due diligence and valuation report - tasman resources€¦ · in may 2012, tasman and rio tinto...

Full company name – Arrowhead BID 1 ASX:TAS

Due Diligence and Valuation Report See important disclosures on page 26 of this report.

Due Diligence and Valuation Report

Arrowhead Code: 19-09-03

Coverage initiated: 03 Nov 2011

This document: 18 September 2012

Fair share value bracket: AU$0.35 to AU$1.19

Share price on date: AU$0.195i

Company: Tasman Resources Ltd.

Ticker: ASX:TAS

Headquarters: Perth, Australia

Managing Director: Gregory Howard Solomon

Website: www.tasmanresources.com.au

Analyst Team

Vishal Pasari Mohanarangam Purushothaman [email protected] [email protected]

Market Data

52-Week Range: AU$0.061 – AU$0.205ii

Average Daily Volume: 502,212iii

Market Cap. on date: AU$44.08MMiv

Estimated EV (in AU$ MM)

Value Bracket

Copper Gold Silver Uranium Total EV

Low 20.2 3.8 13.0 42.0 79.0

High 92.3 7.6 23.2 146.6 269.8

Fiscal Year (FY) 1st July – 30th June

Summary

Tasman Resources Ltd. (Tasman), incorporated in

1987 and based in Perth, is a commodity

exploration company focused on IOCGU deposits,

along with interests in precious and base metals

and alternative energy. Tasman is focused

primarily on copper, gold, silver and uranium

mineralization in its large, strategically located

tenements on the Gawler Craton in South

Australia, which hosts some of the world’s major

copper/gold/ uranium projects.

The company has two flagship projects namely

Vulcan and Lucas Hill. The Vulcan Prospect,

located in Lake Torrens area, has been shown to

host a highly prospective, very large IOCGU

system, whilst the Lucas Hill tenement is also

considered to be prospective for IOCGU deposits.

In May 2012, Tasman and Rio Tinto Exploration

(RTX) completed formal Farm-in agreement for

funding an accelerated exploration program on its

Vulcan prospect. The agreement was conditional

subject to the results of the Aboriginal Cultural

Heritage Clearance.

In June 2012, Tasman entered into a

supplementary agreement with the Kokatha

Uwankara Native Title Claim Group to establish

guidelines and procedures for heritage clearance

surveys. The agreement covers approximately

10km2 in the Vulcan Exploration License area and

also provides for an additional heritage survey to

be conducted over priority drill targets.

Further to the agreement, Tasman conducted an

Aboriginal Cultural Heritage Survey in July 2012

and announced results in August 2012, as per

which the company obtained clearance for nine

drill sites located in Southern portion of the

prospect. Post the clearance, RTX had declared

the JV agreement unconditional, and is expected

to pay first milestone payment of AU$9MM to

fund the drilling program as per the agreement.

Tasman expects to commence a 12,000m drilling

program in Southern Vulcan prospect by

September 2012. The drilling program is expected

to be completed over a period of 12 months. The

company has also completed two deep diamond

drill holes at Lucas Hill to test discrete, gravity

anomaly, larger in area and of comparable

strength to that over the Carrapateena deposit.

Though still in the initial stages of exploration,

Tasman has achieved good progress and the risks

are mitigated by the extensive knowledge and

experience of the Tasman management team. Rio

Tinto JV is expected to reduce the company’s

financing risk and substantiate its resource

potential. Tasman also benefits from a good blend

of commodities through its several projects.

Given due diligence and valuation estimations

based on comparable resource based valuation

method, Arrowhead believes that Tasman

Resource’s fair share value lies between AU$0.35

and AU$1.19 v . Valuation is based on the

company’s flagship Vulcan prospect for copper,

gold, silver and uranium.

http://www.tasmanresources.com.au/

Tasman Resources Ltd. – Arrowhead BID 2 ASX:TAS


Table of Contents

Company Presentation ...................................................................................................... 3

News ................................................................................................................................. 6

Listing Information ........................................................................................................... 7

Contacts ............................................................................................................................ 7

Major Shareholders ........................................................................................................... 7

Management and Governance ........................................................................................... 8

Assets and Projects ........................................................................................................... 9

Technologies and Markets ............................................................................................... 15

Project Risk Profile Analysis ............................................................................................ 19

Risk Parameters – Definition ........................................................................................... 20

Peer Valuation and Risk Profile ....................................................................................... 21

Peer Analysis .................................................................................................................. 22

Value ............................................................................................................................... 23

Analyst certifications ...................................................................................................... 26

Valuation ......................................................................................................................... 27

Notes and References ..................................................................................................... 28



Company Presentation

Tasman Resources Ltd. (Tasman); incorporated in 1987 and based in Perth, is an exploration company

focused on IOCGU (Iron Oxide-Copper-Gold-Uranium) deposits. Tasman’s commodity base is a good

blend of precious and base metals in its tenements in South Australia, coupled with interests in

companies focusing on Alternative Energy and precious and base metals.

Amongst Tasman’s wide asset portfolio are its flagship projects, the Vulcan and Lucas Hill prospects. The

company commenced drilling at Lucas Hill in February 2012 and observed strong alteration and some

copper mineralization intersection in the two deep holes drilled.

We understand the Vulcan project to be top priority for Tasman, for which it could obtain the required

financing as well as technical expertise. The company had executed a formal conditional Farm-in/ Joint

Venture Agreement (Farm-In/JVA) with Rio Tinto Exploration (RTX), a subsidiary of Rio Tinto Limited,

with RTX making a non-refundable execution payment of AU$1MM to Tasman in May 2012. The

agreement was declared unconditional by RTX in August 2012, after Tasman announced that it has

obtained Aboriginal Cultural Heritage clearance, the only remaining condition precedent from the date of

execution of the Farm-In/JVA. Subsequently RTX is expected to pay First Milestone payment of AU$9MM

to Tasman to fund the drilling program, which is expected to commence in September 2012.

For more information on the Farm-in with RTX, please refer to the Tasman-Rio Tinto Farm-in agreement

details.

Company’s Portfolio and Premiums

A wide commodity base through the diverse and promising exploration prospects provides Tasman with

pre-eminent exploration potential. A strong and experienced management team further provides the

comfort for appropriately conducted and executed strategies.

Wide commodity base through diverse exploration

prospects: Tasman benefits from a good blend of

commodities through a wide number of projects in

South Australia. Its commodity base includes both

precious and base metals - Copper, Gold, Uranium,

Silver, Lead and Zinc. The strong diversity should

provide cushioning against fluctuating commodity prices

and adverse market conditions in the long term.

Tasman also avails some regional benediction from its

operations in South Australia, which is a globally

important destination for the exploration of metals

including copper, uranium, iron ore and goldvi.

Promising IOCGU Deposit: Arrowhead places huge

importance to the fact that the company’s flagship

projects (Vulcan and Lucas Hill) are into the exploration

of the IOCGU deposits, which we consider to hold immense economic potential, once proved for

resources. Additionally, the company benefits from the fact that its more than 2,000km2 tenements

neighbor the giant Olympic Dam mine.

Two of the six IOCGU targets on EL 4322, namely Vulcan and Titan, have been explored by the

company, with drilling continuing in Vulcan. These deposits each lie within approximately 35km of

Olympic Dam, with Vulcan having a target area similar to Olympic Dam of more than 12km2. Drilling at

the Vulcan prospect has yielded positive results, with ore grades and geological data indicating a

sufficient prospectivity for the world’s second largest mining company, the Rio Tinto Group, to enter into

a conditional farm-in agreement.

Lucas Hill’s geophysical characteristics are similar to Carapateena with a relatively larger area.

Arrowhead derives comfort from the Inferred Resources of 203MMT graded at 1.31% Cu, 0.56g/T Au,

Overview of major South Australian mines

Source: https://sarigbasis.pir.sa.gov.au/WebtopEw/ ws/plans/sarig1/image/DDD/204224-008



270ppm U3O8 and 6g/T Ag that Carapateena possesses, and which Lucas Hill could potentially possess

having similar geological characteristics. Apart from sound mineralization, the Lucas Hill prospect

benefits from good infrastructure access including a highway and railway line, power and water facility.

Considering these factors, Arrowhead considers these prospects offer considerable promise in terms of

both economic benefits as well as operational efficiency in the medium to long term.

Farm-in agreement with RTX: The Farm-in by RTX for Tasman’s tenement in the Vulcan prospect, which

has been declared unconditional, should provide Tasman with both significant funding and additional

technological expertise for further exploration and development.

Experienced Management Team: Tasman’s management team, under the geological direction of Rob

Smith who worked at Olympic Dam for Western Mining for approximately 15 years, including six years

as chief geologist, has sound experience in the field of mining, which should help in efficient risk

management along with laying strategies appropriate to the company’s operational, financial and

business matrices. In addition, its experience and expertise in the contours of Olympic Dam provides it

the required competence for executing existing projects as well as provide forethought for prospective

assets.

For more details on the management, see the Management and Governance section of the report.

Company’s Portfolio and Risks

Tasman is in its discovery stage, which is a relatively higher risk stage for a mining company. The

intrinsic risks in the discovery stage derive from uncertainty regarding mineralization, gauging financing

needs and maintaining operational flexibility. We understand this risk to prevail until the company

reaches the development stage (or the ‘lower risk’ stage), which will be attained with a production

decision. Arrowhead understands that because of the size of its prospects which will require significant

testing, Tasman is quite likely to be at least two to three years distant from reaching the production

decision stage as it is currently testing or is in the process of testing its prospects with drilling.

Execution risk: We understand the company could also be exposed to the implementation challenges

that could arise with simultaneously operating two projects. Tasman is currently focused on its two

primary projects – Vulcan and Lucas. While Vulcan is in a more advanced drilling stage, drilling in Lucas

is only recently commenced. However, with both projects in the exploration stage, Tasman could be

faced with implementation and execution challenges including allocation of resources and capital. On the

other hand, a prolonged halt for the other project could result in a loss of exploration momentum.

However, we believe the risk has been substantially reduced as the company has executed Farm – in/

JVA with RTX which brings technical expertise and financial resources to the company.

Financing risk: Tasman is at the start-up stage and will require funding in each stage of the mining

cycle. The company has currently adopted only the equity mode of funding and Arrowhead believes that

failure to obtain additional funds or entering into partnerships could adversely impact its exploration

operations. However, financing risk for Tasman to some extent is mitigated with the Farm-in agreement

with Rio Tinto Exploration (RTX) for Vulcan prospect, which is expected to provide it with immediate

funding for Vulcan prospects and improves company’s cash balance for Lucas Hill projects.

Other risks: Tasman is additionally exposed to commodity price risk, environmental risk, title risk,

insurance risk and foreign exchange risk, amongst others.

For a detailed risk assessment, please refer to the Risk profile analysis section.

Company’s Corporate Strategy

Tasman’s strategy aims at further exploring its flagship projects – Vulcan and Lucas Hill, with a view to

then finding strategic joint venture partners for development. The company is primarily targeting very

large, high-grade copper, gold and uranium deposits from these projects and aims to provide growth

through focus on these proven but underexplored areas through drilling of select priority sites within the

Vulcan IOCGU system. The company has executed a formal Farm-in/ Joint Venture Agreement (Farm-

In/JVA) with Rio Tinto Exploration (RTX), a subsidiary of Rio Tinto Limited for funding an accelerated

exploration program on the Vulcan prospect. The agreement, which was conditional subject to Aboriginal



Heritage clearance survey results, has been declared unconditional by RTX post announcement of survey

results.

Tasman is a major shareholder in two former subsidiaries which it spawned as separate companies,

which we understand to be a part of its business model. Through these investments in Eden Energy and

Fission Energy, the company has interests in alternative energy and nickel and cobalt.



News

– BHP Billiton terminates contract to purchase six Stuart Shelf Tenements from Tasman

Resources: On September 10, 2012, Tasman received notice that BHP Billiton has terminated the

two conditional contracts pursuant to which it had conditionally agreed to purchase from Tasman five

Exploration Licences (ELs) and one Exploration Licence Application (ELA) (ELs 4206, 4300, 4405,

4770 and 4857 and ELA 2011/299) located on the Stuart Shelf in South Australia as previously

announced.

– Farm-in/JV deal over key tenement near Olympic Dam, goes unconditional: On August 6,

2012, Tasman announced it will receive AU$9MM payment from Rio Tinto Exploration Pty Limited

(RTX) after the conditional farm-in and joint venture deal between the two over a key exploration

tenement (EL4322) near South Australia’s Olympic Dam mine, was declared unconditional by RTX

following completion of an Aboriginal Heritage Cultural survey.

– Execution of Supplementary Agreement with Kokatha Uwankara Native Title Claimants: On

June 20, 2012, Tasman entered into a supplementary agreement (Agreement) with the Kokatha

Uwankara (KU) Native Title Claim Group that covers the whole Vulcan Exploration License area (EL

4322) (adjoining the Olympic Dam Project area in South Australia) which is the subject of a

conditional Farm-In Agreement and Joint Venture with Rio Tinto Exploration. This Agreement, which

is supplementary to an existing agreement between Tasman and the KU covering EL 4322, will

operate in relation to an area of approximately 10km2 of EL 4322.

– Tasman agrees to sell six Stuart Shelf Area Tenements: On June 13, 2012, Tasman agreed to

sell five Exploration Licenses (ELs) and one Exploration License Application (ELA) to BHP Billiton. All

six tenements are located on the Stuart Shelf in South Australia. Total consideration is AU$3.0 MM,

payable as AU$2.925MM upon transfer of the ELs and AU$75k upon transfer of the ELA to BHP

Billiton. The sales are each subject to several conditions precedent, including satisfactory completion

of due diligence by BHP Billiton, Ministerial Consent and completion of EL and ELA transfers within 6

and 9 months, respectively.

– Conditional FARM-IN/JV Agreement with Rio Tinto Exploration Pty Limited Executed: On

May 1, 2012, Tasman executed formal Farm-in/ Joint Venture Agreement, with RTX making a non-

refundable execution payment of AU$1MM to Tasman. This replaces the conditional Farm-In/JVA

Letter Agreement signed on 7 October 2011 over Tasman’s wholly owned Exploration License EL

4322. Under the terms of the Farm-In/JVA, RTX and Tasman have retained the original commercial

terms governing the Initial Exploration Program and RTX’s farm-in obligations and rights.

– Tasman publishes quarterly report for Q3 2012 ending 31st March 2012: On April 19, 2012,

Tasman published quarterly activities and cash flow report for Q3 2012 ending 31st March 2012. The

report gave update of Vulcan and Lucas Hill projects. The company at the end of Q3 2012 reported

net operating cash flow of AU$(1.13) MM and net cash flow of AU$(0.11) MM.

– Tasman updates the status of unlisted options: On April 17, 2012, Tasman advised that 1.3MM

unlisted options exercisable at AU$0.10, expiring 16 April 2012 have been exercised and 274,804

unlisted options exercisable at AU$0.10, expiring 16 April 2012 have lapsed.

– Drilling update from Lucas Hill project: On April 2, 2012, Tasman announced completion of two

deep diamond drill holes at the Lucas Hill project. The drilling results showed strong alteration and

some copper mineralization intersection in the two deep holes drilled. The alteration observed in

both holes is expected to be part of larger IOCGU although insufficient dense material was observed

in these holes to explain the strength of the observed gravity response in the Lucas Hill area.

– Tasman publishes half year report for H1 2012 ending 31st December 2011: On March 14,

2012, Tasman published interim financial report for H1 2012 ending 31st December 2011. The report

gave update of Vulcan and Lucas Hill projects. The company at the end of H1 2012 reported net

other income of AU$0.098MM and net loss of AU$0.36MM. The company’s diluted EPS for half year

was AU$c (0.18).



– Lucas Hill project: On November 15, 2011, the company announced that it had secured the

services of a drilling contractor. It expects to initially start drilling two holes in mid-January 2012, for

which it had obtained Aboriginal heritage clearance.

– Tasman announces dating results of Vulcan IOCGU project: On October 27, 2011, Tasman

announced that initial results from four samples indicated an average age of 1590 Ma (Million years).

This is the age of mineralization and is significant to prove that Vulcan can have a major deposit.

– Capital raising completion by Tasman: On October 20, 2011, Tasman announced the completion

of the capital raising process which it initiated on October 17, 2011, AU$2.16MM was raised by

issuing 14.37MM fully paid ordinary shares at an issue price of AU$0.15 per share to professional

and sophisticated investors.

– Development update on Lucas Hill: On October 18, 2011, Tasman announced the completion of

geophysical modeling of the Lucas Hill target. This confirms the prospect as a high-priority IOCGU

target. South Australian government granted the exploration license and access clearance is being

sought by Tasman.

Listing Information

Tasman Resources Ltd. (TAS) is listed on Australian Stock Exchange (ASX) since December 18, 2001.

Contacts

Registered office Level 15, 197 St George's Terrace, Perth, WA, Australia, 6000

Telephone +618 9282 5889

Facsimilie +618 9282 5866

E-mail [email protected]

Major Shareholdersvii

Equity Holder No. of Shares Held (Million)

Percentage Holding

Solomon Gregory Howard 31.17 13.79%

Solomon Douglas Howard 30.66 13.56%

Luitingh Lafras 3.25 1.44%

Scaife Thomas Fleet 3.20 1.42%

Ernie Pty. Ltd. 2.50 1.11%

Le Page Guy Touzeau 1.78 0.79%

Kavel Pty. Ltd. 1.76 0.78%

Tan Biau Luan 1.51 0.67%

Resources & Land Management Services Pty. Ltd. 1.41 0.62%

Peto Proprietary Limited 1.36 0.60%

Malenki Pty. Ltd. 1.30 0.58%

Gasmere Pty. Ltd. 1.21 0.53%

Arden Medical Pty. Ltd. 1.18 0.52%

Glasson Michael John 0.31 0.14%

Smith Robert N 0.10 0.04%

mailto:[email protected]



Management and Governance

Tasman’s management comprises professionals with a proven track record and sound experience in the

exploration and mining industry, which we understand is relevant to channel the company’s strategies

by perceiving market conditions, mining opportunities, operational implications and the associated

economies.

Personnel (Qualification)

Designation Current and total experience

Gregory Howard Solomon

Executive Chairman

Mr. Solomon has been a director of Tasman since its incorporation in 1987. During his 27 years’ experience as a commercial / corporate lawyer in Western Australia, Mr. Solomon has had a very broad range of experience in mining, technology, corporate, commercial, finance and property law. Mr. Solomon has a rich experience in the field of mining due to his involvement in mining / exploration industry as a legal advisor and as a director on several companies with projects in Australia, Indonesia and the Philippines – including the establishment and floating of two mining / exploration companies. He has held directorships of several public companies over a period of more than 27 years.

Guy Touzeau Le Page

Non-executive Director

Mr. Le Page has a rich 10 years’ experience as an exploration and mining geologist in Australia, Canada and the United States, covering gold and base

metal exploration and mining geology. He also acted as a consultant to private and public companies, including production of both technical and valuation reports for resource companies.

Currently, Mr. Le Page is a corporate adviser at RM Capital Pty Ltd (specializing in resources) and is actively involved in mergers and acquisitions, initial public offerings to valuations, consulting and corporate advisory roles. Prior to joining Tolhurst Noall as a Corporate Adviser in July 1998, Mr. Le Page was Head of Research at Morgan Stockbroking Limited (Perth), responsible for the supervision of all Industrial and Resources research, and providing research on various mineral exploration and mining companies listed on the Australian Stock Exchange (ASX), when a Resource Analyst.

Douglas Howard Solomon

Non-executive Director

Mr. Solomon a partner in the legal firm Solomon Brothers and is a Barrister and Solicitor with more than 22 years’ experience in the areas of mining, corporate, commercial and property law

Robert N Smith Technical Expert

Mr. Robert has been associated with Tasman since 2003. He is a member of the Australian Institute of Geoscientists and has particular geological expertise in a variety of gold deposits and komatiite nickel deposits. He has more than 22 years’ experience in WMC Resources in a variety of exploration, operational and managerial roles across Australia. Mr. Robert has held the position of Chief Geologist at the Olympic Dam for six years and was also a member of the team involved in the discovery and development of the Olympic Dam deposit in South Australia.

Mr. Robert graduated from the University of Melbourne with a first class B.Sc (Hons) and M.Sc. degrees in geology in 1976.

Michael J Glasson

Technical Expert

Mr. Mike is a member of the Australian Institute of Geoscientists and has almost 30 years’ experience in gold, base metals and uranium exploration across Australia and in Fiji. He has an exploration background through his previous roles of a senior field geologist (Urangesellshaft (Australia) Pty Ltd), Chief Geologist (Metall Mining (Australia) Pty Ltd. and Sabminco NL) and Exploration Director (Kilkenny Gold NL). He has also acted as a Director for ten years of several ASX listed exploration companies.

Mr. Mike graduated from the University of Melbourne with B.Sc. (Hons) and M.Sc. degrees in geology in 1976.



Assets and Projects

Overview

Tasman’s asset portfolio comprises projects in geologically prospective regions of South Australia. The

company has large tenement holdings prospective for the iron-oxide associated copper-gold-uranium

deposits (IOCGU), epithermal gold-silver prospects, and diamonds. Tasman also has indirect interests in

Alternative Energy and Cobalt-Nickel.

Company’s Asset Portfolio

Tasman’s Projects in South Australia Tasman’s Projects

Source: Company filings Source: Company filings

Lake Torrens Project

Tasman’s interest: 100%

Asset Summary: The Lake Torrens Project,

which includes the Vulcan and Titan prospect, is

Tasman’s flagship project carrying enormous

strategic advantages evident from its proximity to

BHP Billiton’s Olympic Dam deposit. In addition to

the Vulcan prospect, Tasman has several other

priority IOCGU targets within its Lake Torrens

tenement holdings, including Zeus, Billy Barnes

and Marathon South.

Target commodities: Iron-oxide, Copper, Gold,

Uranium

Bouguer Gravity (Inset – Residual)

South Australia

Primary / Flagship Projects

•Vulcan Project - 100% interest; IOCGU Deposit

•Lucas Hill - 100% interest; IOCGU Deposit

South Australia

Secondary Projects

•Parkinson Dam - 100% interest; Gold-Silver (Lead-Zinc)

•Central Gawler - 100% interest; Gold

Equity Interest

Investments

•Eden Energy Ltd. - Alternative Energy company; 22.87% interest

•Fission Energy td. - Uranium Explorer and potential nickel-cobalt producer; 19% interest



Potential Mineralization: The project is within

close proximity of Olympic Dam Deposit and

geophysical benefits of its proximity to key

tectonic lineaments. Olympic Dam Deposit is the

world’s largest IOCGU deposit (largest uranium

deposit, 4th largest copper deposit, and 4th largest

gold deposit). As on June 2011, Proven reserves

at the Olympic Dam mine stood at 146MMT with a

grade of 1.98% Cu, 0.58kg/t U3O8, 0.69g/t Au

and 4.01g/t Agviii.

Location: Tasman has a tenement holding of

over 2,000km2, adjoining BHP Billiton's Olympic

Dam deposit in Central South Australia.

Lake Torrens Project – Location Plan

Recent Developments: On June 2012, Tasman

entered into a conditional agreement with BHP

Billiton to sell six outlying tenements located on

the Stuart Shelf in South Australia, which includes

five Exploration Licences (ELs) and one

Exploration Licence Application (ELA). However,

the contract was terminated on September 2012

Vulcan Prospect


Asset Summary: Vulcan is a prime IOCGU target

in the Lake Torrens project, as it bears

geophysical similarities to the adjacent Olympic

Dam deposit. Vulcan prospect is spread over

more than 11km2 area and is a priority project for

Tasman Resources.

Target commodities: Primary focus on iron

oxide associated copper-gold-uranium

Location: Approximately 30km NNE of BHP

Billiton’s Olympic Dam IOCGU mine.

Regional geology: The prospect is within close

proximity to key tectonic lineaments which were

previously used in the original targeting of

Olympic Dam in the mid-1970s. Subsequent

analysis by the South Australian government,

detailed below, has also confirmed the age of the

Vulcan deposit to be essentially the same as the

Olympic Dam ore body.

Dating results: The South Australian

government, through its PACE 2020 initiative,

funded and technically coordinated the geological

dating of selected samples from Tasman’s IOCGU

project. The dating results indicated an

approximate average age of 1590 Ma (million

years), which is similar to the approximate

geological age of 1601 Ma of other proximate

IOCGU rich deposits like the Olympic Dam,

Prominent Hill and Carapateena.

Residual Gravity image (Drilling sites)

Drilling results: The Company has drilled eight

holes to date, all of which have intersected

IOCGU alteration and/or mineralisation. VUD 003,

VUD 007 and VUD008 have exhibited the most

favorable results.

VUD

003 From To M

Cu

%

Au

g/T

U3O8

Kg/T

874.20 930.85 56.65 0.59 0.17 0.05

Includes 895.08 895.42 0.34 5.85 2.23 0.03

912.00 919.80 7.80 1.21 0.35 0.14

Includes 919.05 919.80 0.75 4.44 1.34 0.58

930.20 930.85 0.65 7.80 2.41 0.03



VUD

007 From To M

Cu

%

Au

g/T

U3O8

Kg/T

Mo

%

1065 1228 163 0.23 0.08 0.04 0.01

Incl. 1118 1208 90 0.25 0.09 0.05 0.02

VUD 008

From To M Cu %

Au g/T

U3O8 Kg/T

Mo g/T

899.7

5 1079.5

179.7

5 0.19 0.10 0.017 68

Incl. 910 931 21 0.63 0.28 0.023 107

Recent Developments: In May 2012, Rio Tinto

Exploration Pty Limited (RTX) and Tasman

Resources Ltd executed a formal Farm-in/ Joint

Venture Agreement, with RTX making a non-

refundable execution payment of AU$1MM to

Tasman. For more details, please refer to the

Tasman-Rio Tinto Farm-in agreement details.

In June 2012, Tasman entered into a

supplementary agreement with the Kokatha

Uwankara (KU) Native Title Claim Group covering

the Vulcan Exploration License area (EL 4322).

The agreement establishes guidelines and

procedures for heritage clearance surveys, and

further provides for an additional heritage survey

with KU representatives to be conducted over

priority drill targets. The Agreement is in addition

to an existing agreement between Tasman and

the KU and will cover approximately 10km2 area.

Tasman conducted an Aboriginal Cultural Heritage

Survey mid-July after supplementary agreement

and announced results in August 2012. The

company had obtained clearance for nine drill

sites located in Southern portion of the prospect.

As this was the only remaining condition

precedent from the date of execution of the

Farm-In/JVA, the agreement has been declared

unconditional by RTX, and RTX is expected to pay

first milestone payment of AU$9MM to fund the

drilling program.

Project schedule: Post Aboriginal Cultural

Heritage clearance, Tasman expects to commence

12,000m drilling program in Southern Vulcan

prospect by September 2012. The drilling

program is expected to be completed over a

period of 12 months.

Vulcan Program Details Status

Geological and Geophysics review, remodeling

Completed

Dating of selected samples Results available

Select new drill targets Completed

Conclude 9B agreement with KU

Completed

Heritage survey over new targets

Completed

Drill highest-priority targets Clearance obtained;

drilling to begin in Sep-12

Lucas Hill Project


Asset Summary: Identification of the IOCGU

target at Lucas Hill was announced in Aug-2011.

Target commodities: IOCGU deposits

Location: 25km south east of Woomera on the

Stuart Shelf in South Australia. The prospect

apparently has good infrastructure facilities with

proximity to the main railway line and highway,

power and water.

Lucas Hill Project – Location Plan

Regional geology: Geophysical characteristics

suggest that the gravity anomaly was of strength

comparable to and size greater than the

Carapateena deposit. Carapateena contains

Inferred Resources of 203MMT graded at 1.31%

Cu, 0.56g/T Au, 270ppm U3O8, and 6g/T Ag.

Residual Gravity (Inset – Carapateena)



Recent developments: Tasman completed two

deep diamond drill holes at Lucas Hill Project in

Q3 2012. Strong alteration and some copper

mineralization intersection were observed in the

two deep holes drilled. While the depth of the

basement is significant, Tasman believes the

presence of strong alteration and some

mineralization associated with strong and

unexplained gravity anomaly, warrants further

geophysical work and possible drill testing. Assay

results are expected to be available in 4-6weeks.

Parkinson Dam Project


Asset Summary: Exploration commenced in

mid-2005 resulting in the discovery of the

previously unknown epithermal gold-silver

mineralization.

Target commodities: Gold, Silver, lead, zinc

Location: Located approximately 60km west of

Port Augusta in South Australia. The prospect

benefits from a strategic location and

infrastructure, being close to major highways.

Drilling history: After the initial phases of RC

percussion and diamond drilling, Tasman

discovered high grade mineralization in drill hole

PD 63 (21m at 21g/t Au and 83g/t Ag). However,

further drilling did not yield similar positive

results with respect to the grade or width of the

intersection.

Project schedule: Though further targets for

drill testing have been identified, Tasman did no

further drilling during the year owing to its focus

on the ongoing drilling at Vulcan

Central Gawler Project


Asset Summary: It has three prospects,

namely: Skye, Birdie and Golf North. Gold targets

have been identified based on regional calcrete

sampling and geophysical interpretation by

previous explorers. Tasman aims to improve the

identified target zones and find new targets.

Target commodities: Gold

Location: 95km southwest of Coober Pedy,

South Australia

Regional geology: Tasman had located a 15-m wide low-grade mineralized zone at the Skye

prospect including 6m @ 2.9g/t, indicating

potential for narrow high-grade plunging shoots.

Recent developments: Southern Gold reported

positive results from drilling at the Golf Bore

prospect, located several hundred meters

southwest of Tasman's Golf North prospect.

Project schedule: No work was carried out

during the year in these tenements as the area is

restricted by Department of Defense, which

Tasman expects to be resolved.

Garford - Columba Oil Shale Prospect


Asset Summary: Drilling indicated 7m to 30m

thickness of strongly carbonaceous black organic

rich Tertiary mudstones at various points along its

40km length at shallow depths of around 7m to

15m. A 2m composite sample of carbonaceous

material from one hole was determined for its oil

shale potential. A pyrolysis gas chromatography

was conducted, which indicated good potential for

oil generation.

Target commodities: Oil Shale

Location: 80km southwest of Coober Pedy and

30km west of the Port Augusta to Darwin railway

Investments

Tasman has equity interests in Eden Energy and

Fission Energy, both possessing different

commodities / assets.



Eden Energy Ltd. (EDE)

Tasman’s interest: 22.87% on a fully diluted

basis, as on 30-Jun-12.

Target commodities: Alternative energy -

hydrogen, coal seam and abandoned mine

methane, and geothermal energy.

Company details: EDE is an alternative energy

company making promising progress in its carbon

/hydrogen pyrolysis project. At the same time,

EDE’s subsidiaries in the United States and India

are making progress in Optiblend Dual Fuel Kit

sales.

Fission Energy Ltd. (FIS)

Tasman’s interest: 19% as on 30-Jun-12.

Target commodities: Uranium, nickel-cobalt

Company details: FIS owns 50% in Mt Thirsty

Nickel-Cobalt Project located 20kms north-

northwest of Norseman, in Western Australia. Mt

Thirsty has current JORC resources as below:

Resource

(MMT) Co Ni Mn

Inferred 15.3 0.11% 0.51% 0.73%

Indicated 16.6 0.14% 0.60% 0.98%

Joint Ventures

Asset Summary: Flinders Mining Ltd (Flinders)

has a diamonds-only joint venture with Tasman.

The JV included all of Tasman’s tenements other

than the Lucas Hill and Parkinson Dam projects.

Based on the Joint Venture agreement, Flinders

could earn 70% of the diamond rights on

expending AU$750K over four years.

Target commodities: Diamond



Tasman – Rio Tinto Farm-in agreement

In May 2012, Rio Tinto Exploration Pty Limited (RTX), a wholly owned subsidiary of Rio Tinto Limited,

signed a conditional agreement with Tasman for funding an accelerated exploration program on its

Vulcan prospect making a non-refundable execution payment of AU$1MM to Tasman.

Terms of the agreement

Cash payment of AU$1MM by RTX, as non refundable execution payment within 5 business days. the original payment of AU$10MM will now be reduced by the timely amounts

1. Detail of changes in Letter Agreement (Clause for initial payment of AU$10MM)

1) Extension of date for satisfaction of the condition precedent for 6 months.

1 a) If satisfied: RTX will pay AU$9MM, balance of the AU$10MM payable under the Letter Agreement to undertake the Initial Exploration Program.

1 b) If not satisfied:

i) Extension of 18 months:RTX has the option to fund 2.4km drilling program on heritage cleared areas of the Vulcan prospect through payment of AU$1MM; extension of time for satisfaction of the condition for next 18 months

ii) Extension of 2 years: if not satisfied even after further 18 months, RTX has the option to fund 2.4km drilling program on heritage cleared areas of the Vulcan prospect through payment of AU$2MM; extension of time for satisfaction of the condition for next 2 years

iii) Waiver: if condition not satisfied even after further 2 years, RTX may elect to either waive the condition or allow the Farm-In /JVA to terminate.

2) If RTX elects not to waive the condition or exercise any of the above options, or at any time elects to withdraw, the Farm-In/JVA will terminate, and any payments made by RTX to Tasman will be retained by Tasman

3) If at any time prior to the termination of the Farm-In/JVA the condition is satisfied, the Farm-In/JVA will become unconditional and any outstanding balance of the original AU$10MM will become immediately payable; Tasman will be required to complete the outstanding drilling obligation under the Initial Exploration Program

4) Tasman to undertake an estimated AU$5MM exploration program that includes a total of at least 12km of drilling within the first 12 months after satisfaction of the condition. (including drilling undertaken before Abrginial Heritage access is secured for restricted area)

Option 1: 55% interest in the Agreement by RTX

Conditions:

1) Payment of a further AU$7MM to Tasman; and

2 a) Fund the delineation of a JORC compliant Inferred mineral resource and completing a concept study within three years of electing to farm-in; or

2 b) Disbursing an additional AU$25MM for funding exploration; whichever is earlier

Option 2: Increase interest from 55% to 80%

Conditions:

1) Pre-feasibility study should be completed within the next five years; or

2) Disbursing an additional AU$50MM for funding exploration; whichever is earlier

At 80% interest by RTX, Tasman can:

1) maintain the remaining interest and contribute to future funding; or

2) Offer its remaining stake to RTX (for compulsory purchase) for an agreed value of fair market value



Technologies and Markets

Uraniumix

Chemistry and Properties

Uranium is a toxic silvery-white, shiny metal that

is both ductile and malleable. The atomic number

for this element is 92 and the chemical symbol is

“U”. Uranium is a reactive element; it also

dissolves in acids and reacts with water. Uranium

is a rare element with density of about

19.05g/cm3.

Applications

Uranium finds its widest application as a fuel to

nuclear power plants. Its other applications

include:

explosive and yield booster in nuclear weapons

material for armor and armor-piercing projectiles

catalyst

additive for glass and ceramics (to obtain beautiful green or yellow colors)

toner in photography

mordant for textiles

additive for the preparation of biological

samples for electron microscopy

shielding material (depleted uranium)

ballast (counter weights)

Sources and Production

Sources: Uranium occurs in minerals including

pitchblende, carnotite, cleveite, autunite,

uraninite, uranophane, and tobernite. It is also

found in phosphate rock, lignite, and monazite

sands.

Production: The worldwide production of

uranium in 2011 amounted to 63,085 tonnes, of

which 31% was mined in Kazakhstan. Other

important uranium mining countries are Canada

(14%), Australia (9%), Namibia (5%), Russia

(5%), and Niger (7%).

Demand: Uranium’s demand is primarily driven

by its importance in power generation in nuclear

reactors, and determined by the number of

reactors in operation and their capacity. In 2011,

the supply of uranium met only 85% of the

demand.

The WNA projects that world uranium demand as

about 72,680T of U in 2015; most of this will

come directly from mines. It also expects the

future production from existing and new mines

will not be sufficient to meet the demand

requirements in WNA's upper scenario to 2030

(2030 demand 137k tU; 2030 primary production

97k tU).

Market Trends: Prices and drivers

Uranium prices have declined 25% post closure of

nuclear plants due to earthquake and Tsunami in

Japan. Currently, Uranium spot price remains at

US$50.75/lb from US$66.5/lb prior to

earthquake. However, prices have increased over

the last five years due to increased demand for

electricity and countries demanding more

uranium for utilization in nuclear plants.

In the medium term, we expect the uranium

prices to increase, primarily driven by rising

demand from Japan and China, coupled with

supply shortage. According to Australian Bureau

of Resources and Energy Economics and

Sciences, Uranium prices are expected to reach

US$81/lbs by 2016.

Uranium Price trend in last five years

Source: Infomine

Gold


Gold is the most widely accepted and applied

precious metal, with chemical symbol ‘Au’ and

atomic number ‘79’. It is dense, soft, shiny and

the most malleable and ductile pure metal.

Applications

Gold, due to its properties, has been a highly sought-after precious metal for coinage, jewelry

and other arts since the beginning of recorded



history, and has been majorly used for jewelry

(48% of the total application as on 2011),

investments (40%) and technological purposes

(12%).

Sources, Supply and Production

Production increased 5.4% y-o-y in 2011, with

China remaining the top producer. Australia, US,

Russia and South Africa followed China in

production. Total production in 2011 was

2,700MT, with 13% contributed by China.

World Gold Production 2011 (MT)

Source: USGS

Gold Market Driver

Gold demand is mainly driven by the need for

value preservation, which is affected by the

economic situation (money supply, inflation,

interest rates, debt and equity markets). Demand

for gold is generally seen to be rising during weak

economic conditions and is thus considered to be

a safe haven for investments.

Bar & Coin demand (%) vs Price

Source: Bloomberg; World Gold Council

Another important driver is the fabrication

demand from downstream sectors, predominantly

jewelry. Also, a structural shift in central bank

policy towards gold in recent times is driving

demand. Central banks have bought about 30Moz of gold since March 2009, which is about 12% of

global demand. Further, China, one of the largest

buyers of U.S. Treasuries, reduced its holdings in

US treasuries and is increasing gold reserves by

around 30% a year. This clearly shows its intent

to diversify foreign-exchange holdings.

Pricing x : Gold prices have been rising since

2001, when the price was around US$250/oz, and

reached record levels in early 2011 due to

increase in money supply in the US.

In first half of 2012, gold price has fallen

primarily due to lower imports from India and

tight credit conditions as a result of Eurozone

debt crisis. We expect gold price to rise in second

half of 2012, backed by increase in demand from

India and expected easing by US Central Bank.

Gold Price trend in last five years

Source: Infomine

Copperxi


Copper is a ductile metal with high thermal and

electrical conductivity possessing the chemical

symbol ‘Cu’ and atomic number 29.

Applications

Electronics: About 65% copper produced globally is

used for electrical applications. The important uses of copper include power generation and transmission of electricity. It is also used in wiring and contacts for appliances.

Architecture: About 25% copper produced globally is used in buildings as copper is a waterproof metal and is used for plumbing, roofing and cladding.

Industry and Transport: Copper is used in the production of industrial machinery and transportation vehicles. Transport accounts for about 7% of the global copper usage.

Biological Applications: Copper has biostatic, antimicrobial, and fungicide capabilities. Copper

bracelets are used to ease joint pains and arthritis. It is also used in providing hygienic surfaces in hospitals and other healthcare facilities.

0 500 1,000 1,500 2,000 2,500 3,000

World total

China

Australia

United States

Russia

South Africa

Peru

Indonesia

Canada

Other

2010 2011

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

200

400

600

800

1000

1200

1400

1600

1800

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Price (US$) Bar & Coin Demand (%)



Sources and Production

Production: The top 10 corporate producers

control approximately 53% of global mine output,

with the remaining holdings being fragmented.

The top five producing countries viz. Chile, Peru,

China, US, and Indonesia, control 61% of the

total mine production. Chile leads the world in

mine production with a 34% share; China is the

major contributor to refined production and

demand at 23.8% and 39%, respectively. Mine

production expected to grow at a CAGR of 4.7%

by 2014 as a result of supply from new mines.

Copper Mine Production (KT)

Source: icsg.org

Supply is expected to be deficit (~240kmt) in

2012; however with increased output from new

and existing mines in 2013, supply is expected to

be in surplus.

Demand: Demand is expected to grow by a

lower rate of 2.5% in 2012 as a result of slow

growth in China (3.6%) and US (3.9%) and a

contraction in demand from EU. However, in

2013, demand growth is expected to reach 3.9%,

backed by improved macroeconomic conditions

and rise in Chinese consumption (4.9%)

Copper demand (KT)

Source:

www.codelco.cl/prontus_codelco/site/artic/20110803/asocfile/20

110803155044/codelco_update_july_2011.pdf

Copper Price Trend

Copper prices declined 21% in 2011, however,

have recovered in Jan-2012 with stabilization in

Chinese manufacturing and relatively improving

economic conditions in Europe. Price is expected

to rise during 2012-2014, until the global

inventory pipeline is replenished. Post 2015,

excess supply is expected to lead to a reduction

in copper price.

Copper Price Trend

Source: Bloomberg

74

76

78

80

82

84

86

88

0

5,000

10,000

15,000

20,000

25,000

2006 2007 2008 2009 2010 2011 2012F

% U

tiliz

atio

n

Min

e P

rod

uct

ion

(K

T)

World Mine Production World Mine Capacity Mine Capacity Utilization (%)

0

5,000

10,000

15,000

20,000

25,000

0

5,000

10,000

15,000

20,000

25,000

2004 2005 2006 2007 2008 2009 2010 2011 2012F

Pro

du

ctio

n (

KT)

Co

nsu

mp

tio

n (

KT)

Consumption Production

0

2000

4000

6000

8000

10000

12000

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

US$/m

t



IOCGU Deposits

Propertiesxii

IOCGU (Iron oxide-copper-gold-uranium) deposits are the significantly valuable concentrations of

copper, gold and uranium ores hosted within iron oxide dominant gangue assemblages sharing a

common genetic origin.

The IOCGU deposits generally possess the following properties:

Economic metals comprise copper, with or without gold

Ore style is hydrothermal with strong structural controls

Magnetite and hematite is found in abundance

Fe oxides with Fe / Ti are greater than that found in most igneous rocks and bulk crust

Mineralization

The IOCGU deposits are hugely mineralized with contained ore in the range 10MMT to 4BT with a

grading between 0.2% to 5% copper and 0.1 to more than 3 g/T gold.

Important global depositsxiii

Advantages and disadvantages of exploring IOCGU deposits

The underlying benefit of IOCGU deposits is the resultant profitable mines, which is generally an

outcome of the large size of such deposits, comparatively simple metallurgy and comparatively high

grade of IOCG deposits.

At the same time, IOCGU exploration is difficult owing to vast alteration systems and difficult to drill

unaltered rocks. Additionally, numerous occurrences, and a wide variety of deposit styles widens

exploration effortsxiv.



Project Risk Profile Analysis

Tasman in comparison to its peers carries a

medium risk profile. However, from a medium-to-

long term perspective, we believe Tasman will be

able to quickly advance its projects by defining

resources for development, considering it has

huge potential in South Australia and the required

management expertise

Peer Risk Analysis

We have evaluated the risk profile of Tasman

compared with other exploration companies in

Australia possessing a similar commodity base,

with however relatively more advanced stages in

exploration. We identified the risk as

Low/Medium/High and assigned a score of 1/2/3

respectively based on the risk profile of the major

projects pursued by the companies. The

important risk categories considered for the study

include

– Project Maturity Risk: LOW - Near feasibility;

HIGH - Proof of concept stage

– Financing Risk: LOW - Near negotiations /

lower exploration capex; HIGH - Funding need

for exploration or no well-known funding

sources

– Operational / execution Risk: LOW - Advanced

stages of production and stable grade

extraction; HIGH - Early development stages

and volatile grade extraction or more

– Key Man Risk: LOW - All key operations /

decisions do not depend on a few people;

HIGH - Few decision makers whose presence

is critical for decision making

The individual risk parameters and the underlying

rationale for the scores are discussed in the

subsequent sections.

Peer Risk Profile

Tasman has a relatively higher operational and

project stage risk, while it fares relatively better in

terms of key man risk and financing risk.

Ticker

Total

Risk

Score

Project

Stage

Risk

Financing

Risk

Operational

Risk

Key man

Risk

TAS 1.6 2.0 1.0 2.0 1.5

GCR 2.0 2.0 2.0 2.0 2.0

RXM 2.1 2.5 2.0 2.0 1.5

HAV 1.4 1.5 1.5 1.5 1.0

Lake Torrens and Lucas Hill Projects

Project Stage Risk –MEDIUM

– Tasman is in the initial stages of exploration,

with ongoing drilling activity in Vulcan and

drilling expected to commence in Lucas Hill.

– At the same time, it has achieved good

progress with the drilling it has conducted till

date. Thus, we consider it to be in the

medium risk category.

Financing/Capex Risk – LOW

– The company has zero debt and has strong

backing of strong private players. Nearly 25%

of the equity is held by strong private players.

This should support funding its capex

requirements

– Tasman’s Farm-in with RTX should provide it

with good financial flexibility for its Vulcan and

other projects. RTX is also expected to pay

Tasman AU$9MM to fund drilling program, as

the agreement became unconditional in

August 2012.

Operational / execution Risk – MEDIUM

– Tasman could be challenged for appropriate

allocation of resources (capital and personnel)

with two of its flagship projects – Vulcan and

Lucas Hill running nearly simultaneously

– Sound technical expertise should support

Tasman’s on the functional and operational

front.

Key man Risk – LOW

– We understand Tasman to face Key man risk

considering it has a small board of directors,

thus limiting scope for planning and

implementing decisions at a larger forum.

– However, the long association of the

management with the company mitigates this

risk to a great extent.



Risk Parameters – Definition

Project Stage Risk

The different stages in a project are:

Early stage exploration: In this stage, the

exploration location is decided using

combination of various techniques such as,

samplings, drilling, geophysics, and other

extensive geological and exploration services.

Pre-feasibility study: A preferred Base Case

option will be identified from the possible

options available to the company. The

preferred Base Case option will provide some

level of confidence in the production capacity,

ore grades, metal recovery, capital and

operating costs, project schedule, and project

risks / opportunities. A financial analysis will

also be carried out in order to assess the

economic viability of the project.

Feasilbility study: This includes a collection

of more detailed information, additional

designs, and project-specific cost information

to refine the project cost and schedule. This

will also address information gaps, issues of

concern, risks, and opportunities identified in

the advanced exploration stage.

Detailed engineering: Detailed designs

based on the project scope, concept designs

and purchase of key plant equipment will be

completed.

Site construction: Site construction starts as

per the field engineering designs and is

expected to confirm adherence to appropriate

quality control practices.

Commissioning and start of operations:

After completion of construction, operability

testing and acceptance, the Owner will be

asked to confirm whether the project

construction and performance is as designed

and meets the required plant performance

and safety requirements. The final operating

control programs will be completed, installed,

and tested for fuctional efficiencies.

We consider a project to carry lower risk profile if

feasibility study is complete and detailed

engineering has been conducted as the

uncertainty regarding the sustainability of the

project reduces significantly.

Project Financing Risk

Initial stages of exploration, development and

production requires high levels of capital

investment. Investments will be riskier when

done in exploration stage as the economic

viability of deposit is not determined. The risk

level of the capital reduces as it advances through

the various exploration stages.

Initial stages of exploration, and development of

the project attracts high-risk-capital investors. As

the project stages proceed, they have varied

options like equity (IPO), debt financing, etc.


the exploration capital expenditure is low and the

company has secured financing to fund its capital

expenditure.

Operational Risk

Mining machinery, transport and new

technologies are used for operations in areas

which have complicated geological and climatic

conditions. There are increased risks of flooding,

pit slope and rim slide, accidents caused by the

use of mining transport equipment due to adverse

weather conditions and problems in power supply

facilities and recovery plants. These risks could

result in delayed ore production and recovery,

increased costs, health, safety and environmental

issues and affect the company’s production

activities. Additionally, the quality of ore reserves,

and the method used for extraction also

contribute to the operational risk.


the company is in the advanced stages of its

operations and extracts fairly stable grades.

Key Man Risk

The company is run by its management who

brings prior experience and knowledge to the

table. Also, it is important that a company does

not rely heavily on very few individuals who have

vast experience in the field.

We consider a project to be of lower risk profile if

the management team is highly qualified, has

good number of years of experience in oil and gas

field and has lesser dependability on few people.



Peer Valuation and Risk Profile

We have also evaluated the companies based on

the value per resource and the risk profile.

Enterprise Value per Resource has been

evaluated. AU$/T has been used as a proxy for

the valuation measure.

The Risk Profile has been assessed as a weighted

blended score based on the project maturity risk

(30% weightage), financing risk (30%),

Operational risk (20%) and key man risk (20%).

The individual risk score have been provided in

the risk profile table in the Peer Risk Profile table

in the previous section.

Valuation Vs Risk Profile Chart

Valuation Vs Risk Profile

Company Total Risk

Score

Enterprise

Value/

Resource

(AU$ /T)

Enterprise

Value

(AU$ MM)

Total

Resource

(MMT)

TAS 1.6 0.01 44.0 3,630.0

GCR 2.0 0.05 8.3 162.4

RXM 2.1 0.22 72.1 329.0

HAV 1.4 0.20 60.9 311.4

The analysis clearly indicates our assertion that

Tasman commands a premium compared to its

peers, considering the medium risk profile of its

projects.

TAS

GCR

RXM

HAV

-

0.1

0.1

0.2

0.2

0.3

- 0.5 1.0 1.5 2.0 2.5 3.0

EV A

U$

/T

Company Risk Score



Peer Analysis

Name of Company Project name Market cap (MM AU$)

EV (MM AU$)

Resources MMT

EV/Resources (AU$/T)

Tasman Resources Ltd. Vulcan 45 44 3,630 0.01

Golden Cross Resources Copper Hill 12 8 162 0.05

Rex Minerals Ltd Hillside Project

(Pine Point Copper Belt)

128 72 329 0.22

Havilah Resources Kalkaroo 63 61 311 0.20


0.22

0.20

0.05

0.01

-

0.05

0.10

0.15

0.20

0.25

Rex Minerals Ltd Havilah Resources Golden CrossResources

Tasman ResourcesLimited




Value

The Fair Market Value for Tasman Resources’ shares stands between AU$79.03MM and AU$269.81MM.

The Fair Market Value for one of Tasman Resources’ publicly traded shares stands between AU$0.35 and

AU$1.19.

Tasman Resources Comparablesxv

The Comparable Resources valuation uses Peer’s resource, resource grade/project stage and Enterprise

value to arrive at Tasman's fair value. The peers have been identified on the basis of similar resources

and region of operation.

The valuation is done using regression analysis between the grade of the resource or project stage and

EV/Resource of the comparables. We have used the resource grade or project stage depending on the

correlation factor between the resource grades or project stage and EV/resource of the peers.

Arrowhead has estimated the resources for Vulcan based on the drilling results disclosed in company

filings.

Copper Comparables

Ticker Company Enterprise Value

(AU$ MM) Estimated

Resources (KT) Estimated

EV/Resources

TAS Vulcan Project $44 4,515 4,515

BHP Olympic Dam $199,423 69,039 69,039

HGO Kanmantoo $115 303 303

OZL Prominent Hill $1,488 2,305 2,305

OZL Carapateena Project $1,488 798 798

Gold Comparables


(AU$ MM) Estimated

Resources (Koz) Estimated

EV/Resources

TAS Vulcan Project $44 1 $29,466

BHP Olympic Dam $199,423 85,239 $2,340

HGO Kanmantoo $115 200 $573

OZL Prominent Hill $1,488 4,810 $309

OZL Carapateena Project $1,488 1,110 $1,341

Silver Comparables


(AU$ MM) Estimated

Resources (Koz) Estimated

EV/Resources

TAS Vulcan Project $44 31 $1,432

BHP Olympic Dam $199,423 392,187 $508

HGO Kanmantoo $115 3,764 $31

OZL Prominent Hill $1,488 22,262 $67

OZL Carapateena Project $1,488 11,760 $127

Uranium Comparables


(AU$ MM) Estimated

Resources (T) Estimated

EV/Resources

TAS Vulcan Project $44 72,537 $0.6

BHP Olympic Dam $199,423 2,163,263 $92.2

UUU Honeymoon $2,641 5,902 $447.4

RIO Ranger $117,638 84,473,984 $1.4



Important information on Arrowhead methodology

The principles of the valuation methodology employed by Arrowhead BID are variable to a certain

extent, depending on the sub-sectors in which the research is conducted. But all Arrowhead valuation

researches possess an underlying set of common principles and a generally common quantitative

process.

With Arrowhead commercial and technical due diligence, the company researches the fundamentals,

assets and liabilities of a company, and builds estimates for revenue and expenditure over a coherently

determined forecast period.

Elements of past performance such as price/earning ratios, indicated as applicable, are mainly for

reference. Still, elements of real-world past performance enter the valuation through their impact on the

commercial and technical due diligence.

We have presented the comparable method based on enterprise value per resource unit (AU$/unit) as a

primary measure of fair value, which is central to the methodology applied towards building the fair

value bracket.

Arrowhead BID Fair Market Value Bracket

The Arrowhead Fair Market Value is given as a bracket. This is based on quantitative key variable

analyses such as key price analysis for revenue and cost drivers or analysis and discounts on revenue

estimates for projects, especially relevant to projects estimated to provide revenue near the end of the

chosen forecast period. Low and high estimates for key variables are produced as a valuation tool.

In principle, an investor comfortable with the high brackets of our key variable analysis will align with

the high bracket in the Arrowhead Fair Value Bracket, and, likewise, in terms of low estimates. The

investor will also note the company intangibles to analyze the strengths and weaknesses, and other

essential company information. These intangibles serve as supplementary decision factors for adding or

subtracting a premium in investor’s own analysis.

The bracket should be taken as a tool by Arrowhead BID for the reader of this report and the reader

should not solely rely on this information to make his decision on any particular security. The reader

must also understand that while on the one hand global capital markets contain inefficiencies, especially

in terms of information, on the other, corporations and their commercial and technical positions evolve

rapidly. This present edition of the Arrowhead valuation is for a short to medium-term alignment

analysis (one to twelve months). The reader should refer to important disclosures on page 26 of this

report.

Information on the Tasman Resources Limited Valuation

Tasman Resources Valuation Methodology: The Arrowhead fair valuation for Tasman is based on

the comparable Resource Based Valuation method. Arrowhead has adopted Resource Based Valuation as

the company is currently in the exploration stage and is yet to demonstrate existence of a feasible

mineral deposit in its flagship projects. Arrowhead has identified comparable resources in companies

comparable to Tasman, which could be relatively larger in size and at an advanced stage of mining. We

have discounted each resource based on the stage of operation. Currently, Arrowhead has based the

valuation on Vulcan project.

Comparable Companies: Tasman is at the early stage of exploration with prime focus on mining

copper, gold, silver and uranium. The company has completed geological and geophysical review

remodeling, selected new drill targets and concluded 9B agreement with KU. The comparable deposits

include Olympic Dam, Prominent Hill, Carapateena, and Honeymoon. All these comparables are into the

exploration / production of Cu, Au, Ag and U, providing good benchmark for estimating the company’s

EV/Resources.

Underlying Business Plan: Tasman Resources, with diversified projects, is focused on developing its

flagship projects – Vulcan and Lucas Hill. The company has drilled eight holes in Vulcan till date, and



expects to commence drilling in Southern Vulcan prospect by September 2012, post Aboriginal Cultural

Heritage Clearance. Tasman has entered into a Farm-in agreement with Rio Tinto Exploration (a

subsidiary of Rio Tinto Ltd), which is expected to provide with additional technical expertise and the

required financing.

For its Lucas Hill project, Tasman has secured the services of a drilling contractor. It has initially drilled

two holes, for which it had obtained Aboriginal heritage clearance, in mid-January 2012.



Analyst certifications

I, Mohanarangam Purushothaman, certify that all

of the views expressed in this research report

accurately reflect my personal views about the

subject security and the subject company.

I, Vishal Pasari, certify that all of the views

expressed in this research report accurately

reflect my personal views about the subject

security and the subject company.

Important disclosures

Arrowhead Business and Investment Decisions,

LLC received fees in 2011 and 2012 from Tasman

Resources for researching and drafting this report

and for a series of other services to Tasman

Resources, including distribution of this report

and networking services. Arrowhead BID owns

long positions in Tasman Resources equity as well

as long call options in Tasman Resources equity.

Aside from certain reports published on a periodic

basis, the large majority of reports are published

by Arrowhead BID at irregular intervals as

appropriate in the analyst’s judgment.

Any opinions expressed in this report are

statements of our judgment to this date and are

subject to change without notice.

This report was prepared for general circulation

and does not provide investment

recommendations specific to individual investors.

As such, any of the financial or other money-

management instruments linked to the company

and company valuation described in this report,

hereafter referred to as “the securities”, may not

be suitable for all investors.

Investors must make their own investment

decisions based upon their specific investment

objectives and financial situation utilizing their

own financial advisors as they deem necessary.

Investors are advised to gather and consult

multiple information sources before making

investment decisions. Recipients of this report are

strongly advised to read the information on

Arrowhead Methodology section of this report to

understand if and how the Arrowhead Due

Diligence and Arrowhead Fair Value Bracket

integrate alongside the rest of their stream of

information and within their decision taking

process.

Past performance of securities described directly

or indirectly in this report should not be taken as

an indication or guarantee of future results. The

price, value of, and income from any of the

financial securities described in this report may

rise as well as fall, and may be affected by simple

and complex changes in economic, financial and

political factors.

Should a security described in this report be

denominated in a currency other than the

investor’s home currency, a change in exchange

rates may adversely affect the price of, value of,

or income derived from the security.

This report is published solely for information

purposes, and is not to be considered as an offer

to buy any security, in any state.

Other than disclosures relating to Arrowhead

Business and Investment Decisions, LLC, the

information herein is based on sources we believe

to be reliable but is not guaranteed by us and

does not purport to be a complete statement or

summary of the available data.

Arrowhead Business and Investment Decisions,

LLC is not responsible for any loss, financial or

other, directly or indirectly linked to any price

movement or absence of price movement of the

securities described in this report.



Valuation

Resource Based Valuation for the Vulcan Prospect

Copper Low High Remarks

EV/Resources 1344.08 3636.90 Correlation

of 93%

between

resource grade and

EV/Resource

Slope

268165.54 268165.54

Intercept

-1994.58 -1994.58

Grade (%) 1.2% 2.1%

Value Bracket

Estimated EV/Resources

Mineral content (in KT)

Attributed EV

(AU$ MM)

Value/ Share (AU$)

Low 1,344 15.1 20.23 0.09

High 3,637 25.4 92.33 0.41

Gold Low High


of 32% between

resource

grade and

EV/Resource

Slope 2018.45 2018.45

Intercept 65.97 65.97

Grade (g/t) 0.35 0.50

Value Bracket


Mineral content (in Koz)

Attributed EV

(AU$ MM)

Value/ Share (AU$)

Low 772 5.0 3.84 0.02

High 1,075 7.1 7.64 0.03

Silver Low High


of 1.74%

between

resource grade and

EV/Resource

Slope 54.30 54.30

Intercept -3.41 -3.41

Grade (g/t) 2.40 3.20

Value Bracket


Mineral content (in Koz)

Attributed EV

(AU$ MM)

Value/ Share (AU$)

Low 127 102.3 12.99 0.06

High 170 136.5 23.25 0.10

Uranium Low High


of 1.28% between

resource

grade and

EV/Resource

Slope 93.40 93.40

Intercept 154.88 154.88

Grade (kg/t) 0.20 0.58

Value Bracket


Mineral content (in T)

Attributed EV

(AU$ MM)

Value/ Share (AU$)

Low 174 241.8 41.96 0.19

High 209 701.2 146.58 0.65

ARROWHEAD FAIR VALUE BRACKET

Value Bracket

Copper Project

Gold Project Silver Project Uranium project

Total EV (AU$ MM)

Value/ Share (AU$)

Low 20.2 3.8 13.0 42.0 79.0 0.35

High 92.3 7.6 23.2 146.6 269.8 1.19

y = 268166x - 1994.6R² = 0.9296

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

0.0% 0.5% 1.0% 1.5% 2.0%

y = 2018.5x + 65.974R² = 0.3198

$0

$500

$1,000

$1,500

$2,000

$2,500

0.0 0.2 0.4 0.6 0.8

y = 54.299x - 3.4132R² = 0.0174

$0

$100

$200

$300

$400

$500

$600

2.0 3.0 4.0 5.0

y = 93.401x + 154.88R² = 0.0128

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

$400.0

$450.0

$500.0

0.0 0.1 0.2 0.3 0.4 0.5 0.6



Notes and References

i Bloomberg as on 18-Sep-12

ii Bloomberg as on 18-Sep-12

iii 3 months average daily volume from Bloomberg as on 18-Sep-12

iv Bloomberg as on 18-Sep-12

v Arrowhead Business and Investment Decisions Fair Value Bracket - AFVBTM. See information on valuation on pages 23-27of this report and important disclosures on page 26 of this report.

vi http://paceinvestors.pir.sa.gov.au/

vii Reuters, as on 13-Aug-12

viii http://www.mining-technology.com/projects/olympic-dam/

ix http://www.world-nuclear.org/info/inf23.html;

http://www.theaustralian.com.au/business/mining-energy/global-uranium-demand-expected-to-skyrocket/story-e6frg9df-1226306620160; http://www.roperld.com/science/NuclearPowerDecline.htm;

http://www.macquarieprivatewealth.ca/dafiles/Internet/mgl/ca/en/advice/specialist/noel/documents/matt-noel-uranium-report.pdf;

http://www.theaustralian.com.au/business/mining-energy/uranium-supply-in-focus-as-reactors-poised-to-come-back/story-e6frg9df-1226395185001;

http://www.wallstreetdaily.com/2012/04/26/uranium-price-forecast-the-nuclear-industrys-fundamental-shortage/;

http://nextbigfuture.com/2012/03/australian-outlook-for-world-economy.html x http://goldinvestingnews.com/26319/2012-gold-q2-market-trends-outlook-price-investing-india-demand-united-states-comex-federal-reserve.html

xi http://www.miningweekly.com/print-version/new-mining-operations-to-impact-copper-supply-growth-2012-03-30;

http://www.icsg.org/images/stories/pdfs/icsg_press_release_-_2012_04__forecast.pdf;

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Metals/6472905;

http://www.marketwatch.com/story/societe-generale-cuts-2012-copper-gold-outlook-2012-06-11; http://www.businessinsider.com/here-are-morgan-stanleys-commodity-predictions-for-2012-and-2013-2012-5?op=1;

http://www.commodityonline.com/news/anz-trims-2012-gold-silver-copper-forecast-48459-3-48460.html

xii http://en.wikipedia.org/wiki/Iron_oxide_copper_gold_ore_deposits; http://eprints.jcu.edu.au/4705/

xiii Recreated from information available in: http://en.wikipedia.org/wiki/Iron_oxide_copper_gold_ore_deposits

xiv http://www.pir.sa.gov.au/__data/assets/pdf_file/0005/104198/Baker_Tim.pdf

xv Source (EV): Bloomberg as on to 17-Sep-12. Resource for each project has been estimated after discounting individual projects of the peers in each product category.

Enterprise Value (EV) in AU$ MM and Estimated Resources are in thousands MT. Estimated EV/Resources is in AU$/MMT.

http://www.world-nuclear.org/info/inf23.html

http://www.theaustralian.com.au/business/mining-energy/global-uranium-demand-expected-to-skyrocket/story-e6frg9df-1226306620160

http://www.roperld.com/science/NuclearPowerDecline.htm

http://www.macquarieprivatewealth.ca/dafiles/Internet/mgl/ca/en/advice/specialist/noel/documents/matt-noel-uranium-report.pdf

http://www.theaustralian.com.au/business/mining-energy/uranium-supply-in-focus-as-reactors-poised-to-come-back/story-e6frg9df-1226395185001

http://www.wallstreetdaily.com/2012/04/26/uranium-price-forecast-the-nuclear-industrys-fundamental-shortage/

http://nextbigfuture.com/2012/03/australian-outlook-for-world-economy.html

http://en.wikipedia.org/wiki/Iron_oxide_copper_gold_ore_deposits

due diligence and valuation report - tasman resources€¦ · in may 2012, tasman and rio tinto...

Documents