Exploration, Investment and Development for Exploration, Investment and Development for Miners, Financiers and InvestorsMiners, Financiers and Investors

Canada as a source of investment Canada as a source of investment for African for African miningmining

Africa Mining Congress 2010Africa Mining Congress 2010

Bruce Shapiro Bruce Shapiro President, MineAfrica Inc.President, MineAfrica Inc.

President, Canada-South Africa Chamber of President, Canada-South Africa Chamber of BusinessBusiness

www.mineafrica.comwww.canadasachamber.com

Why should Africa’s mines turn to Why should Africa’s mines turn to Canada?Canada?

1. Toronto is the mining finance capital of the world1. Toronto is the mining finance capital of the worldCanada is a global leader in the mining industry and Toronto is theCanada is a global leader in the mining industry and Toronto is the

world's most active centre for mining equity finance. Over the past fiveworld's most active centre for mining equity finance. Over the past five

years, issuers listed on both the Toronto Stock Exchange (TSX) and theyears, issuers listed on both the Toronto Stock Exchange (TSX) and the

TSX Venture Exchange have led all international exchanges in miningTSX Venture Exchange have led all international exchanges in mining

equity financings.equity financings.

Over 10,000 transactions;Over 10,000 transactions; 80% of all mining financings in number (US$136.9 billion).80% of all mining financings in number (US$136.9 billion). 36% of total equity capital raised globally.36% of total equity capital raised globally. 27% compound annual growth rate in number of listings.27% compound annual growth rate in number of listings. Record $22.2 billion in 2009 alone.Record $22.2 billion in 2009 alone.

Importance of TorontoImportance of Toronto

To emphasize the importance of Toronto as a To emphasize the importance of Toronto as a sourcesource

of mining equity, its main competition in terms of of mining equity, its main competition in terms of

number of listings is;number of listings is;

ASX at 9%.ASX at 9%. LSE-AIM at 8.5%.LSE-AIM at 8.5%. US markets combined at 0.35%.US markets combined at 0.35%.

Total # of listings as of 2009Total # of listings as of 2009

Mining ListingsMining Listings

610

17162 58 55 36

1434

TSXTSXV

ASX LSE-AI M

NYSE NYSEAmex

J SE HKEx

Number of New Mining Listings 2005-Number of New Mining Listings 2005-20092009

YearYear TSX/TSXV LSE/AIM ASX NYSEAmex NYSE HKEx JSETSX/TSXV LSE/AIM ASX NYSEAmex NYSE HKEx JSE

2009 104 4 22 1 2009 104 4 22 1 1 1 1 1 002008 138 29 9 5 2008 138 29 9 5 3 3 2 3 3 2 2007 186 142 33 13 2007 186 142 33 13 3 n/a 4 3 n/a 4 2006 112 70 55 14 2006 112 70 55 14 6 n/a 10 6 n/a 10 2005 86 53 67 17 2005 86 53 67 17 3 n/a 6 3 n/a 6

The table shows a consistent increase in the number of newThe table shows a consistent increase in the number of newlistings on the TSX and TSX-V from 86 in 2005 to 104 by lastlistings on the TSX and TSX-V from 86 in 2005 to 104 by lastyear. On the other hand, listings on the competing year. On the other hand, listings on the competing

exchangesexchangeshave been going down.have been going down.

Top 10 Caps on TSXTop 10 Caps on TSX

Market Capitalization in 2009Market Capitalization in 2009

TICKER COMPANY

MARKET CAPITALIZATION

31.DEC.2009

ABX Barrick Gold Corporation $40.8BPOT Potash Corporation of Saskatchewan Inc. $33.9BG Goldcorp Inc. $30.3B

TCK Teck Resources Limited $21.7BK Kinross Gold Corporation $13.5B

CCO Cameco Corporation $13.3BAGU Agrium Inc. $10.3BAEM Agnico- Eagle Mines Ltd. $8.9BYRI Yamana Gold Inc. $8.8BELD Eldorado Gold Corporation $8.0B

TSX/TSXV and AfricaTSX/TSXV and Africa

Toronto is the top exchange for mining in Toronto is the top exchange for mining in Africa;Africa;

169 mining companies listed in 2009 out of about 169 mining companies listed in 2009 out of about 300 non African based comanies.300 non African based comanies.

681 mining properties as of 2009.681 mining properties as of 2009. $2.6 billion in equity capital raised out of 68 $2.6 billion in equity capital raised out of 68

financings.financings. Projects in 44 African countries.Projects in 44 African countries.

Top 10 Financings into Africa in 2009Top 10 Financings into Africa in 2009

Paladin Energy - uranium in NamibiaPaladin Energy - uranium in Namibia $400m $400m First Quantum – copper, diamonds in DRC, First Quantum – copper, diamonds in DRC, Mauritania, ZambiaMauritania, Zambia $345m$345m IAMGOLD - gold in Burkina FasoIAMGOLD - gold in Burkina Faso $345m$345m Katanga Mining - copper in DRCKatanga Mining - copper in DRC $282m$282m Anvil Mining - copper in DRCAnvil Mining - copper in DRC $200m$200m Equinox Minerals - copper in ZambiaEquinox Minerals - copper in Zambia $184m$184m Red Back Mining -gold in Ghana, MauritaniaRed Back Mining -gold in Ghana, Mauritania $165m$165m Banro Corp - gold in DRCBanro Corp - gold in DRC $117m$117m Centamin Egypt - gold in EgyptCentamin Egypt - gold in Egypt $98m$98m Mantra Resources - uranium in TanzaniaMantra Resources - uranium in Tanzania MozambiqueMozambique $52m$52m

Canadian projects in AfricaCanadian projects in AfricaCountry # of projects

South Africa 23

DRC 20

Mali 20

Burkina Faso 20

Tanzania 20

Ghana 19

Niger 16

Namibia 16

Guinea 11

Botswana 11

Sierra Leone 10

Zambia 9

Others 42

2. Expected Canadian mining growth to 2. Expected Canadian mining growth to boost foreign investmentboost foreign investment

Like in most other jurisdictions, the CanadianLike in most other jurisdictions, the Canadianmining sector suffered losses during themining sector suffered losses during the

recentrecentfinancial crisis. financial crisis.

Canada Mining Report 2010;Canada Mining Report 2010; Canadian mining shrank 10% year-on-year.Canadian mining shrank 10% year-on-year. Predictions of 7.4% annual growth for next 4 years.Predictions of 7.4% annual growth for next 4 years. Investment outflows to foreign development Investment outflows to foreign development

expected.expected.

3. Leader in CSR in the mining sector3. Leader in CSR in the mining sector

Canadian miners are working with the federal government on Canadian miners are working with the federal government on a Corporate Social Responsibility Strategy to help developinga Corporate Social Responsibility Strategy to help developingcountries reduce poverty and build their economies throughcountries reduce poverty and build their economies throughresponsible development of their natural resources. responsible development of their natural resources.

Canada’s CSR Strategy for the International ExtractiveCanada’s CSR Strategy for the International ExtractiveIndustry in Developing Countries sets out government'sIndustry in Developing Countries sets out government'sexpectations on;expectations on; Social responsibility.Social responsibility. Environmental stewardship.Environmental stewardship. Health and safety.Health and safety.

Canada's mining industry has its own independent CSR program,Canada's mining industry has its own independent CSR program,Towards Sustainable Mining, which involves consultations, publicTowards Sustainable Mining, which involves consultations, publicreporting and third party verification.reporting and third party verification.

How different jurisdictions can access How different jurisdictions can access

Canadian financeCanadian finance

1. Listing on the TSX and TSX-V1. Listing on the TSX and TSX-V or CNSX

Stock listing is a proven way to;

Raise capital, particularly for junior miners. Attract long-term investment. Draw expert advice in project finance and

management.

Listing Costs

TSX TSX-VentureListing Fees $10,000-$200,000 $7,500-$40,000Accounting/Auditing Fees $75,000-$100,000 $25,000-$100,000Legal Fees $400,000-$750,000 $75,000+Underwriters’ commission 4-6% Up to 12%

Other fees to consider include:

Securities Commission fees, Transfer agency fees, Investor relations costs,Geological or engineering reports, Printing and translation costs, Valuation reports and Director and Officer liability insurance

Listing Timetable and Costs

Details of an approximate time table and the various costs involved can be found in the white paper in the binder

Canadian National Stock Exchange – Canadian National Stock Exchange – CNSXCNSX

CNSX has created a unique exchange to trade listed securities that is CNSX has created a unique exchange to trade listed securities that is designed to meet the needs and characteristics of public companies designed to meet the needs and characteristics of public companies and their investors. CNSX matches enhanced disclosure and and their investors. CNSX matches enhanced disclosure and streamlined issuer regulation with leading edge technology. streamlined issuer regulation with leading edge technology. Combined with comprehensive regulatory oversight CNSX provides Combined with comprehensive regulatory oversight CNSX provides an efficient new stock exchange that fosters integrity, transparency an efficient new stock exchange that fosters integrity, transparency and liquidity for trading securities.and liquidity for trading securities.

The costs of listing on this exchange are much lower than the TSX or The costs of listing on this exchange are much lower than the TSX or TSX-V and the listing requirements are considerably easier to comply TSX-V and the listing requirements are considerably easier to comply with. However the issuer will have to have its own pool of investors with. However the issuer will have to have its own pool of investors to take advantage of this option.to take advantage of this option.

It is possible to move from the CNSX to the TSX or TSX-V at a later It is possible to move from the CNSX to the TSX or TSX-V at a later stage if there is benefit in this.stage if there is benefit in this.

2. Partnering with Canadian Investors

Joint ventures and strategic alliances;Joint ventures and strategic alliances;

Canadian industry completed 442 deals worth $10.2 Canadian industry completed 442 deals worth $10.2 billion in 2009. billion in 2009.

Advantage in providing risk-sharing.Advantage in providing risk-sharing. Canadian knowledge of technical, financing, legal & Canadian knowledge of technical, financing, legal &

regulatory landscape.regulatory landscape. Contacts for political, financial & professional Contacts for political, financial & professional

purposes.purposes. Access to Canadian Financing institutions such as

Export Development Corporation.

3. Participating in promotional events3. Participating in promotional events

PDAC’s annual exhibition - largest miningPDAC’s annual exhibition - largest mining

convention of its kind;convention of its kind;

Among top networking platforms for investors, Among top networking platforms for investors, financiers, developers and brokers.financiers, developers and brokers.

Junior miners particularly enhance their chances of Junior miners particularly enhance their chances of being noticed.being noticed.

PDAC 2010 drew a record 22,000 delegates and PDAC 2010 drew a record 22,000 delegates and 1,000 exhibitors in trade show1,000 exhibitors in trade show.

4. Participating in African focused 4. Participating in African focused promotional eventspromotional events held in Canada

Canada-South Africa Chamber of Business &MineAfrica;

Host largest North American African focused annual mining breakfast and seminar during PDAC - record 340 attended.

MineAfrica rents out space at its booths to African juniors, service providers and governments.

Hosts seminars in Canada and London, UK that are dedicated to mining in Africa.

MineAfrica hosts similar seminars which include Africa but are not Africa specific, through its new international division, On The Ground Group.

5. 5. ParticipatingParticipating in Non-African in Non-African focused promotional eventsfocused promotional events held

in Canada

There are many opportunities to promote your mining project in Canada but other than the Canada-South Africa Chamber of Business and MineAfrica events, none of these opportunities focus exclusively on Africa.

Africa’s mining sector: competing Africa’s mining sector: competing against global leadersagainst global leaders

1. Advantages – Abundant resources

International Development Research Centre rates Africa asnew frontier for innovation Resevoir of young talent. Growing market for cutting-edge technologies. Source of fresh ideas.

And Africa has the geology

Africa’s mining sector: competing Africa’s mining sector: competing against global leadersagainst global leaders

The Fraser Institute recently released its annual mining surveycomparing all mining regions in various categories including policy potential, which is the main area of concern for investors when it comes to opportunities in Africa. The table in the following slide shows the policy potential for 10 of Africa’s mining jurisdictions. The Fraser Institute scored them on a progression scale from 2006/2007 to 2009/2010.

It also ranked them out of the total of similar jurisdictions measured over the same period. You will notice that there are African jurisdictions that are in the top third, such as Botswana and Burkina Faso and yet there are others that are in the bottom five, e.g. DRC and Zimbabwe.

Categories assessed for policy potential

1. Policy formulation2. Administration, interpretation and enforcement of

regulations3. Environmental concerns4. policy inconsistencies5. Concern on native/aboriginal land claims6. Taxation regimes7. Availability of infrastructure8. Socioeconomic agreements9. Community development conditions10. Political stability11. Labor regulations and agreements12. Geological data bases13. Security

Policy Potential IndexPolicy Potential Index

Score Rank

2009/ 2008/ 2007/ 2006/2009/ 2008/ 2007/ 2006/2010 2009 2008 2007 2010 2009 2008 2007

Botswana 66.5 64.9 74.3 47.3 21/72 18/71 11/68 38/65 Mali 58.2 53.6 24.7 41.4 27/72 33/71 58/68 42/65 Ghana 53.3 51.3 63.1 45.3 34/72 35/71 23/68 40/65 Burkina Faso 49.6 45.1 45.5 34.5 36/72 42/71 38/68 46/65 Namibia 49.2 52.5 51.4 * 37/72 34/71 33/68 * Tanzania 44.9 41.8 35.0 41.3 44/72 48/71 49/68 43/65 Zambia 36.5 44.4 49.8 31.0 52/72 44/71 34/68 50/65 South Africa 26.2 40.4 34.6 29.0 61/72 49/71 50/68 53/65 DRC (Congo) 18.9 24.1 34.4 17.4 68/72 63/71 51/68 57/65 Zimbabwe 14.7 19.1 2.9 2.9 69/72 65/71 67 /68 65/65

The table above ranks the 10 sampled African countries for the 13 policy areas covered

by the Fraser Institute in order of their standing out of 72 major mining jurisdictions

surveyed by the Fraser Institute worldwide. The higher the ranking, the higher the

country’s potential to attract new mining investment on the basis of policy.

Access to Canadian finance boosted Access to Canadian finance boosted South America’s mining sectoSouth America’s mining sectorr

1. Increasing investment concentration

256 (169) Canadian mining companies in South America

1,015 (681) Canadian mining properties. $3.0B ($2.6B) in equity capital raised in 2009 – from

125 (68)financings.

African figures in brackets

Top 10 Financings for South American Projects in 2009

Mirabela Nickel - nickel, copper in Brazil $267m

Silver Standard Resources - gold, silver in Argentina $170m Kinross Gold - gold in Chile & Ecuador $516m Medoro Resources - gold in Colombia $102m Andean Resources - gold in Argentina $90m Jaguar Mining - gold in Brazil $86m Rusoro Mining - gold, copper in Venezuela & Chile $80m Quadra Mining - gold, copper in Chile $78m Colossus Minerals - gold, platinum in Brazil $72m MBAC Fertilizer - phosphate, potash in Brazil

$57m

Canadian projects inCanadian projects inSouth AmericaSouth America

Country # of projects

Peru 84

Argentina 60

Chile 59

Brazil 49

Ecuador 23

Colombia 20

Bolivia 17

Guyana 14

Venezuela 10

Others 14

Policy Potential Index

Score Rank

2009/ 2008/ 2007/ 2006/ 2009/ 2008/ 2007/ 2006/

2010 2009 2008 2007 2010 2009 2008 2007

Chile 79.1 79.9 82.0 64.1 7/72 7/71 6/68 27/65 Mexico 58.1 57.7 63.0 64.1 28/72 28/71 24/68 28/65 Peru 47.7 56.6 54.1 30.1 39/72 30/71 28/68 52/65 Brazil 46.1 47.1 45.0 51.2 40/72 39/71 39/68

36/65 Colombia 40.6 43.0 26.3 24.6 48/72 46/71 56/68

55/65 Panama 31.2 42.4 6.1 * 56/72 47/71 65/68 * Argentina 28.4 33.0 40.3 40.9 59/72 56/71 43/68 44/65 Guatemala 21.9 5.1 * * 64/72 69/71 * * Honduras 20.4 11.8 0.0 * 65/72 68/71 68/68 * Bolivia 20.1 16.5 7.0 9.2 66/72 66/71 64/68 63/65 Ecuador 10.5 4.1 4.9 30.1 71/72 70/71 66/68 51/65 Venezuela 6.9 3.7 20.3 4.8 72/72 71/71 59/68 64/65

Just like in the case of Africa, the table above ranks the 10 sampled South American countries in order of

their standing out of 72 major mining jurisdictions surveyed by the Fraser Institute worldwide. The

higher the ranking, the higher the country’s potential to attract new mining investment on the basis of

13 policy categories previously stated.

Comparison of African & South American

Policy Potential Indexes Score Rank

2009/ 2008/ 2007/ 2006/ 2009/ 2008/ 2007/ 2006/2010 2009 2008 2007 2010 2009 2008 2007

Chile 79.1 79.9 82.0 64.1 7/72 7/71 6/68 27/65 Botswana 66.5 64.9 74.3 47.3 21/72 18/71 11/68 38/65 Mali 58.2 53.6 24.7 41.4 27/72 33/71 58/68 42/65 Mexico 58.1 57.7 63.0 64.1 28/72 28/71 24/68 28/65 Ghana 53.3 51.3 63.1 45.3 34/72 35/71 23/68 40/65 Burkina Faso 49.6 45.1 45.5 34.5 36/72 42/71 38/68 46/65 Namibia 49.2 52.5 51.4 * 37/72 34/71 33/68 * Peru 47.7 56.6 54.1 30.1 39/72 30/71 28/68 52/65 Brazil 46.1 47.1 45.0 51.2 40/72 39/71 39/68

36/65 Tanzania 44.9 41.8 35.0 41.3 44/72 48/71 49/68 43/65 Colombia 40.6 43.0 26.3 24.6 48/72 46/71 56/68 55/65 Zambia 36.5 44.4 49.8 31.0 52/72 44/71 34/68 50/65 Panama 31.2 42.4 6.1 * 56/72 47/71 65/68 * Argentina 28.4 33.0 40.3 40.9 59/72 56/71 43/68 44/65 South Africa 26.2 40.4 34.6 29.0 61/72 49/71 50/68 53/65 Guatemala 21.9 5.1 * * 64/72 69/71 * * Honduras 20.4 11.8 0.0 * 65/72 68/71 68/68 * Bolivia 20.1 16. 7.0 9.2 66/72 66/71 64/68 63/65 DRC (Congo) 18.9 24.1 34.4 17.4 68/72 63/71 51/68 57/65 Zimbabwe 14.7 19.1 2.9 2.9 69/72 65/71 67 /68 65/65 Ecuador 10.5 4.1 4.9 30.1 71/72 70/71 66/68 51/65 Venezuela 6.9 3.7 20.3 4.8 72/72 71/71 59/68 64/65

Comparison of Africa and South America

The policy potential index tables show that onaverage, African countries fare better than

SouthAmerican countries.

Only Chile ranks 7th out of 72 jurisdictions Most other South American countries rank towards

tail end of scale. Ecuador and Venezuela are actually ranked 71st and

72nd respectively. Majority of African countries rank in mid-table.

Comparison tableCanada

Africa South America

Canadian Companies 169 256Mining Properties 681 1015Financings in 2009 68 125Capital Raised in 2009 $2.6B $3.0B

Africa – South America Africa – South America Comparison – GlobalComparison – Global

Africa South America

Total Co’s Exploring in 829 727

# of TSX & TSX.V Co’s 174 279

Can % of Global Total 21% 38%

Projects by All CompaniesProjects by All CompaniesGlobalGlobal

Projects Africa South America

Grass Roots 941 993

Exploration 610 603

Advanced Exploration 480 322

Pre-feasibility / scoping

157 106

Feasibility 170 86

Construction 62 37

Operating 489 364

TOTAL 2909 2511

Projects by TSX and TSX.V Projects by TSX and TSX.V CompaniesCompanies

Projects Africa South America

Grass Roots 302 564

Exploration 259 353

Advanced Exploration 130 159

Pre-feasibility / scoping

48 69

Feasibility 54 38

Construction 16 17

Operating 75 89

TOTAL 884 1289

Can % of Golbal Total

30.4% 51.3%

Global Capital Raisings from Global Capital Raisings from Jan 1, 2009Jan 1, 2009

Capital Raisings Africa South America

Number 273 202

Targetted $10.9B $6.7B

Raised $9.7B $5.9B

Capital Raisings from Jan 1, Capital Raisings from Jan 1, 20092009

TSX Listed CompaniesTSX Listed CompaniesCapital Raisings Africa South America

Number 87 151

Targetted $4.8B $3.6B

Raised $4.6B $3.1B

Can % of Global Total

47.4% 52.5%

Several reasons why Canadian investors favour South America

1. History Major Canadian investment to South America began in

1980s. Canadian investment to Africa ballooned only after 2000.

2. Policy Many South American gov’t’s have similar policies to Canada. Africa behind in mineral policy changes.

3. Capacity for Risk Canada is a resource based economy and Canadian investors

accept a greater risk profile than other western countires

4. Geology The two regions have almost similar geological attributes.

5. Other Less important considerations include proximity and

different time zones both of which impact on communication and travel costs.

Sources and Thanks to:Sources and Thanks to:

Innocent Madawo (Researcher)Innocent Madawo (Researcher) Canada-South Africa Chamber of BusinessCanada-South Africa Chamber of Business MineAfrica Inc.MineAfrica Inc. The Fraser InstituteThe Fraser Institute National Resources CanadaNational Resources Canada Canada Mining Report – 2010Canada Mining Report – 2010 The Vancouver SunThe Vancouver Sun TMXTMX Canadian Securities LawCanadian Securities Law International Development and Research CentreInternational Development and Research Centre Intierra Resource IntelligenceIntierra Resource Intelligence

Useful WebsitesUseful Websites imadawo@yahoo.com http://www.mineafrica.com/ http://www.canadasachamber.com/ www.fraserinstitute.org http://www.nrc-cnrc.gc.ca/eng/index.html http://www.reportsandreports.com/market-reports/canada-mining-report-2010/ http://www.vancouversun.com/business/Will+mining+suffer+Bill+becomes/3072115/

story.html http://www.tmx.com/en/listings/listing_with_us/faq/index.html http://www.canadiansecuritieslaw.com/2010/04/articles/mergers-acquisitions/mining-http://www.canadiansecuritieslaw.com/2010/04/articles/mergers-acquisitions/mining-

ma-opportunities-and-trends/ma-opportunities-and-trends/ http://www.mineafrica.com/miningseminar/mineafricapdac2010report.htmhttp://www.mineafrica.com/miningseminar/mineafricapdac2010report.htm http://www.idrc.ca/AfricaNewFrontier/http://www.idrc.ca/AfricaNewFrontier/ http://www.fraserinstitute.org/commerce.web/product_files/miningsurvey2009-http://www.fraserinstitute.org/commerce.web/product_files/miningsurvey2009-

2010.pdf2010.pdf http://www.fraserinstitute.org/commerce.web/product_files/miningsurvey2009-http://www.fraserinstitute.org/commerce.web/product_files/miningsurvey2009-

2010.pdf2010.pdf http://www.nrc-cnrc.gc.ca/eng/index.htmlhttp://www.nrc-cnrc.gc.ca/eng/index.html iintierra.comntierra.com

For More InformationFor More Information

Bruce Shapiro Bruce Shapiro President, MineAfrica Inc.President, MineAfrica Inc.

President, Canada-South Africa President, Canada-South Africa Chamber of BusinessChamber of Business

Toronto, Ontario, CanadaToronto, Ontario, Canada

bruce@mineafrica.combruce@mineafrica.com

www.mineafrica.comwww.mineafrica.comwww.canadasachamber.comwww.canadasachamber.com