MINE PERU: Dual-Listed Companies on the TSX/TSX-V and the BLV (Lima Stock Exchange)

MINE PERU: Dual-Listed Companies on the TSX/TSX-V and the BLV (Lima Stock Exchange) Presenters: Janne Duncan Patricia Prato Casado Partner, Macleod Dixon LLP Associate, Macleod Dixon LLP Tel.: (416) 202-6715 +58 212 276 0059 Email: janne.duncan@macleoddixon.com patricia.prato@macleoddixon.com MAY 27, 2010

The Toronto Stock Exchange 2

Bolsa de Valores de Lima 3

Peru

TSX and TSX-V Mining Companies TSX and TSX-V Mining Companies - Properties in Peru (April 30, 2010) Source: InfoMine and MiG Report of TSX/TSX-V 5

Interlisted Mining Companies – TSX - BVC 6

Interlisted Mining Companies – TSX-V - BVC 7

Lima Mining Companies Lima Mining Companies (April 30, 2010) There are 256 companies in total listed in the Lima Stock Exchange. 27 of them correspond to regular mining companies, and 8 to junior mining companies. 8

Mining Companies Mining Companies currently listed: a) Regular Mining Companies: 9

Mining Companies Mining Companies currently listed: b) Junior Mining Companies: Alturas Minerals Corp. Apoquindo Minerals Inc. Candente Copper Corp. Inca Pacific Resources Inc. Norsemont Mining Inc. Panoro Minerals Ltd. Rio Alto Mining Limited Vena Resources Inc. 10

Canadian Regulatory Overview • Canadian Securities Laws • Laws are largely harmonized through national instruments: • Prospectus offerings • Exempt offerings (private placements) - applicable 4-month hold period for purchased securities • Take-over bids • Continuous disclosure obligations • Corporate governance • Companies deal with a designated principal regulator • Toronto Stock Exchange Rules • TSX Company Manual • TSX Venture Exchange Corporate Finance Manual • Corporate Laws • Company not required to be incorporated in Canada • No requirement to have resident Canadian directors

Peru Regulatory Overview The General Mining Law No.28327 is the main Mining Statute in Peru. There is also the Law of Mining Royalties, No.28258 There is a Rule regarding the Environmental Protection on Mining Activities, D.S.No. 016-93-EM 12

Important Links • Rules on the High Risk Capital of the Lima Stock Exchange Stock: • http://www.bvl.com.pe/Juniors/ReglamentoMod2005.pdf • Law that regulates the Peruvian Stock Market: http://www.bvl.com.pe/decreto_legis1.jsp?idioma=E • Rules of Important Acts, Privileged Information and other Publications: • http://www.bvl.com.pe/reglamento_hechos_imp.html • Companies currently listed in the Lima Stock Exchange • http://www.bvl.com.pe/emp_listado_todas.jsp

Bolsa de Valores de Lima • BVL is the only stock exchange in Peru. Moreover, is the only one in the region which has a mining Venture Exchange • The BVL is regulated by the Comision Nacional Supervisora de Empresas y Valores – CONASEV. • The BVL is a public company and its shares are traded on the Peruvian equity market. • Trading is made by electronic system, which guarantees a transparent and efficient market. IT IS THE ONLY STOCK EXCHANGE LINKED TO CDS, which makes for easy clearing and settlement for dual-listed companies • SEC recognizes BVL as designated offshore securities market under “S” regulations. 14

Peru Regulatory Environment • Peru markets itself as having a friendly market environment for business • There are no taxes or restrictions to short term or long term capital flows in or out of the Country. • The exchange rate is market driven and there are no taxes or restrictions to buying/selling foreign currency in Peru. • Canada and Peru have signed 3 agreements effective August 1, 2009: • Canada-Peru Free Trade Agreement • Labour Coooperation Agreement • Agreement on the Environment 15

Advantages to listing on TSX • Market sentiment: Certain North American investors may be more attracted to a company with a "local" listing • Access to capital for growth: BLV does not provide access to the levels of investment capital that are available on TSX • Heightened company profile: Increased press coverage and analyst's reports, helping to maintain liquidity of shares • Objective market value: Potential re-rating or revaluation of the company • Increased liquidity • New market for shares

Advantages to Listing on the BVL • Peruvian investors have an appetite for locally-listed companies, particularly large producers • BVL has streamlined its processes to match the TSX TSX-V more than other international exchanges (AIM, ASE, Johannesburg)

Doubling Up: BLV and TSX • On-going expenses - underwriting, legal (all applicable jurisdictions), audit, registrar and transfer fees, fees to stock exchanges, fees to securities regulators • Corporate governance more complicated since issuer is listed in multiple jurisdictions • Continuous disclosure obligations • Regulatory compliance • Check to see if there are exemptions under various rules for foreign issuers

Practical differences for BLV companies • Liman companies undertaking TSX listing or capital raising should prepare for a greater volume and complexity of legal documentation • TSX listings and Canadian capital raisings involve lawyers to far greater degree than in Lima (even for routine placements) as transactions are "lawyer driven" • Differences in documentation between TSX and BLV listings • TSX requires that the Board must contain independent directors, and directors with experience in Canadian capital markets • Increased costs associated with management time, frequent travel to Canada, and additional resources to list as TSX entity

Comparison of Continuous Obligations for Maintaining Listing on TSX/TSX-V vs. PSE

Exemptions for Foreign Issuers • National Instrument 71-102 – Continuous Disclosure and Other Exemptions Relating to Foreign Issuers • An issuer that qualifies as a Designated Foreign Issuer (a "DFI") will receive relief from certain Canadian disclosure requirements • If there are de minimus securities owned, directly or indirectly, by Canadian residents (<10%), and the issuer is subject to foreign disclosure requirements in a designated foreign jurisdiction (such as Lima), the issuer will qualify as a DFI • Exempt from requirement to prepare Canadian forms of: Material Change Reports; financial statements and MD&A; AIFs; Business Acquisition Reports; Management Information Circulars; and Early Warning Reports, provided, among other things, that the issuer (i) complies with its foreign disclosure requirements relating to such documents, and (ii) complies with applicable Canadian filing obligations and shareholder delivery requirements • DFI status does not relieve issuer from all Canadian securities law obligations (e.g. qualification of auditors, certification of financial statements, obligation to notify of change in corporate structure)

Exemptions for Foreign Issuers • Issuer required to disclose to its shareholders, at least once a year, that it is a DFI subject to the requirements of a foreign regulatory authority • Determinations on DFI status are made as at the start of each financial year (i.e. the exemption lasts for one year) • Interlisted issuers with 75% of trading value and volume on an exchange other than the TSX will be exempt from certain requirements concerning securityholder approvals, private placements and security-based compensation arrangements

National Instrument 43-101 - Standards of Disclosure for Mineral Projects • Requirement to file technical report triggered by (i) new previously undisclosed scientific or technical material information about any of the issuer's material properties prior to the filing of a document listed below, or (ii) a material change to information contained in a previously issued technical report is discovered between the filing of a preliminary prospectus and the filing of the final prospectus • A technical report must be filed at the same time an issuer (i) becomes a reporting issuer, (ii) files a short form or long form prospectus, (iii) files an information circular in relation to the acquisition of a mineral property, (iv) or files an AIF in that includes previously undisclosed scientific or technical material information • Technical report must also be filed within 45 days following the issuance of a news release that includes previously undisclosed scientific or technical material information which represents a material change

National Instrument 43-101 - Standards of Disclosure for Mineral Projects • Scientific and technical data must be prepared by a “qualified person” (as defined in NI 43-101) • Technical report must be prepared in format required by NI 43-101 and must use definition standards from the Canadian Institute of Mining & Metallurgy ("CIM") to report quantities and grades of “mineral resources” – inferred; indicated; measured – and “mineral reserves” – probable; proven • Issuer may make disclosure and file a technical report the utilizes the mineral resource and mineral reserve categories of the JORC Code if such disclosure includes statement that the report was prepared in using the guidelines of the JORC Code, and that the categories used are directly comparable with the classifications of the CIM • NI 43-101 does not permit inferred mineral resources to be added to other categories of mineral resources

Technical Reports – TSX and TSX-V Requirements TSX Company Manual • Appendix B: Disclosure Standards for Companies Engaged in Mineral Exploration, Development and Production TSX Venture Exchange Corporate Finance Manual • Appendix 3F Mining Standards Guidelines • Appendix 3E News Release Guidelines

Peru Mining Companies • Must submit a list containing the identified mineral substances on the qualified property. • Must submit a Geological Report of the property where the resources obtained from the issuance would be invested. Such report must contain the recommendations for exploration and development of the project. It also must be elaborated in accordance with the Code of Standards to Inform regarding Mineral Resources and Mine Reserves, approved by the Lima Stock Exchange. • Must be the owner of the mining property or at least have an option contract granting an exclusive right to explore such property.

43-101 – Standards v. Peruvian Code of Standards

LIMA Stock Exchange Mining Companies must submit the following requirements before the Peruvian Ministry of Mines: • Consolidated Annual Declaration informing the Ministry about the mining activities performed the previous year. This declaration would be used to classify the mining company as Big and Medium Size Mines, Small Size Mines, and Crafted Mines; evaluating its impact on the national economy. If the Company fails to comply with this requirement, a fine valued between 1 and 6 applicable tax unit. • Monthly Reports of: (i) Production and (ii) Statistics of Accidents must be submitted before the Ministry. Such reports must be submitted 10 days after the month has concluded. • Declarations of: (i) planned and (ii) executed investments per month. Such declarations must be submitted 10 days after the month has concluded. • Obligation to pay the annually “derecho de vigencia”, which grants the right to exploit the mine. 33

LIMA Stock Exchange • Comply with the assigned minimum production. E.g.: a Small Size Mine shall produce: S$50.00 yearly by acre; while a Crafted Mine shall produce US$ 25.00 yearly by acre. • The General Mining Law No.28327 is the main Mining Statute in Peru. There is also the Law of Mining Royalties, No.28258. There is a Rule regarding the Environmental Protection on Mining Activities, D.S.No. 016-93-EM. • It is required for mining companies to present/submit environmental assessments or environmental impact statements, but I wasn't able to find how often. I know for sure at the beginning of the project companies must submit one. 34

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MINE PERU: Dual-Listed Companies on the TSX/TSX-V and the BLV (Lima Stock Exchange)