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AIBC Summit, 20 May 2009, Sydney

BHUKIA Gold (-Copper) Deposit, Rajasthan, INDIA Lessons Learnt from 5 Years Exploration of a Remarkable Discovery. AIBC Summit, 20 May 2009, Sydney. Start-up Concept Attracted by under-explored gold endowment in India Entry barriers coming down

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AIBC Summit, 20 May 2009, Sydney

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  1. BHUKIA Gold (-Copper) Deposit, Rajasthan, INDIA Lessons Learnt from 5 Years Exploration of a Remarkable Discovery AIBC Summit, 20 May 2009, Sydney

  2. Start-up Concept • Attracted by under-explored gold endowment in India • Entry barriers coming down • JV partner (NRI) with credentials & ‘connections’ and exciting exploration projects (incl. Bhukia) • Sole-focus Newco set up late-2004 • 2-3 year drill-out Bhukia • List on London-AIM, mark cap expectation A$+60 M

  3. Properties • Rajasthan main focus • Jagpura Project , Gold (70%) • Applications pending elsewhere • Gold, b/metals, diamonds (100%)

  4. Outcomes • Initial 2-3 year exploration success; rapid build-up in Gold Resources • A$16.1 million private equity (31.36 M shares) • JV partner runs into permitting problems; our ‘connections’ not as good as we had expected • Irrational and illegal discretionary actions taken by Rajasthan Govt agency • After $7 million spent, can’t get next level permits! • New Rajasthan Govt. – a ray of HOPE!!??

  5. Drilling at Bhukia at Panch Mahuri Zone at Mahi Zone

  6. BhukiaAncient Workings Panch Mahuri Delwara

  7. BhukiaAncient Workings Person standing at edge of open pit here Timran Mata Largest Ancient Open Pit in drainage gully

  8. Bhukia Ancient Workings Mortar stone Pestle Gold Tailings Mound

  9. Wealth Creation by Exploration…BUT Exploration Target Phase 1 is +5 Moz Gold Resource 1.74 Moz in situ US$1.5 Billion Doldrums Will there ever be a gold mine? 2005 2006 2007 2008 2009 2004 3-Year Permits Exploration going well Permitting delays Legal doldrums

  10. Our Experience ……. Enigmatic • Legally granted permits • 2-3 years positive exploration, $7 million spent • Then Rajasthan Govt. reneges on next level of permits • Unprincipled discretionary actions … Unbelievable! • Tried reasoning and negotiation • Legal challenge ………… new Govt………some hope now

  11. India Mining Sector • Slowly opening up from mid-1990s • 100% FDI …..but……no foreign-run mine yet! • Fragmented industry, State-run agencies can veto investment • New National Mineral Policy still not legislated • A principles-driven policy difficult to achieve – no political consensus • Still some underlying resentment to private enterprise and FDI despite policy pronouncements to the contrary?

  12. What now for our JV? Need Govt support, not more hurdles! India needs a minerals success story Our JV gold development project could provide choices for future generations ……

  13. Lessons Learnt • Spend slowly • ‘Educate’ bureaucrats and politicians along the way to subdue expectations • Don’t assume laws, natural justice, logic and reasonableness will prevail in permitting matters • Process-driven business environment, outcomes appear secondary at times!

  14. Bureaucracy The system works…….just don’t hold your breath

  15. Road Blocks Expect them…….. They are a dead set certainty Organized Chaos……..not to be confused with Disorganized Chaos!

  16. Infrastructure………. ………Interrupted! Things are improving ...but slowly

  17. Have Patience…… ..….and Perseverance The Brits couldn’t really change India in 200 years So what makes you think you can!?

  18. Rajasthan • Wonderful land of arid beauty and ancient palaces • India • Excellent untapped mineral potential • But….. • Plan B for IGL • Continue to assert our legal rights…… • …New Business outside of India • to spread risk Many Thanks

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