3rd Quarter Results

NOVENTA LIMITED

Unaudited Condensed Consolidated Financial Statements

(including Management Discussion & Analysis)

for the 3 and 9 months ended 30 september 2010

8 November 2010

Chairman's Statement

The third quarter of the year has seen Noventa make continued progress. September saw the successful raising of $9.1m of fresh equity capital to enable the Company to progress further with the Strategic Plan that has previously been highlighted to shareholders (and which is outlined on pages 6 and 7). This continued endorsement by investors of the Company and the operational and organisational progress being made at the Marropino Mine (the "Mine") is extremely encouraging.

At the Mine, the Company continues to process tailings through the existing processing plant and throughout the quarter achieved average recoveries of 51% which have continued following the end of the period. Noventa also continues work to prepare the Mine infrastructure for recommencing production in accordance with the Strategic Plan. Work on the site access roads has been completed and the Company continues to progress repairs of the existing tailings dams and has started construction of a new tailings dam for when production from new ore recommences.

The Company is progressing the Marropino pit optimization plan and the design of the new processing plant required to increase the Mine's production capacity to at least 500,000 lbs/pa of tantalum. The Company is in negotiations to reach an agreement with a specialist company for an engineering, procurement, construction and management ("EPCM") contract to design and manage the expansion project. The final amount of capital expenditure for the expansion project is currently being determined with this specialist company.

In July 2010, the Company signed a confidential three year off-take agreement for the sale of a substantial proportion of its projected tantalum concentrate production with a new customer at market related prices at the date of signing which has helped de-risk the re-start of production at the Mine.

Along with many rare earths and metals, demand for tantalum has been increasing and as a result the spot price for 30% tantalum concentrate has increased from $37 per lb at the beginning of 2010 to $92 per lb today. Our expansion plan is designed to meet the commitments under our existing fixed price sales contracts and, if recoveries continue at the same levels as we having been achieving from processing the tailings, we should have a significant surplus which can be sold at, or close to, market prices.

Noventa completed its first two shipments of tantalum concentrate during the quarter from the port of Quelimane in Mozambique. Quelimane is significantly closer to the Mine than the previously used Walvis Bay port in Namibia and proves that the Company's production can reliably be exported from Mozambique. As at the date of this report, Noventa is finalising its third shipment of tantalum concentrate containing 4,760 lbs Ta2O5 at a grade of 27%.

The Noventa board was also strengthened during the third quarter with Leslie Heymann joining the board. Leslie has a wealth of experience as a mining engineer and complements our already strong team.

As part of the application for a Toronto Stock Exchange (TSX) listing, Scott Wilson Roscoe and Poe Associates Inc has prepared a 43-101 compliant report (which is on the Company's website) which confirmed that the resources at Marropino and Morrua are significant and should provide us with enough material to process over the next 10-11 years, generating substantial cash flows. The Company continues to validate the resource at Mutala.

The Company is still working on a detailed evaluation of the Marropino South site, where places with very high concentrations of tantalite have been identified. Due to the erratic occurrence of pockets with high grades of Ta2O5 in the site, the sampling and evaluation process is currently under consideration.

On a final note, Noventa prides itself on its contribution to the local community surrounding the Mine, and this was highlighted by the opening, on 2 November 2010, of a medical clinic situated in Marropino village, financed and constructed by Noventa. The opening ceremony was attended by H.E Shaun Cleary, the High Commissioner of the United Kingdom in Mozambique, Dr. Alberto Baptista, Director of Health for Zambezia Province, Dr. Horátio Belenguezes, the Permanent Secretary of the Ministry of Mineral Resources, and almost all of the Board of Directors including me in my capacity as Chairman, the mine management and staff and a significant proportion of the local community, highlighting the importance of bringing modern healthcare facilities for the first time in its history to the village; the nearest alternative facilities are three and a half hours by road from the village.

I would like also to thank all the management for their outstanding efforts in all aspects and especially in the progress made at the Mine, as well as my fellow Directors and our advisors for the support.

Eric F. Kohn TD

Chairman

For further information please contact:

Eric F. Kohn TD

Chairman

Noventa Limited

+41 22 8500560

+41 79 5030150

www.noventa.net

Nick Harriss/Emily Staples

Religare Capital Markets (Nomad)

+44 20 7444 0800

Daniel BriggsReligare Capital Markets (Joint Broker)+44 20 7444 0500

Andrew Chubb

Cannacord Genuity (Joint Broker)

+44 20 7050 6500

Cautionary note regarding forward looking statements

This document contains "forward-looking information" which may include, but is not limited to, statements with respect to the future financial or operating performance of Noventa Limited ("the Company"), its subsidiaries (together "the Group"), affiliated companies, joint ventures, its projects, the future price of tantalum and morganite, the estimation of mineral reserves and mineral resources, the realization of mineral reserve and resource estimates, the timing and amount of estimated future production, revenues, margins, costs of production, estimates of initial capital, sustaining capital, operating and exploration expenditures, costs and timing of the development of new deposits, costs and timing of future exploration, requirements for additional capital, foreign exchange risks, governmental regulation of mining operations and exploration operations, timing and receipt of approvals, consents and permits under applicable mineral legislation, environmental risks, title disputes or claims, limitations of insurance coverage and regulatory matters. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "targets", "aims", "anticipates" or "believes" or variations (including negative variations) of such words and phrases, or may be identified by statements to the effect that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved.

Forward-looking statements involve known and unknown risks, uncertainties and a variety of material factors, many of which are beyond the Company's control which may cause the actual results, performance or achievements of Noventa, its subsidiaries, affiliated companies and/or joint ventures to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Readers are cautioned that forward-looking statements may not be appropriate for other purposes than outlined in this document. Such factors include, among others, future prices of tantalum and morganite; general business, economic, competitive, political and social uncertainties; the actual results of current exploration and development activities; conclusions of economic evaluations and studies; fluctuations in the value of the U.S. dollar or the pound sterling relative to the local currencies in the jurisdictions of the Company's key projects; changes in project parameters as plans continue to be refined; possible variations of ore grade or projected recovery rates; accidents, labour disputes or slow downs and other risks of the mining industry; climatic conditions; political instability, insurrection or war, civil unrest or armed assault; labour force availability and turnover; delays in obtaining financing or governmental approvals or in the completion of exploration and development activities; as well as those factors discussed in the section entitled "Risk assessment" of the Management discussion & analysis. The reader is also cautioned that the foregoing list of factors is not exhausted of the factors that may affect Noventa's forward-looking statements.

Although Noventa has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this document and, except as required by applicable law, Noventa disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Cautionary note regarding technical information

Technical information in this publication is summarised or extracted from the report entitled 'Technical report on the Marropino project and associated properties, Zambezia Province, Mozambique', prepared by Scott Wilson Roscoe Postle Associates Inc on 27 September 2010 (the 'Scott Wilson 2010 report').

Readers are cautioned not to rely solely on the summary of such information contained in this annual report and financial statements, but should read the above mentioned reports (which are available at www.noventa.net) and any future amendments to such report. Readers are also directed to the cautionary notices and disclaimers contained therein.

Management discussion & analysis

This management discussion and analysis ('MD&A') has been prepared as of 7 November 2010 and should be read in conjunction with the Group's unaudited condensed consolidated financial statements and notes thereto for the three month period ended 30 September 2010 ('Quarter 3-2010'), the nine month period ended 30 September 2010 ('Year to date - 2010') and the audited financial statements and notes thereto for the year ended 31 December 2009 (available from www.noventa.net).

Listing details

Noventa is a Jersey Corporation listed on the AIM Market ('AIM') of the London Stock Exchange under symbol NVTA. Noventa is finalising its listing on the Toronto Stock Exchange ('TSX') which is anticipated to be complete in November 2010, subject to all requirements being satisfied.

Principal activities

Noventa's principal activity is the production of tantalum concentrate. Tantalum is a rare heavy metal that is used in the manufacture of electronic capacitors, turbine blades, medical applications, and industrial cutting tools.

The wholly owned Mozambican subsidiary of Noventa, Highland African Mining Company Limitada, holds title to mining concessions at Marropino, Morrua and Mutala in the Zambezia province of Mozambique and exploration licences over various adjacent areas. The mining operations are currently at the Marropino Mine which has operated intermittently since 2003, but was placed in care and maintenance in May 2009. Operations at the Marropino Mine recommenced in April 2010 on a deliberately limited scale to test improvements to the process, and to train personnel. These personnel will be used to train others when full scale operations start. This is also the first step towards the Marropino Mine commencing production from the primary hard rock deposit in Half 1-2011.

In addition to tantalum, the Marropino ore body also contains a pink beryl gemstone commonly known as morganite. The morganite is associated with the quartz waste in the ore body and is extracted as and when encountered.

MINERAL RESOURCES, EXPLORATION SITES AND GEOLOGICAL OUTLOOK

The Group holds mining concessions and mining licences in the Alto Ligonha Pegmatite Belt of Zambezia Province in Mozambique, grouped at Marropino, Morrua, Mutala, Gilé and Ginama. The most geologically well understood properties are Marropino and Morrua.

In Quarter 3-2010, on 27 September 2010, the mineral resources of the Group were estimated by Scott Wilson Roscoe Postle Associates Inc for the purposes of their NI 43-101 report (the 'Scott Wilson 2010 report) which is a pre-requisite for the Company's listing on the TSX. The results were:

Notes:

1. CIM definitions were followed for Mineral Resources

2. Mineral Resources are estimated at cutoff grades of 150 ppm Ta2O5

3. Mineral Resources for Marropino are estimated using a base price of $60.32/lb Ta2O5 and for Morrua using a price of $45.50/lb Ta2O5

4. A minimum mining thickness of 2 meters was used

5. Includes 1.69 MM t @ 470 ppm Ta2O5 in-situ ore and 1.43 MM t @ 300 ppm Ta2O5 stockpiled oversize material

The Group intends to initially exploit the Marropino deposit and subsequently, once the Marropino resource is exhausted, move to full scale mining at the Morrua deposit commencing with the oversize stockpiles and subsequently the hard rock deposit. Pre-concentrate produced at Morrua will be transported to Marropino for final concentration. Subject to the completion of further geological studies at Mutala, which is the most advanced and well understood of the Group's additional sites (SRK Consulting, in the SRK 2007 Report, reported a SAMREC compliant Inferred Resource of 10.3 MM tonnes grading 236 ppm Ta2O5 for Mutala), the Group intends to supplement the feed for Marropino with a pre-concentrate from Mutala.

In addition to the Marropino, Morrua and Mutala concessions, the Group has various sites with significant exploration potential at Ginama, Gilé, and the satellite surficial deposits at Marropino.

Of the latter surficial deposits, the Marropino South deposit lying two kilometres South East of the Marropino Mine and measuring approximately one kilometre square is of potentially significant interest. During Quarter 3-2010, samples from three pits at Marropino South were independently assayed and reported tantalum grades of 2,697 ppm, 3,836 ppm and 7,577 ppm. These compare to the average 223 ppm of the primary hard rock deposit at Marropino. The Company is currently working on a detailed evaluation of the Marropino South site. Due to erratic occurrences of pockets with very high grades of Ta2O5 the sampling and evaluation process is currently under consideration.

Strategic plan and outlook INCLUDING events subsequent to quarter 3-2010

On 10 June 2010 the Board of Directors approved a new three year strategic plan (the 'Plan') designed to optimise the profitability, cash generation and sustainability of the Group, enhancing value for shareholders.

The core development aspects of the Plan are:

·; to upgrade the Marropino plant capacity to in excess of 500,000 lbs of tantalum per annum during 2010/11 (refer to the section of the MD&A titled 'Process plant upgrade');

·; to broaden the customer base for the Group's tantalum pentoxide and increase the average selling price (refer to the section of the MD&A titled 'Sales contracts');

·; to upgrade the capability and infrastructure of the Marropino plant to handle material from the Group's Mutala, Morrua and other surrounding sites during 2011 (refer to the section of the MD&A titled 'Process plant upgrade');

·; to bring Mutala into production by 2012, and work towards bringing Morrua into production as soon as practicable, but no later than 2015, leveraging off the infrastructure at Marropino in both cases; and

·; to complete further geological exploration on the mining concessions and exploration licences held by the Group to assess the existence of economic tantalum deposits, or other materials.

In August 2010, the Group identified an additional deposit of Tantalum bearing ore on the existing Marropino concession - Marropino South (refer to the section of this MD&A titled 'Mineral resources, exploration sites and geological outlook'). Marropino South has the potential to enhance the economics of the Plan, especially in the earlier years, by extending the life of the Marropino Mine and providing run of mine material of higher than the average grade currently available at Marropino. The Board anticipates that the implementation of the Plan, even if Marropino South does not prove to be viable, will result in the Company becoming cash generative in 2011, with cash generation improving significantly during the rest of the period of the Plan. Until the evaluation of Marropino South is completed, there is no guarantee that it is viable or of consistently high grade.

Operations Overview

During Quarter 3-2010 the Group has focussed on the following key areas:

·; Production efficiency and improving recovery rates;

·; Proving the viability of the Group's supply chain from Mozambique to its customers;

·; Securing a new market related medium term sales contract to take advantage of the rising price of tantalum concentrate and provide security over the revenue forecasts in the Plan;

·; Initiating the Group's geological exploration plan across the various mining licenses and concessions to which the Group holds title in Mozambique;

·; Finalising the Marropino process plant upgrade project test work and design work in order to commence the procurement and construction phase of the project;

·; Preparing for 24 hour production and initial mining in the Marropino pit;

·; Finalising the pre-requisites for the Groups listing on TSX, namely the 43-101 report; and

·; Securing funding to allow the Group to implement the Plan.

The Marropino Mine recommenced production on 23 April 2010 on a deliberately modest restart using tailings material. Production results to date have surpassed expectation and prove that the current process, with the improvements introduced by the new management team, can deliver better results than have previously been achieved. During Quarter 3-2010 the operation has consistently achieved a recovery rate of 51% compared to an average rate of 30% to 35% achieved before the Marropino Mine was placed in care and maintenance.

In July 2010, the Group signed a confidential 3 year off-take agreement for the sale of a substantial proportion of its projected production of tantalum concentrate with a new customer at market related prices at the date of signing. This new off-take agreement has allowed the Group to take advantage of the rising price of tantalum and reduced the risk of changes in prices on the revenue forecasts in the Plan.

The Group completed its first two shipments of tantalum concentrate to this new customer during Quarter 3-2010 from the Quelimane port in Mozambique. Subsequent to the Quarter end, in November 2010, the Group successfully exported its first shipment since the Marropino Mine restarted operations to its existing customer from the port of Nacala, Mozambique. These shipments have allowed the Group to prove that tantalum concentrate production can reliably be exported from Mozambique, rather than from Walvis Bay in Namibia which was significantly further away from the Marropino Mine and the chosen shipping port prior to the Marropino Mine entering care and maintenance. The Group anticipates significant savings in distribution costs arising from using shipping ports geographically near the Marropino Mine.

During the Quarter the Group implemented the initial phase of its geological research plan on its nine mining exploration sites (principally surrounding the Morrua concession) and the less well geologically mapped areas of its concessions to assess the viability of economic extraction of tantalum concentrate from these sites. The initial phase of this geological research was conducted during July and August 2010 in partnership with the University of Glasgow, United Kingdom, and Universidade Eduardo Mondlane, Maputo Mozambique, involving field work by eighteen students under the supervision of the Group's consultant geologist. The work undertaken led to the discovery of Marropino South (refer to the section above titled 'Mineral resources, exploration sites and geological outlook').

The Marropino process plant upgrade project entered the final detailed design stages during Quarter 3-2010 and the Group has commenced procurement of key long lead time items such as the spiral banks, transformers and motor control centres (MCCs). Based on the test work and design work to date, the Group anticipates that the Marropino plant will provide in excess of 500,000 lb per annum of tantalum contained in a concentrate at a minimum contained percentage of 25%.

Subsequent to the Quarter end, in preparation for full scale mining once the Marropino process plant upgrade is completed, the Marropino Mine is making final preparations for moving to operating 24 hours a day. Additionally, the pit is being prepared for mining with the update of the pit optimisation plan, the completion of the hydro-geological study and the acquisition of the necessary mobile equipment underway. It is anticipated that production will ramp up with run of mine feed from the pit from December 2010 with an associated increase in sales thereafter.

In September 2010, Scott Wilson Roscoe Postle Associates Inc finalised their technical report on the Marropino project and associated properties of the Group, required under Canadian National instrument 43-101 as a pre-requisite for the listing of the Company on the TSX. This report was approved by the Toronto Stock Exchange in October 2010 which is a key milestone in the listing process. The Group anticipates that the remaining requirements for listing on the TSX will be completed during the first half of November 2010.

Funding for operations and the Marropino process plant upgrade during the period has been from phased shareholder investment in accordance with the Plan. $9,117,000 (before expenses) has been raised from shareholders in September 2010, of which $6,009,000 was received in September 2010, $1,036,000 has been received subsequent to the Quarter end in October 2010. $1,036,000 of the remaining $2,072,000 will be received in December 2010 with the balance received in March 2011. Total funds committed by shareholders in the Year to date -2010 is $11,275,000.

Changes in Directors

Mr. K Chung was appointed as a Non-executive Director of the Company on 30 March 2010.

Mr. P Lawless was appointed Chief Operating Officer and a Director of the Company on 19 April 2010.

Mr. P Cox did not stand for re-election as a Director of the Company and ceased to be a Director of the Company on 30 June 2010.

Mr. J Allan completed his agreed term as Chief Executive Officer on 30 June 2010 and became a Non-executive Director.

Mr P. Lawless was appointed Chief Executive Officer on 30 June 2010.

Mr L. Heymann was appointed as a Non-executive Director of the Company on 27 September 2010.

Production

The Group recommenced production at the Marropino Mine on 23 April 2010 on a deliberately limited scale basis, mining the tailings dams. During Quarter 3-2010 the Group operated a single shift achieving monthly production of 11,904 lbs of tantalum concentrate at a minimum concentration of 25.0% (i.e. a minimum of 2,976 lbs of contained tantalum). Up to 31 October 2010 the Group has produced 62,020 lbs of tantalum concentrate at a minimum concentration of 25.0% (i.e. a minimum of 15,505 lbs of contained tantalum). While these volumes are relatively low compared to the projected output from the Marropino Mine once the new processing plant is commissioned, they indicate a significant improvement in the recovery of the tantalum in the ore body compared to the previous mining operations - the Group is consistently achieving recovery rates of 51.0%, which compares to the previous rates achieved of 30.0% to 35.0%. Processing tailings is more technically challenging than processing run of mine material because the feedstock is of a lower quality, so the high recovery rate is encouraging, and underpins the Group's approach to testing each stage of production in a measured and controlled manner in order to optimise the production process and increase overall recovery.

Subsequent to the end of Quarter 3-2010, from 1 October 2010, the Group has begun to recruit and train a second shift with the Marropino Mine in anticipation of operating 24 hours a day. Production has increased in October 2010 to 20,598 lbs of tantalum concentrate at a minimum concentration of 27.0% (i.e. a minimum of 5,561 lbs of contained tantalum). The Group anticipates that production will rise to 6,061 lbs of contained tantalum per month once the new shift is fully trained.

The Group has commenced preparation for mining in the pit at Marropino from December 2010, including an update of the Pit Optimisation study commissioned in Half 1-2010 to reflect the production capability of the revised plant design, completion of the hydro-geological study and the repair and procurement of necessary mobile equipment. Mining the pit prior to the full commissioning of the upgraded process plant at Marropino will allow the Group to establish grade control in the pit and ensure that employees have the necessary skills and training. In the short term it will also provide the Group with run of mine material at an average 223 ppm (compared to 118 ppm in the tailings) with an increase in monthly production and sales of tantalum concentrate.

Sales contracts

During Half 1-2010 the Group had a single confidential exclusive long term off-take agreement for the sale of all of its production of tantalum concentrate, which was initially negotiated in 2007.

In June 2010, the Group successfully renegotiated and signed an amendment to this off-take agreement which has allowed the Group to reduce annual quantities of tantalum and sell on a non-exclusive basis to this original customer. This will allow the Group to sell the remaining annual production to other parties, and to benefit from increased market prices and a more diversified customer base.

In July 2010 the Group signed a confidential 3 year off-take agreement for the sale of a substantial proportion of its projected production of tantalum concentrate with a new customer - a major processor and refiner of specialist metals and advanced ceramics. The agreement is for similar quantities as for the Group's existing renegotiated off-take agreement. The agreement is subject only to a sample shipment of material being chemically acceptable. This sample shipment left Mozambique for the customer on 24 August 2010 arriving on 16 October 2010. A subsequent shipment was dispatched to the customer on 21 September 2010.

Delivery chain

The Group has historically shipped its tantalum concentrate from Walvis Bay, Namibia. This shipping route was not cost effective due to the significant distance that the product had to travel from the Marropino Mine to shipping point (around 3,900 Km).

During Quarter 3-2010 the Group has succeeded in shipping material directly from the port of Quelimane (320 Km from the Marropino Mine) to its new customer. Subsequent to the end of Quarter 3-2010, on 11 November 2010, the Group anticipates shipping material from the port of Nacala (600 Km from the Marropino Mine) to its existing customer. This shipment will prove that it is viable to export directly to both of the Group's customers from Mozambique. The Group anticipates significant cost savings from using shipping ports near the Marropino mine.

Supply chain

Due to the remote location of the Marropino Mine in Mozambique, and the relative reliance on The Republic of South Africa for the procurement of spares and equipment, the Group has focussed on the procurement process within the operating subsidiaries to ensure that parts and equipment are available in a timely manner, without tying up unnecessary working capital.

The Group is completing a full review of all items of inventory to identify inventory that is surplus to requirements. This review will be finalised in Quarter 4-2010 and surplus inventory will be sold where the net realisable value is positive.

During Quarter 3-2010, on 1 August 2010, the Group appointed a new Logistics and Procurement Manager, Mr B Cavel, to oversee the procurement process. He is based in Maputo and will oversee future improvements in the procurement and logistics process, which is now underpinned by a common ERP system across the Group operations in Mozambique and South Africa.

Infrastructure

The Group has established the appropriate infrastructure to support the current operations at the remote Marropino Mine.

The Marropino Mine was connected to the national electricity grid in December 2009. Initial connection issues have been resolved and the Marropino Mine now has a reliable power supply. This is supplemented by diesel generators for back up. The mains electricity supply not only reduces the cost of power, but it also provides a continuous current which improves the productivity of the processing plant and increases the working lives of certain consumable items of the plant such as pump impellers.

Water is sourced on site from boreholes and the natural lake on the Marropino site providing a cost effective and reliable supply.

During Quarter 2-2010 the Group completed an optimisation project of the existing buildings and facilities at the Marropino Mine, centralising the stores into one building, relocating the workshop and dry processing plant to more appropriate locations for production purposes, and refurbishing and expanding the accommodation at the Marropino Mine in order to provide appropriate conditions for employees and visitors to the site. This programme has continued in Quarter 3-2010 with the construction of the laboratory building. The Group has also improved local sourcing of food products, with established relationships now in place to provide a reliable supply to the Mine.

Process plant upgrade

The Marropino Mine has made losses in every year of operation due to a combination of factors, including, but not limited to, the incorrect design of the processing plant and significant rejection of the ore body to oversize. These failings impacted significantly on the ability of the processing plant to recover the tantalum contained in the ore body.

In April 2010, the Group contracted Paradigm Project Management ('PPM') as the engineering consultant for the Marropino Mine plant upgrade project. PPM, employees of the Company and expert independent consultants have contributed to the design of the new plant which will process all material to achieve higher recovery and efficiency. Their work has been supported by studies commissioned by the Group into the liberation process and separation technique of the ore body at Marropino, which show that a three size fraction separation is necessary to optimise recovery through gravity separation across different spiral banks and shaking tables. The Group intends to appoint an engineering consultant to design and project manage the expansion project under an Engineering, Procurement, Construction and Management ('EPCM') contract

The test work and the core design for the new plant is now complete and the Group has commenced the procurement phase. During Quarter 3-2010, the Group has placed orders for the necessary long lead time equipment in September 2010. The amount of additional capital expenditure for this expansion project, and hence the Company's funding requirements, are being determined in consultation with PPM.

The projected cash flows for the upgrade project are anticipated to be expended during Quarter 4-2010 and Half 1-2010. The Group anticipates that the necessary funds will be obtained through phased capital inflows arising either from shareholder investment and / or debt funding. The financing for the initial phases was obtained in September and October 2010 (refer to the section of the MD&A titled 'Funds raised').

The Directors believe that once commissioned in Half 1-2011, the plant upgrade will provide the levels of production needed at a production cost which is profitable based on current off-take agreements.

Health and Safety

The Group is committed to maintaining a safe working environment at the Marropino Mine both in terms of the working policies and practices adopted and the operating environment at Marropino.

Policies and practices

Commitment starts through leadership influence on the shop floor and the continuous drive to institutionalise best practices from safety systems in mining and environmental management. The provision of appropriate protective clothing and equipment to all employees and maintaining a culture of awareness of health and safety risks has driven the safety culture forward. This is embedded in the working culture at the Marropino Mine, with daily Health and Safety update meetings, weekly Health and Safety topics highlighted to employees through posters and notices at the mine site and a continued focus by management and supervisors on Health and Safety related issues. During Quarter 3-2010 the Group had 2 vehicle incidents (Year to date - 2010 - 4) and 2 Lost Time Incidents ('LTI's) (Year to date - 2010 - 136), all minor in nature but from which lessons have been learnt to further strengthen the Company's safety culture.

Operating environment

The Group activities result in significant deposits of oversize material and tailings at Marropino which pose risks of subsidence. The Group manages the risks associated to the creation of these deposits through ongoing monitoring of the stability of the oversize dumps and the structural effectiveness of the tailings dam walls. As at the date of this report, these are considered effective based on recent inspections and pose limited risk of serious injury or death. None of the accommodation facilities are in areas that could be affected by these deposits.

Non-Financial Resources

The Group's non financial resources relate to the Group's human resources, infrastructure, systems, technologies, and processes and community relationships.

Human resources

The Group has recruited at all levels of the organisation, with a particular focus in Mozambique on the recruitment of Mozambican citizens who are experienced managers and skilled plant operatives. The Group always gives preference to Mozambican nationals, or Portuguese speaking individuals if Mozambican nationals are not available. This approach has proved invaluable to maintaining good working relationships with the Mozambican authorities, and the local community in the area in which the Marropino Mine is situated. It also promotes the economic and social development of Mozambique, and the participation of the workforce at the Marropino Mine in the overall development of the operations. The benefits of this approach are seen in the excellent results achieved by the Marropino Mine.

The Directors believe that the human resources in the Group are appropriate to the current and projected level of activity in the Group, both at the Marropino Mine, and in the administrative support functions.

Systems, technologies and processes

The Group has completed a review of all systems and processes throughout the Group, and identified areas for improvement. A new ERP system has been installed allowing a common platform for the Group operations at Marropino, Maputo and Johannesburg. This system provides a significantly enhanced stock management platform. Once integrated with the Group maintenance system, this will provide a streamlined and efficient maintenance planning, stock control, and financial reporting system.

Community relationships

The Marropino Mine is located in a remote location in Mozambique. The operations of the Mine provide much needed direct employment to the region, direct local economic benefits through local procurement, and indirect economic benefits from the increased economic activity in the region. These benefits, coupled with the Group focus on employment of Mozambican nationals wherever possible provide a basis for strong community relationships.

The Group additionally contributes directly to the local community, undertaking projects for the improvement of living conditions in Marropino and the surrounding areas. During Quarter 3-2010 the Group completed the construction of the medical clinic in Marropino which was officially inaugurated on 2 November 2010. Further, the Group has drilled a new water bore hole in Marropino and is providing the necessary pumping equipment for the facility to be operational by the end of November 2010. On an ongoing basis the Group contributes to the maintenance of the road infrastructure around the Marropino Mine.

Subsequent to the end of Quarter 3-2010, initiatives have been agreed with the villagers at Marropino to produce fresh produce for the Marropino Mine. The Marropino Mine will establish a cash fund from which local producers can draw down funds for the construction of facilities to support this local produce, such as the chicken coop.

An additional initiative is underway to promote health in the Marropino community through the development of a University of Glasgow and Universidade Eduardo Mondlane (Maputo) joint project; this may result in the mutual exchange of medical doctors and students, and the provision of enhanced medical care through the company-sponsored clinic at Marropino. The initiative is in early development but could, if successful, lead to a fruitful long term partnership.

The Directors believe that the community relationships at Marropino, and with the regional government based in Quelimane, are good and provide an appropriate level of stability for the current and projected level of activity at Marropino.

Markets and competition

Tantalum is a rare specialty metal that has become crucial for the electronics industry and other new technologies such as the following:

With electronic devices becoming smaller, lighter, with more processing power, tantalum usage is increasing. Global tantalum demand is expected to grow at a CAGR of 6% per annum reaching 7Mlb by 2012 (Global Capital Magazine, October 2008). Global supply has fallen behind global demand and is expected to continue lagging for the foreseeable future.

Four developments have made the supply problem critical:

1 Suspended Production:

• Tanco

• Talison's Greenbushes underground mine in South Western Australia suspended production in 2008 due to falling world prices and stated their requirement for the tantalum concentrate price to reach $80 to $100 per pound of contained tantalum before production wound recommence.

• Noventa, when the Marropino Mine was place in care and maintenance in May 2009.

2 Drained Inventories:

• The United States Defense Logistics Agency, the second largest supplier of tantalum during 2001 to 2007 (500,000+ lb per annum), exhausted its captive supply and stopped sales. It has now announced that it intends to rebuild stocks creating demand pressure.

3 Recycling Difficulties:

• Recycling has become more difficult due to the smaller size of electronic components.

4 Restrictions on Product from Conflict Regions:

• Increasing international sanctions on conflict minerals - Central African countries, Democratic Republic of Congo, Rwanda, and Uganda.

• US legislation which would make it illegal to buy or sell conflict minerals anywhere in the supply chain is advancing and gaining support (H.R. 4128 & S. 891).

In this context, the market is characterised by supply shortage from ethical producers, which is placing upwards pressure on spot prices of tantalum concentrate. Since 1 January 2010 to the date of this report, the price per pound of contained tantalum has increased from $37.0 to $92.0.

Although the spot price has shown significant increases in 2010, supply prices are normally set by way of long-term off-take deals between miners and processors. Noventa has renegotiated, or entered into new off-take agreements with major customers, that capitalise on the increasing tantalum price (refer to the section of this MD&A titled 'Sales contracts') and provide a stable price for economic production once the Marropino Mine upgrade is completed. As a member of the Electronics Industry Citizenship Coalition ('EICC'), an organisation dedicated to ensuring worker safety and fairness, environmental responsibility and business efficiency in the electronics industry, Noventa is one of the few suppliers which can provide tantalum concentrate to these customers.

The Group believes that it is in a strong position in this market to expand operations on a profitable and sustainable basis.

Risk assessment

The following table summarises the principal risks and uncertainties faced by the Group, and the actions taken to mitigate these risks:

Financial Overview

The following table provides selected financial information for the two years to 31 December 2009 and quarterly and year to date ('YTD') information that has been published for 2009 and 2010, prepared under International Financial Reporting Standards ('IFRS') and presented in thousands of United States Dollars, except per share amounts:

Quarter 3-2010 results overview

It is not meaningful to compare the performance in Quarter 3-2010, during which the Group operations were focussed on a deliberately modest restart of the Marropino Mine, to Quarter 3-2009 when the Marropino Mine was under care and maintenance. The financial section of this MD&A focuses on the current reporting periods, events subsequent to the reporting period end, and management's future intentions.

During Quarter 3-2010, the Group reported a gross loss of $1,391,000 on sales of $600,000. The Group recognised $111,000 of revenue on the bulk sale of rough morganite that remained at Marropino from before the Marropino Mine was placed in care and maintenance in May 2009. The Group recognised revenue of $489,000 on its first two shipments of tantalum concentrate since the Marropino Mine restarted production in April 2010. Revenue for the quarter is relatively low reflecting the production design constraints on the current processing plant which limit the volumes that can be fed to the plant, the relatively low grade of the tailings which are being processed (118 ppm compared to the Marropino Mine pit average grade of 223 ppm) and production being on one shift. These have been offset by a significant improvement in recovery rates of tantalum to 51% from historic rates of between 30% - 35%. Subsequent to the end of Quarter 3-2010, in October 2010, the Marropino Mine has begun preparations to move onto 24 hour production from which the Group anticipates an increase in revenue in Quarter 4-2010. The Group has also implemented actions to recommence mining of the Marropino pit from December 2010 which will provide run of mine feed to the plant at an average 220 ppm (compared to 118 ppm available in the current tailings) further increasing production volumes and revenue. Cost of sales has increased over Quarter 2-2010 reflecting the Marropino Mine fixed and variable running costs, costs incurred to restore mobile fleet to operating conditions and the repair and maintenance of the infrastructure at Marropino in anticipation of the Marropino Mine process plant upgrade in Quarter 4-2010 and Half 1-2011. It is anticipated that Cost of sales relative to revenue will decrease in Quarter 4-2010 when the fixed and semi-fixed element of the Marropino cost is spread over increased production and sales.

Underlying administrative expenses decreased from $1,050,000 for Quarter 2-2010 to $912,000 for Quarter 3-2010 principally reflecting a decrease in staff costs. Additional one off or non cash expenditure of $937,000 (refer to the section of this MD&A titled 'Administrative expenditure') was incurred in the Quarter offset by favourable exchange gains of $238,000 principally arising on the revaluation of trade creditors denominated in Mozambique Metical.

During Quarter 3-2010 the Group raised $9,117,000 before expenses from an unconditional private placing, additional placing, subscription and additional subscription totalling 90,096,512 Ordinary Shares of £0.0004 each in the Company. The Company issued warrants exercisable at 10p to the subscribers on the basis of one warrant for every two Ordinary Shares subscribed. 60,237,001 Ordinary Shares were issued during September 2010 at £0.065 per Ordinary Share raising $6,091,000 before expenses which was received in the Quarter. The remaining 29,859,511 Ordinary Shares were secured under an irrevocable commitment and will be issued in three equal tranches at £0.06587 per Ordinary Share. The first tranche was issued subsequent to the Quarter end on 15 October 2010 with $1,036,000 received by the Company. The remaining two tranches are anticipated to be issued on 31 December 2010 and 31 March 2011. Further details are included in the section of the MD&A titled 'Funds raised'. The funds will be used to finance working capital and provide the initial phased capital inflows required for the process plant upgrade programme (refer to the section of this MD&A titled 'Process plant upgrade').

The warrants issued with the September 2010 fundraisings are classified as derivative financial liabilities under IFRS reflecting their denomination in GBP when the functional currency of the Company is US$. The warrants were fair valued on initial recognition at $1,644,000 which is recorded within 'Derivative financial liabilities', a balance included in Current liabilities in the Statement of financial position. Changes in the fair value of the warrants reflecting underlying changes in the GBP fair value and changes in the US$ / GBP exchange rate, are recorded in the Statement of comprehensive loss within finance income / expense. The change in fair value reported on warrants in the Quarter is $831,000.

In September 2010 the Group commenced the procurement of long lead time items of equipment necessary for the Marropino Mine process plant upgrade. Additional capital expenditure has principally been incurred on engineering consultant fees, as the work has continued on finalising the detailed design and test work of the upgraded plant. $1,149,000 is recorded within Assets in the course of construction included in Property, plant and equipment for these fees.

During Quarter 1-2010, the Group initiated legal proceedings in South Africa against SRK Consulting (South Africa) Limited, a company incorporated in accordance with the laws of South Africa, for breach of contract and negligence in the preparation of the Independent Competent Persons' Report on the Material Properties of Highland African Mining Company Limited in March 2007. As at the date of this report, a statement of the defendant's exception to the claim has been received, but no court date has been set. During Quarter 3-2010 the Group incurred legal expenditure of $182,000 (Year to date - 2010 - $341,000 including a 700,000 Rand deposited in a Trust Account as a deposit for costs) with respect to this claim.

Going concern

The Group's mining activities are located in Mozambique, where the Group has historically produced tantalum concentrate (and recovered morganite) from its Marropino Mine which was placed in care and maintenance in May 2009 due to continuing operating losses, processing plant deficiencies and past management failures to address the underlying production and logistical issues.

In July 2009, the Group commenced a turnaround strategy after the appointment of Mr. E F Kohn TD as Chairman to the Group. The entire Board of Directors was also replaced and wide-ranging changes made throughout the business at key management levels to support the turnaround and the mining operations in Mozambique. The new management team have implemented a rigorous assessment of the business in order to establish whether the mining operations in Mozambique could be performed on a profitable and sustainable basis.

While there can be no certainty, the studies commissioned by the new management team into the geological, metallurgical and processing of the ore body at Marropino Mine indicate that the concession can be operated on a profitable and sustainable basis. Accordingly, the Group recommenced mining operations at the Marropino Mine on 23 April 2010 on a limited scale to initially reprocess previously mined material contained in the tailings. The reprocessing of previously rejected tailings and oversize material has allowed the Group to test and prove the validity of the proposed changes in design from the previous methods used and to provide additional revenue as well as training the new team. After the additions, upgrades and modifications have been completed the Directors anticipate that the plant will be able to return to full production using the substantially higher grade hard rock ore body at Marropino with results that will represent an improvement over those previously achieved. This is expected to make the mining operation sufficiently cash generative to fund all expenditure in the Group, and provide surplus cash to fund the subsequent development of the Mutala concession, subject to geological test work.

As at 7 November 2010 the Group had cash of $3,262,000, further unconditionally committed funds of $2,072,000 (of which $1,036,000 is due to be received in December 2010 and $1,036,000 in March 2011) and no debt. The Group believes it requires a further investment to fund the Plan which will be used to fund working capital, provide the capital investment necessary at Marropino and fund the costs of further geological work at the other mining concessions and sites held under mining licences. The Group is currently exploring various funding opportunities. The Group's existing funds are expected to be sufficient to finance the Group operations providing the Group time to obtain the additional funding required to implement the Plan.

The Directors have adopted the going concern basis in preparing the financial statements, having carried out a going concern review, on the basis that:

·; they have successfully recommenced operations on a limited basis at the Marropino Mine and demonstrated that the proposed modifications and changes to the plant should make the plant effective;

·; they have successfully raised $11,289,000 of interim financing in June and September 2010 to support the Group whilst additional phased funding to implement the Plan is secured;

·; they have taken all reasonable steps possible to assess the viability of the Plan, including the preparation of forecasts for a period exceeding twelve months from the date of approval of the unaudited condensed consolidated financial statements, and believe that the Group will become profitable and will return high rates of return on shareholder investment in the future; and

·; they have a realistic expectation based on the feedback from their discussions with potential investors and potential debt providers that the strategy to secure the additional funding required to implement the Plan is realistic, subject to satisfactory market conditions prevailing.

The Directors believe they will be able to raise the additional funding required, subject to satisfactory market conditions prevailing, but acknowledge that there is a material uncertainty over their ability to secure the additional funding required to implement the Plan which may cast significant doubt on the Group's and the Company's ability to continue as a going concern and, therefore, its ability to discharge its liabilities in the normal course of business.

Revenue

During Quarter 3-2010 the Group completed two shipments of tantalum concentrate via the port of Quelimane, Mozambique, to the Group's new customer realising revenue of $489,000. Additionally, the Group realised revenue of $111,000 through the bulk sale of the Group's remaining rough morganite inventory.

During Quarter 1-2010, the Group reached agreement with LJ International Limited for the sale of consignment stock held by Goldleaves Trading Limited and Miranda Gems (HK) under the morganite Joint Venture Agreement between the Group, and these parties. The morganite Joint Venture Agreement has been terminated, with payment due to the Group for the sale of the abovementioned inventory of $1,000,000. In accordance with this agreement, $300,000 was received in February 2010, $200,000 in March 2010, and $100,000 per month thereafter. During Quarter 3-2010 the final amounts due under the settlement have been received.

Subsequent to Quarter 3-2010, in November 2010, the Group anticipates completing its first shipment of tantalum concentrate to its existing off-take customer using the port of Nacala, Mozambique. Once completed, this shipment will prove the viability of using Nacala as an export port for supplies to this customer.

Gross loss

The Gross loss (Revenue less Cost of sales which includes direct operating costs of the Marropino Mine irrespective of whether it is producing tantalum concentrate) was $1,391,000 in Quarter 3-2010 and $1,636,000 in Year to date -2010. The Gross loss in Quarter 3-2010 arises from higher Cost of Sales in Quarter 3-2010 compared to Half 1-2010, reflecting an increase in production at the Marropino Mine. Additionally, significant maintenance was completed on mobile fleet and infrastructure at the Mine during the Quarter which is charged to Cost of Sales. The increase in Cost of Sales was partially offset by sales of tantalum concentrate in the Quarter of $489,000. The Gross loss in Year to date - 2010 is $245,000 greater than the Quarter 3-2010 loss due to the positive impact on Gross Profit arising from the $1,000,000 sale of morganite in Quarter 1-2010 which has no attributable Cost of Sale (morganite recovery arises as a by-product of the tantalum concentrate production and accordingly no cost of production is attributed to it).

Administrative expenses

Underlying administrative expenses settled in cash, including certain support and indirect costs at the Marropino Mine, decreased from $1,050,000 for Quarter 2-2010 (Year to date - 2010 - $2,558,000) to $912,000 for Quarter 3-2010 (Year to date - 2010 - $1,646,000) principally reflecting a decrease in staff costs. During Quarter 3-2010 the Group recorded expenditure of a significant or non-recurring nature for the following items:

·; $5,000 (Year to date - 2010 - $285,000) for sign on bonuses and direct recruitment costs for key management positions, $5,000 (Year to date -2010 - $135,000) of which was paid in Ordinary Shares of the Company;

·; $160,000 (Year to date - 2010 - $160,000) for discretionary bonuses for key management staff and directors reflecting their significant individual contributions to the Group in the period, $60,000 (Year to date - 2010 - $60,000) of which was paid in Ordinary Shares of the Company;

·; $194,000 (Year to date - 2010 - $716,000) of consulting costs directly related to the assessment of geological properties, engineering and metallurgical processing at the Marropino Mine;

·; $80,000 (Year to date - 2010 - $341,000) of financial advisory consulting costs related to the restructuring of the Group's operations;

·; $194,000 (Year to date - 2010 - $683,000) of legal costs incurred (including $92,000 deposit for defendant costs which has been provided against in the Quarter) with respect to the claim against SRK Consulting (South Africa) Limited noted above and various reviews and revisions to the Group's contracts and agreements;

·; $125,000 (Year to date - 2010 - $247,000) of legal and consulting fees related to the proposed TSX listing of the Company;

·; $179,000 (Year to date - 2010 - $532,000) of share based payments;

·; $46,000 (Year to date - $99,000 loss) exchange gain arising on non US$ denominated bank balances. This gain is offset in full by exchange gains and losses on trading items through natural economic hedges (see note 9);

·; $192,000 (Year to date - 2010 - $370,000) exchange gain arising on the revaluation of non US$ denominated trade creditors denominated principally in Mozambique Metical reflecting the devaluation of the Metical to US$ exchange rate.

·; $nil (Year to date - 2010 - $925,000) release of provisions against IVA recoverable assets (note 3.2) reflecting the Group's revised assessment of the recoverability of the IVA balances.

Exploration and evaluation expenses

During Quarter 3-2010, the Group completed an initial geological exploration and evaluation of the mining licences to which the Group holds title in the Zambezia Province and updated its geological understanding of its mining concessions. This project was completed in partnership with the University of Glasgow, United Kingdom and the Universidade Eduardo Mondlane, Maputo, Mozambique whereby students from the abovementioned universities, funded by the Group, completed field work on the Group's licences under the supervision of the Group consultant geologist. Total expenditure incurred was $299,000 of which $91,000 was capitalised in property, plant and equipment and $208,000 was expensed in Quarter 3-2010. This work resulted in the discovery of Marropino South, which is now being evaluated to accurately define its shape, average grade and tonnage - refer to the section of this MD&A titled 'Strategic plan and outlook including events subsequent to Quarter 3-2010'.

During Year to date - 2010, the Group incurred a further $40,000 of expenditure on bulk sampling at Marropino and initial geological evaluation at the Mutala concession.

Net finance expense

Net finance expense during Quarter 3-2010 is $837,000 (Year to date - 2010 - $838,000) principally reflecting the non cash change in fair value of certain classes of the Group's issued warrants which are classified as derivative financial liabilities (refer to note 9).

Taxation

During Quarter 3-2010 the Group has released $27,000 of income tax provisions relating to tax liabilities and penalties for the financial years ended 31 December 2005 to 31 December 2008 which are no longer required due to the successful negotiation of settlements of the relevant amounts with the Mozambique Tax Authority in the Quarter.

The Group has significant tax losses in Mozambique which are expected to offset future taxable profits for the foreseeable future.

Liquidity and Capital Resources

The Group has no external credit lines and is funded solely through shareholder investment. As at 30 September 2010, the Group cash balance was $3,767,000. Subsequent to Quarter 3-2010, in October 2010, the Group received $1,036,000 of additional shareholder funding from the subscription of Tranche A of the September 2010 Additional Subscription (refer to the section of the MD&A titled 'Funds raised during Quarter 3-2010).

The Group forecasts cash expenditure in the remainder of 2010 and 2011 to exceed the cash balance and future predicted cash inflows due to the expenditure required on property, plant and equipment for the upgrade of the Marropino plant, and the funding of working capital in the phase prior to upgrade and during the ramp up of production at the plant. The Group will therefore be dependant on future shareholder investment to fund the development of the Plan.

Cash flows from operating activities

Cash used in operating activities was $2,779,000 in Quarter 3-2010 (Year to date - 2010 - $7,291,000) as a result of operating losses in the period and the deferred receipt of part of the income arising on the tantalum sales in the period in accordance with the agreed payment terms, offset by the re-imbursement of $198,000 IVA (Year to date - 2010 - $198,000). Non cash items in the period relate principally to $179,000 (Year to date - 2010 - $532,000) share based payments expense, and $831,000 finance expense (Year to date - 2010 - $831,000) reflecting the change in fair value of warrants which are accounted for as derivative financial liabilities.

Cash flows from investing activities

Cash used in investing activities in Quarter 3-2010 was $1,118,000 (Year to date - 2010 - $1,575,000) arising from the purchase of capital assets totalling $1,119,000 (Year to date - 2010 - $1,580,000) offset by $1,000 interest received (Year to date - 2010 - $5,000). The purchase of capital assets in Quarter 3-2010 reflects the progression of the Marropino plant upgrade project and the availability of funds from the phased fundraisings completed in June and September 2010.

Cash flows from financing activities

In June 2010, the Group secured $2,158,000 additional shareholder funding through a placing (the 'June 2010 Placing'), a conditional placing (the 'June 2010 Conditional Placing Shares') and an additional conditional placing (the 'June 2010 Additional Conditional Placing') of Ordinary Shares of £0.0004 each in the Company. $1,519,000 from the June 2010 fundraisings was received in Quarter 3-2010.

In September 2010, the Group secured shareholder investment of $9,117,000 before expenses from an unconditional placing (the 'September 2010 Placing), a subscription (the 'September 2010 Subscription'), an additional placing (the 'September 2010 Additional Placing') and an additional subscription (the 'September 2010 Additional Subscription') of Ordinary Shares of £0.0004 in the Company. $6,010,000 (before expenses) was received in Quarter 3-2010 with an additional $1,036,000 received in October 2010. The remaining $2,072,000 is due in December 2010 and March 2011.

Contractual obligations

As at 30 September 2010 the Group has capital commitments of approximately $3,950,000 principally related to long lead time items required for the plant upgrade and EPCM fees.

The Group has commitments under operating leases for the rental of premises, with $35,000 due in 2010 and $138,000 due in each of 2011 and 2012.

The Group expects that payment of contractual obligations will come from funds generated by operations subsequent to the commissioning of the new processing plant at Marropino, and from current funds and shareholder investment in the period prior to commissioning.

The Group does not have any off-balance sheet liabilities or transactions that are not recorded or disclosed in the financial statements.

Capital Stock

The Company has one class of Ordinary Shares which carry no right to fixed income. Each share carries the right to one vote at the general meetings of the Company.

The Company has authorised share capital of 1,250,000,000 Ordinary Shares of £0.0004 each, of which 319,492,887 are issued as at 30 September 2010. As at the date of this report, the Company has in issue 334,299,865 Ordinary Shares of £0.0004 each, an increase of 14,806,978 Ordinary Shares, reflecting the issue of the Tranche A shares from the September 2010 Additional Subscription (refer to the section of this MD&A titled 'Funds raised during Quarter 3-2010'), the issue of 489,961 shares to certain Directors and employees as compensation for services provided, the issue of 1,000,000 bonus shares to Mr J Allan and the issue of 2,000,000 bonus shares to Mr E Kohn contractually due reflecting the increase in the average share price of the Company to above 10.0p per share in the 30 days preceding 27 October 2010, and the exercise by warrant holders of 1,363,847 warrants. The Directors have the authority to issue up to 500,000,000 Ordinary Shares.

There are no specific restrictions on the size of a holding of shares nor on the transfer of shares, which are both governed by the general provisions of the Articles of Association and prevailing legislation. The Directors are not aware of any agreements between holders of the Company's shares that may result in restrictions on the transfer of securities or on voting rights.

At 30 September 2010, the Company had instruments that could result in the issue of 77,090,235 Ordinary Shares in the form of warrants, share options and bonus shares. Additionally, as at 30 September 2010, the Company was committed to issuing 424,766 Ordinary Shares to Directors for services provided and 65,195 Ordinary Shares to employees for remuneration contractually payable in Ordinary Shares of the Company. These obligations are reflected in the 'Shares to be issued' reserve, a component of the Company and Group equity. Details of employee share schemes, other call options and arrangements relating to the issue of Ordinary Shares in the Company are set out in notes 11 and 12.

No person has any special rights of control over the Company's share capital and all issued shares are fully paid.

On 15 March 2007, Highland African Ventures Limited, Kerias Management Trading Limited and Fleming Partners (Liechtenstein) AG (together the 'Connected Shareholders') entered into the 'Relationship Agreement' with the Company governing the exercise by the Connected Shareholders of their rights in relation to the Company following the admission of the Company to AIM. In Quarter 3-2010 and as a result of the September 2010 Placing, Subscription and Additional Subscription, this relationship has automatically terminated as the combined shareholding of the Connected Shareholders fell below 30% and thus the Connected Shareholders no longer have certain rights and obligations granted or imposed upon them under the Relationship Agreement which included:

·; the right to appoint two Directors, one of which could be appointed as Chairman;

·; the right to withhold consent from the Company for the issuance of new Ordinary Shares;

·; the right to subscribe to any new Ordinary Shares in proportion to the Connected Shareholders' holdings to prevent dilution of the interests of the Connected Shareholders; and

·; the obligation to offer the Company first refusal of any investment opportunity relating to the tantalum and morganite business carried on by the Group.

Funds raised

Funds raised during Quarter 3-2010

In September 2010, the Group secured shareholder investment of £5,882,000 (approximately $9,117,000) before expenses from an unconditional placing (the 'September 2010 Placing), a subscription (the 'September 2010 Subscription'), an additional placing (the 'September 2010 Additional Placing') and an additional subscription (the 'September 2010 Additional Subscription') totalling 90,096,512 Ordinary Shares in the Company.

On 3 September 2010, the Group completed a placing of 42,021,415 new Ordinary £0.0004 shares (the 'September Placing Shares') and a subscription of 8,442,506 new Ordinary Shares of £0.0004 each (the 'September Subscription Shares') at a price of £0.065 per new Ordinary Share. On 17 September 2010, the Group completed an additional placing of 9,773,080 new Ordinary Shares of £0.0004 (the 'September 2010 Additional Placing Shares') on the same terms as the September 2010 Placing and the September 2010 Subscription. The funds raised from the September Placing Shares, the September Subscription Shares and the September Additional Placing Shares (collectively the 'New Shares') of £3,915,000 (approximately $6,010,000) will be used to fund working capital and provide the initial phased capital inflows required for the process plant upgrade programme (refer to the section of the MD&A titles 'Process plant upgrade'). The new Ordinary Shares have been subscribed by a combination of new investors and existing shareholders.

In addition to the monies raised through the issue of the New Shares, the Company received an irrevocable commitment from Compagnie Internationale de Participations Bancaires et Financieres SA , ('CIPAF'), a subsidiary of General Mediterranean Holding SA, to subscribe for 29,859,511 new Ordinary Shares of £0.0004 each (the 'Additional Subscription Shares') at a price of 6.587p per share to raise a further £1,967,000, approximately equivalent to $3,108,000 (the 'Additional Subscription'). The Additional Subscription will take the form of three distinct tranches, as laid out below, with the Company receiving the subscription funds for each of the tranches at the time each tranche is subscribed, and the respective Additional Subscription Shares allotted to CIPAF within five working days of the subscription monies being received:

(1) The funds from Tranche A were received by the Group subsequent to the end of Quarter 3-2010 on 15 October 2010. CIPAF paid the Group £2,500 (approximately $4,000) of interest due to the delay in remitting the funds.

The subscribers for the New Shares and the Additional Subscription Shares received warrants to subscribe for one new Ordinary Share of £0.0004 for every two Ordinary Shares subscribed for (the 'September 2010 Warrants'). The September 2010 Warrants have an exercise price of £0.10 and a term ended 7 September 2012. Further details on the September 2010 Warrants are provided in note 9.

Funds raised prior to Quarter 3-2010

On 8 June 2010, the Group secured £1,449,000 ($2,158,000) additional shareholder funding through a placing (the 'June 2010 Placing'), a conditional placing (the 'June 2010 Conditional Placing Shares') and an additional conditional placing (the 'June 2010 Additional Conditional Placing') of Ordinary Shares of £0.0004 each in the Company.

June 2010 Placing

The Group completed the private placing of 6,826,450 Ordinary Shares of £0.0004 each for £0.065 per Ordinary Share, raising £444,000 ($652,000) before expenses.

June 2010 Conditional Placing

The Group secured commitments for the conditional placing of 14,415,723 Ordinary Shares of £0.0004 each for £0.065 per Ordinary Share, raising £937,000 ($1,403,000) before expenses. The June 2010 Conditional Placing was conditional on the following conditions precedent:

1. the Directors obtaining shareholder approval at the AGM of the Company on 30 June 2010 for the issuance of the June 2010 Conditional Placing Shares;

2. the June 2010 Conditional Placing Shares issued being accepted to trading on AIM; and

3. there being no material adverse change in national or international financial, market, industrial, economic or political conditions, or any other occurrence of any nature which, in the reasonable opinion of the Company's corporate broker would, or would be reasonably likely to have, a material adverse effect on the business of the Company during the period from 8 June 2010 to the Company's AGM on 30 June 2010.

The conditions precedent for the conditional placing were met in full at the Company's AGM on 30 June 2010 and the funds were received by the Group in Quarter 3-2010.

June 2010 Additional Conditional Placing

On 16 June 2010, the Group secured additional commitments under the same terms as the June 2010 Conditional Placing for 1,053,741 Ordinary Shares of £0.0004 each for £0.065 per Ordinary Share, raising £68,000 ($103,000) before expenses. The funds from this additional placing were received by the Group in Quarter 3-2010.

Proposed transactions

As at the date of this report, no agreements to merge with or acquire another entity have been entered into.

Significant proposed transactions relate solely to the issue of new Ordinary Shares for cash consideration, or raising of debt finance to fund the Plan, the terms of which have not yet been finalised.

Transactions with related parties

During Quarter 3-2010, consulting services were provided by certain Directors, and / or companies in which they have a beneficial ownership, amounting to $297,000 (Year to date-2010 - $851,000; year ended 31 December 2009 - $1,035,000; Quarter 3-2010 and Year to date-2009- $818,000). These fees are included in the Condensed Consolidated Statement of Comprehensive Loss as Administrative expenses. Full details are provided in note 12. These transactions were conducted in the normal course of business and were accounted for at the fair value of the transactions, which is the exchange amount in all instances other than those involving share based payments, where the fair value is determined by means of a valuation model (note 12).

Critical accounting estimates

In the application of the Group's accounting policies which are described in note 3 to the Group financial statements for the year ended 31 December 2009, including consideration of the Going concern status of the Company and Group, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The effect on the financial statements of changes in estimates in future periods could be material.

The following are the critical judgements that the Directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in financial statements.

Carrying value of tangible fixed assets

As described more fully in the Group financial statements for the year ended 31 December 2009, the Group impaired all of its tangible operating fixed assets held at 31 December 2009. During Quarter 1-2010, the Group concluded the preliminary design of the new processing plant at the Marropino Mine, with a sufficiently reliable estimate of the capital investment required in order for the Marropino Mine to be net cash positive after future capital investment. In March 2010, in order to meet the Marropino Mine restart programme, the Group commissioned the construction of a key long lead time item for the hard rock circuit at Marropino. During Quarter 2-2010 and Quarter 3-2010, the Group made significant advances with the detailed design of the Marropino plant upgrade, incurring capital expenditure for engineering consultant fees of $1,149,000. In Quarter 3-2010 the Group commenced placing orders with requisite deposits made for further key long lead time items such as spiral banks. These items are the principal components of assets in the course of construction included within property, plant and equipment. Additionally, the Group has purchased certain items of equipment, principally light transport vehicles, which are necessary for the current operations, and will continue to be utilised when the plant upgrade is completed.

The recoverability of the carrying value of the Property, plant and equipment asset is dependent on the Group's ability to secure additional shareholder investment to fund the remaining capital investment required at the Marropino Mine, and the ability of the Group to realise forecast budgeted results of operations.

Recoverability of input Value Added Tax

Mozambique Value Added Tax ("IVA"), operates in a similar manner to UK Value Added Tax ("VAT"). The Group is exempt from IVA on its exports from Mozambique under the terms of its Mining Licence Agreement and Mozambique tax law. The Group is able to recover input sales tax on all purchases within Mozambique. The Group is always therefore in a net recovery position of IVA. Since 2004, the Group had not succeeded in recovering IVA from the Mozambique Government. Due to the significant uncertainty over the recoverability of these IVA balances, the Group provided in full against the assets as at 31 December 2009 which amounted to $1,611,000 at the USD to Metical exchange rate of 27.5. As at 30 September 2010, the gross and net IVA recoverable assets are respectively $1,159,000 and $737,000 at the USD to Metical exchange rate of 36.21.

During Quarter 3-2010, in August 2010, $502,000 of the IVA recoverable was approved for payment by the Mozambique Tax Authority. This represents 87.3% of the total IVA reclaimed to date by the Group. $70,000 of the ongoing claims has been withheld, pending the Group providing additional information to support the amounts claimed. As at the date of this report, approximately $468,000 has been received by the Group in August 2010, with the approved balance of the two ongoing claims anticipated during Quarter 4-2010. The Group anticipates that a further $200,000 of the IVA recoverable, once claimed in Quarter 4-2010, will be received by the Group during Quarter 4-2010 and Quarter 1-2011. In Quarter 2-2010 the Group released $925,000 of the provision against IVA recoverable assets reflecting the revised assessment of the recoverability of the IVA recoverable balances as at that date.

As at 30 September 2010, the Group has a reasonable expectation that $737,000 of the IVA recoverable balances will be collected in an orderly and timely manner. The remaining IVA recoverable balance of $422,000 remains provided against, with recovery subject to the Group providing satisfactory responses to the additional information requested relating to the ongoing IVA claims and further discussions with the Mozambique Taxation Authority regarding the ability of the Group to reclaim IVA recoverable balances that were under declared during 2004 to 2007.

FOR THE 3 AND 9 MONTHS ENDED 30 SEPTEMBER 2010

All results derive from continuing operations. The loss and total comprehensive loss for all periods presented are wholly attributable to equity holders of Noventa Limited.

CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of preparation

The condensed consolidated financial statements of the Group for the three and nine months ended 30 September 2010, which are unaudited and have not been reviewed by the Company's auditor, have been prepared in accordance with the International Financial Reporting Standards ('IFRS') accounting policies adopted by the Group and set out in the annual report for the year ended 31 December 2009. The Group does not anticipate any change in these accounting policies for the year ended 31 December 2010.

This Quarter 3-2010 report has been voluntarily prepared in anticipation of the Company's proposed listing on The Toronto Stock Exchange - these condensed consolidated financial statements have been prepared to comply with applicable Canadian legal requirements. In preparing this report, the Group has adopted the guidance in the AIM rules of the London Stock Exchange (the 'AIM Rules') for interim accounts which do not require that the interim condensed financial statements are prepared in accordance with IAS 34, 'Interim financial reporting'. While the financial figures included in this report have been computed in accordance with IFRSs applicable to interim periods, this report does not contain sufficient information to constitute an interim financial report as that term is defined in IFRSs.

The financial information contained in this report also does not constitute statutory accounts under the Companies (Jersey) Law 1991, as amended. The financial information for the year ended 31 December 2009 is based on the statutory accounts for the year ended 31 December 2009. The auditors reported on those accounts: their report, while unqualified, included an emphasis of matter regarding the Group's and Company's ability to continue as a going concern. Readers are referred to the auditors' report to the Group financial statements as at 31 December 2009 (which is available at www.noventa.net), and the section titled "Going Concern" in the Management Discussion & Analysis section of this report.

These condensed financial statements for the three and six months ended 30 September 2010 have been prepared in accordance with the IFRS principles applicable to a going concern, which contemplate the realisation of assets and liquidation of liabilities during the normal course of operations. The conditions and risks noted in the section titled "Going Concern" in the Management Discussion & Analysis section of this report cast significant doubt on the validity of that assumption. Having carried out a going concern review in preparing these consolidated condensed financial statements for the three and six months ended 30 September 2010, the Directors have concluded that there is a reasonable basis to adopt the going concern principle, but acknowledge that there is a material uncertainty over the ability of the Group and Company to remain a going concern, and therefore to discharge its liabilities in the normal course of business.

2. Critical accounting judgments and key sources of estimation uncertainty

In the application of the Group's accounting policies which are described in note 3 to the Group financial statements for the year ended 31 December 2009, including consideration of the Going Concern status of the Company and Group, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. The effect on the financial statements of changes in estimates in future periods could be material.

2.1 Critical judgements in applying the Group's accounting policies

The following are the critical judgements that the Directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

2.1.1 Carrying value of tangible fixed assets

As described more fully in the Group financial statements for the year ended 31 December 2009, the Group impaired all of its tangible operating fixed assets held at 31 December 2009. During Quarter 1-2010, the Group concluded the preliminary design of the new processing plant at the Marropino Mine, with a sufficiently reliable estimate of the capital investment required in order for the Marropino Mine to be net cash positive after future capital investment. In March 2010, in order to meet the Marropino Mine restart programme, the Group commissioned the construction of a key long lead time item for the hard rock circuit at Marropino. During Quarter 2-2010 and Quarter 3-2010, the Group made significant advances with the detailed design of the Marropino plant upgrade, incurring capital expenditure for engineering consultant fees of $1,149,000. In Quarter 3-2010 the Group commenced placing orders with requisite deposits made for further key long lead time items such as spiral banks. These items are the principal components of assets in the course of construction included within property, plant and equipment. Additionally, the Group has purchased certain items of equipment, principally light transport vehicles, which are necessary for the current operations, and will continue to be utilised when the plant upgrade is completed.

The recoverability of the carrying value of the Property, plant and equipment asset is dependent on the Group's ability to secure additional shareholder investment to fund the remaining capital investment required at the Marropino Mine, and the ability of the Group to realise forecast budgeted results of operations.

2.1.2 Recoverability of input Value Added Tax

Mozambique Value Added Tax ("IVA"), operates in a similar manner to UK Value Added Tax ("VAT"). The Group is exempt from IVA on its exports from Mozambique under the terms of its Mining License Agreement and Mozambique tax law. The Group is able to recover input sales tax on all purchases within Mozambique. The Group is always therefore in a net recovery position of IVA. Since 2004, the Group had not succeeded in recovering IVA from the Mozambique Government. Due to the significant uncertainty over the recoverability of these IVA balances, the Group provided in full against the assets as at 31 December 2009 which amounted to $1,611,000 at the USD to Metical exchange rate of 27.5. As at 30 September 2010, the gross and net IVA recoverable assets are respectively $1,159,000 and $737,000 at the USD to Metical exchange rate of 36.21.

During Quarter 3-2010, in August 2010, $502,000 of the IVA recoverable was approved for payment by the Mozambique Tax Authority. This represents 87.3% of the total IVA reclaimed to date by the Group. $70,000 of the ongoing claims has been withheld, pending the Group providing additional information to support the amounts claimed. As at the date of this report, approximately $468,000 has been received by the Group in August 2010, with the approved balance of the two ongoing claims anticipated during Quarter 4-2010. The Group anticipates that a further $200,000 of the IVA recoverable, once claimed in Quarter 4-2010, will be received by the Group during Quarter 4-2010 and Quarter 1-2011. In Quarter 2-2010 the Group released $925,000 of the provision against IVA recoverable assets reflecting the revised assessment of the recoverability of the IVA recoverable balances as at that date.

As at 30 September 2010, the Group has a reasonable expectation that $737,000 of the IVA recoverable balances will be collected in an orderly and timely manner. The remaining IVA recoverable balance of $422,000 remains provided against, with recovery subject to the Group providing satisfactory responses to the additional information requested relating to the ongoing IVA claims and further discussions with the Mozambique Taxation Authority regarding the ability of the Group to reclaim IVA recoverable balances that were under declared during 2004 to 2007.

3. Segment Information

The Directors consider that the primary reporting format is by business segment. The Directors consider there to only be one business segment, being the mining, extraction and production of tantalum concentrate, currently undertaken solely from the Marropino Mine in Mozambique. Morganite production is incidental to this principal activity and arises as a by-product of the tantalum concentrate production. All administrative expenditure is allocated to this sole segment.

No geographical analysis of the results by region is reported due to the dominance of the Group's operations in Southern Africa (The Republic of South Africa and The Republic of Mozambique) relative to those in Jersey (Channel Islands) other than for 'Cash and cash equivalents'. 'Cash and cash equivalents' balances are predominantly maintained in Jersey (note 9).

4. Revenue

An analysis of the Group's revenue is as follows:

During Quarter 3-2010 the Group completed two shipments of tantalum concentrate via the port of Quelimane, Mozambique, to the Group's new customer (refer to the section of the MD&A titled 'Sales contracts') realising revenue of $489,000. These shipments have confirmed the viability of the Quelimane port as an export port for supplies to this customer. Additionally, the Group realised revenue of $111,000 through the bulk sale of the Group's remaining rough Morganite inventory held at the Marropino Mine.

During Quarter 1-2010, the Group reached agreement with LJ International Limited for the sale of consignment stock held by Goldleaves Trading Limited and Miranda Gems (HK) under the Morganite Joint Venture Agreement between the Group, and these parties. The Morganite Joint Venture Agreement has been terminated, with payment due to the Group for the sale of the abovementioned inventory of $1,000,000. During Quarter 3-2010 the final amounts due under the settlement have been received.

Subsequent to Quarter 3-2010, in November 2010, the Group anticipates completing its first shipment of tantalum concentrate to its existing off-take customer using the port of Nacala, Mozambique. Once completed, this shipment will prove the viability of using Nacala as an export port for supplies to this customer.

5. Net finance expense

6. Intangible assets

The Group's intangible assets relate principally to the acquired Morrua mining concession in the Zambezia Province of Mozambique. While the Group has full title to the mining concession, as at all reporting dates, the development of the mining concession is uncertain. Once further geological, metallurgical and engineering studies have been completed, and if a viable resource is confirmed, development will need to be funded through either external funding (shareholder investment or loan arrangements) or through positive cash flows from operations. The timing of any development in this mining concession is therefore uncertain. Due to these factors, there is a significant level of estimation uncertainty regarding the carrying value of the intangible assets and the intangible assets have therefore been impaired in full. The impairment was recorded in 2008.The estimated reserves in the Morrua concession amount to 7,770,000 tonnes containing 3,594,540kg of tantalum providing 7 to 8 years of production.

7. Property, plant and equipment

The Group impaired all of its operating tangible fixed assets held as at 1 January 2009 and 31 December 2009, reflecting the uncertainty over the future profitability of the Marropino Mine due to the lack of available funding for the Group to successfully install a comminution circuit at Marropino and complete the upgrade of the Marropino plant. The net book value at 30 September 2010 principally reflects deposits made on the initial equipment for the Marropino Mine process plant upgrade (including equipment for the comminution circuit), engineering consultant fees directly attributable to the Marropino process plant upgrade, light transport vehicles and critical mining equipment (note 2.1.1).

If the Group is successful in implementing its plans and making the Marropino Mine a profitable operation, the Directors anticipate that a portion of the impairment recorded as at 31 December 2009 will be written back in future periods.

8. Inventories

9. Financial instruments

Details of the capital risk management policy of the Group are provided in note 11.

This note provides further information on the financial instruments of the Group including the risks associated with these instruments and the Group financial risk management policies to address these risks.

9.1 Significant accounting policies and classification of financial instruments

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 3 to the Group financial statements for the year ended 31 December 2009.

9.2 Financial risk management objectives

The Group actively manages the risks arising from its operations, and financial instruments at Board level. The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework and to ensure that the Group has adequate policies, procedures and controls to manage successfully the financial risks that the Group faces.

While the Group does not have a written policy relating to risk management of the risks arising from any financial instruments held, the close involvement of the Chairman, CEO and CFO in the day to day operations of the Group ensures that risks are monitored and controlled in an appropriate manner for the size and complexity of the Group. Financial instruments are not traded, nor are speculative positions taken. The principal risks that the Group faces with an impact on financial instruments are summarised below. Further details by class of financial instrument are described later in this note.

The Group's key financial market risks arise from changes in foreign exchange rates ('currency risk'). The Group is also exposed to credit risk.

Currency risk

The Group is exposed to foreign currency exchange risk mainly in relation to the US Dollar, to South African Rand, Mozambique Metical and Great British Pound. The potential currency exposures are:

·; Transactional exposure in respect of:

§ operating costs, capital expenditures and, to a lesser extent, sales incurred in currencies other than the functional currency of operations;

§ certain exchange control restrictions which require funds to be maintained in currencies other than the functional currency of operations; and

§ financial assets and liabilities denominated in currencies other than the functional currency of Group companies, such as bank balances held in currencies other than US$, and trade payables denominated in national currency in Mozambique and South Africa.

·; Translational exposures in respect of investments in overseas operations which have functional currencies other than US Dollars.

The Group's policy is to minimise transactional exposure through maintaining detailed forecast cash flows by principal currency in which cash inflows and outflows are made, allowing the Group to retain funds in the relevant currencies to create natural hedges against exchange fluctuations.

Credit risk

The Group principally has exposure to credit risk on its bank balances and trade receivables. This risk is managed through the selection of bank counterparties based on the financial security of the counterparty, credit assessment of customers and contractual terms and conditions and monitoring.

Interest rate risk

The Group is, to a limited extent, exposed to interest rate risk which arises principally from the Group's bank and cash balances.

Liquidity risk

The Group has liquidity risk as at 30 September 2010 due to the forecast cash outflows before and during the Marropino Mine upgrade project exceeding forecast operating cash flows in the period. Details of the liquidity position of the Group as at the date of these financial statements and its dependence on future financing is provided in the section titled 'Going concern' of the Management Discussions & Analysis section of this report.

9.3 Classes of financial assets and liabilities

The Group analyses its financial instruments into the following classes based on the differing risks to which the instruments expose the Group:

Fair value

The assumptions used by the Group to estimate the fair values of financial instruments are summarised below:

(i) For 'Short term operating assets' and 'Short term operating liabilities' the fair value approximates to book value because of the short maturities of these assets and liabilities.

(ii) For 'Bank balances and cash in hand', the fair value has been determined to approximate book value. The Group has no fixed rate deposits.

(iii) For warrants the fair value has been calculated using a Black Scholes valuation model due to the short term of the derivative instruments (a maximum of 23.5 months at 30 September 2010). The warrants are carried at fair value and accordingly the book value and the fair value of the warrants is the same.

Short term operating assets

These assets are principally subject to credit risk. The balance at 30 September 2010 principally comprises trade receivables from the sale of tantalum concentrate in Quarter 3-2010 (see note 4) and IVA recoverable assets (note 2.1.2) (the balance at 31 December 2009 principally comprises recoverable input VAT in South Africa; the balance at 30 September 2009 principally comprises amounts due from the sale of tantalum concentrate in Quarter 3-2009). Credit risk arises due to changes in the credit rating of the counterparty. The Group's credit risk is reduced as it only transacts with a small number of counterparties who have a sound credit rating. The Group's exposure to credit risk is further controlled by reviewing its credit exposure to counterparties at regular intervals.

The maximum exposure to credit risk is the carrying value of the class at all balance sheet dates.

No amounts included in 'Short term operating assets' are past due and not impaired at 30 September 2010, 31 December 2009 or 30 September 2009. The Group does not hold any security against the receivables in 'Short term operating assets'.

Included in the 'Short term operating assets' are receivables which have been provided against. Movements in the provision account against 'Short term operating assets', which principally relates to the input IVA recoverable in Mozambique (see note 2.1.2) is as follows:

The increase in the allowance account during 2009 reflects the increase in the underlying input IVA balance recorded by the Group offset by the effect of the devaluation of the Mozambique Metical. The decrease in the allowance account in Quarter 1-2010 and Quarter 3-2010 reflects the effect of the devaluation of the Mozambique Metical on the IVA recoverable balance, offset by an increase in input IVA. The decrease in the allowance account in Quarter 2-2010 principally reflects the revision to the assessment of recoverability of the IVA balances of $925,000 (note 2.1.2), the effect of the devaluation of the Mozambique Metical on the IVA recoverable balance and an increase in allowance against deposits for defendant legal costs of $92,000.

Bank balances and cash in hand

All amounts are carried at amortised cost, and, other than cash in hand, are interest bearing assets, with interest rates arranged with counterparty financial institutions based on commercial negotiations, reflecting the term, currency and amount of each deposit. Due to the short term cash requirements of the Group, as at 30 September 2010 interest rates are mainly nominal rates on current account bank balances.

The principal risk arising for 'Bank balances and cash in hand' is credit risk in terms of counterparty default. The Group manages this risk through the monitoring of the credit status of the counterparty financial institutions and the retention of funds principally in the Group's Jersey bank accounts. As at the balance sheet date the Group's assets in 'Bank balances and cash in hand' are principally held with the following banks, which are all high quality financial institutions:

The maximum amount subject to credit risk is the total book value.

'Bank balances and cash in hand' is also subject to the risk of changes in foreign currency exchange rates. As at the reporting dates, the assets in 'Bank balances and cash in hand' were carried in the following currencies:

The impact of changes in foreign currency exchange rates on the carrying value of 'Bank balances and cash in hand' is shown along with all other financial instruments, in the foreign currency sensitivity analysis below.

Short term operating liabilities

'Short term operating liabilities' represents trade, and other payables arising in the normal course of business. No interest is chargeable on any of the items included in 'Short term operating liabilities', as long as the Group adheres to the agreed payment terms with each supplier.

The principal risks associated with 'Short term operating liabilities' are liquidity risk and the risk of changes in foreign currency exchange rates. The impact of these risks is shown below in the sections respectively on liquidity risk and foreign currency sensitivity analysis along with all other financial instruments of the Group.

Warrants

'Warrants' contains warrants issued by the Company which are classified as derivative financial liabilities as the warrants are issued in a currency other than the functional currency of the Company. Warrants falling within this category were issued by the Group in September 2009 (the 'September 2009 warrants'), and twice in September 2010 (the 'September 2010 warrants -1' and the 'September 2010 warrants - 2', together the 'September 2010 warrants') as part of the fundraisings in these months. Upon initial recognition, the fair value of the warrants is 'carved out' of the funds received from shareholder investment and recorded within derivative financial liabilities. At each reporting date the fair value of the warrants is measured, with changes in the fair value of the warrants recorded in the consolidated income statement within finance income/expense. The warrants do not create any obligation on the Company other than to deliver shares in the Company for a fixed price (18p per share for the September 2009 warrants and 10p per share for the September 2010 warrants), at the option of the holder, for 18 months from the date of issuance of the September 2009 warrants and 2 years from the date of issuance of the September 2010 warrants. 'Warrants' does not therefore expose the Company or Group to any risks as at the balance sheet date.

Movements in the number of warrants outstanding are as follows:

Movements in the fair value of warrants are as follows:

The fair value of warrants issued in Quarter 3-2010 and at the period end has been determined using a Black Scholes valuation model with the following inputs: