BRR - Straight from the source

PRESENTATION BY JOHN LANGFORD, CHIEF EXECUTIVE OFFICER OF MUNDO MINERALS LIMITED (MUN)

“Resources Rising Stars”

http://www.brr.com.au/event/51919

WEDNESDAY, OCTOBER 1, 2008, 11:30 AM.

            MUN    Here we go. That’s how exactly the summary of the market last night with gold shining through, so wise opportunities. Mundo, as some of you will note,  

10                    we’ve presented here a couple of years in a row and we’d like to thank Bob Nicholas and told us the opportunity to present again a snapshot of what we’ve achieved.

                        Those who do know, Mundo is an Australian listed company but all of our

15                    assets are located in South America. We’re targeting a low-cost production base heading towards quarter million ounces of gold a year of sustainable production and we’d like to think we can achieve heading towards that next four to five years markets obviously permitting. We think we’ve got the assets to achieve that. We’ve got the management team to achieve that and we’ve

20                    got a hell of a lot of focus.

                        I’ll talk to you briefly today about our assets, but we have a strategy we think that is really important to have a pipeline of assets from exploration assets that can provide development through to assets that are in development

25                    phase and project assessment phase and we have some of those, and of course, we started production at our Engenho Project a few months ago. Obviously, as you go to production, your risk is reduced but if we have a pipeline of assets then we think we can create a very strong sustainable future. We’ve achieved a lot during the last twelve months, but the next two to

30                    three years are going to be a hell of a lot busier for us.

                        Our vision is to achieve a quarter of a million ounces. I guess to give you a snapshot on how we think we will achieve that, Engenho next year will get full production of around 34,000 ounces of gold a year. We kind of told people we

35                    thought that Engenho had the ability to increase its production base to around 45,000/50,000 ounces of gold a year. We no longer think that’s appropriate. We think that with the exploration success we’re finding that that would head closer to 65,000/70,000 ounces. We would anticipate that production increasing over the next eighteen months or so, and I’ll demonstrate that to

40                    you.

                        We’d hope to have our first asset improved coming on board hopefully mid 2011. It’s showing strong legs at the present moment and God willing, with some explorations in one of our Brazilian projects we’d like to have another

45                    project coming on board, sort of, late 2011. That is ambitious but the projects are showing a very strong support at the moment and we hope to have our first project from Tocantins coming in 2013. Roundly, that will give us a production base a bit over 200,000 ounces of gold a year. The key thing with all of our projects are that they are reasonably long life, but I think, we’re very happy about this we’ve grade associated with them all and a grade gross margin.

                        Where we see ourselves in five years? Obviously, having three mining

5                      projects and having the resource base heading towards 3.5 million ounces of gold. At the end of this presentation, I’ll give you a bit of the snapshot on where we see the targeted resources that we have at the present moment, we’re heading pretty close to that.

10                    I’ll give you a snapshot of our projects at the present moment. This will be reasonable to say (inaudible) (00:03:26) to cover, please feel free to come and talk to me at the booth if you have any questions. Engenho is a project that we have a resource of around1.8 million tonnes at 5.5 g per tonne. We expect to have an annualised initial production base of around 34,000 ounces

15                    with high profit margins and we have significant exploration upside on those tenements and we’re starting to get some pretty good success there. We bought as asset of AngloGold Ashanti before (inaudible) (00:03:59) sold that they’ve put a small open pit over the orebody. We’re currently developing a decline down towards below the major ore bodies. There are two ore bodies

20                    there, one is called Bola and one is Galera. While we are mining these, we’re actually mining some remnant ore in the open pit wall that is providing some production and cashflow for us at the present moment.

                        A couple of weeks ago, we did announce a slight downgrade in the ounces

25                    we have in this open pit wall. We lost about 8,000 ounces in resource when we opened it up. We’re currently doing that in order of the integrity of all the ore body at the moment, but we’re seeing nothing there that’s causing us any major concerns. We see there’s plenty of potential on this asset. Engenho has drilled down to 270 m. It is open at depth. It is getting stronger at depth

30                    and with it, the economic potential of Engenho, the main ore bodies down about 500 m. We think there is potential for that with some parallel ore bodies and we’re seeing some evidence of that with the development work we are doing.

35                    Just to very quickly explain to you the issue we had with the ounces we’ve lost so that some of you, our shareholders….the open pit wall we’re currently mining, there are three ore bodies that we are mining at the present moment. This one in yellow is where we had the problem. We’d initially interpreted this as having a centralised orebody with some movements around it which are

40                    there. The initial interpretation, I suggested that, this was a fully high grade ore zone. All we found when we developed in here was that there was a small patch of ore in the middle that was actually low uneconomic grade that didn’t make sense for us to mine. So when we took that out, we ended up with this cavity top shaped. It was coincidentally…is very similar to the interpretation

45                    that balance to the orebody. So, anything I can say, guys, we’re really sorry but we stuffed up in this part of the orebody. But development is going very well. We’ve now developed nearly three levels. Underground, we need three or four levels getting into full production. The good thing is that we, kind of thought, the grade is going to be at 5 g. It’s coming out about 7 g up the top, so we’ve had a couple of bonuses there.

                        From an exploration potential, Engenho is located just here. It’s located in

5                      about 30 hectares. We have 711 hectares of tenements. When Engenho was first discovered, it was discovered by looking at some old mined workings and AngloGold Ashanti found rock chip samples that went between 5 g and 90 g per tonne. About 600 m away, there’s another anomaly called Mazoca, and they’re at a very similar result. So that kind of excited us a little bit and we

10                    found that AngloGold had done some stream sampling so suggested to us we needed to look properly at the whole tenement. So we conducted a complete soil sampling and a mapping exercise and the results of that are as follows. We now have a complete trend that’s coming through,  we have not done any work underneath here because we haven’t had land access. We’ve got plenty

15                    of work here and we now have three major anomalies. In addition to Mazoca, we have Olhos and we have Crista. The results we’re getting here are really interesting.

                        This red here, the Crista anomaly, comes right through to the surface. The

20                    guys have been able to step it up 220 m. It’s about 4 m to 5 m in width and looks like it’s a pretty flat steep dipping. Alas there’s no surface exploration, but it’s certainly coming out with a geochemical work that this is in fact larger than anything else we’ve got in the tenements. We’re looking forward to drilling it.

25

                        To give you a quick idea of some results that we’ve had, these are rock chip samples, but also channel samples that we’ve put in and we’re getting grades of 2 g or 3 g, but then kind of a getting a 5 g, 4 g, 7 g, 8 g, 11 g, 24 g per tonne, yes, 3 g, 9 g, 20 g per tonne. When we bulked all of these out, it went

30                    around 6.8 g per tonne. Remember in Engenho it’s about 5.5 g. So, this is looking okay. Initial metallurgical test is just we’re getting about 92% to 95% recovery from this also. It looks very similar to Engenho. Engenho has given it since we started to mine in excess of 95%.

35                    The Olhos anomaly, again, is only soil sampling, really it’s anything of a 0.5 g significance. We’ve been picking up things like 18 g, 4 g, 10 g, a couple of 2 g or 5 g, etc. So, this is looking like a very, very interesting area for us.

                        So a little summary for Engenho, we are in production, mine development is

40                    going well, the grade is looking fine. The mill’s giving us great recovery and we’ve got some really good exploration success happening. Couple of heavy snaps for you,  this is the add up we put in to access the open pit wall and the decline that’s accessing the major orebody. Ground conditions, underground are excellent, that is typical of what we see in the housekeeping underneath

45                    the mine. It’s superb. That’s our treatment plant, very simple for you. That’s the office block, our crusher, our mill, tankage, etc. the gold illusion is right back here and we have a workshop in here. The open pit is just back here so it just pooling around here, it’s very, very compact operation. All of our plant, is as you’ve expect, computerised to mechanised.

                        Just to move on quickly to Peru, Torrecillas is a narrow vein but high-grade deposit that we’re looking at. We have an expectation that this will give us a production profile of around 50,000 to 70,000 ounces of gold a year. But

5                      importantly, we expect to put a grade through a mill of between 15 g and 20 g per tonne. This has had previous historic workings on it. When I said there’s a narrow…they are narrow. They’re located on a well-defined geological structure called the Nasca - Ocoña Trend and our primary tenement is right in the guts here, it’s very well located. We’ve identified over 6.5 km of vein

10                    structure. Because they are narrow, we don’t think drilling is a right way to prove a resource here. We did do some drilling and we’ve got some really interesting results. You see, we’ve got some 8 g to 19 g per tonne, 75 g, 97 g, 95 g, 140 g, 19 g, etc., so there’s….let us go it’s good there’s no more refracture, it gives about 91% recovery. When I said we don’t….we haven’t

15                    been drilling, we’ve put a decline down. Our decline’s improved pretty good for anyone putting declines down to Australia, we’re paying about $1,200 a metre and so it’s about the same process as you do drilling program for. We’ve accessed this vein structure. When I said this is being previously mined, it has. It’s been mined about 120 m. This work is known as

20                    mesothermal, which means they got very, very deep. We have just started mining along some mineralised veins here and last week, we’ve sent our first ore to a custom mill, so we generate a little bit of revenue from Peru, but it’s all part of that project assessment.

25                    We’ve also put a cross cut out to this vein structure here and over here which is about to access over here, so we have about forty people working in Peru. The program here is we expect that we’ll continue to do this project assessment till mid next year and get straight into full feasibility study. When we say we want to be in production early 2011, it’s not that difficult. Peru is

30                    pretty good place to get approvals. It’s pretty a stark area so environmentally, but we’re not expecting any grade issues and we’re looking at 50,000 to 70,000 ounces at 15 g to 20 g per tonne. It’s a pretty small (inaudible) (00:11:44) we’re putting in so infrastructure-wise it’s not difficult.

35                    We are looking on ore sorting to help ourselves, I mean, our money is little less selective. That means we’ll mine on a more bulk basis underground, pour all through a crusher through an x-ray sorter, which will then sort the ore from the waste. We’ve done a few tests on this at the moment and it’s looking encouraging. We’ve got so more work to do but we think we’ve got some

40                    good economies from this project.

                        A couple of little heavy snaps underground, we’ve got a couple of locomotors that transport the ore around the place again, the housekeeping is excellent. We do timber (inaudible) (00:12:23) one of our directors in June that’s when

45                    we inspected it. When we say it’s narrow, it doesn’t mean that it is difficult for the miners. That’s a photograph of the ore. You can see that the mineralisation is very, very well defined. The guys can mine with little less delusion.

                        Some of you would’ve seen the next slide, (inaudible) (00:12:45) dump trucks, well (inaudible) (00:12:51) 60 g per tonne and it’s in the mine, so we will mine there. It’s actually spectacular-looking stuff.

5                      I want to talk briefly about Tocantins. Tocantins is a joint venture we have in Central Brazil. It’s joint venture where we have the ability to earn up to 80% by taking any resource we find back through bank feasibility stage. It is a large greenstone belt. We have 256,000 hectares of tenements here. It is large. To put that in perspective, the strike from there down to there is 200

10                    km. It’s about Kalgoorlie to Menzies, and we control all of the tenements in blue and in red. So far, we’ve only managed to just prick the surface so what we’ve done some work down on this whole tenement here, a little bit of work down in here and we’re currently focusing just in here.

15                    I’ll talk firstly about this area here. It started as a 3 km soil anomaly. We did some RAB drilling and follow up with a bit of diamond drilling. I then found a couple of main mineralised zones here. We’re currently not drilling here, we’re doing a data review just to work at what we’re doing and we will need to do some more work. But we’ve got some interesting results, again with RAB

20                    drilling hitting over 0.50 g is interesting. Pretty much evident we’ve got was over a gram, but I think you know, we got 4 g, 4 g, there’s 16 g per tonne, 14 g, 3 g per tonne, and also 200 g per tonne result in here followed by 37 g and a rock chip of 44.

25                    We think these are pipelike structures, so far, which is really encouraging. We’ve had visible gold in either of that diamond holes, so starting to show some reasonable continuity, but it is at early stages. (Inaudible) (00:14:43) it’s kind of pipelike structures and we think it would be open pittable.

30                    Tenement next door to….. I just want to go back from that one, tenement next door to here is called Empire. Just before end of financial year, we have a present drilling here, we need just move to keep the tenement. We got a   1.25 m at 22 g out of one or three holes and we now identified a pretty much or anomaly and so we’ll follow that probably early 2009. The focus at the

35                    present moment is on Nova Prata. We think this potential has the potential to develop about 4 to 5 midsized gold assets. Midsized gold assets we see as between 400 to 1,000 ounces and a 1 million ounces at grades sort of 69 g per tonne. We see in Nova Prata as something different. We think it’s a large tonnage, 2 g to 3 g type scenario and so our focus is very much on trying to

40                    prove a large tonnage below grade anomaly. One of the good things about not drilling is that geos have to get in there, you’ve got some bit of drive around. The other day they sent me a photograph of a rock that they’ve found, just in here, and it doesn’t look like it goes to 2 g to 3 g, to me, there’s a nice gold all the way through it. So, that tenement is pretty encouraging and

45                    we’re just at the present moment plotting where we want to put the drilling.

                        To finalize that, I want to give you a bit of an update on this called Jaqueira. Jaqueira, we have on option over to purchase. It’s, I think, an important point to make it is that point of our presentation is all of our assets are located very close to infrastructure. We have good road facilities. We have good water. We have good power in all of our infrastructures and we’re located near pretty major cities so the ability to put workforces is pretty impressive. The deal here, we have 5,300 hectares of tenements. We have an option to have a

5                      look this over two years and we pay a bit under $5 an ounce measured Indicated for any resource we’ve found in that two years. That sounds incredibly cheap. It’s not because we also pay a 2.5% royalty but importantly we’ve structured this still where we actually pay consideration on success. Just down here is a mine called Jacobina, your miner is pretty significant

10                    Canadian company is mining there. They were mining some remnant ore from an old mine there. The remnant ore they’re getting about 100,000 ounces of gold a year at the last 4 to 5 years and it’s not looking like stopping. There have been some mining activities on the tenements we’re looking at, but no drilling at this stage. We think this is a potential half million ounce type

15                    scenario grade we’re looking at is potentially plus 10 g per tonne. Why do we think that? We think that because we’ve been able to go underground and have a look at the historic workings and also test. We’re doing some channel samples on the mineral zone that we’re looking at drilling out. Now, I’ll just take us through some of those numbers, there’s a 9, a 10, a 5 or 7, 13 g, 13

20                    g, 9 g, 20 g, 78 g, 17 g, 17 g, 9 g, 20 g, 39 g, 51, g, so there’s plenty of grade in the areas that have been opened up and our view is that we would like to start drilling at early 2009. We don’t think we’ll take a lot effort to prove whether it’s a boy or girl. Our expectation is it will be a boy and we’ll get in to start to mine it. We have some tenements down here that have some channel

25                    samples to give out 68 g per tonne and it’s a nice grade up here as well.

                        The interpretation of these are that they are high grade ore zones separated by low grade, low grade they’re talking about 3 g to 4 g per tonne so probably we’ll be taking that out as part of the mining process as well. We have a

30                    drilling program in place, we’re just waiting on drilling approvals.

                        Just to wrap up, in the time I’ve got left to give you some indications of where we see the potential of our assets, we’ve put nothing on Tocantins. We think it’s little too early at this stage. But we see Engenho with the current resource

35                    below 270 m in our exploration properties heading towards the million ounces potential until a lot larger than what we though it would be. At Jaqueira, the one that I just talked about we see as being between 500,000 ounces and 800,000 ounces. At Torrecillas, the Peruvian asset, we see that there’s also been above million ounces. Most importantly though we’ve got grade, we’ve

40                    got 4 g to 5 g to 6 g per tonne here, 8 g to 10 g here, and 15 g to 20 g per tonne here. So I guess, at the moment, it’s early stages for us. As I said in the interview a little while ago, we’re a bit like kind of puberty, we’ve got a lot of potential but we’ve got to manage ourselves really well to make sure we end up being a good solid citizen of the resource community but we believe we’ve

45                    got the management team. We know we’ve got the assets and we’ve certainly got the commitment to drive that forward. We have a strong Board of Directors. We’re pretty tightly capitalised, that is our first bar of gold that we sent to the bank, pretty happy to get the money in for that and I guess the only one thing left to do and that’s the disclaimer of everything I’ve just said.

                        Thank you very much.

PRESENTATION CONCLUDED

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