The VALMIN Code

1 code for theTechnical Assessment and ValuationofMineral and petroleum Assets and SecuritiesforIndependent Expert Reports~ The VALMIN code ~2005 EditionPrepared by:The VALMIN Committee, a joint committee of The Australasian Institute ofMining and Metallurgy, the Australian Institute of Geoscientists and theMineral Industry Consultants Association with the participation of theAustralian Securities and Investment Commission, the Australian StockExchange Limited, the Minerals Council of Australia, the PetroleumExploration Society of Australia, the Securities Association of Australia andrepresentatives from the Australian finance for the Technical Assessment and Valuation of Mineral and petroleum Assets and Securities for Independent Expert Reports (The VALMIN code ) 2 The Australasian Institute of Mining and Metallurgy The VALMIN code is binding on members of The AusIMM when preparing publicindependent expert reports required by the Corporations Act concerning mineral andpetroleum assets and securities.

2 Australian Institute of Geoscientists"The Australian Institute of Geoscientists supports the VALMIN code and endorsesit as a statement of industry and professional best practice. The VALMIN code isbinding on members of AIG when preparing public independent expert reportsas required by the Corporations Act covering mineral and petroleum assets andsecurities."Australian Stock Exchange Australian Stock Exchange supports the issue of the code and any serious breachesof which ASX is made aware will be brought to the attention of The AusIMM. Australian Securities & Investments Commission The Australian Securities & Investment Commission (ASIC) refers to the VALMINCode when reviewing mining and exploration prospectuses and takeover regards the code as indicative of best practice, and expects that when specialistmining terms used in the code are contained in such documents that they will havethe same meaning as in the code .

3 Compliance with the code does not relieve issuersand others involved in the preparation of prospectuses and takeover documents fromtheir broader disclosure obligations under the Corporations Act. Mineral Industry Consultants Association To be advised by Council of Australia The Minerals Council of Australia endorses the VALMIN code as a statement ofindustry and professional good practice and recognises that companies and issuersand others involved in the preparation of prospectuses and takeover documents arerequired to comply with their disclosure obligations under the Corporations Act andwith any requirements under Australia's International Accounting and ReportingStandards. Securities Institute of Australia Securities Institute of Australia supports the code as indicative of best practice forindependent experts preparing valuations and assessments in relation to specialistmining WITH AND SUPPORT FOR THE VALMIN CODECode for the Technical Assessment and Valuation of Mineral and petroleum Assets and Securities for Independent Expert Reports (The VALMIN code )

4 3 TABLE OF CONTENTS CODESUBJECTCLAUSEPAGE of the CodeC 1 5 Preparation of the CodeC 25 DisclaimerC 35 TerminologyC 45 Fundamental PrinciplesC 55 Obligations of Valuation PractitionersC 6 105 6 Purposes of ReportsC 116 Applicability of CodeC 12 136 Types of ReportsC 146 7 MaterialityC 15 177 CompetenceC 18 237 IndependenceC 24 277 8 TransparencyC 28 318 Valuation MethodologyC 328 The Commissioning EntityC 33 369 Experts and SpecialistsC 37 419 10 Commissioning a ReportC 42 4310 Intention of a ReportC 44 4510 11 DeclarationsC 46 4811 Cost of a ReportC 4911 Content of a ReportC 50 11 Data and InformationC 51 5411 12 Referring to Existing ReportsC 55 5712 Nature of ValueC 58 6112 Illustrations C 6212 AdministrationC 63 6413 Site InspectionsC 65 6613 TenementsC 67 7313 14 Mineralisation, Resources and ReservesC 74 8214 15 Mining and Ore ProcessingC 83 8815 16 Capital and Operating CostsC 89 9316 Completion and CommissioningC 9416 RevenueC 95 9616 17 Finance C 97 10017 Share Market and Economic ConditionsC 101 10217 RiskC 10317 code for the Technical Assessment and Valuation of Mineral and petroleum Assets and Securities for Independent Expert Reports (The VALMIN code )

5 4 DEFINITION OR ACRONYMNUMBERPAGE 119 Advanced Exploration Areas D 2021 AIGD 219 AssetD 20 and 2621 and 22 ASICD 319 ASXD 419 AusIMMD 5 19 Commissioning EntityD 619 Competence/CompetentD 719 Corporations ActD 819 Development ProjectsD 2021 Disclosure DocumentD 919 Expert and SpecialistsD 1019 Exploration Areas D 2019 Fair Market ValueD 4323 Fairness and Reasonableness ReportD 1120 General Mining or petroleum Industry ExperienceD 1220 Independent/IndependenceD 1320 Independent Expert ReportD 1420 JORC code D 1520 Listing Rules D 419 Material/Materiality D 1620 MCAD 1721 MICAD 1821 MineralD 1921 Mineral Assets D 2021 Mineral Resources and Ore ReservesD 2121 Mineral or petroleum SecuritiesD 2221 Mining/ petroleum IndustryD 2321 Operating MinesD 2021 Pre-Development ProjectsD 2021 PESAD 2422 PetroleumD 2522 petroleum AssetsD 2622 Professional AssociationD 2722 Public ReportsD 2822 ReportD 4223 Reasonableness Test D 2922 Risk D 3022 Securities D 3122 Senior Specialist D 1019 SIAD 3222 SPED 3322 Specialist D 1019 Technical Assessments D 34 22 Technical Assessment Reports D 3523 Technical Value D 36 23 Tenement

6 D 37 23 Transparency/ TransparentD 3823 Uncertainty D 39 23 Valuation D 4023 Valuation DateD 4123 Valuation Report D 4223 Value D 4323 Vendor Consideration Opinion D 44 23 WPCD 45 23 DEFINITIONS and ACRONYMSCode for the Technical Assessment and Valuation of Mineral and petroleum Assets and Securities for Independent Expert Reports (The VALMIN code )Note: Procedural and mandatory clauses and paragraphs are in normal typeface, except that the word must is in bold,discretionary clauses and paragraphs are in italicsand those Definitions incorporated in the text of the code are in bold.

7 5 THE VALMIN CODEPURPOSE OF THE purpose of the VALMIN code is to provide aset of fundamental principles and supportingrecommendations regarding good professionalpractice to assist those involved in the prepara-tion of Independent Expert ReportsD14that arepublic and required for the assessment and/orvaluation of MineralD20and PetroleumD26 Assetsand SecuritiesD31so that the resulting Reports willbe reliable, thorough, understandable andinclude all the MaterialD16information requiredby investors and their advisers when makinginvestment OF THE code has been prepared by the VALMINC ommittee, a joint committee of The AustralasianInstitute of Mining and Metallurgy (The AusIMM),the Australian Institute of Geoscientists (AIG) andthe Mineral Industry Consultants Association(MICA), with the participation of the AustralianSecurities and Investment Commission (ASIC),the Australian Stock Exchange Limited (ASX),the Minerals Council of Australia (MCA), thePetroleum Exploration Society of Australia (PESA),the Securities Institute of Australia (SIA) andrepresentatives from the Australian finance VALMIN Committee has prepared two earlierversions of the code , the first being issued on 17 February 1995 (applicable from 1 July, 1995) andthe second on 22 November 1997 (applicablefrom 1 April, 1998).

8 VALMIN code provides guidance onmatters that may be subject to the AustralianCorporations Act 2001D8, the associatedCorporations Regulations, other provisions ofAustralian law, the published policies andguidance of ASIC and the Listing RulesD4of ASXor of other relevant recognised stock code applies in any particular circumstanceonly if, and to the extent that it is not inconsistentwith the law, ASIC policy and guidance or therequirements of the relevant recognised code does not constitute legal advice anddoes not claim to consider all matters that may berelevant to the preparation of an IndependentExpert Report or the assessment and/or valuationof Mineral and petroleum Assets and is the responsibility of valuation practitionersto determine their legal obligations for eachassessment and/or valuation and for thepreparation of an Independent Expert Report andto seek legal advice when use of the word must in a paragraph of aclause denotes a mandatory VALMIN Coderequirement that mustbe complied with unless,in particular circumstances.

9 To do so would bein breach of the law or the requirements of therelevant stock use of the word should in a paragraph ofa clause indicates that some discretion may beemployed with its application, depending onthe particular circumstances of a Report andproviding that the code s fundamental principlesare not of key terms are listed at the endof the code . In order to assist users of theCode, some Definitions that are associated withthe code s fundamental principles are alsoincorporated in the text of the code , printed initial or significant mention in the VALMINCode of a Definition or Acronym is indicated bysuperscript. For example, ValuationD40 means thatthis term is defined in Definition number word having a capital first letter generallyindicates that it is a defined singular includes the plural and vice fundamental principles that this Coderequires to be applied to the preparation of PublicIndependent Expert Reports are Materiality,Competence, Independenceand Transparency asare described in detail in Clauses 15 to 31 andDefinitions D16, D7, D13 and D38 OF VALUATION as from 29/4/2005, The AusIMM, asfrom 30/9/2005, the AIG and as from ?

10 ?/??/2005,MICA expect mandatory application of thisversion of the VALMIN code by their memberswhen involved in the preparation of PublicD28 Independent Expert ReportsD14required bylegislation such as the Corporations ActD8or bythe Listing Rules of the ASX or of other recognisedStock Exchanges. The code applies to Securitieswhere the Technical AssessmentD34or theValuationD40of underlying Mineral or PetroleumAssets is VALMIN code is recommended practice andshould be adhered to when assessing and valuingMineral and petroleum Assets and Securities,regardless of where or for whom their TechnicalAssessments and/or Valuations are prepared orthe location of the Assets under consideration orwhether or not they are prepared by those whoCode for the Technical Assessment and Valuation of Mineral and petroleum Assets and Securities for Independent Expert Reports (The VALMIN code )Note: Procedural and mandatory clauses and paragraphs are in normal typeface, except that the word must is in bold,discretionary clauses and paragraphs are in italicsand those Definitions incorporated in the text of the code are in bold.