Jennings gives $11.85 NPV and target(This is a text excerpt of the original report at the Jennings Capital website. The original report contains better formatting and color graphs and charts, and is superior to what is shown here. I am in no way affiliated with Jennings Capital but am posting this report as a convenience to you. TC)
JENNINGS CAPITAL, INC. REPORT
Please see important disclosures on pages 33 and 34.
March 22, 2011
Recommendation: BUY
EAST ASIA MINERALS CORPORATION 12-Month Target: C$11.85
(TSXV-EAS C$5.80) Risk Rating: AVERAGE
INITIATING COVERAGE
ONE PLUS ONE EQUALS THREE
?? Miwah to report maiden resource in early Q2/2011
EAS has an 85% interest in the world-class Miwah deposit
which, in our view, ultimately has the potential to become a
+15 million oz gold project. The Company is currently
drilling the main Miwah and anticipates outlining an NI 43-
101 resource estimate in early Q2 2011.
?? Sangihe already has 1 million oz of gold resource
The Company recently put out an NI 43-101 inferred
resource estimate of 27.3 million tonnes averaging
0.95 g/t gold and 13.58 g/t silver, for 0.84 million oz gold
and 11.9 million oz of silver in near and at surface oxides
and sulphides. These results were based on 79 drill holes
and almost 1,700 surface samples. The resource estimate
is contained within two separate bodies, the Binebase and
Bawone, separated by approximately 1 km of shallow
untested cover. The mineralization remains open at both
prospects.
?? Upcoming Catalysts
?? More drill results from Miwah
?? NI 43-101 resource estimate on Miwah in April
?? Spin-out of the three separate entities
?? Advance exploration and expansion of initial NI 43-101
resource estimate at Miwah
?? Commence Miwah metallurgical, environmental and
scoping studies 2011
?? Initiate pre-feasibility study
?? Advance exploration and gold zone expansion at
Sangihe and Abong epithermal gold projects
?? Continue Barisan gold-copper porphyry belt drilling
We estimate the company will report +4 million oz of gold in
the initial resource estimate at Miwah. Based on an average
gold production of 423,000 oz at a total cash cost of
US$386/oz and development capex of US$450 million, we
arrive at our net present value of US$683.3 million for Miwah.
We ascribe US$100/oz in the ground for Sipopok (our
estimate of 2 million oz of gold) and Sangihe and a nominal
value of US$60 million to all of the other properties, to come
up with a net asset value of C$11.83 per share.
We are initiating coverage on East Asia Minerals Corporation
with a BUY recommendation and C$11.85 target price.
Sector: METALS AND MINING
Analyst: ALKA SINGH, CFA, MBA, B.SC.
e-mail: alka.singh@jenningscapital.com
Tel: (416) 304-3964 Fax: (416) 214-0177
East Asia Minerals Corporation is a Canadian-based mineral
exploration company with mining assets across gold and copper
exploration properties in Indonesia and uranium exploration
properties in Mongolia. The Company is headquartered in
Vancouver, Canada, and has operational offices in Jakarta,
Indonesia and Ulaan Baatar, Mongolia.
Company Statistics
Market Cap. C$446.6 million
Basic Shares O/S (MM) 77.0 million
Fully Diluted Shares O/S (MM) 83.5 million
52-Week Range C$4.80 - C$8.73
Cash and Equivalents (03/31/2011) C$14.3 million
Total Debt (03/31/2011) n/a
Enterprise Value C$432.3 million
JCI Estimated Miwah Gold Resource
East-West Direction 1,000 m
North-South Direction 400 m
Depth 100 m
Specific Gravity 2.3
Total Tonnes of Rock (MM tonnes) 92
Average Gold Grade (g/t) 1.50
Expected Gold Resource (MM oz) 4.44
2
TABLE OF CONTENTS
INVESTMENT SUMMARY ............................................................................................ 3
INVESTMENT POSITIVES............................................................................................ 3
INVESTMENT RISKS .................................................................................................. 4
NEAR-TERM CATALYSTS .......................................................................................... 5
CORPORATE OVERVIEW ........................................................................................... 6
VALUATION.............................................................................................................. 7
PROJECTS AND PROPERTIES .................................................................................... 9
PROJECTS IN INDONESIA............................................................................... 10
PROJECTS IN MONGOLIA .............................................................................. 27
SHARE CAPITALIZATION ......................................................................................... 30
MANAGEMENT AND BOARD OF DIRECTORS ............................................................. 31
DISCLOSURES........................................................................................................ 33
3
INVESTMENT SUMMARY
We are initiating coverage on East Asia Minerals Corporation with a BUY
recommendation and 12-month target price of C$11.85, which represents 1x our
net asset value (NAV) of C$11.83/sh for EAS.
East Asia Minerals Corporation (“East Asia”, “EAS” or the “Company”) is a Canadianbased
mineral exploration company with mining assets across gold and gold-copper
exploration properties in Indonesia, and uranium and phosphate exploration properties in
Mongolia. The Company is headquartered in Vancouver, Canada, and has operational
offices in Jakarta, Indonesia and Ulaan Baatar, Mongolia. The Company’s shares are
listed on the TSX Venture Exchange under the symbol “EAS”.
The flagship project for East Asia is the Miwah tenement in the Aceh Province of
Indonesia, where the Company is currently drilling to have an NI 43-101 compliant
resource estimate by early Q2 2011.
Our target price of C$11.85 per share for EAS is based on our estimated net asset value
of C$11.83/share. We have based our estimates for the capital costs and operating costs
on the nearby Martabe Mine, which is expected to be in production by Q4/2011.
INVESTMENT POSITIVES
First mover advantage
East Asia Minerals Corporation was the first mining exploration company to go into the
Aceh Province, and it acquired approximately 400,000 hectares of land for exploration in
2006, ahead of the senior mining companies. The Company did a laudable job of
acquiring known bulk tonnage gold and gold-copper discoveries, made by mining
companies in the early-mid 1990s but abandoned due to non-technical reasons.
New Mining Law in Indonesia - largely positive for EAS
The New Mining Law was approved by the Indonesian legislature in December 2008 and
signed by the President in January 2009. Under the Old Mining Law, mineral exploration
and mining activity in Indonesia was conducted under either a Mining Authorization
("KP") and/or a Contract of Work (CoW), which was issued by the Central Government.
The New Mining Law grants permits through the issuance of the mining license or IUP.
The IUP is granted in two stages, namely the Exploration IUP and the Operation
Production IUP. The New Mining Law guarantees that the holder of the Exploration IUP
will be consecutively granted the Operation Production IUP. East Asia has recently
received a licence that confirms conversion of the Miwah tenements to Ijin Usaha
Pertambangan (IUP "Mining Licence"). The IUP allows the Company three years to
complete exploration and a feasibility study which could be extended to five years, after
which the licences are converted to development licences for an initial 20-year term and
are renewable for another 20 years (two 10-year terms). In addition, East Asia has
received IUPs for all of its Aceh properties, totalling five tenements.
Miwah has the potential to become a +15 million oz gold deposit
The Miwah tenement is in a similar volcanic setting and is comparable in size to (or larger
than) the Martabe gold-silver deposit (5.5 million oz gold and 60 million oz silver); also
located in North Sumatra. We believe that the Miwah tenement (including Miwah Main,
South Miwah Bluff and Moon River) contains in excess of 10 million oz gold. If we include
Sipopok, which is 1.5 km to the north of the Main Miwah, the Miwah tenement could host
4
over 15 million oz of gold. With the limited work done on Sipopok, the deposit has the
potential to be half the size of the Main Miwah deposit.
We expect Miwah initial resource north of 4 million oz of gold
Based on the current scope of the mineralization at Miwah Main Zone, Miwah South Bluff
and Moon River, the Miwah project could host over 15 million oz of gold. The Miwah
Prospect, including the Signal area, is currently at 1,600 metres in the east-west
direction and greater than 600 metres in the north-south direction and has vertical
thickness of approximately 100-125 metres. Using these dimensions and an estimated
density of 2.3 t/m3 suggests potential for +200 million tonnes. With an average grade of
1.6 g/t, a potential resource of +10 million ounces is plausible, in our view. Our initial
estimate of +4 million oz of gold is calculated based on 1,000 metres in the east-west
direction, 400 metres in the north-south direction, 100 metres vertical depth,
2.3 t/m3 and an average gold grade of 1.5 g/t.
Exhibit 1: East Asia’s Properties, along with Location of Multi-million Ounce
Deposits in the Area
Source: East Asia Minerals
INVESTMENT RISKS
No formal mineral resource or economic study
East Asia’s various properties across Indonesia and Mongolia are currently in the
development phase. The Company is drilling the properties in anticipation of outlining a
resource estimate in the future. There is always risk associated with mining projects,
especially when they have no reserves/resources identified.
5
Forestry permit - not a significant concern, in our view.
Some parts of the Miwah Project are located in a forestry protected area. The Company
is confident it will receive a land-reclassification, which will allow Miwah to be mined as
an open-pit. We believe that the land re-classification will be obtained; however, investors
should note that the forestry permits are not required until the Company makes a
production decision.
Political and Environmental Concerns
The Company’s primary assets are located in Aceh, Indonesia and Mongolia, which
should be considered high-risk regions from a political standpoint. Any political
uncertainty or labour disruptions could be a negative for the Company. Environmental
concerns, while not an issue currently, could present development challenges in the
future. However, East Asia is pro-active in this regard; having conducted base-line
studies on its properties prior to exploration, and maintains ongoing community relations
programs and communications in all of its project areas.
Technical Risks
East Asia has a number of properties across Indonesia and Mongolia that are currently
exploration stage. The Company is drilling these properties to estimate the resource
potential. There are always risks associated with mining projects, especially when they
are in the early stages of exploration.
Commodity Price Risk
East Asia’s properties are mainly mineralized with gold, copper and uranium reserves. As
with the forecasting of any commodity market, there are key risks to our current
expectations for the global gold, copper and uranium market and our price forecasts.
Foreign Exchange Risk
As East Asia’s operations are spread across Canada, Indonesia and Mongolia, the
Company is exposed to foreign exchange risks arising from its international transactions.
The Company reports financials in C$ and, as a result, any fluctuation in the exchange
rate between the operating currency relative to the reporting currency will have an impact
on the reported earnings and value of the Company’s assets and liabilities.
NEAR-TERM CATALYSTS
?? More drill results from Main Miwah, approximately 73-77 holes planned for NI 43-101
resource estimate expected in early Q2/11
?? Spin out of assets into three different companies by June
?? Advance exploration and expansion of initial NI 43-101 resource estimate at Miwah
?? Commence Miwah metallurgical, environmental and scoping studies 2011
?? Initiate pre-feasibility study
?? Advance exploration and gold zone expansion at Sangihe and Abong epithermal gold
projects
?? Continue Barisan gold-copper porphyry belt drilling
6
CORPORATE OVERVIEW
East Asia Minerals Corporation is a Canadian-based mineral exploration company with
mining interests across gold and gold-copper exploration properties in Indonesia, and
uranium and phosphate exploration properties in Mongolia. The Company is
headquartered in Vancouver, Canada, and has operational offices in Jakarta, Indonesia
and Ulaan Baatar, Mongolia. The Company’s shares are listed on the TSX Venture
Exchange under the symbol “EAS”.
The Company has gold and gold-copper deposits in Aceh Province and North Sulawesi
in Indonesia. EAS is currently in the process of completing an NI 43-101 resource
estimate drilling program on the Miwah bulk tonnage project.
Among the other projects, the near-surface Sangihe (Binebase-Bawone zones) and
Abong (Barisan 1 tenement) gold projects are the most advanced. The Company also
owns seven uranium and two phosphate properties in Mongolia.
The Company sold its wholly-owned Mongolian subsidiary, EAM Energy LLC and paid its
shareholders a cash dividend of C$1.30 per share (C$70.3 million) in October 2007.
EAS completed a private placement of C$18.9 million in June of 2009, and currently has
almost C$12 million in cash and no long-term debt.
On March 4, 2011, East Asia announced the set-up of three wholly owned subsidiaries
and the transfer of most of the non-Miwah assets: Sangihe Gold Corporation will be the
precious metals exploration company focused on eastern Indonesia; Barisan Gold is to
become a gold-copper porphyries company (including Abong epithermal gold project and
Takengon gold-copper project, all in Aceh Province in Indonesia); and East Asia Energy
Corporation will become a Mongolian mining and energy company.
Exhibit 2: East Asia Proposed Structure Helps Unlock Value for Non-Miwah Assets
Sangihe Gold Corp.
Miwah Gold (85%)
Indonesia (North Sulawesi)
EAST ASIA MINERALS CORP.
Mongolia Indonesia (Aceh Province)
Ingiin (100%) Tangse (80%)
Barisan 1 (80%)
Barisan 2 (80%)
Enger Ar (100%)
Ulaan Nuur (100%)
Uranium Properties
Gold & Copper Properties
Takengon (75%)
Indonesia (Aceh Province)
Sangihe (70%)
East Asia Energy Corp. East Asia Minerals Barisan Gold Corp.
Bukht Uul (100%)
Unegt (100%)
Hutul (100%)
Sevsuul Bulag (100%)
Source: Jennings Capital Inc.
7
Exhibit 3: Miwah Project Details
Project/mine Name: Miwah
Location North Sumatra, Indonesia
Ownership 85%
Type of Mine Open-pit
Primary Metal Gold
Throughput 10 Mtpa
Production Early-2015
Expected mine life (years) 10+ years
Estimated Resources 100 Mt @ 1.5 g/t Au
Current Status NI 43-101 resource estimate due soon
Source: Jennings Capital Inc.
Exhibit 4: East Asia General Parameters
Ticker(s) EAS:TSX-V
Shares outstanding (million) 1 24.1
Fully-Diluted Shares Outstanding (million) 1 68.8
Average Daily Volume (‘000s) 248.0
Head office Vancouver, Canada
Location of Projects Indonesia and Mongolia
Expected Gold Resources
Resources (million oz) +4
Average Expected Mine Life Based on Resources
Miwah 10+ years
Total Gold Production (000 oz)
FY2015E 444.1
FY2016E 441.5
FY2017E 439.0
FY2018E 434.0
Cash Cost (US$/oz)
FY2015E $367
FY2016E $369
FY2017E $371
FY2018E $376
00
VALUATION
Initiating coverage with a BUY recommendation and 12-month target of C$11.85
East Asia is currently working on an NI 43-101 compliant resource estimate for its Miwah
gold project in Indonesia. The Company has yet to complete a scoping study, which
makes it difficult for us to build a financial model for its projects.
We have made assumptions based on the feasibility study of the Martabe Gold Project,
located 100 km south-east of Miwah. Based on a resource estimate of 4 million oz of
gold, average annual production of 423,000 oz gold at a total cash cost of US$386/oz,
8
gold recoveries of 80% and development capex of US$450 million (we are being very
conservative here), we arrive at our net present value of US$683.3 million for the Miwah
Project.
We are valuing Sipopok (our estimate of 2 million oz gold) and Sangihe at US$100/oz in
the ground and all the other exploration properties at a nominal value of US$60 million.
Our target price of C$11.85 per share for EAS is based on our net asset value of
C$11.83/share.
Exhibit 5: Uranium Resources - Net Asset Value Breakdown
NPV per project C$ MM
Miwah @ 12% discount rate 683.3
Sipopok (85% interest in 2 Moz @ US$100/oz) 170.0
Sangihe (70% interest in 0.8 Moz @ US$100/oz) 58.8
Other exploration projects 60.0
Proceeds from Exercise of Options/ Warrants (C$ MM) 4.0
Net cash 12.0
LT Debt 0.0
Net Asset Value 988.1
Total FD Shares Outstanding (MM) 83.5
NAV Per Share (C$) $11.83
Source: Jennings Capital Inc.
East Asia shares are trading at 0.5x NAV
East Asia shares are trading at 0.5x our estimated net asset value of C$11.83 per share,
which is on the lower end of the other gold exploration companies that are trading at 1.5 -
2.5x their NAV We believe that Miwah is a world-class gold deposit and EAS shares
should start trading at least 1x NAV.
East Asia shares are significantly undervalued compared to the peer group
We compare adjusted market cap per ounce of gold resources of East Asia (our estimate
of 4 million oz of gold for Miwah and 0.9 million oz at Sangihe) to adjusted market cap per
ounce of International Tower Hills, Detour Gold, Guyana Goldfields, Osisko, Romarco,
Ventana Gold and Fronteer Gold. East Asia shares seem to trade at US$80/oz compared
to the average of US$250/oz for the group.
9
Exhibit 6: Adjusted Market Cap/oz of Resource
$50
$100
$150
$200
$250
$300
$350
$400
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
Average of peer group (market cap/oz of resources)
Market cap/oz of resources
Companies Average
Source: Jennings Capital Inc.
PROJECTS AND PROPERTIES
East Asia’s mining properties are spread across Indonesia and Mongolia
East Asia currently does not have any operating facilities and is still exploring and
developing its properties in Indonesia and Mongolia for mineral resources. The Company
has joint ventures in six highly prospective epithermal gold and porphyry gold-copper
properties in Indonesia. These properties have several advanced projects with identified
mineralization and the potential to host multi-million ounce gold resources. Further, the
Company has seven uranium properties (including the advanced Ingiin-Nars, Ulaan Nuur
and Enger uranium projects) and two phosphate properties in Mongolia.
10
Exhibit 7: East Asia’s Project Ownership Structure
EAST ASIA MINERALS CORP.
(MAJOR PROPERTIES)
Indonesia
Miwah Gold (85%)
Sanghie (70%)
Tangse (80%)
Barisan 1 (80%)
Barisan 2 (80%)
Gold & Copper Properties
Takengon (75%)
Ulaan Nuur (100%)
Mongolia
Ingiin (100%)
Enger Ar (100%)
Uranium Properties
Bukht Uul (100%)
Unegt (100%)
Hutul (100%)
Sevsuul Bulag (100%)
Source: East Asia Minerals
PROJECTS IN INDONESIA
MIWAH TENEMENT
Background Information
Indonesia was engulfed in a civil war which lasted for over 30 years. Also, Aceh was the
closest point of land to the epicenter of the massive 2004 Indian Ocean earthquake,
which triggered the “Boxing Day Tsunami” that devastated much of the western coast of
the region, including part of the capital of Banda Aceh. In the Aceh Province, hundreds of
thousands of people were killed or went missing in the disaster. The government of
Indonesia estimated that the tsunami caused damages amounting to US$4.5 billion. This
event helped trigger the peace agreement between the government of Indonesia and the
Free Aceh Movement (GAM), which had been fighting for independence against the
Indonesian authorities for 29 years, mediated by former Finnish president Martti
Ahtisaari, with the signing of an MOU on August 15, 2005. The Aceh Province is very rich
in oil and gas and in 2007, accounted for almost 25% of Indonesia’s total oil and gas
output and almost half of the province’s revenue. Aceh’s mineral wealth is also potentially
significant but it has been one of the least explored regions in the world due to the civil
11
conflict. The area was briefly explored for minerals in the 1990s, when the Miwah deposit
and the other deposits also acquired by East Asia were discovered by Highland Pacific.
Miwah Prospect - the flagship project (85% interest)
The Miwah exploration project is 85% owned by East Asia and represents a highsulphidation
epithermal gold prospect. The Miwah prospect was defined by the
3,100 metres drilling work carried out by Highland Pacific (previous explorer) in the late
1990s, which yielded significant alteration and mineralization with intercepts including
71 metres of 1.4 g/t gold and 58 metres of 1.1 g/t gold. However, a review of the historical
data indicated that early drilling was parallel to higher grade (greater than 5 g/t gold)
structures at surface, and did not fully assess the project’s tonnage and grade upside.
Exhibit 8: The Miwah Team
Source: Jennings Capital Inc.
East Asia has drill validated 1.2 km strike at Main Miwah
East Asia has drill validated a 1,200 metres strike length along the outcropping shallow,
laterally extensive Main Miwah Gold Zone and has encountered wide intercepts of gold
mineralization in over 95% of all the holes drilled. The Main Miwah Gold Zone remains
open in all directions. The Company has already completed 3.6 km rock saw channel
samples covering Main Miwah and South Miwah Bluff. The Main Miwah mineralization is
drill proven to be 1.2 km in the east-west direction, 125-150 metres high and
approximately 600 metres in the north-south direction. East Asia has also discovered a
new South Miwah Bluff zone containing gold-rich rock sawn channels, including 83.59 g/t
gold over 24 metres and 20.14 g/t gold over 12 metres. The discovery of this zone has
opened up the southwest portion of Miwah Gold Zone and expanded the property’s
potential.
12
Exhibit 9: Miwah Drill Plan
Source: East Asia Minerals
Moon River area could expand the northern continuity of the gold mineralization
The alteration, lithology and gold grade range of the Moon River discovery is similar to
that of the Miwah Main Zone. The Miwah alteration and mineralization is part of a
package of altered and mineralized rock that has distinctive chargeability, resistivity and
magnetic signatures. The mineralization extends all the way from the Miwah Main Zone
through to Moon River and to Sipopok approximately 1.5 km to the north. Although EAS
is in the early stages of exploration of the extensions of Miwah Main Zone, it is greatly
encouraged by the way all the pieces are fitting together.
The Sipopok epithermal gold target is located ~1.5 km north of the Miwah area
Associated alteration and mineralization in the area of Sipopok suggest a similar
significant, but smaller (1 km by 1 km), epithermal gold target to that of Miwah. East Asia
has already started drilling the Sipopok deposit to determine if the two deposits connect,
and should get a better understanding of the potential size and scope of the Sipopok
deposit. In our view, Sipopok is the continuation of the same large system as Miwah.
13
Exhibit 10: Miwah South Bluff - Sipopok Section
14
The information contained in this report was obtained from sources we believe to be reliable. We do not represent that such
information is accurate of complete and it should not be relied on as such. Any opinions expressed herein reflect our judgment
at this date and are subject to change. Jennings Capital Inc. and/or employees from time to time may hold shares, options or
warrants on any issue included in this report and may buy or sell such securities. This report is not to be construed as an offer
to sell or solicitation to buy securities. Member – CIPF. Jennings Capital (USA) Inc. is a member of SIPC.
Exhibit 11: Miwah, Moon River and Sipopok - Chargeability/Resistivity
Source: East Asia Minerals
Significant upside potential for Miwah tenement
Regional work at the Miwah tenement is being conducted concurrent to the NI 43-101
drilling at Main Miwah. The upside potential is expected from three potential sources:
1. The Moon River discovery has the potential to double the north-south direction of
the original (pre-EAS drilling) Miwah Main Zone mineralization. It has the same
characteristic vuggy-silica alteration as Miwah Main Zone. EAS geologists have
sampled Moon River on the basis of increased geological understanding from
ongoing drilling and mapping and believe that it has the potential to double the
mineralization of the Miwah Main Zone to more than 700 metres in the northsouth
direction.
2. Sipopok, located 1.5 km north of the Miwah Main Zone mineralization, is
currently a 1 km-by-1 km alternation footprint, and one area of exposure and
mapping/sampling has outlined an area of approximately half the size of Main
Miwah. When drilling commences at Sipopok in H2/11, we should get a better
understanding of the potential size and scope.
3. The Company has identified one gold-bearing feeder zone for the Main Zone,
being the South Miwah Bluff Zone, located adjacently south of the west side of
the Miwah Main Zone (south of Miwah Bluff), and mapping/sampling suggests
the potential for another feeder zone to the east end (adjacently south of
Block M); although more work needs to be completed to confirm the view and
possibly generate drill targets.
15
Exhibit 12: South Miwah Bluff Feeder Zones
Source: East Asia Minerals
Miwah Property has similarities to the Martabe gold-silver deposit
The Miwah Property is in a very similar volcanic setting to the Martabe gold-silver
deposit, also located in North Sumatra (Purnama and Baskara resources: 127.8 million
tonnes at 1.4 g/t gold (5.5 million oz gold) and 15 g/t silver (60 million oz silver), and is of
comparable size. Miwah also exhibits a likeness to the size, style and geometry of the
alteration system developed at the Pierina gold deposit in Peru (67.7 million tonnes
grading 2.98 g/t gold and 22 g/t silver, giving a total of 6.5 million oz gold and
47.9 million oz silver).
Good infrastructure with power and road access within 10 km
Miwah tenement is located approximately 10 km from power and road access. It is easy
to build a road directly to the project-site, which the Company will consider in the future.
Currently, access to the site for equipment, etc. is via helicopter from Medan,
approximately 280 km to the south east of the project area, or from East Asia’s logistics
centre, located approximately 15 km from the project site at the town of Geumpang.
There is also access by a well-developed trail, which is used on a regular basis to bring in
supplies and personnel.
16
Exhibit 13: Miwah - Schematic Long Section
Source: East Asia Minerals
Exhibit 14: Miwah and Regional Geology - (over Aeromagnetics)
Source: East Asia Minerals
17
Exhibit 15: East Asia’s Miwah Prospect
Source: East Asia Minerals
Exhibit 16: Miwah NS Section Looking West
Source: East Asia Minerals
18
Exhibit 17: Miwah EW Section Looking North
Source: East Asia Minerals
Exhibit 18: Miwah Southwest-Northeast Long Section
Source: East Asia Minerals
Miwah gold is not refractory
Metallurgical work done by a previous owner at the Miwah Main Zone indicated gold
recoveries of 74% - 84% from cyanidation testing of mixed oxide sulphide and greater
than 90% recovery for oxide. There is significant free gold in the samples indicating
favourable metallurgy. The Company continues to do more petrographic tests and has
discovered that there are significant quantities of evenly distributed fine free gold in the
oxides, mixed oxide-sulphide and sulphide samples. Even in the base of the system
which is mostly sulphides, the gold is typically present as free gold, indicating that even in
the sulphide part of the Miwah system, gold is not refractory. East Asia will conduct more
metallurgical testing as the Miwah project is advanced. The even distribution of gold is
19
observed in petrographic samples and in assays laterally along the Miwah mineralization
and down-hole in the drilling.
Exhibit 19: Vuggy-Silica Pyrite Core from Miwah
Source: Jennings Capital Inc.
Miwah initial resource could be north of 4 million oz of gold
Based on the current scope of the mineralization at Miwah Main Zone, Miwah South Bluff
and Moon River, the Miwah project could host over 15 million oz of gold. The Miwah
Prospect, including the Signal area, is currently at 1,600 metres in the east-west
direction and more than 600 metres in the north-south direction and has vertical
thickness of approximately 100 - 125 metres. Using these dimensions and an
estimated density of 2.3 t/m3 suggests potential for +200 million tonnes. With an average
grade of 1.6 g/t, a potential resource of +10 million ounces is plausible, in our view. Our
initial estimate of +4 million oz of gold is calculated based on 1,000 metres in the eastwest
direction, 400 metres in the north-south direction, 100 metres vertical depth,
2.3 t/m3 specific gravity and an average gold grade of 1.5 g/t.
20
Exhibit 20: Miwah Project
Source: East Asia Minerals
Exhibit 21: Vuggy-Silica Outcrop
Source: Jennings Capital Inc.
21
OUR FINANCIAL MODEL FOR MIWAH
The Miwah Project is very geologically similar to the Yanacocha deposit (Newmont) and
Piniera deposit (Barrick Gold) in Peru. The Yanacocha gold mine produced 1.5 million oz
(750,000 attributable ounces) of gold in 2010 and had reserves of 9.7 million oz.
High sulphidation epithermal-type gold ores of the Yanacocha mining district are hosted
by the Upper Pyroclastic and Lower Andesitic sequences of the Yanacocha Volcanic
Complex. The mineralization is structurally controlled. Recognized alteration types at
Yanacocha include residual quartz/silicification, advanced argillic, argillic and propylitic
assemblages. Extensive and widespread exposures of residual quartz and massive
silicification are present at Yanacocha. Massive tabular bodies of pervasive silicification
have completely replaced volcanic lithologies as quartz saturated solutions cooled and
precipitated quartz in the proximity of the water table. The presence of stacked tabular
bodies of silicification suggests a rapidly fluctuating water table. Sub-vertical to vertical
zones of massive silicification are related to structurally controlled hydrothermal breccias.
Residual quartz alteration resulted from intense acid leaching and has been sub-divided
into the following three types: 1) granular quartz; 2) vuggy quartz; and 3) vuggy quartz
overprinted by granular quartz.
The Pierina Au-Ag ore deposit in the Cordillera Negra of north-central Peru is a high
sulphidation (acid sulphate) epithermal deposit hosted by Tertiary pyroclastics. The
probable reserves totalled 112.5 million tonnes at 1.96 g/t Au. The ore is treated by heap
leach processing (80% recovery) and currently produces around 270,000 oz of gold at a
cash cost of $US400/oz. The waste to ore stripping ratio is 1.4:1. There is a strong
lithological control to the mineralization and alteration at Pierina. Residual vuggy-ilica
containing alunite is the main host to ore. This core zone is surrounded by alunite with
minor pyrophyllite and dickite, which also locally hosts ore, in turn surrounded by an outer
kaolinitic to illitic clay zone. The pumiceous tuffs are more strongly mineralized and
altered, containing the bulk of the ore, although lesser mineralized pervasive quartzalunite
is also found in the overlying lithic tuffs. The basal andesites have undergone
clay-pyrite alteration with veinlet mineralization. A sulphide feeder zone has been
intersected to the south. Gold is disseminated in the vuggy-silica altered rhyodacite
pumice, present as micron sized native gold grains associated with Fe-oxides, quartz and
pyrite.
The mineralization at Miwah is very similar to the above deposits. Our modelling
assumptions are based on the Martabe Deposit in Northern Sumatra, which is
approximately 100 km south-east of Miwah. The Martabe deposit has some metallurgical
issues but metallurgical tests at Miwah have shown that the issues do not exist at Miwah.
The Martabe Project has a reserve base of 2.7 million ounces of gold and 32.8 million
ounces of silver solely from the Purnama (also referred to as “Pit 1?) and the Barani
deposit in reserves, and resources of 6.5 million ounces of gold and 66 million ounces of
silver from the Purnama, Barani and Ramba Joring deposits. Based on the current
reserves, the life-of-mine is expected to be 10 years, with annual production for the early
years of mine life being on average 250,000 ounces of gold and 2-3 million ounces of
silver. The mine is currently being built for US$440 million in development capex, with
operating costs of US$2.52/tonne of material mined and US$11.10/tonne for milled. We
are using similar operating and capital cost numbers for Miwah.
22
Exhibit 22: Comparing our Miwah Estimates to Martabe Deposit
Project Miwah (est) Martabe
Throughput (Mtpa) 10.0 4.5
Total Tonnage (Mt) 100.0 173.8
Mineable Gold Resource (million oz) 4.4 8.1
Mineable Silver Resource million oz) 10.6 91.2
LOM Strip Ratio 1:1 1.3:1
Average Gold Grade 1.67 1.42
Gold Recoveries 80% 70-80%
Average Annual Gold Production (000 oz) 423 200
Average Annual Silver Production (million oz) NA 2
LOM (years) 10+ 10+
Development (million) $450 $440
Mining and Processing Costs (US$/tonne) $15.00 $13.62
Total Cash Costs (US$/oz) $386 $427
Source: Jennings Capital Inc.
Exhibit 23: Model Parameters
Development capex US$ 450 million
Sustaining capex (LOM) US$ 35 million
Mill size 27,000 tpd
Annual throughput 10 Mtpa
Annual gold production (first 5-years) 440,000 oz
Annual gold production (LOM) 423,000 oz
Average cash cost (first 5-years) US$ 373/oz
Average cash cost (LOM) US$ 386/oz
Mine life 10+ years
Expected production start-up 2015
Mineral resources (100% interest; our estimate) +4 Moz
Gold recovery 80%
Net Present Value (at US$ 1,100/oz Gold, 12% disc. rate) US$ 683.3 million
Gold Price (US$/oz) $1,100/oz long-term starting in 2015
Spanish Mountain Gold start-up 2015
LOM 10+ years
Current estimated resources +4 Moz
Throughput 10 Mtpy
Annual gold production (first 5-years) 440,000 oz
Annual gold production (LOM) 423,000 oz
Average cash cost (first 5-years) US$ 373/oz
Average cash cost (LOM) US$ 386/oz
Mining parameters
Mine life (years) 10+
Average gold grade (LOM) (g/t) 1.67
Average gold recovery 80%
Gold capital expenditures
Gold development capex (C $MM) C$ 450
LOM gold sustaining capex (C $MM) C$ 35
Source: Jennings Capital Inc.
23
Exhibit 24: Miwah Gold Production and Cash Cost Estimates
$100
$200
$300
$400
$500
$600
400,000
405,000
410,000
415,000
420,000
425,000
430,000
435,000
440,000
445,000
450,000
2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E
Cash costs (US$/oz)
Gold Production (oz)
Miwah Gold Production Cash costs (US$/oz)
Source: Jennings Capital Inc.
SANGIHE GOLD CORP.
SANGIHE PROSPECT
The Sangihe exploration project, located in Sangihe Island, North Sulawesi Province,
Indonesia, is 70% owned by East Asia and includes numerous epithermal and porphyry
gold and copper prospects, within a 42,000 hectare tenement. These prospects were
initially discovered and explored in the 1980s. The two most advanced prospects within
the property include Binebase, which has surface exposed oxide of gold, and Bawone,
with shallow to surface sulphide and oxide gold. The two ore bodies are separated by
1 km of shallow untested cover. The Bawone portion of the deposit seems to have higher
gold grades compared to the Binebase portion. There are several other high-grade gold
epithermal prospects that have been mapped/sampled by East Asia and ready for initial
drilling, including Kelapa (trench results including 14 metres at 34.8 g/t gold) Brown
Sugar (East Asia drill hole - 16 metres at 2.7 g/t gold and 33.2 g/t silver), Sedi, Kupa and
Bonzos (good trench results from all three).
In September 2010, the Company announced an initial resource estimate for the Sangihe
project (only Binebase and Bawone included) of 27.3 million tonnes averaging 0.95 g/t
gold (0.83 million oz) and 13.6 g/t silver (11.9 million oz) based on 79 drill holes
(comprising of 7,561 metres of drilling) and 1,700 surface samples. The Binebase
Prospect is located 1.2 km north-west of the Bawone Prospect along the structural strike.
The mineralization is still open along strike at both the Binebase and Bawone prospects
in the property. The intervening stretch between the gold zones exhibits shallow post
mineral tuff cover that has not yet been drill tested. The only window through the zones
has a 2 metre trench sample with 2.9 g/t gold, indicating that the mineralized zone
persists along strike.
East Asia has started the Phase II drill program at Sangihe. Drilling has started at the
Bibebase oxide gold deposit, where 62 out of the 79 holes were drilled during Phase I - a
total of 4,000 metres of diamond drilling are planned during this campaign, which is
targeted for completion by the end of 2011. The Phase II drill program will focus on
expansion of the surface and near-surface gold resources at both Binebase and Bawone
through further in-fill and extension drilling. In addition, beginning in April, an airborne
24
magnetic survey will be conducted over a significant portion of the licensed area to
generate new prospects. The Company also intends to conduct initial drilling at the
Salurang, Sede, Kupa and Taware gold prospects.
Exhibit 25: East Asia’s Sangihe Project in Indonesia
Source: East Asia Minerals
Exhibit 26: Sangihe’s Regional Geology and Prospects
Source: East Asia Minerals
25
BARISAN GOLD CORP.
BARISAN II GOLD-COPPER PORPHYRY BELT (6 GOLD COPPER PORPHYRIES)
The Barisan II Prospect is 80% held by East Asia and consists of a cluster of six known
porphyries, out of which four have been drilled previously by senior mining companies,
including Rio Tinto. In 2008, East Asia identified three new porphyry targets within the
northwest trending, 20-km long Barisan porphyry belt.
UPPER TENGKERENG - GOLD-COPPER PORPHYRY
In late 2008, the Company drilled the Upper Tengkereng (UT) with a single hole grading
646 metres at 0.39 g/t gold and 0.21% copper, including a higher grade portion of
268 metres at 0.57g/t gold and 0.26% copper. The results suggest much better gold
grades than that reported in historic drilling programs. The second hole, reported on
January 17, 2010, intercepted 690.9 metres of 0.4 g/t gold and 0.3% copper. The grades
increased with depth and the hole bottomed in 58.9 metres of 1.2 g/t gold and 0.5%
copper. The hole has determined a vector to anticipated higher grades.
LOWER TENGKERENG - GOLD-COPPER PORPHYRY
The Company expects similar porphyry mineralization at its Lower Tengkereng (LT)
prospect located some 2 km southwest of UT. The Company plans to upgrade the
historical gold results at this prospect, which has indicated historic mineralization across
339 metres at 0.47 g/t gold and 0.20% copper. The LT prospect has similar
mineralization and alternation types as UT and could be part of the same body at depth.
EAS started drilling in July 2010 at Lower Tengkereng (LT), which is located 1.5
kilometres south-west of UT. Both are similar windows of porphyry gold-copper
mineralization exposed through shallow volcanic cover rocks that may be linked at depth.
The first hole reported on 10 August 2010 intercepted 415.1 m of 0.39 g/t gold and 0.18%
copper, including 0.49 g/t gold, 0.22% copper over 279.4 metres where the hole was
stopped due to poor drilling conditions. The second hole intercepted 499.7 m of 0.26 g/t
gold and 0.11% copper, including 0.5 g/t gold, 0.22% copper over 128 metres. The hole
was stopped in mineralization at 499.7 metres due to drill rig limitations.
PORPHYRY BAHU PROSPECT - GOLD RICH-WEAK COPPER PORPHYRY
The Bahu prospect has porphyry style mineralization and alternation over a 1.6 x 0.9 km
area. This prospect has never been drilled before; however, chip channel samples
revealed 30 metres at 0.71 g/t gold and 341 parts per million (ppm) copper and 40 metres
at 0.59 g/t gold.
26
Exhibit 27: Barisan’s Local Geology
Source: East Asia Minerals
ABONG EPITHERMAL GOLD DEPOSIT
The Abong Epithermal Gold project is 80% owned by East Asia and is represented by a
near surface, low sulphidation epithermal gold prospect. The deposit is located in the
Barisan l tenement, has in excess of 2 km of strike and is up to 800 metres wide. It is
currently open in all directions. The Company has drilled 130 holes covering
8,660 metres. Drilling has resulted in an average 1.7 g/t over 13 metres. The Abong
deposit has excellent access to roads and an NI 43-101 resource estimate is expected
following additional drilling later in 2011. The gold mineralization is contained within a
major northwest trending corridor up to 800 metres wide and is currently traceable for
over 2 km. Gold mineralization at Abong occurs within a flat lying, near-surface, 10 -
15 metres thick jasperoid sheet. This expansive blanket contains a series of elongated,
northeast oriented higher grade (4 - 6 g/t) gold zones that are surrounded by extensive
areas of 0.5 to 1.5 g/t gold mineralization. The drilling results indicated near surface
mineralization in most holes and also defined the distributions and shape of mineralized
zones including Bulan and Bintang.
TANGSE PROJECT - A LARGE COPPER-MOLY PORPHYRY
East Asia owns an 80% stake in the Tangse project, located 100 km to the southeast of
the Provincial capital of Banda Aceh. The property is close to the main regional highway
and the power grid. The property was explored by Conzinc RioTinto, Australia in the
1980s, and the results exhibited a large porphyry copper-molybdenum deposit containing
a zone of copper-molybdenum mineralization measuring 5 km long and 1 - 2 km wide.
The historically ascertained estimates (non-NI 43-101 compliant) indicate at least
600 million tonnes of low grade copper-molybdenum material. Furthermore, the Tangse
porphyry system has been subjected to widespread supergene enrichment, mainly
prevalent as a surface exposed higher grade, oxide portion, comprising a non-NI 43-101
27
compliant resource of shallow copper oxide totalling 30 million tonnes grading
0.7 - 0.8% Cu (SXEW amenable) and open for expansion through exploration.
TAKENGON - LARGE EXPOSED GOLD-BEARING QUARTZ VEIN SYSTEM
East Asia acquired 75% of the Takengon property in February 2007. The property is
located in the Aceh province, North Sumatra, and covers an area of 19,000 hectares. The
main mineralized zone on the property includes the drill ready Collins epithermal gold
prospect, which is a low sulphidation mineralized system associated with an elliptical
magnetic feature. The mineralization consists of gold-bearing vein swarms and stockwork
covering an area at least 400 by 800 metres. In addition to the Collins gold prospect, the
property hosts three other known prospects rich in copper reserves with grades of 2.58%
and 1,240 parts per million (ppm) for copper and 1 parts per million (ppm) for gold. The
initial exploration work at Collins, encompassing a selection of drill targets, was
completed during 1998. East Asia did some channel samples and received 11 metres at
22.20 g/t and 11 metres at 14.99 g/t gold.
Exhibit 28: Miwah and Regional Geology - (over Aeromagnetics)
Source: East Asia Minerals
PROJECTS IN MONGOLIA
INGIIN-NARS URANIUM PROPERTY
The Ingiin-Nars property, rich in non-NI 43-101 compliant uranium reserves, was fully
acquired by East Asia in June 2007. Based on Soviet-era drilling and trenching, the
deposit extends northeast into the East Asia property, where it remains open along strike.
The uranium mineralization is stratiform sandstone hosted and reported to be amenable
to ISL recovery. The known Nars uranium mineralization, including both the Ingiin and the
Mys deposits, is traceable at surface for 11 km. The main Ingiin Deposit contains
28
historical drilled resource of approximately 1,000 tonnes of contained uranium. The grade
averages 0.042% U, calculated on an average thickness of 3 metres and cut off grade of
0.02% U, representing a deposit of approximately 2.4 million tonnes. The average grade
of non-category drill intercepts is 0.052% U.
Exhibit 29: East Asia Energy - Mongolian Assets
Source: East Asia Minerals
East Asia has completed ground work, including radiometric surveying, mapping,
trenching, sampling and identification of the historically drilled holes at Ingiin-Nars.
Phase I drilling has been completed and validated the uranium intersected by the historic
Soviet drilling.
ENGER PROJECT
The Enger Project is a wholly-owned property located 150 km south-east of Ulaanbaatar,
Mongolia. The mining area is spread across 1,648 hectares, with uranium mineralization
hosted in Cretaceous basin-fill sandstones and siltstones. The property has mainly
indicated two types of uranium mineralization – one occurring as steep dipping
tectonically complex zones in rhyolite and the other as stratiform bodies in the lower
Cretaceous sedimentary rocks. At Zone 1, mineralization is present at 60 - 90 metres in
width, up to 350 metres in length and has a true thickness of 1.7 to 6.0 metres. Grades
vary between 0.056% and 0.19% uranium over the intervals, with a maximum of 0.549%
uranium over 0.65 metres. However, the uranium is depleted at the surface. At Zone 2,
located 70 to 120 metres below surface, uranium mineralization has a true thickness of
up to 200 metres and grades of between 0.061% and 0.067% uranium. A 20-metre thick
steeply dipping zone lies between and connects Zones 1 and 2. This zone averages
grade of 0.055% uranium.
29
Exhibit 30: Enger Geology
Source: East Asia Minerals
During the 2006 exploration program, 10 drill holes totalling 2,005 metres were
completed. The drilling test at the Enger property was designed to confirm the existence
of uranium mineralization recorded from historical Soviet work. Results from the initial drill
holes indicated significant improvement on grades and widths of the mineralization
reported by the earlier drilling tests. East Asia drill results included 2.5 metres of
0.232 U3O8, 2.5 metres of 0.410 U3O8, and 13.5 metres of 0.108 U3O8.
ULAAN NUUR PROJECT
A Goliad and Oakville Formation prospect; being evaluated for ISR Mining
Potential
The Ulaan Nuur Prospect was fully acquired by East Asia on May 3, 2007, for a onetime
payment of US$60,000. The property covers an area of 1,508 hectares and hosts a
partially defined, potentially significant deposit of stratiform sandstone with uranium
mineralization. According to limited historical drilling conducted during the Soviet era, the
property consists of at least nine shallow dipping, stratiform bodies of uranium
mineralization, ranging in thickness from 0.1 - 3.5 metres with grades between 0.03 and
0.184% uranium. The mineralization was traced for 600 - 800 metres along strike and up
to 400 metres down dip. The Soviets calculated a projected resource (P2 category) of
10,000 tonnes (22 million pounds) of contained uranium. The data also indicated an
average grade of 0.049% uranium, representing a deposit of approximately 20 million
tonnes.
30
OTHER PROJECTS IN MONGOLIA
Exhibit 31: East Asia’s Development Prospects in Mongolia
Project Name (Area)
Hectares Commodity Highlights
U4 Sevsuul Bulag 1,540 Uranium
2008: Ground radiometric survey confirmed 3 x 1km strong uranium
anomaly. Results of 32 selective rock chip samples range from 0.01%
to 0.1% U3O8.
U5 Nogoon 17,902 Uranium In Choir Basin about 45km SE of Haraat Deposit. Historical Toirom with
lignite drilling reported 0.7m @ 0.02% U.
U6 Tsagaan Del 26,242 Uranium License acquired 07/08. Historic 3,510m drilling in 53 holes. 2.5m @
0.186% U.
U7 Unegt 11,055 Uranium
2008: Ground radiometric survey defined two anomalies: West: 200m x
10m, East: two 20m thick outcrops over 2.5km strike. 17 selective rock
chip samples with 0.01% to 0.08% U3O8.
U8 Delger 9,321 Uranium License granted 01/08. Data and ground check required. (Gobi Altai)
potential
U9/10 Ugtam 1 & 2 4,425/332 Uranium Located in high potential Dornod region (Mardai and Gurvan-potential
bulag deposits) 200-570 m deep targets speculated by Soviets.
U11 Uvor Hudag 4,184 Uranium License granted 2008. Data and ground check required. potential
Ph1 Davaa 1,745 Phosphate License granted 09/08. Located adjacent and on strike to world-class
rock phosphate reserves in the Khuvsgul Basin.
Ph2 Ikh Uul 11,723 Phosphate License granted 09/08. Located adjacent and on strike to world-class
rock phosphate reserves in the Khuvsgul Basin.
Source: East Asia Minerals
SHARE CAPITALIZATION
East Asia has approximately 77 million common shares issued and outstanding. In
addition to this, the Company has 125,000 warrants at C
.75 and 6.4 million options
outstanding at C$3.57 - the fully diluted number of shares is 83.5 million. The major
shareholders of the Company are Sprott Asset Management LP, Tocqueville Asset
Management and Pate Capital. More than 50% of the outstanding shares are held by the
top 15 institutional investors. Management and insiders own approximately 20% of the
shares outstanding. At its current price of C$5.80, the market capitalization is
approximately C$446.6 million. The Company has a working capital position of
C$12.0 million and no debt.
Exhibit 32: Share Capitalization
Total Shares Strike Price Expiry In-the-Money Value of Options
(MM) Price Date Shares (MM) ITM (C$ MM)
Common Shares Outstanding 77.0
Options 6.4 $3.57 13-Dec-14 3.2 $3.9
Warrants 0.1
.75 19-Jun-11 0.1
.1
Fully Diluted Shares 83.5 $4.0
Source: East Asia Minerals
31
MANAGEMENT AND BOARD
East Asia is headed by Michael Hawkins who was previously the Mongolia Manager for
AngloGold Ashanti (AU:JSE; not rated). Prior to that, he worked as the Chief Geologist
at Highland Pacific. Mr. Hawkins has over 30 years of experience in the mining industry
and has spent several years in Mongolia and Indonesia. In our view, East Asia has a very
experienced management team and is one of the best in the junior mining sector.
Mr. Hawkins had previously worked in Aceh; he had recognized the significant potential
at Miwah while he was the Chief Geologist at Highland Pacific. In 2006, under the
leadership of Mr. Hawkins, East Asia targeted the epithermal gold and porphyry goldcopper
style mineralization in Indonesia, which the larger mining companies missed.
Mr. Michael Hawkins (President, CEO & Director) has over 30 years of exploration
experience in Mongolia, PNG, Indonesia, Australia, North America and Latin America.
Prior to joining East Asia, he was the Mongolia Manager for AngloGold Ashanti (AU:JSE;
not rated) and Chief Geologist at Highland Pacific. Mr. Hawkins has a proven track record
for discovery of high-grade gold and copper-gold resources and has been directly
involved in the greenfield exploration, discovery and development of several million
ounces of gold in the Asia-Pacific region. He is also a member of the Australian Institute
of Mining & Metallurgy.
Mr. Lionel Martin (Chief Operating Officer) is a Professional Geoscientist with over
30 years of experience in Asia, Canada and Africa, including 16 years with Noranda Inc.,
where he was Exploration Manager-Australasia, and seven years with Eldorado Nuclear
Ltd. (Cameco Corp.). Prior to joining East Asia Minerals in 2005, he was responsible for
generating projects and negotiating advanced exploration agreements in Asia, one which
led to significant added tonnage and grade to a large porphyry copper-gold deposit in
Papua New Guinea. In the Abitibi region of Northern Canada, Mr. Martin was a senior
member of the team that discovered two base metals deposits in Québec's Matagami
Mining Camp, one that was brought to production. Mr. Martin was also lead developer of
Noranda's drill core sampling and analysis protocols.
Mr. Darryl Clark (VP Exploration) is a graduate of CODES, University of Tasmania. He
is an exploration geologist whose work has taken him throughout the Australian, Central
Asian and South East Asian regions over 17 years. His work over the last 10 years,
including Country Manager, Vale Mongolia; General Manager, Vale Minerals Exploration
Australasia; Geology Manager - MinEx BHP Billiton and Consulting for SRK, has seen
him involved in a diverse range of technological, political and cultural environments with
unique challenges. During previous corporate roles, Dr. Clark was responsible for
focusing business development strategies and designing multi-commodity (Ni, Cu, Fe, U,
Coal, Au and Fertilizers) exploration programs.
Mr. Alex Granger (VP Business Development) has spent the last twelve years in the
investment banking industry covering the metals and mining sector. The last ten of those
years were spent in the Asia Pacific region with CIBC World Markets, covering
companies based in East Asia and Australia. Mr. Granger has assisted companies in
Asia raise in excess of $1 billion on the Toronto Stock Exchange and has advised both
large and small Asian companies in cross border transactions. Mr. Granger brings an
extensive knowledge of the global capital markets to East Asia Minerals, having been
based in Canada, the U.S., China, Australia and Hong Kong during his career as a
metals and mining investment banker. Currently based in Hong Kong, he brings added
synergies as the Company pushes forward with its growth plans.
32
Mr. Michael Nayyar (Chief Financial Officer) is a CA with 15 years accounting,
financial management and regulatory experience. Mr. Nayyar is a member of the
Canadian Institute of Chartered Accountants and the Institute of Chartered Accountants
of British Columbia.
Mr. Darren Pylot (Chairman of the Board) has 15 years of financing and management
experience in the junior resource sector. He is currently the Vice-Chairman, CEO and
Director of Capstone Mining.
Mr. Edward C. Rochette (Director) is a lawyer and an internationally known negotiator
and transaction specialist with 30 years of experience in the acquisition of mining rights,
international business, land management and natural resource transactions. Currently,
Mr. Rochette is working as a Partner with IBDA, a premier consulting firm in China
conducting business in Beijing and other areas of the world, where his responsibilities
include transaction specialist in the international mining sector. Previously, he was Senior
Vice President of Ivanhoe Mines Ltd. for 16 years, where his responsibilities included the
negotiations to acquire the world-class Oyu Tolgoi copper-gold project. Mr. Rochette
splits his time living in Beijing, China and Ulaan Baatar, Mongolia.
Mr. John Wright (Director) has 35 years of mining experience in engineering,
construction and operations of both open pit and underground mines in North and South
America. Mr. Wright was formerly the co-founder and Chief Operating Officer of Pan
American Silver from 1995-2003 and was a director of both Regalito Copper Corp. and
Northern Peru Copper Corp. from inception until the sale of the companies. He is
currently a director of Lumina Copper Corp.
Mr. Nick Kohlmann (Corporate Communications) has worked in the explorationmining
industry for over 30 years; the past ten of which have been focused on investor
relations and marketing. Prior to joining the East Asia team, he was Vice President of
CHF Investor Relations. Previously, he worked as an exploration geologist and project
manager in Africa and North America with junior and senior companies.
33
Jennings Capital Inc. Research Disclosures
Company Ticker
East Asia Minerals Corporation TSXV-EAS
I, Alka Singh, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also
certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or
views in this report.
Note: This is our initiating coverage report on East Asia Minerals Corporation.
U.S. Client Disclosures
This research report was prepared by Jennings Capital Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian
Investor Protection Fund and a Participating Organization of the Toronto Stock Exchange and the TSX Venture Exchange. Jennings Capital Inc. is an
affiliate of Jennings Capital (USA) Inc. Jennings Capital (USA) Inc. accepts responsibility for the contents of this research report, subject to the terms
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REPORTS AND THE INDEPENDENCE OF ANALYSTS.
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Subject to the limitations on liability described above, Jennings Capital (USA) Inc. takes responsibility for the content of this research report in
accordance with Rule 15a-6 under the U.S. Securities Exchange Act of 1934, as amended. All transactions by U.S. persons in securities discussed in
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This research report was prepared by Jennings Capital Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian
Investor Protection Fund and a Participating Organization of the Toronto Stock Exchange and the TSX Venture Exchange.
JENNINGS CAPITAL IS NOT SUBJECT TO U.K. RULES WITH REGARD TO THE PREPARATION OF RESEARCH REPORTS AND THE
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The contents hereof are intended solely for the use of, and may only be issued or passed onto persons described in part VI of the Financial Services and
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This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein.
Stock Ratings
Speculative Buy: The stock is expected to provide a total return in excess of 10% over the current trading price over the next 12 months; however,
there is material event risk associated with the investment.
Buy: The stock is expected to provide a total return in excess of 10% over the current trading price over the next 12 months.
Hold: The stock is expected to provide a total return of 0% to 10% over the current trading price over the next 12 months.
Sell: The stock is expected to provide a negative total return over the next 12 months.
Risk Ratings
Low/Average Risk — Stocks with less volatility than the market as a whole, with solid balance sheets and dependable earnings.
Above Average Risk — Stocks with more volatility than the market. Financial leverage is considerable but not threatening, earnings are more erratic,
or other quality concerns regarding accounting, management track record, and similar issues.
Speculative — Stocks of unproven companies or ones with very high financial leverage, suspicious accounting, or with other significant quality
concerns. A speculative risk rating implies at least the possibility of financial distress leading to a restructuring.
34
Distribution Ratings: Out of approximately 80 stocks in the Jennings Capital Inc. coverage universe, the ratings distribution is as follows:
BUY 39%
SPECULATIVE BUY 44%
HOLD 8%
RESTRICTED 6%
TENDER TO OFFER 4%
SELL 0%
Revised Monthly
Security Abbreviations: NVS (non-voting shares); RVS (restricted voting shares); RS (restricted shares); SVS (subordinate voting shares); MV
(multiple voting shares).
Quarterly Recommendation Hierarchy: Is a ranking distribution identifying the percentage of total, number, and the investment banking relationship
(%) for all recommendation categories that can be found on the Jennings Capital Inc. website (www.JenningsCapital.com).
Analyst Stock Holdings: Equity Research analysts, associates and members of their households are permitted to invest in securities covered by them.
No Jennings Capital Inc. analyst, associate or employee involved in the preparation of an analyst report is permitted to effect a trade in the security of an
issuer whereby there is an outstanding recommendation for a period of 30 calendar days before and 5 calendar days after issuance of the research
report
Compensation: The compensation of the analyst and/or associate who prepared this research report is based upon in part, the overall revenues and
profitability of Jennings Capital Inc. Analysts are compensated on a salary and bonus system. Some factors affecting compensation including the
productivity and quality of research, support to institutional, retail and investment bankers, net revenues to the equity and investment banking revenue as
well as compensation levels for analysts at competing brokerage dealers. Analysts are not directly compensated for specific Investment Banking
transactions.
Jennings Capital Inc. Relationships: Jennings Capital Inc. may receive or seek compensation for investment banking services from all issuers under
research coverage within the next 3 months.
Jennings Capital Inc. or its officers, employees or affiliates may execute transactions in securities mentioned in this report that may not be consistent
with the report’s conclusions.
Company Specific Disclosures
Is this an issuer related or industry related publication? Issuer Industry
Does the Analyst or any member of the Analyst’s household have a financial interest in the securities Yes No
of the subject issuer? If yes, nature of interest:
Is Jennings Capital Inc. or Jennings Capital (USA) Inc. a market maker in the issuer’s securities Yes No
at the date of this report?
Do Jennings Capital Inc., Jennings Capital (USA) Inc. and their affiliates in the aggregate Yes No
beneficially own more than 1% of any class of common equity of the issuer?
Does Jennings Capital Inc., Jennings Capital (USA) Inc. or the Analyst have any actual material conflicts Yes No
of interest with the issuer? Explanation:
Does the Analyst or household member serve as a Director or Officer or Advisory Board Member of Yes No
the issuer?
Has the Analyst received any compensation from the subject company in the past 12 months? Yes No
Has Jennings Capital Inc., Jennings Capital (USA) Inc. and/or any affiliates managed or Yes No
co-managed an offering of securities by the issuer in the past 12 months?
Has Jennings Capital Inc., Jennings Capital (USA) Inc. and/or any affiliates received compensation for Yes No
investment banking and related services from the issuer in the past 12 months?
Has the Analyst had an onsite visit with the Issuer? Yes No
(The extent to which the analyst has viewed the material operations is available on request)
Has the Analyst ever been compensated for travel expenses incurred as a result of an onsite visit with
an Issuer? Yes No
NOTES:
Private Client Services-313, 1 St. W. PO Box 5519, High River, AB T1V 1M6
Private Client Services-100, Pedway Level, Barrington Place, 1903 Barrington St., Halifax, NS B3J 3L7
INSTITUTIONAL RESEARCH
Sales Russell Stanley, CFA, MBA, Head of Research
russell.stanley@jenningscapital.com 416.304.2178
Jason Baibokas, CFA, MBA, Sr. Managing Director, Head of Sales
jason.baibokas@jenningscapital.com 416.214.0600 Gold/Base Metals
Grant Beasley, CFA, Managing Director Peter Campbell, P.Eng.
grant.beasley@jenningscapital.com 416.214.0600 peter.campbell@jennings.capital.com 416.304.3963
Gordon Fernandes, Institutional Sales Stuart McDougall, B.Sc.
gordon.fernandes@jenningscapital.com 416.214.0600 stuart.mcdougall@jenningscapital.com 416.304.2176
Michael Graham, Institutional Sales Alka Singh, CFA, MBA, B.Sc.
michael.graham@jenningscapital.com 416.214.0600 alka.singh@jenningscapital.com 416.304.3964
David Beasley, MBA, CFA, Quantitative Trading Strategist Ryan Walker, M.Sc.
david.beasley@jenningscapital.com 416.214.0600 ryan.walker@jenningscapital.com 416.304.2194
Oil & Gas
Gregory Chornoboy, B.Sc., P.Eng., MBA
Trading greg.chornoboy@jenningscapital.com 403.292.9485
Kate Branscombe, Sr. Managing Director, Co-Head of Trading David Ricciardi, CFA
kate.branscombe@jenningscapital.com 416.214.0600 david.ricciardi@jenningscapital.com 403.262.0906
Doug Van Peteghem, Sr. Managing Director, Co-Head of Trading Tim Murray, CFA
doug.vanpeteghem@jenningscapital.com 416.214.0600 tim.murray@jenningscapital.com 403.292.9484
David Lawson, Branch Manager
david.lawson@jenningscapital.com 416.214.0600 Special Situations
Tim Fisher, Institutional Trader Russell Stanley, CFA, MBA, Head of Research
tim.fisher@jenningscapital.com 416.214.0600 russell.stanley@jenningscapital.com 416.304.2178
Earle D. McMaster, CFA, Sr. Institutional Trader, Managing Director Ken Chernin
earle.mcmaster@jenningscapital.com 416.214.0600 ken.chernin@jenningscapital.com 902.496.7007
Marc Charbin, CA, CFA
marc.charbin@jenningscapital.com 416.304.2191
INVESTMENT BANKING Research Associates
Daryl Hodges, M.Sc., President & CEO, Head of Investment Banking Greg Doyle
dhodges@jenningscapital.com 416.304.2174 greg.doyle@jenningscapital.com 416.304.2171
David Donato James Humen, CA
Sr. Managing Director, Investment Banking james.humem@jenningscapital.com 403.292.9487
david.donato@jenningscapital.com 416.304.2189 Trenton Latos, P.Eng.
John Jentz trenton.latos@jenningscapital.com 403.292.9484
Sr. Managing Director, Investment Banking Spencer Langley
john.jentz@jenningscapital.com 416.304.3890 spencer.langley@jenningsacapital.com 416.304.3894
David McGorman Bill Mantzoutsos, MBA
Sr. Managing Director, Investment Banking bill.mantzoutsos@jenningscapital.com 416.304.2184
david.mcgorman@jenningscapital.com 403.262.0900 Grace Vong, CA
grace.vong@jenningscapital.com 416.304.3961
Syndication Devin Wagner
Christopher Syme, VP Syndication devin.wagner@jenningscapital.com 403.292.9483
chris.syme@jenningscapital.com 416.304.2177
Research Coordinator
P. Lorelei Reid
lorelei.reid@jenningscapital.com 416.304.2175
T: 403.292-0970 F: 403.292.0979 Toll free: 1.888.292.0980
T: 416.214.0600 F: 416.214.0177 Toll free: 1.877.214.3303
T: 403.292.9328 F: 403.292.9329 Toll free: 1.877.292.0970
T: 416.304-2190 F: 416.304.2195 Toll free: 1.866.319.2573
Head Office-2700, 308 - 4th Avenue S.W., Calgary AB T2P 0H7
33 Yonge St., Suite 320, Toronto, ON M5E 1G4
Private Client Services-2700, 308 - 4th Avenue S.W., Calgary AB T2P 0H7
Private Client Services-33 Yonge St., Suite 320, Toronto, ON M5E 1G4
T: 403.652.4032 F: 403.652.4278
T: 902.496.7580 F: 902.496.7599 Toll free: 1.800.565.8660
Jennings Capital research is available on Bloomberg, Reuters, Thomson Financial and at www.jenningscapital.com
Member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund
Participating Organization of the Toronto Stock Exchange and the TSX Venture Exchange