Half Yearly Report (Management Discussion)

NOVENTA LIMITED

Management Discussion & Analysis

for the 3 and 6 months ended 30 June 2011

19 August 2011

Chairman's Statement

I must report that the last quarter has been a very difficult period for Noventa; the additional funding requirements that I discovered and were announced in June have proved to be significantly greater than previously envisaged by our business plan, including the new process plant at Marropino and other necessary projects. The Group made a loss before tax of $2.39 million for Quarter 2-2011 on revenues of $0.27m.

In March we commissioned the Interim Comminution Circuit ('ICC') at the Marropino Mine using the existing plant with additions to enable us to process run-of-mine material which contains a higher grade of Ta2O5 than the tailings that we have been processing since April 2010. The ICC was designed to increase the rate of production to 200,000 lbs of contained Ta2O5 per annum which will bring the Group closer to cash break even on monthly operations at the Marropino Mine. During Quarter 2-2011 the ICC substantially increased the rate of production at Marropino, but was not able to maintain the targeted rate of production of 200,000 lbs contained Ta2O5 per annum for a sustained period due to mechanical difficulties and the age of the old plant. The annual equivalent rate achieved in Quarter 2-2011 was 115,000 lbs contained Ta2O5. Corrective action has been taken, principally in June and July 2011, with output increasing to an annual equivalent rate of 177,000 lbs contained Ta2O5 in the second half of July 2011. Final measures have been implemented in July and early August 2011, increasing production to the target level of 200,000 lbs per annum Ta2O5. While the experience of commissioning the ICC has been invaluable to the Group, informing the commissioning plan for the new Marropino process plant and giving experience to our team in managing and mining the pit, the lower than anticipated volumes delivered have adversely impacted the Groups cash flows.

The Group undertook the preliminary hydrogeological study at Marropino in Quarter 2-2011. This study revealed that the level of water in the dams at Marropino is insufficient to supply the Marropino Process plant during 2011, principally due to low levels of precipitation. Action has been taken to provide water from the nearby river and from boreholes. The additional water supply pipeline announced on the 2 June 2011 is now well under construction and is on course to be completed during the fourth quarter of 2011.

During Half 1-2011, significant progress has been made on the engineering, procurement and civil construction phases of the Marropino process plant upgrade project ("Project ReStart"). The new process plant is scheduled to be fully operational by the end of 2011, and it is expected to be capable of an annual rate of production of circa 600,000 lbs of contained Ta2O5 or more by Quarter 3-2012. At this rate of production we expect the Group to be profitable and generate a positive cash flow. Despite the significant progress made, it has not been possible to negotiate either a satisfactory EPC (engineering, procurement and construction) or an EPCM (engineering, procurement, construction and management) contract with the proposed project manager or to find an alternative contractor for the construction of the new plant within the required time frame and on acceptable terms. This has led to increased in-house supervision costs with our own project team using the proposed project manager as a project administrator and consultant. The necessary replacement of the civil engineering contractor also led to delays in the expected commissioning date and the need for increased working capital, although these have largely been recovered subsequent to 30 June 2011.

In August 2011 the Group renegotiated better terms for one of its off-take agreements which took advantage of the increasing market price for Ta2O5 concentrate. All of the Group's production from the new process plant is now committed under the Group's off-take agreement until the end of 2013, or 2015 if options contained in the off-take agreements are exercised by the off-take parties. While the Group's off-take agreements have multiple pricing points and are between 31-61% below the current spot price, they provide a stable and profitable sales price for the Group's Ta2O5 concentrate.

As a result of changing practices in the shipping industry, the Company has altered its shipping arrangements, causing a short interruption to delivery of material to one of its clients and increasing its current shipping costs to its customers by an average of US$3.54 per lb of tantalum pentoxide contained concentrate. The tantalum pentoxide concentrate that Noventa produces is mildly radioactive and it is therefore shipped as a Class 7 material. Noventa has always shipped using this designation. The current denial and delay of Class 7 shipments has been recognised as an international problem by the IAEA, IMO and ICAO, and by the UK government. The IAEA has set up an International Steering Committee to coordinate international efforts to determine solutions to the denial and delay of Class 7 shipments which may include increasing the threshold for designation as Class 7 cargo. However, as a consequence of these generally recognised shipping issues in transporting such Class 7 material, Noventa has revised shipping arrangements with its customers and will be shipping to the USA through Walvis Bay (Namibia) and to Thailand (from Mozambique), the latter by agreement with its customer to ship the product to a different specification so that the material does not fall into the Class 7 category. The Company is currently evaluating its future long term solutions and shipping arrangements.

The Group has finalised the terms of a $37.6m equity raise to bring the new process plant at Marropino and other infrastructure for the Group into full operation. The Group has also completed an extensive review and update to the budget supporting the business plan in conjunction with its advisers.

At the Marropino Concession, the evaluation of the two recently identified pegmatites (one of which extends from the current open pit to the north east, and the other, some 1.5 kilometres to the south east) was completed in Quarter 2-2011were determined by drilling and independent laboratory assays as not economic at current market prices of Ta2O5, we continue to be optimistic about the potential of other pegmatites on the 11,280 hectare Marropino concession and our remaining mining concessions and exploration licenced sites, and is continuing its exploration programme. In July and August 2011, the Group has repeated the exploration of our mining concessions and exploration licenses by graduates from the University of Glasgow and undergraduates from Universidade Eduardo Mondale, Maputo, Mozambique led by our Senior Consultant Geologist.

During Half 1-2011, preliminary preparatory work was started at our Morrua mining concession, which contains a higher grade deposit than Marropino, to evaluate the metallurgy and access infrastructure and to develop a suitable mine plan. We are evaluating the possibility of bringing Morrua into production at the end of 2013.

During 2012, we intend to complete further geological work at Mutala in order to update the NI 43-101 report on our mineral resources. Subject to the results of these studies, we may supplement the feed for the Marropino processing plant with a pre-concentrate from the Mutala concession.

We take our relationship with the local community very seriously. The medical clinic, situated in Marropino village, from which we draw the majority of our work force, was financed and constructed by Noventa at a relatively modest cost and opened on 2 November 2010. It now has two nurses provided by the Government in housing built by Noventa, and continues to be supported by the Mine paramedic whose contribution to the health of the Mine staff and Marropino village has been outstanding. A program has been implemented with the University of Glasgow, Scotland to provide a team of doctors for 6 weeks together with doctors from the Medical School of the Universidade Eduardo Mondale, Maputo, Mozambique during July and August 2011 to improve the health of the village which provides a large number of our employees. The village primary school, also constructed and financed by the Group at modest cost, operates on two shifts and has increased its intake of pupils to 520. The Government has provided an additional teacher, increasing the number to five.

On 12th April 2011, Her Excellency Dr. Esperança Bias, the Minister for Mineral Resources for Mozambique, visited the Mine accompanied by Mozambique Television. The Minister publicly expressed her delight at the progress and improvements made at the Mine. The event was a significant endorsement of our relationship with the Mozambican authorities and our standing in the local community. I met with the Minister recently with our Mine General Manager and Director of our operating subsidiary Delio Darsamo, as well our consultant Geologist and we continue the effort to keep the Ministry and the Minister informed of our progress.

I would like to extend my thanks to the Management team and our employees for their commitment and efforts. Pat Lawless resigned on 5 May 2011 for personal family reasons to return urgently to the UK, and John Allan, a director and former CEO of Noventa Ltd, who is currently running Project ReStart, assumed the role of CEO as an additional duty. He will relinquish his appointment when Fernando Fernandez-Torres, who assumed the role of COO on 1 August 2011, becomes CEO during Quarter 4-2011. Zeca de Barros will be joining Noventa as the new CFO with effect from 5 September 2011 replacing Daniel Cassiano-Silva who resigned in July 2011. I also wish to thank my fellow Directors in a very difficult period for the Company and our advisors for their support, which is contributing to substantial progress on our path towards growth and profitability.

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 (Broker)+44 20 7444 0500

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 ('Noventa' or 'the Company'), its subsidiaries (together 'the Group'), affiliated companies, joint ventures, its projects, the future price of Ta2O5 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 Ta2O5 concentrate 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 the Company's forward-looking statements.

Although the Company 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, the Company 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 report 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'). Information of a scientific or technical nature contained in this publication arising since the date of the Scott Wilson 2010 report is provided by Noventa management and has been prepared under the supervision of Donald Hains, of Scott Wilson Roscoe Postle Associates Inc., who is a "qualified person" in accordance with National Instrument 43-101 - Standards of disclosure for Mineral Projects ('NI 43-101').

Readers are cautioned not to rely solely on the summary of such information contained in this report, but should read the Scott Wilson 2010 report (which is 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 19 August 2011 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 June 2011 ('Quarter 2-2011'), the six month period ended 30 June 2011 ('Half 1-2011') and the audited financial statements and notes thereto for the year ended 31 December 2010 (available from www.noventa.net). Additional information relating to Noventa, including Noventa´s annual information form, is available on the System for Electronic Document Analysis and Retrieval ('SEDAR') at www.sedar.com.

Except where otherwise noted, amounts are presented in this MD&A in United States Dollars. Terms used in this report are defined on pages 34 and 35.

LISTING DETAILS

Noventa is a Jersey company with Ordinary Shares quoted on the AIM Market ('AIM') of the London Stock Exchange under symbol NVTA, listed on the Toronto Stock Exchange ('TSX') under symbol NTA and quoted on the PLUS Quoted Market ('PLUS') operated by PLUS Markets plc under symbol NV. On the TSX, Noventa has Designated Foreign Issuer status. The Company's Convertible Redeemable Preference Shares are traded on PLUS.

PRINCIPAL ACTIVITIES

Noventa's principal activity is the production of tantalum pentoxide concentrate ('Ta2O5 concentrate'), which is priced by reference to the amount of contained Ta2O5. Tantalum is a rare heavy metal that is widely used in electronic capacitors, turbine blades, medical applications, optical applications, industrial cutting tools and in other industries.

The wholly owned Mozambican subsidiary of Noventa, Highland African Mining Company Limitada, has mining concessions at Marropino, Morrua and Mutala in the Zambezia province of Mozambique and exploration licences over various adjacent areas. The current mining operations are at the Marropino Mine. The Marropino Mine commenced production from the primary hard rock deposit during Quarter 1-2011. The Marropino Mine achieved production at the rate of 177,000 lbs per annum of contained Ta2O5 in the second half of July 2011. Final measures implemented in July and early August 2011 have increased production to the target level of 200,000 lbs per annum Ta2O5. The Directors are planning a full production capacity of 600,000 lbs per annum of contained Ta2O5 from Quarter 3-2012 when the new plant ramp up is completed at Marropino.

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 only as and when encountered.

STRATEGIC PLAN AND OUTLOOK

On 10 June 2010 the Board of Directors of Noventa (the 'Directors' or the 'Board') approved a three year strategic plan (the 'Plan') designed to optimise the profitability, cash generation and sustainability of the Group, enhancing value for shareholders. The Plan was updated on 22 December 2010 and 9 August 2011.

The core development aspects of the Plan are:

·; to upgrade the Marropino process plant capacity to 600,000 lbs of contained Ta2O5 per annum during 2011 (refer to the section of the MD&A entitled 'Process plant upgrade');

·; 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 and 2012 (refer to the section of the MD&A entitled 'Process plant upgrade');

·; to bring Morrua into production by 2013 (previously by 2012), and work towards bringing Mutala into production as soon as practicable, but no later than 2016 (previously by 2015), leveraging off the infrastructure at Marropino in both cases (refer to the section of the MD&A entitled 'Mineral resources, exploration sites and geological outlook'); 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 (refer to the section of the MD&A entitled 'Mineral resources, exploration sites and geological outlook').

The Board is satisfied with the operational progress against the updated Plan which envisages the commencement of mining operations at Morrua in 2013 rather than 2012. The Directors anticipate that confirmatory geological test-work and pre-feasibility work at Morrua will commence in Quarter 2-2012. Subject to satisfactory results from this work and appropriate market conditions, the Group intends to commence construction of the processing plant at Morrua in Quarter 4-2012. Additional funding of $60.0m is anticipated to be necessary to commence operations at Morrua.

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 at Marropino, Morrua, Mutala, and Ginama. The most geologically well understood properties are Marropino and Morrua.

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 which was a pre-requisite for the Company's listing on the TSX in December 2010. The Scott Wilson 2010 report was limited to a review of the Mineral Resources at Marropino and Morrua. The results were:

Notes:

1. CIM definitions were followed for Mineral Resources

2. Mineral Resources are estimated at cut-off 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 is currently exploiting the Marropino deposit (the 'Marropino Ore Body'). On 16 May 2011 the Group completed a price sensitivity update to the 2010 Life-of-Mine report on Marropino for the increasing market price of Ta2O5 concentrate. The update was undertaken by Mr Anton von Wielligh Pre Eng (ECSA) Member SAIMM of AB Global Mining Consultants, South Africa. Using the Company's previously contracted off-take agreement sales prices for the period of the contracts and a price of US$ 90.0 per pound of Ta2O5 not subject to the off-takes, the Marropino Mine estimated mineral reserve increases from 7,395,863 tons at an average 219 ppm to 8,124,159 tons at an average 223 ppm Ta2O5, equating to an increase in Life-of-mine to approximately 51 months from 42 months. At a price of US$ 100.0 per pound of Ta2O5 not contracted, the mineral reserve increases to 8,834,036 tons at 223 ppm Ta2O5 which equates to a Life-of-Mine increase to approximately 55 months. The increase in grade over the previous estimate is due to higher grade resources becoming economic to extract at greater depth.

During Quarter 1-2011, the Group initiated preliminary work at Morrua to assess the feasibility of bringing Morrua into production during 2012 to take advantage of the rising market price for Ta2O5 concentrate. An updated Life-of-Mine report for Morrua was prepared in June 2011 by Mr Anton von Wielligh Pre Eng (ECSA) Member SAIMM of AB Global Mining Consultants. This report indicates a mineral reserve of 6,432,466 at a price of US$ 120.0 per pound of Ta2O5. This mineral reserve includes 1,430,000 tonnes of stockpiled oversize material and 6,002,466 tonnes of pegmatite ore. The Group anticipates that confirmatory geological test-work and pre-feasibility work at Morrua will commence in Quarter 2-2012. This assessment will determine whether Morrua may be developed using a standalone processing plant, or whether pre-concentrate produced at Morrua could be transported to Marropino for final concentration. Subject to satisfactory results from this work, the Group intends to commence construction of the processing plant at Morrua in Quarter 4-2012.

The Group has an obligation under its mining concession for Mutala to start production in order to retain the concession. The Group intends to start mining on this concession on a low cost pilot basis as soon as possible. Preliminary activities in 2012 will include completion of further geological work at Mutala with an updated NI 43-101 report. Subject to the completion of these studies at Mutala, the Group intends to process a pre-concentrate from Mutala through the Marropino plant.

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

Of the Marropino surficial deposits, the Marropino South deposit lying two kilometres South East of the Marropino Mine and measuring approximately one kilometre square is potentially of interest. During Quarter 3-2010, samples from three pits at Marropino South were independently assayed and reported Ta2O5 grades of 2,697 ppm, 3,836 ppm and 7,577 ppm. These compare to an average 223 ppm for the Marropino Ore Body. The Company is currently working on a detailed evaluation of the Marropino South site to define the extent and quality of the Marropino South deposit. A programme of dense pit sampling was completed in Quarter 1-2011; bulk samples of about 200 kg were extracted from the pit walls and the material has been processed through a small (pilot scale) processing plant to produce concentrate for further analysis at an independent laboratory. Samples were dispatched in Quarter 2-2011 and the results are expected in Quarter 3-2011.

During the pit sampling process undertaken at Marropino South, it became apparent that the Ta2O5 mineralisation is not related to the Marropino Ore Body. By GPS mapping in the vicinity of the mineralized horizon, a 700m long pegmatite outcrop (the "Marropino South Pegmatite") was found, covering an estimated area of c.7.4 hectares. Noventa undertook exploration work on this pegmatite in January 2011 consisting of trenching and bulk sampling. A subsequent programme of 6 core sample drill holes was completed in April 2011 with the samples submitted for testing to the ALS laboratory in Johannesburg, South Africa and the Inspectorate Metals and Minerals laboratory in Rustenburg, South Africa. Final results were obtained in July 2011 which indicate that this pegmatite does not contain concentrations of Ta2O5 that are economic at current market prices.

Additional on-going geological studies completed by the Group in January 2011 identified that the currently mined Marropino Ore Body extends along strike for an estimated further 550m to the North East with a width of between 60m and 80m (the "Marropino Extension Pegmatite"). This extension of the Marropino Ore body was subject to a programme of 9 core sample drill holes during March 2011. The samples were submitted to the ALS laboratory in Johannesburg, South Africa and the Inspectorate Metals and Minerals laboratory in Rustenburg, South Africa. Final results were obtained in July 2011 which indicate that this pegmatite does not contain concentrations of Ta2O5 that are economic at current market prices.

Operations Overview

The Group has operated from a single mine in Marropino, Mozambique since 2003. The productivity and profitability of operations have been significantly lower than expectation since production began, with failure to achieve a profit in any year of operation. The continuing operating losses at the Marropino Mine led to it being placed in care and maintenance in May 2009. The Marropino Mine recommenced operations in April 2010 with a deliberately modest restart using tailings material.

During Half 1-2011 the Group focussed on the following key areas:

·; Production ramp up (from 50,000 lbs to a target output of 200,000 lbs of contained Ta2O5 per annum); this has involved the construction of an interim comminution circuit ('ICC'), moving to 24/7 operations and the resumption of mining from the Marropino open pit;

·; Finalising the detailed design stage for the new process plant at Marropino and signing the engineering design agreement;

·; Progress on the procurement and construction phases of the new process plant at Marropino;

·; Updating the Life-of-Mine study for Marropino;

·; Carrying out an initial hydrogeological study at Marropino and implementing the recommendations from that report;

·; Starting preliminary work to assess the feasibility of bringing Morrua into production during 2013;

·; Progress on the Group's geological exploration projects in accordance with the Plan;

·; Recruiting a new Chief Executive Officer after Mr P Lawless resigned for personal reasons on 5 May 2011. The recruitment was completed on 28 June 2011 with the appointment of Mr F Fernandez-Torres as Chief Operating Officer from 1 August 2011 and Chief Executive Officer elect from Quarter 4-2011. Mr J Allan was appointed as the interim CEO to bridge the gap.

·; Completing the Environmental Impact Assessments and associated Environmental Management and Monitoring Plans for Marropino, Morrua and Mutala which are now complete; and

·; Obtaining funding necessary to continue the construction of the new process plant at Marropino.

Subsequent to 30 June 2011, the Group has focussed on:

·; Finalising the revision to one of its off-take agreements to allow the Group to take advantage of part of the rising spot price for Ta2O5 concentrate; and

·; Establishing a long-term viable shipping route for its Ta2O5 concentrate to the Group's customers and examine other beneficiation and distribution opportunities.

The initial phase of the reconstruction and expansion of Marropino, from April 2010 to March 2011, proved the viability of the production process at the Marropino Mine, with the modifications introduced by the current management team. The second phase was completed during Quarter 1-2011 with the construction of the ICC for the current Marropino process plant, the procurement and commissioning of the necessary mobile equipment for mining the Marropino pit and the gradual increase in headcount to allow 24 hours per day, seven days a week operations at Marropino. The ICC, by allowing the Group to process run of mine material from the Marropino pit at average grades of 223 ppm (compared to 118 ppm contained in the tailings), was designed to increase the rate of production to 200,000 lbs of contained Ta2O5 per annum, bringing the Group closer to cash break-even at the Marropino Mine. Construction of the ICC was completed on 18 February 2011 and the ICC was commissioned on 5 April 2011. The interim period was used to address problems encountered with the operation of the ICC which were generally due to wear and tear on the existing plant. Key components of the current processing plant were replaced during scheduled shutdowns in line with the Group's preventative maintenance policy. During Quarter 2-2011 the ICC substantially increased the rate of production at Marropino, but was not able to maintain the targeted rate of production of 200,000 lbs contained Ta2O5 per annum for a sustained period due to mechanical difficulties. The annual equivalent rate achieved in May and June 2011 was 140,000 lbs contained Ta2O5. Corrective action has been taken, principally in June and July 2011, with output increasing to an annual equivalent rate of 177,000 lbs contained Ta2O5 in the second half of July 2011. Final measures being implemented in July and early August 2011 are expected to increase production to the target level of 200,000 lbs per annum Ta2O5. The ICC will remain in place until the new process plant is completed, which is anticipated in Quarter 4-2011, after which elements of the plant will be reconfigured to form the new plant's recirculation circuit.

On 17 February 2011 the Group signed an engineering design agreement with Paradigm Project Management ('PPM') of Johannesburg, South Africa, for the new Marropino process plant. This finalised the detailed design stage of the new plant, with a full set of design drawings, specifications and supporting documentation delivered during February through to April 2011.

In January 2011, Mr J Allan was appointed as Project Director to take over the lead role in the project to build the new process plant at Marropino ('Project ReStart'). During Half 1-2011 the Group accelerated the procurement of equipment for the new process plant at Marropino with $16.4m (excluding EPCM fees and the ICC) expended or committed for equipment, civil construction and erection of the new process plant as at 30 June 2011. The civil engineering contractor was selected during Quarter 1-2011 with work commencing on site in April 2011. This scope of work for this contractor was restricted in Quarter 2-2011 to earthworks only and a new contractor was selected in June 2011 to complete the concrete works. While the change in contractor has resulted in delays to the initial project timeline, the new contractor is rapidly recovering lost time and the Group anticipates that the project timeline for Quarter 4-2011 will not be affected by this change. In order to reduce the overall risk of the project, the Group finalised the terms of project insurance with its brokers, Aon, in June 2011. The majority of the remainder of the capital expenditure for the upgrade project is expected to be disbursed during Quarter 3-2011 and the new plant, which is anticipated to be complete in Quarter 4-2011, should deliver 600,000 lbs contained Ta2O5 per annum from Quarter 3-2012 after ramp-up.

In May 2011 the Group obtained the results of a price sensitivity update to the 2010 Life-of-Mine report on Marropino for the increasing market price of Ta2O5 concentrate. This study shows that the Life-of-Mine at Marropino has increased from 42 months about 55 months based on a market price of $100.0 per Lb contained Ta2O5. Further details are provided in the section of the MD&A entitled 'Mineral resources, exploration sites and geological outlook'.

In May 2011 the Group undertook a preliminary hydrogeological study at Marropino. This study revealed that the level of water in the dams at Marropino is unusually low and that there is insufficient water to supply the Marropino process plant during 2011, principally due to low levels of precipitation. To mitigate the risk of shortages of water when the new process plant is commissioned and to address the short term requirements at Marropino, the Group is implementing a dual solution which is expected to provide sufficient water for operations. Firstly, a pump and pipe system is being installed in July and August 2011 to obtain water from the Melela river (some 9 km's away from the Marropino process plant). This solution will allow water to be pumped into the original dam system at Marropino that was installed to augment water levels if precipitation is low in future periods. Secondly, four deep fissure bore holes have been commissioned which should provide back-up water. The combined capital cost is c$1.6m, of which $0.5m has been incurred in Quarter 2-2011 and $1.1m is expected to be incurred in Quarter 3-2011.

In March 2011, the Group commenced the preliminary assessment of the feasibility of bringing Morrua into production during 2012 to take advantage of the current Ta2O5 concentrate price (c$130 per lb contained Ta2O5 at June 30, 2011). The Company commissioned an updated Life-of-Mine study for Morrua, the draft results of which were received on 19 June 2011 and have informed the development of the Plan during 2011. The Company has now revised the target commencement of production at Morrua to 2013 to allow for the necessary geological test work and the subsequent, engineering design, procurement and construction of the process plant. The Company anticipates that this preliminary work will commence in Quarter 2-2012. Subject to satisfactory results from this work, the Group intends to commence construction of the processing plant at Morrua in Quarter 4-2012 with production commencing in Quarter 4-2013.

In Half 2-2010 the Group identified three potentially significant Ta2O5 deposits on the Marropino concession. In accordance with the Plan, updated in December 2010, the Group advanced the exploration of these sites being the Marropino South surficial deposit, the Marropino South Pegmatite and the Marropino Extension Pegmatite. Final results for the Marropino South Pegmatite and the Marropino Extension Pegmatite were obtained in July 2011 which indicate that these pegmatites do not contain concentrations of Ta2O5 that are economic at current market prices. Final results for Marropino South are expected in Quarter 3-2011.

In July 2011, the Group implemented 'Project Ligonha Search' using graduates and undergraduates from Glasgow University, Scotland and Universidade Eduardo Mondlane, Maputo, Mozambique under the guidance of its consultant geologist, to explore for new Ta2O5 deposits and other minerals at the Group's mining concessions and sites for which it has exploration licenses. This represents a continuation of 'Project Ligonha' implemented by the Group in 2010. Additionally, the Group implemented 'Project Ligonha Heartbeat' using graduates and undergraduates from Glasgow University, Scotland and Universidade Eduardo Mondlane, Maputo, Mozambique under the guidance of Dr. Philip Cotton, Medical Professor at the University of Glasgow. This project represents part of the Group's Community Development Programme in Mozambique, with the objective of improving public health in the Zambezia province while contributing to the professional development of the students involved.

On 5 May 2011, Mr P Lawless resigned as CEO of the Group and Director for personal family reasons. Mr J Allan, Director and previous CEO, assumed the interim CEO position in addition to his duties as Project ReStart Director, while the Company initiated the recruitment of a permanent CEO. The search for a new CEO was completed on 28 June 2011 when Mr F Fernandez-Torres was appointed as a Director of the Company. Mr Fernandez-Torres assumed the role of COO on 1 August 2011 and is expected to assume the role of CEO during Quarter 4-2011. Mr Fernandez-Torres, a qualified industrial engineer, has been involved in the mining industry for over 30 years, including over 20 years within Rio Tinto and 5 years within the Sibelco Group. More recently, he was the COO of two copper/cobalt mining projects in the Democratic Republic of Congo, the first controlled by AIM-quoted Nikanor PLC (subsequently acquired by Katanga Mining Limited), and the second by a joint venture between Glencore and local interests. Immediately prior to taking up his role with the Company, Mr Fernandez-Torres headed the project in northern Spain to reopen abandoned gold mines for TSX-listed Orvana Minerals Corp.

In Quarter 1-2011 the Group updated the Environmental Impact Assessment for Marropino and finalised new assessments for Morrua and Mutala. This work is now complete.

Funding for operations and the Marropino process plant upgrade has been raised through phased shareholder investments. During Quarter 1-2011 the Board of Directors decided to raise up to $15m by way of an issue of 10% Convertible Redeemable £1 Preference Shares. The Annual General Meeting held on 5 March 2011 gave authority for the issue; $11.9m (before expenses) was raised in March and the shares were issued and admitted to trading on PLUS on 11 April 2011. On 1 April 2011 the Group received further investment of approximately $1,049,000 before issue expenses from the issue of Ordinary Shares under the Company's agreement with Compagnie Internationale de Participations Bancaires et Financieres SA ('CIPAF') which represents the final tranche of investment subscribed by CIPAF in September 2010. On 19 August 2011 the Group obtained irrevocable commitments for $37,578,750 (before issue expenses) of shareholder investment in Ordinary Shares with new and existing shareholders to complete the development of Marropino and to fund the preliminary work at Morrua, including working capital.

In July 2011 the Company signed a revision to one of its off-take agreements to increase the sales price of its Ta2O5 concentrate to this customer. This will allow the Company to take advantage of part, but not all, of the recent market price increase in Ta2O5 concentrate. The revised agreement includes conditions under which the price of the Company's Ta2O5 concentrate may decrease if market prices decrease, although the price will not fall below the previous off-take price. Full details are provided in the section of the MD&A entitled 'Sales contracts'.

As a result of changing practices in the shipping industry, the Company has altered its shipping arrangements, causing a short interruption to delivery of material to one of its clients and increasing its current shipping costs to its customers by an average of US$3.54 per lb of Ta2O5 contained in concentrate. The Ta2O5 concentrate that Noventa produces is mildly radioactive and it is therefore shipped as a Class 7 material. Noventa has always shipped using this designation. However, as a consequence of generally recognised shipping issues in transporting such Class 7 material, Noventa has revised shipping arrangements with its customers and will be shipping to the USA through Walvis Bay (Namibia) and to Thailand (from Mozambique), the latter by agreement with its customer to ship the product to a different specification meaning that the material does not fall into the Class 7 category. The Company is currently evaluating its future long term shipping arrangements.

Going concern

As at 19 August 2011 the Group has cash of approximately $7.6m and has completed, on 19 August 2011, a placing pursuant to which it has placed 73,600,000 new Ordinary Shares at a price of 25 pence each (the 'Issue Price') with both new and existing institutional and other investors to raise approximately $30,360,000 (£18,400,000) (before expenses). In addition, as previously announced on 19 July 2011, the Company intends to conduct an Open Offer giving Shareholders the opportunity to subscribe for a total of 17,500,000 new Ordinary Shares at the Issue Price to raise up to a further approximately $7,218,750 (£4,375,000) (before expenses). Richmond Capital LLP/Richmond Master Fund Limited (collectively 'Richmond') has agreed to subscribe for these Offer Shares at the Issue Price to the extent that valid applications are not received pursuant to the Open Offer, under the Subscription with Clawback. Further details are provided in the section of the MD&A titled 'Events subsequent to the balance sheet date'. The Directors believe that the proceeds of the Placing and the Subscription with Clawback and Open Offer should enable the Company to complete the construction and commissioning of the enhanced and expanded plant at its Marropino mine by the end of 2011 and to provide adequate working capital for the next twelve months. A further $60.0m is expected to be necessary during 2012 to fund Morrua if the initial work supports the development of the concession during 2013.

Accordingly, having taken due consideration of the above, the Directors have concluded that there is a reasonable basis to adopt the going concern basis in preparing these interim unaudited condensed consolidated financial statements.

Change in Directors

Mr K Chung resigned as a Non-executive Director of the Company on 11 April 2011.

Mr I D Benning was appointed as a Non-executive Director of the Company on 13 April 2011.

Prof L G Berglund was appointed as a Non-executive Director of the Company on 13 April 2011.

Mr P Lawless resigned as Chief Executive Officer and Director of the Company on 5 May 2011.

Mr J Allan, a Non-executive Director of the Company and Project ReStart Director for the Marropino process plant upgrade assumed the role of Interim Chief Executive Officer on 5 May 2011.

Mr L Heymann, a Non-executive Director of the Company deceased on 26 May 2011.

Mr T Griffiths resigned as a Non-executive Director and Chairman of the Audit and Risk Committee on 28 June 2011.

Mr T Eggers was appointed as a Non-executive Director and Chairman of the Audit and Risk Committee on 28 June 2011

Mr F Fernandez-Torres was appointed a Director of the Company on 28 June 2011 and has assumed the role of Chief Operating Officer from 1 August 2011. He will assume the role of Chief Executive Officer in Quarter 4-2011.

Production

Production in Half 1-2011 was 44,604 lbs of contained Ta2O5, with Quarter 2-2011 contribution of 28,478 lbs of contained Ta2O5. In May and June 2011 the Marropino Mine produced at a stable annual equivalent rate of production of 140,000 lbs of contained Ta2O5. The increase in production compared to Quarter 1-2011 reflects the commissioning of the ICC in April 2011 which has allowed processing of the higher grade run of mine material, averaging 223 ppm compared to the tailings processed in Quarter 1-2011, which average 118 ppm.

The ICC was designed to enable an increase in production of Ta2O5 concentrate to 200,000 lbs contained Ta2O5 per annum from c65,000 lbs contained Ta2O5 per annum achieved before the ICC was commissioned. During Quarter 2-2011 the ICC was not able to maintain the targeted rate of production of 200,000 lbs per annum Ta2O5. Corrective action has been taken, principally in June and July 2011, with output increasing to an annual equivalent rate of 177,000 lbs contained Ta2O5 in July 2011. Final measures implemented in July and early August 2011 have increased production to the target level of 200,000 lbs per annum Ta2O5.

In February 2011, the Group recommenced mining the pit at Marropino to provide stockpile material for the ICC and in preparation for the commissioning of the new plant in Quarter 4-2011. At 30 June 2011, the Group had approximately 29,710 tonnes in stockpile at an average 238 ppm, representing approximately 13 days feed for the ICC. Mining the pit prior to the full commissioning of the upgraded process plant at Marropino in Quarter 4-2011 has allowed the Group to establish grade control in the pit and ensure that employees have the necessary skills and training. These measures together significantly reduce the risk of the ramp-up by stabilising the supply side of the process, allowing the commissioning team to concentrate on the work-up of the new process plant when completed.

Sales contracts

The Group has two off-take agreements, one of which was renegotiated subsequent to 30 June 2011which will allow the Group to take advantage of part, but not all, of the recent market increase in Ta2O5 concentrate. These agreements are with Cabot Corporation and H.C. Starck, two of the major refiners of Ta2O5. The off-take agreements cover deliveries of 350,000 lbs of contained Ta2O5 in 2011 and 550,000 lbs contained Ta2O5 per annum in 2012 and 2013. Both contracts contain options exercisable at the buyers request covering combined annual deliveries of 470,000 lbs contained Ta2O5 in 2014 and 2015. A further minimum 200,000 lbs of contained Ta2O5 must be delivered any time before the end of 2014. Any shortfalls on deliveries in any contract year are carried forward, with a fixed price decrease per lb delivered to H.C. Starck on any shortfall deliveries. The H.C. Starck agreement also includes option rights over any additional production from any of the Groups concessions during the agreement life (i.e. until 31 December 2015). The current spot price of Ta2O5 concentrate is $130 per lb of Ta2O5. Only a small proportion of Ta2O5 concentrate is traded on the spot market and the prices are volatile. There are no exchange traded contracts for Ta2O5. Most Ta2O5 worldwide is supplied under off-take agreements with refiners. The Group's off-take agreements have multiple pricing points and are at a 31-61% discount to the current spot price.

Delivery chain

Whilst Noventa has been shipping successfully to its customers from Mozambique, as of 1 May 2011 it has not been possible to arrange shipment from Mozambique of the Groups concentrate while this is designated as Class 7 material (IMO designation 2912 and 2910 radioactive hazardous cargo). This has been confirmed by several shipping agents with experience in such shipments, who were contacted for assistance and approached all of the possible carriers. The denial and delay of Class 7 shipments has been recognised as an international problem by the IAEA, IMO and ICAO, and by the UK government. The IAEA has set up an International Steering Committee to coordinate international efforts to determine solutions to the denial and delay of Class 7 shipments which may include increasing the threshold for designation as Class 7 cargo. As a consequence in the meantime Noventa has confirmed shipping arrangements to the US through Walvis Bay (Namibia) and to Thailand through Mozambique by agreement with its customer to ship the product to a different specification does not fall into Class 7. In addition Noventa is working towards having, in the next 6 months, a process to be able to produce a Ta2O5 concentrate which is below Class 7 and will not be subject to the current shipping restrictions.

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 parts, consumables and equipment, the Group continues to focus on the procurement and logistics process within the operating subsidiaries to ensure that parts, consumables and equipment are available in a timely manner, without tying up unnecessary working capital. Improvements have been implemented in Quarter 2-2011 to enhance the integration of the warehousing function at the Marropino Mine and the procurement and logistics functions. The Group is also negotiating terms for consignment stock holdings at Marropino with major suppliers. The Group anticipates that cost savings will be delivered from the improvements through reduced transport costs and stock holding levels while ensuring that the Marropino Mine has the necessary spares, equipment and consumables to operate without interruption.

Infrastructure

The Group has established the appropriate infrastructure to support the current operations at the Marropino Mine. Work is on-going to complete the infrastructure necessary for the new process plant.

The Marropino Mine is connected to the national electricity grid which provides a reasonably reliable power supply with technical assistance provided by the supplier. The Group intends to install a standby generator to prevent short term power outages having a significant impact on production.

Water is at present sourced on site from boreholes and the natural dams on the Marropino site providing a cost effective and reliable supply, but this is subject to receiving sufficient precipitation during the rainy season. Due to low levels of precipitation in 2010 and 2011 and the increasing water demand that will be required for the new process plant at Marropino, the Group has implemented a project to provide additional water to the natural dams from the Melela river (some 9 km from the Marropino process plant) by reinstating the original augmentation system for the mine and adding deep fissure boreholes. This unbudgeted capital expenditure of $1,600,000 follows the final recommendations of the preliminary hydro-geological study completed in Quarter 2-2011.

During 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, refurbishing and expanding the accommodation at the Marropino Mine in order to provide appropriate conditions for employees and visitors to the site and the construction of the new laboratory building. Further accommodation has been made available during Quarter 1-2011 through the extension of current accommodation facilities. Final infrastructure improvements, including further accommodation and a new explosives store, will be required at Marropino before the commissioning of the new plant, anticipated for Quarter 4-2011.

The Group has also improved local sourcing of food products, with established relationships now in place to provide a reliable supply to the Mine. The Government of Mozambique has approved the construction of an airstrip at Marropino which the Directors anticipate will be finalised during 2012.

Process plant upgrade

The Marropino Mine has made losses in every year of operation by the Group due to a combination of factors, including the initial incorrect design of the processing plant and the lack of a comminution circuit. These failings adversely affected the ability of the processing plant to recover the Ta2O5 contained in the ore. In order to make the Marropino Mine a cash generating operation, the Group is upgrading the Marropino process plant in two stages to allow the Group to ramp up production before commissioning the fully upgraded plant. The estimated expenditure on the upgrade is $33.6 million for both stages. Mr J Allan was appointed as Project ReStart Director in January 2011.

The initial upgrade included the construction of an ICC for the current process plant at Marropino which was completed during Quarter 1-2011 and commissioned on 5 April 2011. In combination with the acquisition in Quarter 1-2011 of mobile equipment permitting mining of the Marropino pit, the Group is now able to process run of mine material from the primary hard rock deposit at Marropino. With operations on a 24/7 basis, the Group anticipates sustainable production at an annual equivalent rate of 200,000 lbs of contained Ta2O5 from August 2011, an increase from 50,000 lbs while the Group was processing tailings material on a single shift in Quarter 4-2010. This initial upgrade will bring the Group close to cash flow break-even at the Marropino Mine.

The second stage involves the construction of the new process plant at Marropino. This new plant will utilise the ICC and the current process plant as a re-circulation circuit to improve recovery rates of Ta2O5. The Directors have planned the upgraded plant to provide 600,000 lbs of contained Ta2O5 per annum at a production cost which is profitable based on the Group's off-take agreements. The Directors anticipate that the process plant will be commissioned in Quarter 4-2011 and will achieve full production by Quarter 3-2012.

The principal stages of the process plant upgrade are engineering and design, procurement of equipment and construction and commissioning.

Engineering and design: In April 2010, the Group engaged PPM as the engineering consultant for the Marropino Mine plant upgrade project. PPM, employees of the Group 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 two independent studies commissioned by the Group from Mintek and The University of Glasgow into the liberation process and separation technique of the ore body at Marropino, which show that a three size fraction separation within the band of 1mm is necessary to optimise recovery through gravity separation across different spiral banks and shaking tables. The test work and design for the new plant was completed in 2010 with the full set of design drawings, specifications and supporting documentation delivered in February 2011. The terms of the engineering design agreement with PPM were also finalised in February 2011.

Procurement: During Half 1-2011 the Group accelerated the procurement phase of the project. At 30 June 2011, $22.1m remains to be incurred on the project, of which $10.8m has been committed under firm purchase orders. The majority of the remainder of the capital expenditure for the project is expected to be disbursed during Quarter 3-2011.

Construction and commissioning: The civil engineering contractor was selected during Quarter 1-2011 with work commencing on site in April 2011. ThE scope of work for this contractor was restricted in Quarter 2-2011 to earthworks only and a new contractor was selected in June 2011 to complete the concrete works. While the change in contractor has resulted in delays to the initial project timeline, the new contractor is rapidly recovering lost time and the Directors anticipate that the project timeline for Quarter 4-2011 will not be affected by this change.

In order to reduce the overall risk of the project, the Group finalised the terms of project insurance with its brokers, Aon, in June 2011.

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 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 Half 1-2011 the Group had three vehicle incidents and one Lost Time Incidents ('LTI's). All injuries were minor in nature but from which lessons have been learnt to further strengthen the Group'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 with the creation of these deposits through careful design of these dams and 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 consist of the Group's human resources, infrastructure, systems, technologies and processes and community relationships. The Group also has other non-financial resources in its mineral resources and exploration sites which are discussed in the section of this MD&A titled 'Mineral resources, exploration sites and geological outlook'.

Human resources

Key recruitments during Half-1 2011 included Mr Declan Sheeran as the Group Exploration Geologist and Mr Ivan Machava as the Group Financial Controller. Both of these individuals were appointed in Quarter 1-2011.

Subsequent to 30 June 2011, the Group's Chief Financial Officer, Daniel Cassiano-Silva, resigned from the Group under the terms of his notice period. It is anticipated that he will leave the Group in November 2011. A replacement is being sought.

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 results achieved by the Marropino Mine since it recommenced production in April 2010.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled every effort would be made to ensure that their employment with the Group continues and that appropriate training is arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the Group. This is achieved through formal and informal meetings. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests.

The Directors believe that the human resources in the Group are appropriate for 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 completed a review of all systems and processes throughout the Group in 2010, and identified areas for improvement. A new Enterprise Resource Planning system was installed in 2010 allowing a common platform for the Group operations at Marropino, Maputo and Johannesburg. This system provides an appropriate stock management platform for the Group's spares and consumables.

Community relationships

The Marropino Mine is situated in a remote location in Mozambique. The operations of the Marropino 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's 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. Examples include the construction of the medical clinic in Marropino which was officially inaugurated on 2 November 2010 and the completion of new water bore holes in Marropino and the surrounding area in December 2010. The Group contributes to the maintenance of the road infrastructure around the Marropino Mine.

Initiatives have also been agreed with the villagers at Marropino to produce fresh produce for the Marropino Mine. The Marropino Mine has established a cash fund from which local producers can draw down funds for the construction of facilities to support this local produce.

An additional initiative has been underway since July 2011 to promote health in the Marropino community through a University of Glasgow, United Kingdom, and Universidade Eduardo Mondlane, Maputo, Mozambique joint project. This project involves the mutual exchange of medical doctors and students, and the provision of enhanced medical care through the Group sponsored clinic at Marropino. This is the first year of this initiative but could, if successful, lead to a fruitful long term partnership.

Within the wider context of the ethical and transparent development of mining in Mozambique, the Group is a committed supporter and participant of the World Bank sponsored Extractive Industries Transparency Initiative ('EITI').

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

Markets and competition

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

The Company produces Ta2O5 concentrate which is sold to concentrate refiners who in turn produce tantalum hydroxide ('oxide'), capacitor grade powder or ingots. With electronic devices becoming smaller, lighter, with more processing power, tantalum usage is increasing - capacitor powder now represents around 40% of the final tantalum market to satisfy the requirements of the electronics industry. This demand then drives the demand and price for Ta2O5 concentrate. Global tantalum demand is expected to grow at a cumulative annual growth rate of 6% per annum reaching 7 Mlbs of Ta2O5 per annum 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:

·; Global Advanced Metals ('GAM') (Formerly Talison Tantalum) suspended production in 2008 at the Wodgina and Greenbushes underground mine in South Western Australia due to falling world prices. While this mine is now reported to be reopening, the annual output is unlikely to satisfy the excess market demand.

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 - for example, The Democratic Republic of Congo.

·; The conflicts minerals clause of the US Financial Reform Bill (Dodd-Frank) which came into effect on 1 April 2011 requiring publicly listed companies on US exchanges to disclose in public accounts whether their products contain elements sourced from conflict areas.

In this context, the market is characterised by supply shortage from ethical producers, which is placing upwards pressure on the spot prices of tantalum and consequently Ta2O5 concentrate. Since 1 January 2010 to the date of this report, the reported price per pound of contained Ta2O5 has increased from $37 to $130 (Source: Metal Pages). While GAM announced in January 2011 that it will now recommence mining at Wodgina with processing at Greenbushes of circa 700,000 lbs contained Ta2O5 per annum, the market still has excess demand and the Group expects that prices will continue to rise.

Although the spot price has shown significant increases in 2010 and subsequently, supply prices are normally set by way of long-term off-take deals between miners and refiners. There are a limited number of refiners and the Group has off-take agreements with two of the major refiners (refer to the section of the MD&A titled 'Sales contracts'). During 2010, and subsequently in 2011, the Group renegotiated, or entered into off-take agreements with these refiners that capitalise on the increasing Ta2O5 concentrate price and provide a stable price for economic production once the Marropino Mine upgrade is completed. As an applicant 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, the Group is one of the few suppliers which can provide Ta2O5 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 unaudited quarterly financial information for the eight most recent fiscal quarters to 30 June 2011 and audited annual information for the preceding two financial years, prepared under International Financial Reporting Standards ('IFRS') and presented in thousands of United States Dollars, except per share amounts:

(1) Comparative amounts adjusted for the 20:1 share consolidation of the Company's Ordinary Shares completed on 11 March 2011.

(2)Represents the repayment value of the Company's Convertible redeemable preference shares prior to issue expenses and accounting presentation requirements of IAS 32.

Half 1-2011 and Quarter 2-2011 results overview

It is not meaningful to compare the trading performance in Half 1-2011 and Quarter 2-2011 during which the Marropino Mine was in operation to Half 1-2010 and Quarter 2-2010 when the Marropino Mine was in care and maintenance until 23 April 2011. The financial section of this MD&A focuses on the current reporting period, events subsequent to the reporting period end, and management's future intentions. Where relevant, comparisons to prior period results are made.

During Half 1-2011 the Group reported a Gross loss of $4,548,000 on three shipments of Ta2O5 concentrate realising revenue of $877,000. The Group recognised revenue of $273,000 on one shipment of Ta2O5 concentrate in Quarter 2-2011. Ta2O5 concentrate revenue for Half 1-2011 is low compared to the Group's anticipated future revenue reflecting the low grade of the tailings which were processed in Quarter 1-2011 (118 ppm compared with the Marropino Mine pit average grade of 223 ppm) and the shipping constraints faced by the Group since June 2011. Refer to the section of the MD&A entitled 'Delivery chain'.

Production volumes did not reach break-even levels in Quarter 2-2011 or Half 1-2011. Cost of sales is greater than revenue due to the impact of fixed and semi fixed costs of operating the Marropino Mine on the per lb production cost of the contained Ta2O5and the additional staff, explosives and diesel costs incurred in preparing the Marropino operations for the new process plant including extracting run of mine material from the main pit at Marropino. The ICC was commissioned in Quarter 2-2011 and has contributed to an increase in output from 16,126 lbs contained Ta2O5 in Quarter 1-2011 to 28,478 lbs contained Ta2O5. The full benefit of processing run of mine material through the ICC has not been felt yet due to the mechanical difficulties with the ICC which impacted adversely on plant availability, ore throughput tonnages and maintenance expenditure. The Group anticipates that production volumes will increase to around 40,000 lbs contained Ta2O5 in Quarter 3-2011 once the ICC operates at its design capability of 200,000 lbs contained Ta2O5 per annum output rate from August 2011.

Administrative expenses for Half 1-2011 were $4,435,000 (Quarter 2-2011: $2,340,000). Expenditure of a significant or one off nature of $1,600,000 was incurred in Half 1-2011 (Quarter 2-2011: $735,000 (refer to the section of this MD&A entitled 'Administrative expenditure').

During Half 1-2011 $352,000 (Quarter 2-2011: $48,000) was incurred on exploration and evaluation of the Marropino South Pegmatite and Marropino Extension Pegmatite. This expenditure was initially capitalised as an intangible asset. Final results from the sampling programme indicate that these two pegmatites are not economic at current prices of Ta2O5 concentrate and the expenditure has been expensed.

In Quarter 1-2011 the Group expensed $116,000 of preliminary costs incurred in respect of the arrangement of debt facilities (including due diligence) from two European Development Banks. These facilities are no longer required due to the placing of the Convertible Redeemable Preference Shares (refer to the section of the MD&A titled 'Funds raised').

During Half 1-2011 the Group accelerated the procurement stage of the Marropino process plant upgrade, with $12,339,000 (Quarter 2-2011: $6,202,000) spent on acquiring property, plant and equipment including the ICC, deposits and stage payments on equipment for the new process plant and engineering design fees. At 30 June 2011 the Group was committed to further capital expenditure of $10,800,000.

At the Company's Annual General Meeting on 4 March 2011, the shareholders approved the creation of a new class of share capital, being Preference Shares, and the consolidation of the Company's Ordinary Shares at the ratio of 20:1.

During Quarter 1-2011 the Group raised $11,904,000 before expenses from the placing of 2,822,290 Convertible Redeemable Preference Shares. The funds raised were received in April 2011 once all conditions precedent had been met and were recorded in Quarter 2-2011. A further $1,056,000 (pre issue expenses) was received in Quarter 2-2011 from the final tranche of the subscription made by CIPAF in September 2010. 447,503 Ordinary Shares were issued in Quarter 1-2011 on the exercise of warrants and share options realising $1,106,000.

The funds are being used to finance working capital and the phased capital inflows required for the process plant upgrade programme (refer to the section of this MD&A titled 'Process plant upgrade').

On 19 August 2011 the Group completed a placing pursuant to which it has placed 73,600,000 new Ordinary Shares at a price of 25 pence each (the 'Issue Price') with both new and existing institutional and other investors to raise approximately $30,360,000 (£18,400,000) (before expenses). In addition, as previously announced on 19 July 2011, the Company intends to conduct an Open Offer giving Shareholders the opportunity to subscribe for a total of 17,500,000 new Ordinary Shares at the Issue Price to raise up to a further approximately $7,218,750 (£4,375,000) (before expenses). Richmond Capital LLP has agreed to subscribe for these Offer Shares at the Issue Price to the extent that valid applications are not received pursuant to the Open Offer, under the Subscription with Clawback. Further details are provided in the section of the MD&A titled 'Events subsequent to the balance sheet date'. The Directors believe that the proceeds of the Placing and the Subscription with Clawback and Open Offer should enable the Company to complete the construction and commissioning of the enhanced and expanded plant at its Marropino mine by the end of 2011 and to provide adequate working capital for the next twelve months.

Revenue

During Quarter 2-2011 the Group completed one shipment of Ta2O5 concentrate in April 2011 realising revenue of $273,000 (Quarter 1-2010: no shipments). This completed the third shipment for Half 1-2011 with sales of Ta2O5 concentrate recorded of $877,000 (Half 1-2010: $nil). Subsequent to April 2011, the Group has not completed any sales due to difficulties in shipping Ta2O5 concentrate from Mozambique - refer to the section of the MD&A entitled 'Delivery chain'. The Group is exploring shipping routes with new partners in Mozambique and in The Republic of South Africa.

The Group did not realise any sales during Quarter 2-2010. During Half 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 was terminated, with revenue of $1,000,000 recorded for the sale of the consignment stock.

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 Ta2O5 concentrate) was $4,548,000 in Half 1-2011 (Half 1-2010: $245,000) and $2,591,000 in Quarter 2-2011 (Quarter 2-2010: $592,000). The Gross loss in Half 1-2011 arises due to the relatively low production volumes combined with increasing costs as the Marropino Mine increased its scale of operations in anticipation of increasing production levels.

The relatively low production volumes reflect the 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 were processed in Quarter 1-2011 (118 ppm compared with the Marropino Mine pit average grade of 223 ppm), and the mechanical difficulties encountered in operating the ICC in Quarter 2-2011. While output has increased in Quarter 2-2011 from 16,126 lbs contained Ta2O5 in Quarter 1-2011 to 28,478 lbs contained Ta2O5, the full benefit of processing run of mine material through the ICC has not been felt yet due to the integration difficulties of the ICC with the relatively aged processing plant which impacted adversely on plant availability and ore throughput tonnages. Production rose gradually during Half 1-2011 to an annual equivalent rate of c145,000 lbs of contained Ta2O5 in June 2011 from 50,000 lbs per annum equivalent in Quarter 4-2010. The Group is addressing the final repairs and upgrades needed of the current plant for the ICC to operate at full capacity and anticipates that production will increase from August 2011 to an annual production rate of contained Ta2O5 of 200,000 lbs.

Expenditure has increased in Half 1-2011 due to increased staff costs with the full complement of staff now on site for 24/7 mining in the pit at Marropino, increased explosives costs associated with mining the pit at Marropino and the creation of stockpiled material, increased electricity consumption due to the ICC, expenditure incurred in refurbishing the D9 bulldozer and second drill rig at Marropino and refurbishing parts of the current process plant to cope with the more abrasive run of mine material from the pit. The full cost of production is not currently absorbed to inventory because, at current volumes, the Group has a gross loss.

The increase in Gross loss in Quarter 2-2011 compared to the Quarter 1-2011 Gross loss of $1,956,000 reflects the increase in expenditure incurred to address the mechanical difficulties in the ICC, increased expenditure in mining the pit at Marropino and creating the stockpile material for the new process plant and the refurbishment of the D9 bulldozer and the second drill rig.

Administrative expenses

During Half 1-2011 the Group incurred expenditure of a significant or one-off nature for the following items:

·; $215,000 (Quarter 2-2011: $50,000; Half 1-2010 and Quarter 2-2010: $nil) for annual discretionary bonuses for key management personnel, $101,000 (Quarter 2-2011: $51,000) of which was paid in Ordinary Shares of the Company. The discretionary bonuses include a $100,000 bonus paid in cash to the Chairman, Mr E F Kohn TD and $40,000 bonus paid in Ordinary Shares to the former CEO, Mr P Lawless;

·; $90,000 (Quarter 2-2011: $90,000; Half 1-2010 and Quarter 2-2010: $nil) for employee severance packages which does not include a severance package for Mr P Lawless.

·; $234,000 (Quarter 2-2011: $205,000; Half 1-2010 - $234,000; Quarter 2010- $16,000) of recruitment consultancy costs and sign on bonuses, principally for the appointment of the new CEO Mr F Fernandez-Torres and key members of the in-house Project ReStart management team, of which $45,000 (Quarter 2-2011: $25,000; Half 1-2010: $54,000; Quarter 2-2010: $nil) were paid in Ordinary Shares of the Company;

·; $175,000 (Quarter 2-2011: $nil; Half 1-2010: $98,000; Quarter 2-2010: $66,000)of costs incurred on the TSX Listing of the Company; 

·; $20,000 of costs incurred on the admission of the Company to the PLUS Quoted Market in anticipation of the admission to trading of the Company's Ordinary Shares and Convertible Redeemable Preference Shares in April 2011;

·; $533,000 (Quarter 2-2011: $162,000; Half 1-2010: $521,000; Quarter 2-2010: $398,000) of legal costs, including costs with respect to the claim against SRK Consulting (South Africa) Limited, revisions to the Company Articles of Association for the creation of the new class of Preference Shares, costs incurred with respect to the Share consolidation of the Company's Ordinary Shares, legal costs incurred in preparation for the Quarter 3-2011 fundraising which are not included within equity at 30 June 2011 (but may be written to equity in Quarter 3-2011 if the Quarter 3-2011 fundraising is successful) and various reviews and revisions to the Group's contracts and agreements;

·; $270,000 (Quarter 2-2011: $163,000) of financial consulting costs;

·; $65,000 (Quarter 2: $65,000; Half 1-2010: $415,000; Quarter 2-2010: $100,000) of consulting costs for the updated Life-of-Mine study at Morrua (2010: consulting costs directly related to the assessment of geological properties, engineering and metallurgical processing at the Marropino Mine); and

·; $nil (Half 1-2011: $nil; Half 1-2010 and Quarter 1-2010: $1,081,000)release of provisions against IVA recoverable assets reflecting the Group's revised assessment of the recoverability of the IVA balances in 2010.

Net finance income/expense

Net finance income in Half 1-2011 was $2,542,000 (Quarter 2-2011: net income of $2,991,000; Half 1-2010: net expense of $1,000; Quarter 2-2010: net income of $1,000) principally reflecting the non-cash credit for the change in fair value of $2,914,000 (Quarter 2-2011: $3,254,000; Half 1-2010 and Quarter 1-2010: $nil) on certain classes of the Group's issued warrants which are classified as derivative financial liabilities (refer to note 9.4.5). These fair value movements are reflected within net finance expense because the warrants were issued as a component part of fundraisings completed in September 2010 and September 2009. Additionally, the Group expensed $116,000 (Quarter 2-2011, Half 1-2010 and Quarter 2-2010: $nil) of initial costs incurred with respect to the arrangement of debt facilities from two European Development Banks. These facilities are no longer required due to the placing of the Convertible Redeemable Preference Shares (refer to the section of the MD&A titled 'Funds raised'). Further movements relate to $14,000 (Quarter 2-2011: $4,000; Half 1-2010: $4,000; Quarter 2-2010: $3,000) interest income received on bank deposits offset by $6,000 (Quarter 2-2011: $3,000; Half 1-2010 and Quarter 2-2010: $nil) charge on the unwinding of the discount on long-term provisions and $364,000 (Quarter 2-2011: $364,000; Half 1-2010 and Quarter 2-2010: $nil) interest charge on the CPS, of which $264,000 (Quarter 2-2011: $264,000; Half 1-2010 and Quarter 2-2010: $nil) relates to cash interest charges and $100,000 (Quarter 2-2011: $100,000; Half 1-2010 and Quarter 2-2010: $nil) relates to non-cash charges reflecting the accounting requirements for the CPS (refer to note 10).

Taxation

The Group has recorded a provision for tax expense during Quarter 2-2011 and Half 1-2011 of $10,000. 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 at the date of this report is funded solely through shareholder investment in either Ordinary Shares or Preference Shares. As at 30 June 2011, the Group's cash balance was $13,084,000. The Group forecasts cash expenditure for the remainder of 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, the funding of working capital in the phase prior to upgrade and during the ramp up of production at the plant, and the initial investment required for the assessment of the feasibility of bringing Morrua into production in 2013. The Directors believe that further equity funding of $30.0 million (pre issue expenses) will be necessary for the Group to complete the development of Marropino and provide the initial funding for the assessment of Morrua. Further equity or debt funding of an estimated $57.5 million (after issue expenses) will be necessary to implement the Group's developments plans for Morrua. Further details are provided in the section of the MD&A entitled 'Going concern'.

Cash flows from operating activities

Cash used in operating activities was $11,251,000 (Quarter 2-2011: $6,504,000; Half 1-2010: $4,512,00; Quarter 2-2010: $2,641,000) principally as a result of operating losses in the period and the increase in Ta2O5 concentrate inventory for sale (2010: due to operating losses and the deferred receipt of part of the income arising on the tantalum concentrate sales in the Quarter 1-2011 and Quarter 4-2010 in accordance with the agreed payment terms and the build-up of finished goods inventory). Non-cash items in Half 1-2011 relate principally to $198,000 (Quarter 2-2011: $57,000; Half 1-2010: $353,000; Quarter 2-2010: $139,000) share based payments expense, $2,929,000 finance income (Quarter 2-2011: $3,259,000; Half 1-2010 and Quarter 1-2010: $nil) reflecting the change in fair value of warrants which are accounted for as derivative financial liabilities, and depreciation of $301,000 (Quarter 2-2010: $197,000; Half 1-2010 $13,000; Quarter 2-2010: $5,000).

Cash flows from investing activities

Cash used in investing activities was $12,263,000 (Quarter 2-2011: $5,832,000; Half 1-2010: $457,000; Quarter 2-2010: $138,000) arising from the purchase of capital assets totalling $11,925,000 (Quarter 2-2011: $5,788,000; Half 1-2010: $461,000; Quarter 2-2010: $141,000) and exploration and evaluation expenditure of $352,000 (Quarter 2-2011: $48,000; Half 1-2010 and Quarter 2-2010: $nil) offset by $14,000 (Quarter 2-1011: $4,000; Half 1-2011: 4,000; Quarter 2-2011: $3,000) interest received. The purchase of capital assets in 2011 reflects the progression of the Marropino plant upgrade project including the ICC and mobile equipment for the initial phase of production ramp-up, deposits and stage payments on equipment for the new process plant and engineering / project management fees. Exploration and evaluation expenditure principally reflects exploratory drilling work on the Marropino Extension Pegmatite and geological consulting costs. This expenditure was impaired in Quarter 2-2011 as these Ta2O5 deposits are not economic at current prices of Ta2O5 concentrate.

Cash flows from financing activities

During Half 1-2011 the Group received $13,377,000 (Quarter 2-2011: $12,271,000) from the issue of new Ordinary Shares in the Company on the exercise of warrants and share options, the receipt of the final tranche of the September 2010 additional subscription and the issue of Convertible Redeemable Preference Shares, net of issue expenses. $116,000 of debt arrangement fees were incurred in Quarter 1-2011 on facilities which are no longer required due to the placing of the Convertible Redeemable Preference Shares. Refer to the section of the MD&A entitled 'Funds raised' for further details in financing in the periods.

Contractual obligations

At 30 June 2011 the Group had capital commitments of approximately $10,832,000 (31 December 2010: $4,724,000; 30 June 2010: $3,400,000) principally related to plant, equipment and fees required for the new process plant at Marropino including engineering contractor fees.

The Group has two off-take agreements for the majority of the Group's Ta2O5 concentrate at profitable fixed forward prices. One of these contracts was signed in 2007 and amended in 2010, and the other was signed in 2010 at market related prices at that time and amended in July 2011 (refer to the section of this MD&A titled 'Sales contracts').

The Group has commitments under operating leases for the rental of premises, with $108,000 due in 2011 and $143,000 due in 2012.

As at 30 June 2011, the Group had no further contractual commitments.

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 and new investment funds in the period prior to commissioning. The Group is currently seeking investment of $30,000,000 (pre-issue expenses) to complete the development of Marropino and to provide funds for the preliminary assessment of bringing Morrua into production during 2013.

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's authorised share capital is £7,500,000 divided into 62,500,000 Ordinary Shares of £0.008 each ('Ordinary Shares') and 7,000,000 10% Convertible Redeemable Preference Shares of £1.00 each ('Preference Shares' or 'CPS').

Ordinary Shares

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

On 11 March 2011, the Company completed a 20:1 share consolidation of the Company's £0.0004 Ordinary Shares into £0.008 Ordinary Shares. Unless otherwise noted, amounts included in this report are made with reference to the number of Ordinary Shares subsequent to the share consolidation. Comparative amounts have been adjusted for the share consolidation.

There were 26,213,280 Ordinary Shares issued and outstanding at 30 June 2011 and at the date of this report. Details of Ordinary Shares and Preference Shares issued in Half 1-2011 and Quarter 2-2011 are given in notes 11 and 10 respectively. Details of Ordinary Shares subscribed by new and existing shareholders subsequent to 30 June 2011 are provided in the section of the MD&A entitled 'Events subsequent to the balance sheet date'.

At 30 June 2011, the Company had commitments in the form of warrants, share options and bonus shares that could result in the issue of a further 4,379,553 Ordinary Shares. Additionally, as at 30 June 2011, the Company was committed to issuing 41,244 Ordinary Shares to Directors for services provided and 111,438 Ordinary Shares to employees for remuneration and sign on bonuses contractually payable in Ordinary Shares of the Company. A further 14,614 Ordinary Shares were committed to PPM. These obligations are reflected in the 'Shares to be issued' reserve, a component of the Company's and Group's 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.

At the Annual General Meeting held on 4March 2011 the shareholders granted the authority to the Directors to issue a further 3,801,732 Ordinary Shares, of which 550,944 have subsequently been issued. Authority was also granted to the Directors to allot any Ordinary Shares that may be required to be allotted in connection with any existing and outstanding options, warrants, compensation arrangements and bonuses that have been issued by the Company. This authority ends on the earlier of 4 June 2012 or the conclusion of the annual general meeting of the Company to be held in 2012.

Preference Shares

At the Annual General Meeting on 4 March 2011 the shareholders granted the authority to the Board to issue 7,000,000 Preference Shares of which 2,822,290 have been issued on 11 April 2011. Details of Preference Shares issued in Half 1-2011 and Quarter 2-2011 are provided in the section of the MD&A titled 'Funds raised' and note 10.

The Company has one class of Preference Shares which carry the right to a fixed preferential dividend at a percentage rate per annum, determined by the Board at the date of issue and payable in preference to any dividend in respect of any other class of shares. The Board may provide that different preferential dividends apply to different Preference Shares; in such an event all Preference Shares will be treated as one and the same class. Other than for the preference dividend the Preference Shares do not confer any further rights of participation in the profits of the Company.

The Preference Shares do not carry voting rights at the general meetings of the Company, except in circumstances where the business of the meeting includes consideration of a resolution which directly or adversely varies any of the rights attached to the Preference Shares, in which case the Preference Shareholders may vote in respect of such a resolution.

On winding up of the Company or other return of capital, the assets of the Company will be applied to repaying holders of the Preference Shares in priority to holders of the Ordinary Shares.

Preference Shares may be redeemed by the Company under the terms of redemption of the Preference Shares determined by the Board at the date of issue.

Preference Shares may be converted into Ordinary Shares of the Company under the terms of conversion of the Preference Shares determined by the Directors at the date of issue.

Other matters

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

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.

Funds raised

Ordinary Shares issued in Half 1-2011 for cash consideration

During Half 1-2011 the Company issued the following Ordinary Shares for cash consideration:

(1) On 11 March 2011, the Company completed a 20:1 share consolidation of the Company's £0.0004 Ordinary Shares into £0.008p Ordinary Shares. The number and issue price of Ordinary Shares included in this table relate to the number of Ordinary Shares subsequent to the share consolidation.

 (2) These Ordinary Shares were issued in Quarter 1-2011

(3) These Ordinary Shares were issued in Quarter 2-2011 to CIPAF for cash consideration. This subscription of Ordinary Shares represents the final tranche of investment subscribed by CIPAF in September 2010.

(4) Issue expenses of $104,000were incurred in Quarter 2-2011.

Details of Ordinary Shares to be issued pursuant to the August 2011 Placing, Subscription with Clawback and Open Offer are provided in section of the MD&A titled 'Events subsequent to the balance sheet date'.

Placing of Convertible Redeemable Preference Shares

In March 2011 the Group secured the placing of 2,822,290 Preference Shares (with institutional and other investors) at a price of $4.218 per CPS (the 'Issue Price') raising gross proceeds of $11,904,000 before expenses and $11,309,000 after cash expenses. The CPS have a nominal value of £1.00 each and carry an annual coupon of 10% of the Issue Price, payable quarterly in arrears. Each CPS is convertible at any time at the holders' request into one Ordinary Share in the Company. The Company may give notice of redemption at any date after 11 October 2012 at the Issue Price. The CPS will be mandatorily redeemed on 11 April 2016. The Issue Price was calculated at a 25% conversion premium to the mid-market closing price of 210.5p for the Ordinary Shares of the Company on AIM on 16 March 2011, applying the GBP/US$ exchange rate of 1:1.6031 as published in the Financial Times on 17 March 2011.

The Placing was conditional on admission of the CPS to trading on the PLUS. Admission to PLUS was granted on 11 April 2011, at which date the placing became unconditional. The placing was recorded in the financial statements of the Group in Quarter 2-2011.

In connection with the placing the Group issued warrants to the placing agents over 168,985 Ordinary Shares at a subscription price of 210.5p per Ordinary Share.

The net proceeds of the placing are being utilised to:

·; fund Project ReStart; and

·; provide the Group with additional working capital.

On 19 August 2011, the Group announced proposals to alter the terms of the CPS. Further details are provided in section of the MD&A titled 'Events subsequent to the balance sheet date'.

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 to the issue of new Ordinary Shares for cash consideration of up to $30,000,000 pre-issue expenses to fund the Plan, the terms of which have not yet been finalised.

Transactions with related parties

During Quarter 2-2011, consulting services were provided by certain Directors, and / or companies in which they have a beneficial ownership, amounting to $566,000 (Half 1-2011 - $1,059,000; year ended 31 December 2010 - $1,572,000; Quarter 2-2010 - $298,000; Half 1-2010- $529,000). $253,000 (Half 1-2011 - $596,000; year ended 31 December 2010 - $1,207,000; Quarter 2-2010 - $298,000; Half 2-2010 - $529,000) of these fees are included in the Condensed consolidated statement of comprehensive loss as Administrative expenses; $150,000 (Half 1-2011 - $300,000; year ended 31 December 2010 , Quarter 2-2010 and Half 2-2010 - $nil) is included in Assets under construction, a component of the Group Property, plant and equipment balance; $163,000 (Half 1-2011, year ended 31 December 2010, Quarter 2-2010 and Half 2-2010 - $nil) is included as Issue expenses for Convertible Redeemable Preference Shares and $nil (Half 1-2011, Quarter 2-2010 and Half 2-2010 - $nil; year ended 31 December 2010 - $365,000) is included in the Share premium account. Full details are provided in note 13. 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.

Events subsequent to the balance sheet date

Renegotiation of off-take agreements

In July 2011 the Group renegotiated one of its off-take agreements allowing the Group to take advantage of part, but not all, of the recent market increase in the price of Ta2O5 concentrate. In August 2011, the same off-take agreement was renegotiated to allow the Group to ship Ta2O5 concentrate to a different specification which does not fall within the category of Class 7 material for international shipping purposes.

Subsequent to the above amendments, the Group's two off-take agreements cover combined deliveries of 350,000 lbs of contained Ta2O5 in 2011 and 550,000 lbs contained Ta2O5 per annum in 2012 and 2013. Both contracts contain options exercisable at the buyers request covering combined annual deliveries of 470,000 lbs contained Ta2O5 in 2014 and 2015. A further minimum 200,000 lbs of contained Ta2O5 must be delivered any time before the end of 2014. Any shortfalls on deliveries in any contract year are carried forward, with a fixed price decrease per lb delivered to H.C. Starck on any shortfall deliveries. One of the agreements also includes option rights over any additional production from any of the Groups concessions during the agreement life (i.e. until 31 December 2015). The current spot price of Ta2O5 concentrate is $130 per lb of Ta2O5. Only a small proportion of Ta2O5 concentrate is traded on the spot market and the prices are volatile. There are no exchange traded contracts for Ta2O5. Most Ta2O5 worldwide is supplied under off-take agreements with refiners. The Group's off-take agreements have multiple pricing points and are at a 31-61% discount to the current spot price.

Placing, Subscription with Clawback, Open Offer and related party transactions

On 19 August 2011, the Company secured irrevocable commitments from new and existing shareholders to subscribe for 91,100,000 new Ordinary Shares, raising approximately $37,578,750 (£22,775,000) (before expenses) through a Placing and Subscription with Clawback.

The Placing

The Company placed 73,600,000 Placing Shares at 25 pence per Ordinary Share (the 'Issue Price') with both new and existing institutional and other investors, raising approximately $30,360,000 (£18,400,000) (before expenses), conditional only on admission of the Ordinary Shares to trading on AIM. An application has been made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission to AIM will become effective and that dealings will commence in the Placing Shares on 25 August 2011. It is expected that Admission to PLUS will also become effective and that dealings will commence in the Placing Shares on 25 August 2011. Application will also be made to list the Placing Shares on the TSX.

Mr R.J. Fleming, who was, immediately prior to the Placing, a Substantial Shareholder and Related Party of the Company for the purposes of the AIM Rules for Companies, has agreed to subscribe for 1,400,000 Placing Shares. Ekasure Limited, a company in which John Allan, a director of the Company, has a beneficial interest, has agreed to subscribe for 40,000 Placing Shares. Dr Goran Berglund, a director of the Company, has agreed to subscribe for 400,000 Placing Shares. Mr Fernando Fernandez-Torres, a director of the Company, has agreed to subscribe for 32,000 Placing Shares. The Directors (other than the director concerned in the subscription), have consulted with Religare Capital Markets (UK) Limited, the Company's AIM nominated adviser, and believe the terms of these subscriptions to be fair and reasonable insofar as shareholders are concerned.

Following the Placing, the Company will have 100,183,766 Ordinary Shares in issue. The Company does not hold any Ordinary Shares in treasury.

Religare Capital Markets plc will receive 3,018,253 warrants to subscribe for Ordinary Shares with an exercise price of 25 pence per Ordinary Share, exercisable for two years from the date of Admission on AIM of the Placing Shares, in relation to its work on the Proposals. Jacob Securities Inc. will receive 339,884 Ordinary Shares and 947,884 warrants to subscribe for Ordinary Shares with an exercise price of 25 pence per Ordinary Share, exercisable for two years from the date of Admission on AIM of the Placing Shares, in relation to its work on the Proposals.

The Subscription with Clawback and arrangements with Richmond

Pursuant to the Placing, 12,442,750 Placing Shares have been placed firm with Richmond Capital LLP/Richmond Master Fund Limited (collectively 'Richmond'), representing approximately 12.42 per cent. of the enlarged issued ordinary share capital of the Company, upon completion of the Placing. Richmond holds 1,977,800 Ordinary Shares, being 7.55 per cent. of the Company's existing issued ordinary share capital, as at the date of this announcement. Following the Placing, Richmond will have an interest in 14,420,550 Ordinary Shares, being 14.40 per cent. of the Company's issued ordinary share.

The Company has also entered into the Subscription Agreement with Richmond. Pursuant to the Subscription Agreement, Richmond has conditionally agreed with the Company (subject to admission of the Subscription Shares to AIM, the TSX and PLUS) to subscribe for 17,500,000 Subscription Shares in two equal tranches on 30 November 2011 and 31 December 2011. The amount of these subscriptions can be scaled back at the Company's election and will be so scaled back by the Company to the extent that there are valid applications from participants under the Open Offer. In the event that the proposed Open Offer does not proceed, regardless of the reason or cause, then (subject to admission of the Subscription Shares as mentioned above) Richmond will remain obligated to subscribe for the Subscription Shares pursuant to the terms of the Subscription Agreement. Assuming that all of the 17,500,000 Subscription Shares are issued to Richmond (as well as the Placing Shares which it is firmly committed to acquire) then Richmond would hold approximately 27.13 per cent. of the Company's enlarged issued ordinary share capital, following completion of the Proposals but ignoring the impact of the Preference Redemption (refer below).

If all the Offer Shares are subscribed for by Shareholders (including Richmond) then Richmond will hold approximately 14.39 per cent. of the enlarged issued ordinary share capital, ignoring the impact of the preference redemption.

As part of the terms of Richmond's commitment to subscribe for the Subscription Shares subject to the Subscription with Clawback, Richmond will, on the first business day after 31 December 2011, receive 17,500,000 warrants to subscribe for Ordinary Shares with an exercise price of 25 pence per Ordinary Share, exercisable for a period of two years from the date of their issue. Further warrants will be issued to Richmond on the same terms with an exercise value equivalent to Richmond's agreed legal expenses in relation to the Subscription Agreement. Assuming that all of the 17,500,000 Subscription Shares are issued to Richmond (as well as the Placing Shares which it is firmly committed to acquire) and that Richmond were to exercise all 17,500,000 warrants, then Richmond would hold approximately 36.57 per cent. of the Company's enlarged issued ordinary share capital, following completion of the Proposals but ignoring the impact of the Preference Redemption (refer below).

Richmond Partners Master Limited is an exempted company incorporated with limited liability in the Cayman Islands. Richmond Capital LLP (who are regulated by the UK Financial Services Authority) has been appointed to manage and invest the assets of Richmond. The Directors, who have consulted with Religare Capital Markets (UK) Limited, the Company's nominated adviser, believe the terms of these arrangements with Richmond, to be fair and reasonable insofar as Shareholders are concerned.

The Open Offer

In order to provide Shareholders with the opportunity to participate in the fund raising, the Board intends, subject to regulatory approvals, to offer Shareholders on the register at the Record Date the opportunity to subscribe for up to 17,500,000 new Ordinary Shares at the Issue Price, thereby raising up to a further approximately $7,218,750 (£4,375,000) (before expenses).

The Open Offer will be structured so as to allow Shareholders to subscribe for Offer Shares at the Issue Price pro rata to their existing holdings. The Open Offer will also allow Shareholders to make excess applications for Offer Shares, over and above their pro rata entitlement.

It is intended that, subject to regulatory approvals, a circular regarding the Open Offer will be sent to Shareholders in due course and this will provide further details as regards the Open Offer process and timetable. While it is the Board's current intention that the Open Offer will proceed, there can be no guarantee that this will happen.

Proposed restructuring of Convertible Redeemable Preference Shares

In combination with the Placing, Subscription with Clawback and Open Offer, the Board intends to provide Convertible Redeemable Preference Shareholders with an opportunity to have their convertible Redeemable Preference Shares ('CPS') redeemed earlier than previously agreed, whether in whole or in part, and to receive new Ordinary Shares as consideration for such redemption. The Preference Redemption is expected to be calculated on the basis of the CPS being redeemed at their original issue and redemption price of $4.218 plus any accrued but unpaid fixed rate dividend and reinvested into new Ordinary Shares at the Issue Price.

The Preference Redemption will require an amendment to the terms and conditions of the Preference Shares which will need to be approved by Preference Shareholders at a class meeting. Such meeting will be convened at the earliest opportunity and the Board will send notice of the meeting to Preference Shareholders in due course.

The Preference Redemption is being undertaken, inter alia, in order to provide Preference Shareholders with the opportunity to participate in the recapitalisation of the Company, at the Issue Price. As referred to below, the Preference Redemption should provide additional benefits to the Company's future cash flows.

Following the release of the announcements made by the Company on 2 and 3 June 2011, concerns were raised with the Board by certain of the Preference Shareholders regarding the Company's financial position, the circumstances that required the making of those announcements, and the consequential requirement, then disclosed, to undertake a further fund raising. The Board believes that the Proposals and the Preference Redemption will address those concerns, whilst at the same time offering additional benefits referred to below.

In the event that all of the Preference Shareholders elect to have their shares redeemed, then it would result in the issue of approximately a further 28,859,198 new Ordinary Shares and would, in addition, provide a cashflow benefit for the Company as annual dividend payments of approximately $1,190,442 (£721,480) would no longer be payable and it would also remove the current requirement to redeem the CPS on 11 April 2016 in accordance with their terms.

Assuming full redemption, the new Ordinary Shares issued pursuant to the Preference Redemption would equate to 19.69 per cent. of the Company's enlarged issued ordinary share capital following completion of the Placing, the Subscription with Clawback and the Open Offer.

Any new Ordinary Shares to be issued pursuant to the Preference Redemption will be credited as fully paid and will, on issue, rank pari passu with the Existing Ordinary Shares.

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 2010, 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 on-going 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 Board has 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

At 30 June 2011 the Group had tangible fixed assets with a carrying value of $15,431,000, the recoverability of which is dependent on the Group's ability to finalise the new process plant at the Marropino Mine and realise forecast budgeted results of operations at Marropino. In February 2011, the Group finalised the detailed design on all circuits of the new processing plant at the Marropino Mine confirming the Group's estimate (subject to exchange rate variations) of the capital investment required in order for the Marropino Mine to generate positive cash inflows and the phases, and timing, of the Marropino Mine restart programme. In accordance with the Plan, the Group has completed the second phase of production ramp up at Marropino, with the purchase and construction of the ICC which will allow the Marropino Mine to approach cash break even on operations from August 2011. Accordingly, the Directors are of the opinion that the carrying value of tangible fixed assets is recoverable, subject to further shareholder investment of $30,000,000 which is required for the Group to be able to finalise the new process plant at Marropino and fund working capital requirements in the Group.

Impairment of intangible fixed assets

The Group's intangible assets relate principally to the Morrua mining concession in the Zambezia Province of Mozambique to which the Group has full legal title. The intangible asset, representing acquisition costs of the mining concession, was impaired during financial year 2008 due to significant uncertainties regarding the extent and timing of any development of the concession. During Quarter 2-2011 the Group completed an updated Life-of-Mine study for Morrua. Subject to funding being obtained for the Group's operations as outlined above, the Group plans to complete a programme for further geological, metallurgical and engineering studies at Morrua in Quarter 2-2012. If a viable resource is determined, the Group plans to bring Morrua into production by the end of 2013, subject to appropriate market conditions. The development of Morrua will need to be funded through external funding (shareholder investment or loan arrangements). The timing of any development in this mining concession remains uncertain. The remaining life of the estimated reserves in Morrua amounts to 7.5 years if the Mine produces at c600,000 lbs contained Ta2O5 per annum with a comparable recovery rate to that obtained at Marropino. If the Group is successful in establishing the commercial viability of Morrua, part or all of the impairment of intangible fixed assets may be written back. The Directors remain optimistic for the development of the concession.

Recoverability of input Value Added Tax

Mozambique Value Added Tax ('IVA') operates in a similar manner to UK Value Added Tax. 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 of $1,611,000 at the US Dollar to Metical exchange rate of 27.5. As at 30 June 2011, the gross and net IVA recoverable assets are respectively $1,825,000 and $1,204,000 at the US Dollar to Metical exchange rate of 28.00.

In August 2010, $502,000 of the IVA recoverable was approved and subsequently paid by the Mozambique Tax Authority. During 2010, the Group released $1,081,000 of the provision against IVA recoverable assets (measured at the 31 December 2009 US Dollar to Mozambique Metical exchange rate of 27.5) reflecting the refund of IVA due and the revised assessment of the recoverability of the remaining IVA balances.

As at 30 June 2011, the Group has an expectation that $1,204,000 of the IVA recoverable balances will be collected in an orderly and timely manner. The remaining IVA recoverable balance of $621,000 remains provided against, with recovery subject to 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.

Warrants

Certain warrants issued by the Group are classified as derivative financial liabilities as the warrants were issued in a currency other than the functional currency of the Company. At each reporting date the fair value of the warrants is measured using a Black-Scholes valuation model, with changes in the fair value of the warrants recorded in the Consolidated statement of comprehensive loss within finance income/expense. The valuation is sensitive to the inputs in the valuation model, some of which require judgment. The warrants do not create any obligation on the Company other than to deliver shares in the Company for a fixed price at the option of the holder, over the life of the warrants. Further details are provided in note 9.4.5.

Convertible Redeemable Preference Shares

On 11 April 2011 the Group issued $11,904,000 (pre issue expenses) of Convertible Redeemable Preference Shares. While the CPS in legal form are part of the Capital Stock of the Company, IAS 32, 'Financial Instruments: Presentation', requires the Group to identify the equity and liability component parts of the instrument and assign a value to each. Identification and valuation of the components requires management to exercise judgment. Full details are provided in note 10.

Country of incorporation Jersey, Channel Islands

Registration number 95036

Legal form Public listed company

Shares Listed AIM Market of the London Stock Exchange ('AIM')

RIC Code - NVTA

Toronto Stock Exchange ('TSX')

Stock symbol - NTA

CUSIP - G6682U108

ISIN - JE00B1RPM978

PLUS Quoted Market ('PLUS')

Symbol - NV

Registered address Third Floor, Mielles House

La Rue des Mielles

St Helier

Jersey, JE2 3QD

Channel Islands

Telephone: +44 (0)1534 869 403

Fax: +44 (0)1534 866 859

Email: [email protected]

Website: noventa.net

Directors Mr E F Kohn TD (Executive Chairman)

Mr P Lawless (Chief Executive Officer until 5 May 2011) (resigned 5 May 2011)

Mr J N Allan (Chief Executive Officer from 5 May 2011) (formerly Non-Executive Director)

Mr F Fernandez-Torres (Appointed Chief Executive from 1 August 2011 and Chief Executive Officer elect from Q4-2011)

Mr T J Griffiths (Non-Executive Director) (resigned 28 June 2011)

Dr E J Martin (Non-Executive Director)

Mr G Coltman (Non-Executive Director)

Mr L Heymann (Non-Executive Director) (deceased 26 May 2011)

Mr K Chung (Non-Executive Director) (resigned 11 April 2011)

Mr I Benning (Non-Executive Director) (appointed 13 April 2011)

Prof L Berglund (Non-Executive Director) (appointed 13 April 2011)

Management Noventa Limited:

Mr E F Kohn TD (Chairman)

Mr J N Allan (Chief Executive Officer)

Mr D L Cassiano-Silva (Chief Financial Officer)

Highland African Mining Company Limitada:

Mr D M Whitehouse (Chief Projects Officer)

Mr D D Darsamo (Director & Marropino Mine General Manager)

Mr N Norris (Director & Metallurgical Manager)

Mr L N Juliasse (Human Resources Manager)

Company secretary FML Corporate Services Limited

(formerly Grange Corporate Services Limited)

Third Floor, Mielles House

La Rue des Mielles

St Helier

Jersey, JE2 3QD

Channel Islands

Email: [email protected]

Auditors Deloitte LLP

London Gatwick Office

Global House

High Street, Crawley

West Sussex, RH10 1DL

England

Legal advisors In the United Kingdom:

Skadden, Arps, Slate, Meagher & From (UK) LLP

40 Bank Street

Canary Wharf,

London, E14 5DS

England

In Jersey:

Carey Olsen

47 Esplanade

St. Helier

Jersey, JE1 0BD

Channel Islands

In Mozambique:

Sal & Caldeira

Avenida Julius Nyerere, 3412

Maputo, 2830

Mozambique

In South Africa:

Webber Wentzel

10 Fricker Road

Illovo Boulevard

Johannesburg, 2107

South Africa

In Canada:

Blake, Cassels & Graydon LLPCanadian Barristers & Solicitors23 College Hill5th FloorLondon EC4R 2RP

England

Nominated advisor Religâre Capital Markets (UK) Limited

100 Cannon Street

London, EC4N 6EU

England

Corporate broker Religâre Capital Markets plc

100 Cannon Street

London, EC4N 6EU

England

AIM AIM market of the London Stock Exchange

TSX Toronto Stock Exchange

PLUS PLUS Stock Exchange

Ta2O5 Tantalum pentoxide

CIM Canadian Institute of Mining, Metallurgy and Petroleum's

IFRS International Financial Reporting Standards

IRR internal rate of return

kg kilogramme

klb thousand pounds

km kilometre

lb pound

lbs pounds

m metre

mlbs million pounds

Mt million tonnes

NPV net present value

p or GBp Pence, 100th of one Pound Sterling, legal currency of the United Kingdom

pa per annum

ppm parts per million of Ta2O5

$ or US$ US Dollar, legal currency of the United States of America

£ or GBP Pound Sterling, legal currency of the United Kingdom

Mining concession land where the Group has a granted right to extract economic minerals including, but not limited to Ta2O5

Mining licence land where the Group has a granted right to explore for economic minerals including, but not limited to Ta2O5

Quarter 1 The three month period ended 31 March of the Company's financial year ended 31 December

Quarter 2 The three month period ended 30 June of the Company's financial year ended 31 December

Quarter 3 The three month period ended 30 September of the Company's financial year ended 31 December

Quarter 4 The three month period ended 31 December of the Company's financial year ended 31 December

Half 1 The six month period ended 30 June of the Company's financial year ended 31 December

Half 2 The six month period ended 31 December of the Company's financial year ended 31 December

Contained Ta2O5 The amount Ta2O5 which is contained in a concentrate

Mineral Resource - A 'Mineral Resource' is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth´s crust in such a form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.

Inferred Mineral Resource - An 'Inferred Mineral Resource' is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

Indicated Mineral Resource - An 'Indicated Mineral Resource' is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

Measured Mineral Resource - A `Measured Mineral Resource` is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are so well established that they can be estimated with confidence sufficient to allow appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

Note - Definitions of mineral resource, inferred mineral resource, indicated mineral resource and measured mineral resource are based on the Canadian Institute of Mining, Metallurgy and Petroleum's code for the reporting of Mineral Resources and Mineral Reserves.