology in Leapfrog software package to speed up the wireframing process for cross cutting intrusive units and internal waste units. Bulk densities have been measured on wet samples at irregular intervals in the oxide (where reasonable intact core can be collected) and every metre in the fresh material. For SG assignment, the transition material was grouped with the Fresh material. Block model densities have been estimated using nearest neighbour technique and constrained within lithological, hardness and oxidation domains. Blocks 8m x 20m x 4m (x,y,z) were defined and ordinary kriging was used to estimate block grades within individual wireframes. Drill hole samples have been composited to 2m intervals for the resource calculation. No top cuts were applied. Agreements relating to iron ore on Beadell s Mining Concession Under the terms of Agreement s entered into in August 2012 between Beadell Brasil Ltda and Anglo Ferrous Amapa Mineracao Ltda, Anglo Ferrous has undertaken exploration for iron ore within the area of Beadell s 100% owned Mining Concession (which work comprises the re-assaying and some additional drilling forming part of the work undertaken to complete the maiden resource described above). Beadell has agreed to stockpile iron ore, mined as waste, from the gold pits. Subject to mutual agreement, Anglo Ferrous may mine iron ore on Beadell s Mining Concession. 26