jennings capital report oct. 7, 2011

Please see important disclosures on pages 35 and 36.

October 7, 2011 Recommendation: SPECULATIVE BUY EXPLORATION ORBITE V.S.P.A. INC. 12-Month Target: C$8.00 (TSXV-ORT.A C$2.09) Risk Rating: ABOVE AVERAGE

INITIATING COVERAGE: POISED TO REVOLUTIONIZE THE ALUMINUM INDUSTRY A New, More Environmentally Friendly Method to Produce Alumina: Orbite has patented a process to extract alumina from aluminous clay. If the method is proven to be economic and consistently meets smelter specifications, Orbite’s method will be the first alternative to the 124-year old Bayer method. Alumina is an essential ingredient in the manufacturing of aluminum and it takes approximately two tonnes of alumina for every tonne of aluminum.

Exceptional Logistics: The blue sky potential of this story is augmented by outstanding logistics: Orbite’s aluminous clay deposit is within 20 km from a ship loading facility situated on tidal waters and within a 30 km radius of 10 aluminum smelters in Québec (plus two more in New York State), representing an alumina market of approximately 5.5 million tonnes, or 12% of global aluminum consumption. These smelters currently import alumina from such distant countries as Australia, Jamaica and Brazil.

Initial Batches of High-Purity and Metallurgical Alumina Appear to Meet Industry Specifications: Both metallurgical and high-purity alumina have been produced at Orbite’s industry-scale Cap-Chat facility since it was commissioned in January 2011. According to Orbite, its high-purity alumina is well suited for the high growth LED market and its metallurgical alumina has been used to manufacture aluminum by two separate, independent laboratories.

Other Potential Revenue Streams: Orbite’s process appears to have several applications for the recovery of valuable elements in addition to alumina, which include the production of rare earths, scandium, gallium, hematite, silica, and magnesium oxide. These by-products could potentially be produced at virtually no incremental cost. Furthermore, Orbite has considerable potential to generate patent revenues for its alumina extraction method, and pending patents for the extraction of rare earth oxides and hematite.

Valuation: We are initiating coverage on Exploration Orbite with a SPECULATIVE BUY recommendation and a 12-month target price of C$8.00. Our target price is based on a blend of: (1) Our NAV model for high-purity and metallurgical alumina risked at 30%; and (2) A 7.0x multiple applied to our F2013 CFPS estimate for high-purity alumina alone, which is C$1.25.

Exploration Orbite V.S.P.A. Inc. is a Québec-based resource company whose two flagship assets consist of: a patent pending process to extract metallurgical and specialty high-purity alumina from aluminous clays; and its 6,441-hectare Grande-Vallée property situated in Québec’s Gaspé Peninsula, which contains a sizable aluminous clay deposit. Company Website: http://www.explorationorbite.com

Sector: SPECIAL SITUATIONS Analyst: KEN CHERNIN, MBA e-mail: [email protected] Tel: (902) 496-7007 Fax: (902) 496-7599

Associate: BILL MANTZOUTSOS, MBA e-mail: [email protected] Tel: (416) 304-2184 Fax: (416) 214-0177

Company Statistics

Potential Return-To-Target 283%

52-Week Range C$0.40 - C$5.69

Basic Shares O/S 167.7 MM

Fully Diluted O/S 199.8 MM

Basic Market Cap C$350.4 MM

Cash (10-5-2010) C$71.0 MMWorking Capital (10-4-2010) C$71.0 MM

Total Debt C$2.1 MM

Ent. Value C$281.5 MM

Earnings Summary

FYE: Dec 2010 E 2011E 2012 E 2013 EAnnual ProductionHigh-Purity Alumina na na 350 t/y 1,400 t/y

Metallurgical Alumin na na na 145,000 t/y

Revenues na na US$88 MM US$408 MM

EBITDA na na US$83 MM US$365 MM

EPS (FD) na na US$0.19 US$0.98

CFPS (FD) na na US$0.28 US$1.30

EV/EBITDA na na 3.4x 0.8x

P/E (FD) na na 11.3x 2.1x

P/FCF (FD) na na 7.6x 1.6x

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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.

TABLE OF CONTENTS

INVESTMENT THESIS................................................................................................................... 3

COMPANY OVERVIEW AND PROJECT HISTORY............................................................................. 5

PROJECT DESCRIPTION .............................................................................................................. 6

THE PROCESS............................................................................................................................ 7

THE GRANDE-VALLÉE PROPERTY: SIZABLE ALUMINOUS CLAY RESOURCE ................................ 11

QUANTIFYING THE UPSIDE: NUMEROUS BLUE SKY SCENARIOS.................................................. 13

DEVELOPMENT SCHEDULE AND CATALYSTS.............................................................................. 21

BALANCE SHEET, RECENT FINANCINGS, AND PROJECT FINANCING............................................ 22

KEY INVESTMENT RISKS ........................................................................................................... 24

VALUATION AND RECOMMENDATION ......................................................................................... 25

APPENDIX A: TYPICAL EXTRACTION RATES FOR ALUMINUM & IRON AND THE COMPOSITION OF THE GRAND VALLÉE CLAY................................................................................................... 26

APPENDIX B: ORBITE’S PATENTS AND PENDING PATENTS.................................................... 27

APPENDIX C: SELECT RARE EARTH OXIDE HISTORICAL PRICES ........................................... 28

APPENDIX D: HISTORICAL METALLURGICAL ALUMINA AND ALUMINUM PRICES .......................... 29

APPENDIX E: SENIOR MANAGEMENT........................................................................................ 30

APPENDIX F: BOARD OF DIRECTORS........................................................................................ 32

APPENDIX F: BOARD OF DIRECTORS........................................................................................ 32

APPENDIX G: PRODUCTION ASSUMPTIONS ............................................................................... 33

APPENDIX H: PROJECTED INCOME AND FREE CASH FLOW........................................................ 34

APPENDIX I: LIST OF GLOBAL ALUMINA SMELTERS .................................................................. 35

Jennings Capital Inc. Research Disclosures .................................................................... 36

Company Specific Disclosures .......................................................................................... 37

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INVESTMENT THESIS We are initiating coverage on Exploration Orbite V.S.P.A. Inc. (“Orbite” or the “Company”) with a SPECULATIVE BUY recommendation and 12-month target price of C$8.00. Orbite has developed, and is in the process of commercializing, a method to extract alumina from aluminous clay for the production of both high-purity and metallurgical grade alumina.

If Orbite successfully demonstrates that its process can economically and consistently produce these alumina grades at industry standards/specifications, the Company will have unleashed the means to exploit the ~215 million tonnes (assuming a 90% recovery rate) of Aluminum Oxide (Al2O3) strategically situated within 20 km of a ship loading facility on tidal waters and supported by good infrastructure.

• High-Purity Alumina: Orbite plans to commence commercial production of high-purity alumina during Q2 or Q3 of 2012, at its commissioned Cap-Chat pilot plant, at an initial rate of 1 tonne per day. The Company expects to expand the plant’s capacity to 3 tonnes per day during Q4/12 and then to 5 tonnes per day during Q1/13. High-purity alumina can fetch up to US$750 per kilogram, depending upon the quality and grain size. It is a fast growing market, largely because it is an essential element in the manufacturing of light-emitting diodes (LEDs).

• Metallurgical Alumina: Metallurgical smelter-grade alumina is an essential ingredient in the production of aluminum (approximately two tonnes of alumina is required to produce one tonne of aluminum). Québec is home to 10 alumina smelters that account for approximately 12% of the global aluminum market. This translates into approximately 5.5 million tonnes of alumina annually, and based on current smelter-grade alumina prices, this local market represents C$2.5 billion annually. Furthermore, there are two aluminum smelters in New York State, for a total of 12 smelters along the St. Lawrence River. Québec’s aluminum smelters are currently supplied with alumina imported from countries such as Australia, Jamaica and Brazil. Alumina from neighbouring Orbite would be an attractive alternative for the Québec smelters, given that transportation-associated costs are highly correlated with the price of fuel and account for approximately 25% of alumina’s fob price; therefore, Orbite could afford substantial cost savings to these smelters.

Considerable resource and tremendous exploration potential… Our model indicates that Orbite could supply these smelters for ~40 years, based on the most recent NI 43-101 compliant resource estimate. This resource estimate is based on only ~1% of Orbite’s Grand-Vallée aluminous clay property. Given that the deposit appears to be very homogenous, it has considerable exploration potential.

…but the blue-sky potential of this story does not end in Québec… If the Company proves its process can economically produce metallurgical alumina on a commercial scale, Orbite holds international patents (certain patents are still pending) which could unlock the value of other non-bauxite aluminous ores, such as clays or kaolin, in other countries including China, Russia and Australia (according to Australia Minerals & Mining Group Limited, it has sent kaolin samples to Orbite for testing). In 2010, approximately 82 million tonnes of metallurgical alumina was produced, representing a market of approximately $37 billion.

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…and it does not end with aluminous clay… Although in the early stages, Orbite is conducting laboratory tests using its proprietary technology to process bauxite, and according to the Company, the alumina extraction rate compares favourably with that of its Grande-Vallée alumina clay. This indicates that Orbite’s process could be used to extract alumina from bauxite and could possibly be a viable substitute for the 124-year old Bayer process with significant ecological advantages.

The Bayer process, which is the principal means used globally to extract alumina from bauxite, has remained virtually unchanged since its invention in 1887, and on average, produces approximately 1.75 tonnes of a toxic red mud for every tonne of alumina produced. The production of this environmentally hazardous by-product has drawn considerable scrutiny following a tailings damn failure at Magyar Aluminum in Hungary in October 2010, which resulted in the flooding of several villages and caused 10 deaths and 150 injuries. In contrast, Orbite’s process does not produce red mud, and it is expected that better than 99.7% of the acid used in Orbite’s leaching process will be recovered, which opens the possibility of using the waste material as backfill at the mine site.

Furthermore, although still in the experimental stages, Orbite’s process has the potential to substantially lower operating costs relative to the Bayer process, owing to considerably lower energy consumption (Orbite’s process is exothermic), because of the high acid recovery rate and the absence of calcination needed prior to processing.

…nor does it end with alumina. Orbite’s process appears to have several applications for the recovery of valuable elements in addition to alumina, which include rare earth oxide, scandium, hematite, silica and magnesium oxide. Earlier this year, the Company filed a provisional U.S. patent application extending protection for its existing patented technology to the extraction of scandium, gallium and other rare earth elements from aluminous clay. As we understand it, these by-products could be extracted from the Grand Vallée clay during the alumina production process, at virtually no additional cost.

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COMPANY OVERVIEW AND PROJECT HISTORY Exploration Orbite V.S.P.A. Inc. is a Montreal-based research/resource-focused company incorporated in 1983. Orbite was originally focused on exploration for diamonds and gold, primarily within the Abitibi area in Canada.

Began to focus on alumina: Orbite essentially reinvented itself in the summer of 2005, when it acquired the Grande-Vallée property (11,672 acres at that time) in the Gaspé Peninsula, Quebéc, from Poly-Vein Exploration Inc. (private company). Work undertaken in 2001 indicated that the Grande-Vallée property had considerable potential, with aluminous clay averaging a grade of 24.25% Al2O3.

Conceive an economical process to produce alumina from aluminous clay: Now armed with a potentially sizable aluminous clay deposit, Orbite was faced with the very formidable challenge of developing a process for the economic extraction of alumina from the clay. Although it had been known for decades that alumina could be produced from aluminous clay, the production costs of these processes were so great that they rendered the methods uneconomical. Furthermore, the alumina quality was inferior compared to alumina produced by conventional methods (the Bayer process is discussed below).

However, before purchasing the property, Orbite reviewed tests conducted in 2004 by researchers at Laval University, who performed 25 extraction trials using acid-dissolution methods, followed by a process of pyrohydrolysis at a high temperature. These tests were part of a doctoral thesis published in 2004 by Valérie Ouellet, titled “Extraction of alumina from clay from the Murdochville region of Québec, Canada”. The results of the tests were very encouraging: Eight trials were conducted on burned clays, which enabled the extraction of 97% Al2O3, with recovery rates ranging between 99% and 100%. An additional 17 trials were conducted on unburned clays, which yielded lower extraction rates (95% Al2O3) but similar recovery rates.

Within a month of acquiring the Grande-Vallée property, Orbite hired current President and CEO, Richard Boudreault, as senior Vice President, Strategy and Technology. Mr. Boudreault was charged with leading the Company’s newly formed six-member Scientific Advisory Board, created to focus on developing an economical process to produce high-quality alumina from the Grande-Vallée clays. Mr. Boudreault’s team immediately focused on the Laval laboratory tests and in 2006, Orbite awarded a contract to the Centre d'études des procédés chimiques du Québec (CÉPROCQ) to develop a propriety alumina extraction process, which was based on Orbite’s research.

Success in a laboratory environment - filed first patent: The results from the CÉPROCQ work were extremely encouraging: More than one kilogram of high-purity alumina was produced in a laboratory at an extraction rate of 80%. Orbite sent samples of the high-purity alumina to several companies with aluminum smelting operations as well as the companies involved in the aluminum products sector. The Company filed a patent application to protect the intellectual property rights associated with the inventions contained within the process.

Formed strategic partnerships: In 2007, Orbite sent samples of both metallurgical and high-purity alumina produced in a laboratory-based environment to potential customers. According to Orbite, the samples were deemed to be of such high quality that Aluminerie Alouette Inc. and the Amalgamated Metal Corporation signed agreements with Orbite.

Proved viability in full-scale pilot plant environment: In January 2011, Orbite commissioned its Cap-Chat pilot plant to produce both high-purity and metallurgical alumina. In mid-February 2011, Orbite produced its first tonne of high-purity alumina

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both on schedule and on budget, proving its process was suitable for large scale, commercial production.

In late-May 2011, Orbite announced it had produced the first samples of aluminum from its metallurgical alumina at the Institute of Scientific Research - Energy, Materials and Communications, confirming the quality of Orbite’s metallurgical alumina.

In late June, Orbite announced it had successfully produced a large scale aluminum metal ingot from its metallurgical grade alumina (following a continuous 50-hour electrolysis test) in a large-scale laboratory test conducted at the Norwegian-based leading independent international research organization SINTEF, which is used by all the major aluminum companies for research, development and testing.

PROJECT DESCRIPTION Orbite’s flagship asset consists of two equally important components: (i) The Company’s 100%-owned 15,916-acre Grande-Vallée property, which contains a sizable aluminous clay deposit and is situated in Québec’s Gaspé Peninsula, some 20 km from tidal waters, and; (ii) The Company’s patented and patent pending processes to extract metallurgical and specialty high-purity alumina from aluminous clays, as well as scandium and rare earths.

Exhibit 1: Orbite’s Cap-Chat Pilot Plant

Source: Company website

Orbite has 100% ownership of a 28,000 sq. ft. commissioned production pilot plant in Cap-Chat, Québec (see picture above), where the Company is currently alternating between the production of high-purity and metallurgical alumina.

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After proving it could successfully produce alumina in a laboratory, Orbite formed two strategic partnerships:

Aluminerie Alouette: In 2008, Orbite and Aluminerie Alouette executed a collaboration letter agreement intended to allow Orbite to optimize its process, as well as to be used to develop technical specifications for the pilot plant. In late 2009/early 2010, Alouette contributed $1 million dollars toward Orbite’s experimental pilot plant in Cap-Chat, Québec. The $1 million investment consisted of two convertible notes in the principal amount of $500,000, bearing interest at a rate of 2.25% per annum and maturing in November 2015. The notes can be converted at Alouette’s option, after November 17, 2011, for Class A Shares. Aluminerie Alouette owns and operates the largest and most modern aluminum smelter in North America, which is situated across the St. Lawrence from Orbite’s aluminous clay property in Sept-Îles. Aluminerie Alouette is a consortium comprised of five partners: (1) Rio Tinto Alcan; (2) Investissement Québec; (3) Hydro Aluminum Canada Inc.; (4) Marubeni American Corporation; and (5) Aluminum Austria Metall Québec Inc.

Amalgamated Metal Corporation: In 2007, A letter of intent was signed with Amalgamated Metal Corporation PLC subsidiary, Amalgamet Canada Limited, related to the potential distribution of Orbite’s ultra-pure alumina.

The Amalgamated Metal Group is a worldwide supplier of raw materials and intermediate products, with a focus on non-ferrous metals, steel and construction materials for a broad range of industrial applications.

THE PROCESS Orbite is not the first entity to design a process to extract alumina from aluminous clay. In fact, the United States Bureau of Mines conducted extensive research in the 1940s, aimed at finding alternative sources of alumina to bauxite, driven by concerns of bauxite supply security. However, the research was unsuccessful in developing an economical process, and the alumina that was produced did not meet industry standards (in actuality there is no second tier for metallurgical alumina: it either makes the grade or it is essentially worthless).

As we discuss in greater detail, below, Orbite’s method for producing alumina from aluminous clay entails a slightly high pressurized hydrochloric acid (HCI) leaching, followed by ion precipitation and calcination. Orbite has produced metallurgical and high-purity alumina grades in a laboratory setting and in its pilot plant in Cap-Chat, Québec, using its proprietary technology. From the commissioning of the pilot plant on January 15, 2011, through to August 21, 2011, a total of 40 production lots consisting of 850 kilograms of clay per lot have been processed, and thus far, the results have been very encouraging:

Orbite’s metallurgical grade alumina meets Aluminerie Alouette’s smelter alumina content standard of an Al2O3 content greater than 98.35 wt%;

The metallurgical alumina produced at Orbite’s Cap-Chat plant has been used to make aluminum by two different independent entities: (1) Québec’s National Institute of Scientific Research, in May 2011; and (2) SINTEF (the largest independent research organization in Scandinavia), in June 2011.

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According to Orbite, high-purity samples tested to date have met specifications for LED applications.

Currently, production at the pilot plant is largely focused on optimizing the process parameters and on gaining a better understanding of the kinetics of reaction, which includes adjusting the ratio of acid-to-clay, temperature and pressures. The results from the pilot plant are to be used in a comprehensive study to demonstrate the feasibility of the ore and process before construction of the metallurgical plant.

Patent Protected

Orbite’s process is protected by a portfolio of patents and pending patents in Canada and the United States (20-year patents), and the Company has obtained an international patent which protects the crucial components of the process. There are also patents pending in jurisdictions that the Company considers to be strategic, including Australia, Brazil, China, Hong Kong, Europe, India, Japan and Russia.

A second U.S. patent application, covering process enhancements to improve productivity through higher yield and lower production costs, is also pending. The U.S. patent protection includes a unique signature for alumina and aluminum produced using the Orbite process, thereby guarding against patent infringers marketing in the United States.

Orbite has filed four additional U.S. patent applications, covering alumina process enhancements to improve the productivity through higher yields, coupled with lower production costs, the extraction of rare earths and the production of hematite.

Overview of the Process

As discussed, Orbite’s method for producing metallurgical alumina from aluminous clay entails a high pressure hydrochloric acid leaching, followed by ion precipitation and calcination. Below, we provide an overview of the four primary steps involved in Orbite’s alumina extraction process. Although Orbite’s primary focus has been on the economic extraction of alumina from its aluminous clay deposit, the Company’s research has yielded other potentially lucrative applications, which include the extraction of rare earth oxides and scandium.

1. Preparation of the clay: Like Orbite’s process, past attempts were aimed at producing alumina from aluminous clays based on acid leaching, whereas bauxite is produced with alkaline leaching. However, Orbite’s process differs from previous attempts, in that Orbite mechanically crushes the clay to a specific particle size prior to acid leaching. The crushing of the clay shortens the reaction time in the leaching stage, and the smaller clay particles are less abrasive on the reactors.

2. Acid leaching: This process entails leaching the crushed clay with HCI under a pressure which causes an exothermic reaction and thus produces heat to a temperature of approximately 150oC. The elevated heat accelerates the reaction time. This is different from the Bayer process because the Bayer method calls for leaching with sulphuric acid at a temperature of approximately 270oC and 90 psi. Furthermore, unlike Orbite’s process, a substantial amount of energy is needed to achieve the high temperatures because the Bayer leaching process is endothermic. The leaching phase takes approximately two hours, at which time there remains:

A liquid (or leachate) containing the aluminum chloride and rare earth elements, as wells as impurities such as iron in the form of hematite, calcium, sodium and titanium; and

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A dry material, which is essentially the remnant clay, of which approximately 50% is high-purity silica (the silica is not soluble); therefore, there is potential for it to be sold as a by-product. It could also likely be used as backfill at the mine site (in the Bayer process, the alumina component absorbs the silica, which remains in the final alumina product).

The leachate is separated from the dry remnants by decantation or filtration and then washed with water. The residual leachate can be washed multiple times in order to lower the acidity and to reduce quantities of sodium hydroxide (NaOH), which is used to adjust pH levels during the iron removal stage (discussed below). At this point, the rare earth elements and scandium can be removed from the leachate (the rare earths are absorbed in the carbon and can be dissolved in nitric acid).

3. Hematite precipitation: Hematite is the mineral form of iron oxide (Fe2O3). The liberation of hematite or iron (as well as other unwanted impurities) from the clay has been one of the most significant challenges in past attempts to economically produce alumina from clay (the Bayer process discards the iron by precipitating during leaching thus creating the red mud). Higher levels of iron are undesirable in the final alumina because they can reduce the ductility of the aluminum and aluminum alloys, as well as degrade the castability. Furthermore, Orbite’s method does not produce toxic red mud like the Bayer method.

Orbite’s process removes the iron by precipitating the leachate in the NaOH base, by rapidly increasing the pH level to approximately 12 (Alumina is soluble, whereas the iron is not; therefore, the iron precipitates). The solid portion is then separated from the liquid portion (which contains the aluminum) via filtration or decantation, and the solid is then rinsed. Iron can also be removed using a liquid-liquid refining step, or using a hollow fibre membrane and an extracting agent.

4. Aluminum recovery: The aluminum is recovered from the liquid solution by adding NaOH to the leachate, which decreases the pH level to approximately 9 (internally Orbite refers to this drastic change in pH levels as “teleportation”), in order to precipitate the aluminum hydroxide. The semi-liquid mixture is then washed and filtered in order to isolate the aluminum hydroxide (in liquid form). Finally, the liquid aluminum hydroxide is dried and heated at high temperatures to reach the crystal form desired by the aluminum smelters.

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Exhibit 2: Orbite’s Process for Extracting Aluminum from Aluminous Ores

Source: Canadian Intellectual Property Office, “Processes for Extracting Aluminum and Iron from

Aluminous Ores: Owner: Exploration Orbite, 12, 2010 (Modified by Jennings Capital Inc.)

The final residual volume represents between 10% and 20% of the initial clay volume, and approximately 99.7% of the acid is recovered. The acid can be reused after adjusting its concentration. The extraction rate for the aluminous clay from the Grand-Vallée site has averaged approximately 90% (see Appendix A); however, extraction rates as high as 95% have been achieved.

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THE GRANDE-VALLÉE PROPERTY: SIZABLE ALUMINOUS CLAY RESOURCE The Grande-Vallée property encompasses 15,916 acres and Orbite owns 100% of the mining rights through 115 registered contiguous mining claims (Orbite has recently completed the application for mining permits). The clay currently being used to produce metallurgical and high-purity alumina at the Cap-Chat plant was mined under the permission of the Ministry of Natural Resources, which, in October 2010, authorized the extraction of a maximum 500 tonnes of clay, and a second bulk sample was awarded in 2011 for 3,000 tonnes.

Exhibit 3: Location of the Grande-Vallée Property

Source: Company presentation and Jennings Capital Inc.

Orbite has subdivided the Grand-Vallée property into three zones or sectors: (1) The Marin (east side); (2) The Madeleine (centre); and (3) The Simoneau (west side). Orbite’s Alumina resources are all within the Marin, and although exploration to date has been primarily focused on this sector, the deposit appears to be highly homogeneous, which implies that the property has considerable exploration upside. The Marin sector extends over 4 km in length and ranges from 500 to 1,000 metres in width, with a volume of 400 to 500 million cubic metres (see Exhibit 3, above).

Approximately 1,770 acres within the Marin section are not held by the Company. Furthermore, an additional 1,670 acres are subject to a 3% net profit interest (before taxes and amortization) from the production derived from 12 map-designated claims that were acquired from Poly-Vein Exploration Inc. (private company), in August 2005. Orbite has the option to repurchase this royalty interest for $500,000 after a five-year operating period.

Local Infrastructure The property is 18 km inland from the town of Grande Vallée (population of ~1,000) and accessible from the town of Murdochville (population of ~800) via secondary roads. Grand-Vallée has a 150-metre long wharf, which can accommodate self-loading barges as large as 1,000 tons. The mining claims are on Crown property, and the forests on the lands are relatively sparse owing to their heavy exploitation. Numerous streams intersect

Marin Sector

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the property and flow into the Madeleine River and the Grand-Vallée River. There is limited access to the property via poorly serviced forest roads, which are largely unsuitable for road vehicles. A 69-kilovolt power line is located approximately 4 km from the property’s border.

The Geology The property covers a sizable portion of the Cambro-Ordovician L'Orignal Formation. The alumina content from these clays ranged from 17wt% to 23wt%, and iron content ranged between 7wt% and 8wt%. The most recent NI 43-101 (amended August 31, 2011) divided the deposit into two groups:

Aluminous red claystones which are referred to as argillite (very soft sedimentary rock) and have Al2O3 grades greater than 23%; and

Red and green mudstones (harder than the claystones) with AL2O3 grades ranging between 18% and 23%.

In aggregate, Orbite has drilled 7,118 metres consisting of 43 holes, to test the claystone and mudstone, but the unconsolidated red clay deposits have been the primary focus. They have an average grade of 23.13% of Al2O3 and are found at depths ranging from surface to over 100 metres. There are indications that grades improve with depth.

Exhibit 4: Overall Characteristics of Mudstone and Claystone Samples Silicon Dioxide

Aluminium oxide

Iron Oxide

Calcium oxide

Magnesium oxide Sodium oxide

Potassium Oxide

Titanium Dioxide

(SiO2) (Al2O3) (Fe2O3) (CaO) (MgO) (Na2O) (K2O) (TiO2)

Mean 53.3% 22.8% 8.4% 0.7% 1.7% 1.4% 3.4% 1.0%Maximum 63.9% 26.9% 13.0% 8.1% 3.2% 3.1% 4.8% 1.5%Minimum 47.9% 15.6% 3.2% 0.2% 1.1% 0.3% 2.0% 0.6%

Source: 2010 Field Work, Grand Vallée Property, NI 43-101 Technical Report and Jennings Capital Inc.

The high-purity and metallurgical trials at the pilot plant were conducted using approximately 365 tonnes of material consisting of four different clay families: (1) 46 tonnes of black clay; (2) 46 tonnes of green clay from the periphery of property; (3) 182 tonnes of healthy clay from what appears to be the most prospective area of the site; and (4) 91 tonnes of degraded clay from the surface area. The most promising clay is from the healthy and degraded clay.

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QUANTIFYING THE UPSIDE: NUMEROUS BLUE SKY SCENARIOS A. Current valuation is easily supported by the anticipated initial 2012 high-purity

alumina production. Orbite’s pilot plant currently has the capacity to produce approximately 1 tonne of high-purity alumina per day, and management plans to expand the capacity to 3 tonnes per day in late 2012/early 2013. Working under the assumption that Orbite’s high-purity alumina does, in fact, consistently meet industry specifications, and the Company is able to sell its entire output, and using the lowest published high-purity price (given that we do not have sufficient information on the quality, consistency or grain size of Orbite’s high-purity product), we estimate that Orbite could generate approximately C$50 million in EBITDA in its planned first commercial production in 2012, which translates into only 5.6x Orbite’s enterprise value. Our valuation is based on a high-purity price of $250 per kilogram, which yields 2012 EBITDA of C$83 million, which is 3.4x the Company’s current enterprise value. Orbite’s valuation based on high-purity in isolation is even more compelling when we look forward to 2013. The Company anticipates high-purity production of 5 tonnes per day in 2013, which equates to approximately $307 million in EBITDA or 0.9x enterprise value.

Exhibit 5: Select High-Purity Alumina Prices

Description Purity Particle Size Price

Alpha-Al2O3 99.999% 0.5-10 nm US$396 / KG Alpha-Al2O3 99.9% 50.0 nm US$221 / KG Alpha-Al2O3 99.99% 0.3-0.8 um US$155 / KG Alpha-Al2O3 99.99% 1.5-3.5 um US$142 / KG Alpha-Al2O3 99.99% 3.5-15 um US$141 / KG

Alpha Average: US$211 / KG Gamma-Al2O3 99.90% 5.0 nm US$456 / KG Gamma-Al2O3 99.99% 20.0 nm US$151 / KG Gamma-Al2O3 99.99% 0.4-1.5 um US$153 / KG

Gamma Average: US$243 / KGGroup Average: US$227 / KGGroup Median: US$154 / KG

Source: SkySpring Nanomaterials website (as at September 21, 2011) and Jennings Capital Inc.

Recall that Orbite has produced high-purity in both a lab environment and in its 100%-owned pilot plant. According to the Company, the high-purity it has produced meets industry standards for LEDs

There is very limited information about the size of the global high purity alumina market; however, the global non-metallurgical market is estimated to be approximately 5.5 million to 5.8 million tonnes per year, and approximately 2.8 million tonnes are considered to be specialty grades (the majority of specialty or premium grade alumina is used in the ceramics and refractory industries). There are numerous existing methods used to produce high-purity alumina, which include thermal decomposition of ammonium alum, thermal decomposition of ammonium aluminum carbonate hydroxide, underwater spark discharge with aluminum, vapor-phase oxidation, and hydrolysis of aluminum alkoxide. However, Orbite’s method could prove to be the most cost efficient method. It is also worth noting, one of the more beneficial aspects of Orbite’s process is that it eliminates

14


most of the residual iron and other unwanted impurities, which enables the production of high-purity alumina.

High-purity alumina demand should benefit from LED growth: High-purity alumina is used in applications requiring high ductility or conductivity. These properties are why high-purity alumina is a key ingredient in sapphire wafers and liquid-crystal polymer, which are key components used in the production of LEDs. In 2010, the global market for LEDs was more than US$10 billion, and it is expected to increase by at least a 20% CAGR between 2011 and 2015. Furthermore, the high-purity alumina required for the sapphire wafers is available from only a handful of producers, which has resulted in exorbitant prices for high-purity alumina with the required density, form factors and purity.

Other uses for high-purity alumina include fillers for magnetic media, ceramic substrates and components in semiconductor manufacturing devices. Furthermore, high-purity alumina is also used as a coating in lithium-ion secondary batteries and battery electrodes. Therefore, demand for high-purity alumina could very well be bolstered by growth in demand for electric vehicles and/or hybrid vehicles.

B. Metallurgical Alumina; Within 30 km of a 5.5 million tpy market, representing a C$2.5 billion market Orbite expects the first plant to be operational in 2013. As discussed above, Orbite’s Grand-Vallée aluminous clay deposit is within 20 km from a ship loading facility, situated on tidal waters, within a 30 km radius of 10 aluminum smelters in Québec (not to mentioned two more in upper New York State located on the St. Lawrence Seaway), representing an alumina market of approximately 5.5 million tonnes or 12% of global metallurgical consumption.

Exhibit 6: Exploration Orbite’s Grande-Vallée Property Relative to Québec’s 10 Aluminum Smelters

Source: Canadian Minerals Yearbook (2006), Natural Resources Canada, Company reports, and

Jennings Capital Inc.

Grande-Vallée

Property

Location of

Alumina Smelters

15


Exhibit 7: Alumina Smelters in Québec

Map Reference Smelter Company Aluminum Capacity Potential Alumina

Market

1 Beauharnois Rio Tinto Alcan 5,200 t 10,400 t2 Bécancour A.B.I. 409,000 t 818,000 t3 Shawinigan Rio Tinto Alcan 99,000 t 198,000 t4 Lauralco Deschambault Alcoa-Aluminerie Lauralco Inc. 255,000 t 510,000 t5 Grande-Baie Rio Tinto Alcan 207,000 t 414,000 t6 Laterrière Rio Tinto Alcan 228,000 t 456,000 t7 Alma Rio Tinto Alcan 415,000 t 830,000 t8 Arvida, Jonquière Rio Tinto Alcan 166,000 t 332,000 t9 Baie-Comeau Canadian Reynolds Metals (Alcoa) 438,000 t 876,000 t10 Sept-Îles Alouette 572,000 t 1,144,000 t

Total 2,794,200 t 5,588,400 t Source: Canadian Minerals Yearbook (2006) and Jennings Capital Inc.

Having an alumina source in the same province, versus importing from Australia, Brazil and Jamaica, would result in lower alumina costs for the smelters, given that transportation costs can account for as much as 25% of the fob alumina cost, which is currently around $450 per tonne.

Exhibit 8: Major Global Sources of Bauxite

Source: Global Alumina Corp. and Jennings Capital Inc.

Given that alumina typically accounts for 38% of the cost to manufacture aluminum (see below), Québec aluminum smelters could increase their margins by ~9.5% if they sourced Orbite’s alumina in place of imports (the average aluminum smelter profit margin is approximately 20%). This estimate does not consider the potential saving arising from lower working capital requirements, which would likely result from smelters requiring lower inventory levels.

As we have discussed above, samples of Orbite’s metallurgical alumina have met Aluminerie Alouette’s smelter grade alumina content standard of 98.35 wt%, and were used to make aluminum by two different independent entities: (1) Québec’s National Institute of Scientific Research, in May 2011; and (2) SINTEF (the largest independent research organization in Scandinavia) in June 2011.

16


Gauging the Economics We are faced with two significant wildcards in assessing the economic potential of commercial production of smelter-grade alumina employing Orbite’s technique: The cost of a metallurgical plant and the operating costs. Given that Orbite does not expect to complete a feasibility study until Q2/2012, coupled with the fact that there are no comparable projects which could serve as a proxy, we are forced to make some considerable assumptions.

Capex Looking at fairly recent Bayer alumina refinery expansions and greenfield operations, we can see that the average cost per tonne of annual alumina capacity is approximately $900 (see table below). This is consistent with Light Metals 2011, by the Minerals Metals & Materials Society, which states that a typical greenfield bauxite-fed alumina refinery costs approximately $1,100 per tonne of annual capacity.

Exhibit 9: Recent Alumina Refinery Expansions and Greenfield Projects

Company Project Status Capex Initial / Incremental Production Capex $/tonne

Expansion ProjectAlcoa Alumar expansion (Brazil) Started $2.20 Bln 2.0 MM tonnes / year $1,100 per tonneRio Tinto Yarwun expansion (Australia) Announced $1.90 Bln 2.0 MM tonnes / year $950 per tonne

Greenfield ProjectVale CAP (Brazil) Completed $2.20 Bln 1.9 MM tonnes / year $1,183 per tonneGlobal Alumina Guinea, (Republic of Guinea) Announced $1.33 Bln 3.3 MM tonnes / year $404 per tonne

Source: Company news releases and presentations and Jennings Capital Inc.

We expect an Orbite metallurgical plant (including supporting infrastructure) to be considerably lower than these estimates. Our belief is based on our understanding that a commercial scale plant would essentially be a larger scale version of the Cap-Chat pilot plant, and as we understand it, the Cap-Chat plant essentially consists of “off the shelf” processing components (including reactors).

Exhibit 10: Cost Breakdown of Production of One Tonne of

Aluminum by Key Inputs

Capital Maintenance,

2%

Labour, 10%

Carbon, 12%Other Materials,

13%

Energy, 25%

Alumina, 38%

In Aggregate, Alumina and Energy Account for ~63% of the Cost to Produce

Aluminum

Note: Does not include depreciation and overhead costs. Source: CRU, analyse SECOR and Jennings Capital Inc.

17


Furthermore, Orbite’s process will not produce toxic red mud and, therefore, costs related to tailings facilities would likely be substantially lower than those of a Bayer process refinery, which are likely to increase in the aftermath of the Ajka alumina plant disaster in October 2010.

In our model, we assume that a metallurgical plant employing Orbite’s process would cost between $750 and $800 per tonne of annual capacity (including the infrastructure costs). Orbite anticipates that a typical metallurgical grade processing plant will have an annual capacity of 580,000 tonnes per year (based on a 350-day year). This translates to a plant costing between C$435 million and C$465 million.

Opex We believe that Orbite has the potential to produce metallurgical alumina at a cash cost that is lower than the industry’s average cash cost of approximately $230 per tonne. Our reasoning is based on the assumption that Orbite’s process will require significantly lower energy because of the lower temperatures for leaching (in the Bayer method, the bauxite is leached at ~270o compared to Orbite’s process which requires only ~150o), coupled with the fact that Orbite’s process is exothermic. As we have discussed, Orbite expects to have a 99.7% recycling rate of its HCl. Furthermore, Orbite’s process has the potential to yield numerous valuable by-products, which, if successfully produced and marketed, could completely offset the metallurgical production costs; however, they are not considered in the following valuation.

Based on the assumptions discussed above and listed in the table below, and assuming a 20-year plant life, our model indicates that an Orbite metallurgical alumina plant has an NPV10% of approximately C$375 billion and an IRR of 30%. At a metallurgical alumina price of C$450 per tonne, our model yields an NPV10% of $C565 million and an IRR of 44%.

Exhibit 11: Key Metallurgical Modeling Assumptions

Met Plant Capacity 580,000 tpa Days / year 350 days

Price - Metallurgical C$400/t Discount Rate 10%

Prod. Cost - Metallurgical C$230/t Maintence capex C$2.0 MM

Met Plant Capex C$449.0 MM SG&A C$2.0 MM

Grade (Al2O3) 23.13% Mining cost $2.00 t

Recovery 95% Tax rate 35%

Debt-to-Equity 67% Blended CCA Rate 25% Source: Jennings Capital Inc.

Note that a single metallurgical plant with an annual capacity of 580,000 tonnes of alumina represents only ~10% of Québec’s alumina requirement (based on aluminum smelter capacity) and 0.6% of the global alumina requirement. Assuming Orbite captures one-quarter of the Québec alumina market (a conservative assumption, given the considerable transportation-related cost advantages), Orbite could eventually have as many as three metallurgical plants operating in Québec.

C. Other Potential Revenue Streams Orbite’s process appears to have several applications for the recovery of valuable elements in addition to alumina, which include the production of rare earths, scandium, gallium, hematite, silica, magnesium oxide and potential patent revenues. With the

18


exception of rare earth oxides/scandium and patent revenue, our model indicates that these by-products or peripheral revenue streams are marginal compared to Orbite’s overall topline potential. However, the extraction of these commodities through Orbite’s process will likely come at essentially no additional cost (excluding marketing, storage and handling associated costs).

Exhibit 12: Breakdown of Orbite’s Potential Revenue Streams

C$0 MM

C$500 MM

C$1,000 MM

C$1,500 MM

C$2,000 MM

C$2,500 MM

C$3,000 MM

C$3,500 MM

C$4,000 MM

C$4,500 MM

High Purity Alumina Revenues

Patent Revenues (Bauxite)

Rare Earths & Scandium Revenues

High Purity Alumina Revenues

Metallurgical Alumina Revenues

Hematite Revenues

Magnesium OxideSilica Revenues

Source: Jennings Capital Inc.

Rare Earth Oxides and Scandium Rare earths and scandium, on the other hand, have the potential to bolster Orbite’s revenue and EBITDA, if they can be successfully extracted and marketed. Our modelling indicates that rare earths and scandium could potentially contribute up to $200 million per year for each 580,000-tonne per year plant in revenue, based on the grades disclosed in Orbite’s press releases, a 75% recovery rate and our rare earth and scandium price assumptions.

However, the rare earth/scandium element of the Orbite story is largely dependent upon the metallurgical alumina plant coming into fruition; because the grades of both rare earths and scandium are so low, significant clay throughput would be required in order to generate meaningful quantities. Our modelling indicates that this is the case, despite the fact that these elements could potentially be produced at no extra cost.

Peripheral Revenues

Core Revenues

19


Exhibit 13: Aluminous Clay throughput versus Rare Earths and Scandium Revenue

t/y

5,000 t/y

10,000 t/y

15,000 t/y

20,000 t/y

25,000 t/y

30,000 t/y

35,000 t/y

40,000 t/y

45,000 t/y

C$0.0 MM

C$2.0 MM

C$4.0 MM

C$6.0 MM

C$8.0 MM

C$10.0 MM

C$12.0 MM

C$14.0 MM

C$16.0 MM

C$18.0 MM

Alum

inuo

s C

lay

Thro

ughp

ut

Estim

ate

of R

are

Eart

h R

even

ues

REs & Scandium Revenues

Clay Throughput

Source: Jennings Capital estimates

Our model indicates that based on expected clay throughput for the production of high-purity alumina in isolation, the production and marketing of the rare earths elements listed in the above table (and of scandium) yield an incremental NPV10% of approximately C$19 million, or a mere C$0.09 per fully diluted share.

On the other hand, the construction and subsequent commissioning of a 580,000 tonne per year metallurgical plant paints a very different picture for the contribution of the rare earths and scandium. Assuming a top-end clay throughput of 7.9 million tonnes per year (6,300 tonnes per year of high-purity alumina and 1.74 million tonnes per year of metallurgical alumina), our model indicates that rare earth and scandium production would yield an incremental NPV of approximately C$3.9 billion dollars. After accounting for shareholder dilution estimated to have resulted from financing the construction of three, 580,000-tonne per year capacity metallurgical plants (recall we estimate each plant will cost approximately C$450 million dollars), and assuming a debt-to-equity ratio target of 67%, we estimate that rare earths and scandium could represent an incremental C$13.50 per fully diluted share.

Interestingly, if the rare earth and scandium price assumptions listed in the table above come to fruition, we believe that the production of rare earths has the potential to be more economically beneficial than the production of metallurgical alumina.

Orbite could derive significant patent revenue Aluminous clay deposits are found in Russia and China, and other aluminous-bearing deposits such as kaolin are found throughout the World in countries such as Australia. If Orbite’s process can be applied to these deposits for the production of alumina, the Company could derive significant patent revenue.

Furthermore, Orbite is conducting pre-pilot tests using its proprietary technology to process bauxite, and although this work is still in early stages, according to the Company, the alumina extraction rate compared favourably with that of its Grande-Vallée aluminous clay. This indicates that Orbite’s patented process could be used to extract

20


alumina from bauxite and could possibly be a viable substitute for the Bayer process. Economical extraction of alumina from bauxite using an alternative method to the Bayer process has considerable potential, if it can significantly reduce the environmental footprint left by the Bayer process.

Waste from Orbite’s process contains mixed oxides and approximately 50% of this dry material is high-purity silica. It is believed that the silica would require very little treatment before being used as backfill at the mine site, or it could actually be sold as a by-product (Orbite expects to sell the silica at 96% and 99.9% levels of purity). In contrast, the Bayer method creates 1.5 tonnes of a toxic red residue for every tonne of alumina produced.

The production of Bayer red mud (70 million tonnes are estimated to be generated annually) has come under considerable scrutiny after the Ajka, Hungary alumina plant’s tailings reservoir burst in October 2010, causing flooding of the toxic red mud in several villages and resulted in the death of 10 people and 150 injuries. Recently, the Ajka alumina plant’s owner, Magyar Aluminum, was fined US$648 million for the red mud disaster, and it has been called the worst ecological disaster in Hungary’s history. Furthermore, the storage of Bayer red mud is likely to be more challenging given the expected higher levels of aluminum production coupled with declining ore grades. According to Industrial Minerals, there is currently an estimated 3 billion cubic metres of red mud waste, and this is expected to increase to 4 billion cubic metres by 2020.

In addition, the Bayer process uses large quantities of electricity because of the higher temperatures during leaching, versus Orbite’s process, and Orbite’s process is exothermic.

Gauging the Potential Market Patent revenue could range between 3% and 10% of the user’s top line, if the technology is deemed crucial. We believe that the potential market for existing plant conversions from the Bayer method to Orbite’s process is limited given the considerable up-front costs, but that the potential for greenfield operations is significant.

Currently, approximately half of the world’s alumina smelting capacity is in China, and according to CRU Strategies, the country is expected to account for approximately 43% of alumina refinery capacity. Therefore, there will likely be a need for capacity outside of China.

According to alumina industry participants, alumina demand is expected to outstrip supply by 2015, at which time it is estimated that an incremental 4 million tonnes of alumina capacity will be required annually. Based on the current process, this represents an additional C$1.8 billion in industry revenue per year. Assuming a 5% patent fee and a 25% penetration rate, Orbite’s share would be C$22.5 million per year based on new capacity alone.

21


DEVELOPMENT SCHEDULE AND CATALYSTS High-Purity Alumina Orbite expects to begin commercial production of high-purity alumina during Q3/12, at an initial rate of 1 tonne per day, and this is expected to increase to 3 tonnes per day by the end of Q2/12.

Based on the growing market for LEDs and the limited number of high-purity suppliers currently in the market, Orbite anticipates a capacity expansion from 3 tonnes per day to 5 tonnes per day in Q3/13, followed by another expansion to 9 tonnes per day in mid-2014.

Metallurgical Alumina Orbite recently announced that it selected SMS Siemag AG to perform analyses and process design for the acid recovery portion of the Orbite patented metallurgical process, which is key in the design and subsequent construction of a commercial-scale metallurgical plant.

Orbite has also recently issued a call for tender related to the NI 43-101 Feasibility Study for a metallurgical-grade alumina plant. Orbite’s goal is to have the feasibility study completed by Q2/12. Assuming this goal is achieved, Orbite believes a commercial scale metallurgical plant could be operational by Q3/13.

A significant potential catalyst for Orbite’s stock price is a definitive strategic agreement with an aluminum producer. Given that there are 12 alumina smelters operating in Orbite’s backyard (10 in Québec and two in New York State) who currently import their alumina, we believe this is a very real and likely possibility.

Exhibit 14: Estimate of Orbite’s Timeline

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Commissioned Cap-Chat Pilot Plant

Produced 1st tonne of High-Purity Alumina

Orbite Upgrades Ni 43-101

1st Production of Alumina from ORT Metilurgical

2nd Production of Alumina from ORT Metallurgical

Announces C$57.5 MM equity financing

Produced Metallurgical Alumina from Bauxite

Complete Metallurgical Plant Feasibility Study

Initial High-Purity Production (1 TPA)




First Metallurgical Alumina Plant Operational

2011 2012 2013 2014

Expect to Begin Generating Cash

Flow

Source: Company press releases, discussions with management, and Jennings Capital Inc. estimates.

22


BALANCE SHEET, RECENT FINANCINGS, AND PROJECT FINANCING Balance Sheet As at June 30, 2011, Orbite had 149.7 million Class A common shares outstanding, and issued an additional 17.9 million Class A common shares on July 7, 2011. In aggregate, Orbite has approximately 167.6 million shares outstanding, representing a market capitalization of approximately $350.4 million.

As at June 30, 2011, the Company had 13.3 million warrants outstanding with an average exercise price of $0.73, expiring in November 2011 and November 2012. An additional 8.9 million warrants were issued with the July 7, 2011, equity issue. These warrants have an exercise price of C$4.50 and expire in July 2012. As at the end of Q2/2011, Orbite also had approximately 9.9 million options outstanding with an average exercise price of $0.72 and a weighted-average life of approximately four years.

Orbite is authorized to issue three classes of shares, although only one class, Class A Shares, is issued and outstanding:

Class A shares: Voting, participating, dividend determined by the Company’s Board of Directors;

Class B shares: 25 votes per share, non-participating, dividend determined by the Company’s Board of Directors;

Class C shares: To be issued in series. The directors will define the rights and privileges upon issuance.

As at June 30, 2011, Orbite had approximately C$2 million in debt (summary provided in the table below). Approximately C$300,000 of the Company’s debt is in convertible debentures issued to Aluminerie Alouette under the strategic agreement discussed above. The debentures mature in 2015, and can be converted into Class A shares between November 2011 and November 2014, at the market price less a 15% to 25% discount (minimum conversion price is C$0.75.

Orbite also received interest-free loans from both the Québec government and the Canadian federal government. The Provincial loan is repayable 36 months after the disbursement of the proceeds and the Federal loan is repayable over a five year period following the completion of the Cap-Chat pilot plant.

Exhibit 15: Summary of Orbite’s Debt

Convertible Debentures C$0.304 MMGovernment Loans C$1.69 MMSecured Loans C$0.02 MMShort-term Proportion of Long-term Debt (C$0.01 MM)

C$2.00 MM Source: Company reports and Jennings Capital Inc.

23


Recent Financings Since August 2010, Orbite has raised approximately C$72 million in equity. Prior to the most recent financing discussed below, Orbite had approximately C$18.5 million in cash (C$17.2 million of which was in short-term investments). We estimate that the Company currently has C$71 million in working capital. July 7, 2011: Orbite issued 17.9 million special warrants (including an exercised

15% overallotment options), at C$3.20 per special warrant, for gross proceeds of approximately C$57.5 million. Each special warrant consists of one class A share and one-half share purchase warrant. Full warrants have an exercise price of C$4.50 per Class A share and expire on July 7, 2012 (if the volume weighted average price of the Class A shares exceeds C$7.50 for a consecutive ten-day trading period at the end of the four-month and one day hold period, Orbite has the option to force the conversion).

November 23, 2010: Orbite issued 3,371,111 units through a private placement financing at C$0.45 per unit, for gross proceeds of approximately C$1.5 million. Each unit consisted of one Class A share and one-half purchase warrant with an exercise price of C$0.75 per warrant for 12 months following closing of the financing, or C$0.85 over the 12 month period thereafter.

On November 5, 2010: Orbite issued 27 million units through a private placement financing at C$0.45 per unit, for gross proceeds of approximately C$12.2 million. Each unit consisted of one Class A share and one-half purchase warrant with an exercise price of C$0.75 if exercised 12 months following closing, or C$0.85 over the 12 month period thereafter.

August 16, 2010: Orbite issued 470 units through a private placement financing at C$1,500 per unit, for gross proceeds of C$705,000. Each unit consisted of 8,000 flow-through Class A shares (C$0.15 per share), 2,000 non flow-through Class A shares (C$0.15 per share), and 5,000 full purchase share warrants with a C$0.21 exercise price and 12-month expiration.

Project Financing Orbite intends to use approximately C$20 million to convert its Cap-Chat pilot plant into a commercial facility for the production of high-purity alumina. This C$20 million is expected to be allocated in 2011 and the first half of 2012. Given the sizable margins we expect the high-purity to yield (even using very conservative pricing assumptions), we anticipate Orbite’s Cap-Chat plant to be cash flow positive almost at the outset of commercial production, which we expect to commence in Q3 or Q4 of 2012.

This essentially leaves Orbite with approximately C$50 million in cash (including cash equivalents) for the preparation of its planned metallurgical alumina plant. As we discussed above, we estimate that a metallurgical plant with 580,000 tonne per year capacity will cost between C$435 million and C$465 million, which includes all related infrastructure.

24


KEY INVESTMENT RISKS Market for Both High-Purity and Metallurgical Alumina At the time this report was authored, Orbite did not have definitive sale agreements. Until Orbite has an agreement in place and/or has begun selling its products, we feel there is a considerable risk regarding the quality and consistency for both of Orbite’s alumina grades. Furthermore, although market prices for high-purity alumina currently average $396 per kilogram, from the limited data available there appears to be considerable variability, which is dependent upon the quality of the alumina and grain size.

Market Price for Both High-Purity and Metallurgical Alumina Historically, the price of alumina has been highly positively correlated to the price of aluminum. Although many aluminum and alumina producers are now pricing alumina based on an index related to alumina spot market sales as well as long-term contracts versus the historical practice of alumina prices being pegged to aluminum metal prices, lower aluminum prices could have a negative impact on the price of metallurgical alumina. As discussed above, the price paid for high-purity alumina is dependent on quality and grain size.

Mineral Exploration and Mining Associated Risks The economic value of Orbite’s Grand-Vallée property hinges upon the Company’s success in commercially producing high-purity and/or metallurgical alumina. Although the property appears to be highly homogenous, one of three sections has been the primary focus of exploration to date. Furthermore, Orbite completed an application for mining permits on September 14, 2011. Although the Québec Government has been very supportive of the project, there can be no assurances that these permits will be granted.

Financial Risk Although Orbite currently has C$71 million in working capital, we estimate a 580,000-tonne per year metallurgical alumina plant will cost between C$435 and C$465 million. Therefore, Orbite will be dependent upon the capital markets to finance a proportion of its first (and likely second) planned plant. Furthermore, although we anticipate that Orbite will begin generating cash flow during the third or fourth quarter of 2013, there is always the chance this will not materialize and Orbite would then be dependent upon the capital markets to fund its daily operations.

Regulatory Compliance, Permitting Risks and Environmental Liability As with all exploration, development and mining activities, Orbite’s operations are subject to both federal and provincial laws and regulations. The costs associated with acting in accordance with these laws and regulations are significant. Furthermore, delays associated with compliance with these laws and regulations could result in Orbite not being able to proceed with the development of its operations.

Environmental The industry is also subject to environmental regulation under federal, provincial and local jurisdictions. Legislation can require significant expenditures, and any breach of specified restriction or prohibition may result in fines and/or penalties. Furthermore, as environmental legislation evolves, it is possible that stricter standards and enforcements may be implemented. This could potentially result in larger fines and liabilities, which could increase capital expenditures and operating costs.

25


VALUATION AND RECOMMENDATION We are initiating coverage on Exploration Orbite with a SPECULATIVE BUY recommendation and 12-month target price of C$8.00. Our target price is based on a blend of: (1) Our NAV10% estimate of C$30.00 per fully diluted share for high-purity and metallurgical alumina risked at 30%; and (2) A 7.0x multiple applied to our FY2013 CFPS estimate for high-purity alumina alone, which is C$0.1.25.

Our NAV valuation is based on high-purity and metallurgical alumina. Based on high-purity and metallurgical production alone, our model yields a net asset value per fully diluted share (including shareholder dilution arising from expected future financings) of C$30.00. If we include the potential revenues from rare earth oxides, scandium, patents, hematite, silica and magnesium oxide, our model yields a net asset value per fully diluted share of C$46.00.

Our NAV model is based on a top-end high-purity alumina capacity of 18 tonnes per day or 6,300 tonnes annually, which we expect to be achieved in 2017, and a total of three 580,000-tonne per year capacity metallurgical plants in operation by 2017 (this represents approximately 30% of Québec’s annual alumina requirement).

Cash flow-based valuation is based on our F2013 estimate for high-purity alumina production alone. Although Orbite anticipates commercially producing metallurgical alumina during 2013, production is not expected to commence until the fourth quarter. Given the early stages of this large scale development (the Company only recently issued a call for tender related to the NI 43-101 Feasibility Study for a metallurgical-grade alumina plant), we have only included high-purity for F2013.

If Orbite’s alumina extraction process produces a consistent, high-quality product meeting industry specifications for a sufficient period at lower operating costs, the upside to this story is nothing short of huge, as the Company could very well revolutionize the aluminum industry – $37 billion per year industry - which appears to be searching for a remedy to the production of Bayer red mud.

26


APPENDIX A: TYPICAL EXTRACTION RATES FOR ALUMINUM & IRON AND THE COMPOSITION OF THE GRAND VALLÉE CLAY Exhibit A1: Typical Extraction Rates for Alumina and Iron

from Grand Vallée Aluminous Clay

Note: Based on production from Orbite’s pilot line.

Source: Grand Vallée property NI 43-101 Technical Report (modified by Jennings Capital Inc.)

Exhibit A2: Composition of the Clay

CaO+Na O+K O mol.2 2 FeO*+MgO mol.

Al O mol2 3

Argilites vertes

Argilites rougesArgilites mixtes

Argilites noiratres

Argilites brunatres

Argilites fragmentaires rouges

Feldspath

Muscovite

Illite

Smectites

Chlorites

OlivinePx

Kaolinite

Source: Company presentation

27


APPENDIX B: ORBITE’S PATENTS AND PENDING PATENTS

Description Patent / ApplicationDate Issued /

Filed Pending Jurisdictions

US 7837961 Nov-10

CA 268696 Nov-10

Processes for extracting aluminum and iron from aluminums ores

Australia, Brazil, China, Europe, India, Japan, Russia and Hong Kong

Improvements to Orbite's alumina preparation process

US 91/415,473 Patent may be filed in other jurisdictionsNov-10

Jun-11 na

Apr-11US 61/454,211 Patent may be filed in other jurisdictionsProcesses for extracting rare earth elements from aluminous-bearing ores

Separation methods used for iron-aluminum mixtures US 61/508,950 Jul-11 na

Process fro extracting rare earths from various minerals

US 61/482,253 May-11 na

New technological process related to the production of hematite from iron

US 61/493, 018

Source: Company reports and press releases and Jennings Capital Inc.

28


APPENDIX C: SELECT RARE EARTH OXIDE HISTORICAL PRICES

Exhibit C1: Gallium 99.99%, China Domestic Market

US$0

US$50

US$100

US$150

US$200

US$250

US$300

US$350

US$400

US$450

US$500

USD

/ lb

Low

High

Exhibit C2: Dysprosium Oxide 99.5% - 99.9%, China Domestic Market

US$0

US$100

US$200

US$300

US$400

US$500

US$600

US$700

US$800

US$900

US$1,000

USD

/ lb

Low

High

Exhibit C3: Yttrium Oxide 99.99% - 99.999%, China Domestic Market

US$0

US$5

US$10

US$15

US$20

US$25

US$30

US$35

US$40

USD

/ lb

Low

High

Exhibit C4: Neodymium Oxide, China Domestic Market

US$0

US$20

US$40

US$60

US$80

US$100

US$120

USD

/ lb

Low

High

Exhibit C5: Praseodymium Oxide, China Domestic Market

US$0

US$10

US$20

US$30

US$40

US$50

US$60

US$70

US$80

US$90

USD

/ lb

LowHigh

Exhibit C6: Lanthanum Oxide, China Domestic Market

US$0

US$2

US$4

US$6

US$8

US$10

US$12

US$14

USD

/ lb

Low

High

Source: MetalPrices.com and Jennings Capital Inc.

29


APPENDIX D: HISTORICAL METALLURGICAL ALUMINA AND ALUMINUM PRICES Exhibit D1: Historical Alumina Prices, Chinese Metallurgical

US$200

US$250

US$300

US$350

US$400

US$450

US$500

US$550

US$600

US$650U

SD /

tonn

e

Source: Bloomberg, Metals Bulletin, and Jennings Capital Inc. Appendix D2: Historical Aluminum Prices- LME Cash

Official

US$1,000

US$1,500

US$2,000

US$2,500

US$3,000

US$3,500

USD

/ to

nne

Source: MetalPrices.com and Jennings Capital Inc.

30


APPENDIX E: SENIOR MANAGEMENT Mr. Richard Boudreault, M.Eng, MBA, Adm.A., President, CEO, and Director: Richard Boudreault has been President of Orbite since 2007. He has had considerable experience with start-up and growth companies in the new materials sector. He has a Master of Engineering degree from Cornell University and an MBA from Université de Sherbrooke. Over the years, Mr. Boudreault has worked in technology-related positions for numerous companies, such as SOFINOV (a subsidiary of the Caisse de dépôt et placement du Québec), Oerlikon Aerospace and the Canadian Space Agency.

Mr. Jacques Bédard, Vice President of Finance and CFO: Jacques Bédard is a senior executive officer with more than 25 years of international financial management experience in the high technology, multimedia and medical devices sector. His résumé includes terms as Vice President Finance and CFO for companies such as Softimage and ART, and he has also held senior financial management positions with Microsoft, among others. He has been with Orbite since November 24, 2010, as Vice President of Finance and Chief Financial Officer.

Dr. Joël Fournier, Vice President of Technology and CTO: Joël Fournier is responsible for all aspects related to the development, scaling and implementation of Orbite technologies. He has a Ph.D. in physical chemistry from Université de Sherbrooke and a post doctorate degree from the INRS Energy and Materials Institute. Over the past fifteen years, Dr. Fournier has published close to forty papers, has authored four patents and has completed more than thirty industrial research projects. Within numerous industrial projects, Dr Fournier has been involved in those related to new technologies for aluminum production. Prior to joining Orbite, Dr. Fournier was CEO of the CEPROCQ research centre, participating in Orbite’s technology development.

Dr. Marc Filion, PhD, MBA, Eng., Executive Strategic Advisor: Dr. Filion was president and Chief Operating Officer of SGF Mineral Inc. from 1998 to 2004, and Senior Vice President, Investments for Mines, Minerals and Materials for "Société Générale de Financement du Québec" (SGF) from 2004 to 2006. He was also actively involved in promoting the development, financing and construction of Phase II of the Alouette aluminum smelter, and brings in-depth knowledge of the alumina/aluminum industry to Orbite. Dr. Filion holds a B.Sc. in geology from École Polytechnique at the University of Montréal, a Ph.D. in economic geology and geostatistics from the Royal School of Mines, Imperial College, London, England, and an MBA from École des Hautes Études Commerciales in Montréal, Québec.

Pierre Després, LL.L., Advisor: Mr. Després holds a law degree from Université Laval and advises Orbite on public affairs issues. Mr. Després is a seasoned public affairs and communications expert. He held the position of Vice-President, Communications, at Alcoa Global Primary Products, and has served on various boards of directors of business associations such as the Conseil du Patronat du Québec and the Fédération des chambres de commerce du Québec.

Guy Boucher, LL.L, Legal Counsel and Head of Sustainable Development: Mr. Boucher has extensive experience in legal affairs and sustainable development as a senior executive. Prior to joining Orbite, Mr. Boucher worked for Domtar, where he held top executive positions such as Vice President, Sustainable Development and Vice President, Legal Services and Environmental Affairs. Mr. Boucher holds a licence in civil law from the Barreau du Québec and a Bachelor of Business Administration (B.B.A.) from the University of Ottawa.

31


Mr. Denis Primeau, MBA, Chief Engineer: Mr. Primeau has more than 30 years’ experience in the chemical and petrochemical industries, and has been involved in the construction, commissioning, and optimization of various chemical processes. He was an important member of Rio Tinto’s team during the construction and commissioning of a plant for the enrichment of minerals and in the recycling of hydrochloric-based materials. Mr. Primeau is a Member of the Ordre des ingénieurs du Québec, and holds a Bachelor of Science in chemical engineering and a Master of Business Administration from the University of Sherbrooke.

32


APPENDIX F: BOARD OF DIRECTORS

Mr. Lionel Léveillé, Chairman of the Board of Directors: Mr. Léveillé was President and CEO of Adacel Inc. from February 2001 to July 2005. He has held numerous positions in both the military and aerospace industries, including President of Raytheon Canada and Vice-President of Bombardier and of Oerlikon Aerospace.

Mr. Richard Boudreault, M.Eng, MBA, Adm.A. President, CEO, and Director: See above biography.

Mr. Charles Chevrette MBA, Director: Mr. Chevrette is a lawyer and member of the Québec Bar. He also has an MBA from the University of Ottawa. Mr. Chevrette is an Associate of McMillan SENCRL. Throughout his career, he has worked on numerous corporate financings, mergers-acquisitions and transfers of technology, acting for private companies, institutional investors and university entities. More specifically, he has been involved in several industrial-technology enhancement projects. Mr. Chevrette also served in the Cabinet of Québec under Premier Lucien Bouchard.

Dr. Toby Gilsig, Director: Dr. Gilsig has a degree in electrical engineering from McGill University and a doctorate from the Imperial College of the University of London, where he received an Athlone research grant. He is a member of the Québec Order of Engineers, an honorary member of the IEEE and a Fellow of the Canadian Academy of Engineering, in addition to having received the Manning Award for Innovation in 1995. Previously, he was CEO of M3i Systems Inc., which he co-founded, and prior to this he held a number of management posts at Hydro-Québec, including Vice-President of Research and Director of the Institut de réchérche d´Hydro-Québec.

Mr. Pierre Meunier, Director: Mr. Meunier is a lawyer and an Associate and Strategic Consultant at Fasken Martineau S.E.N.C.R.L., s.r.l. He held several senior posts at the Government of Québec, including Vice-President and founder of the Commission des Services Juridiques, Director of the Centre Communautaire de l'aide Juridique de Montréal, President of the Office de la Protection du Consommateur, acting Deputy Minister for the Ministry of Housing and Consumer Protection, and acting Deputy Minister for the Ministère de l'Environnement. Mr. Meunier is Chairman of the Board of Directors of the Fondation des Muséums nature de Montréal, member of the Board of Directors of the Institut de Réchérche en Biologie Végétale (IRBV), part of the Université de Montréal, and member of the Board of Directors and Treasurer of Éditions Protégez-Vous.

Mr. Christian Van Houtte, Director: Mr. Van Houtte was the President and Chief Executive Officer of the Aluminum Association of Canada for 18 years. He previously held various executive positions in the aluminum industry, including Senior Vice President of the Bécancour Smelter (ABI) facility. He has also held senior management positions for a number of major organizations, including Canadair, the Cliche Commission, Northern Telecom and the Société de Développement de la Baie James.

Mr. Stéphane Bertrand, Director: Mr. Bertrand assumed the role of Chief Executive Officer for the World Energy Congress – Montréal 2010 in November 2007. From 2003 through 2007, he was Chief of Staff for the Premier of Québec. Prior to his role as Chief of Staff, Mr. Bertrand was an executive with Gaz Métro Inc.

33


APPENDIX G: PRODUCTION ASSUMPTIONS Exploration Orbite(TSX.ORT.A)Fiscal Year End: Dec. 31

Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Year 15 Year 20 Year 25 Year 30 Year 35 Year 40 Year 432011 2012 2013 2014 2015 2020 2025 2030 2035 2040 2045 2050 2053

Aluminums Clay Reserves / Resource:

Opening Balance 1,000 MM t 1,000 MM t 1,000 MM t 999 MM t 997 MM t 964 MM t 924 MM t 884 MM t 844 MM t 805 MM t 765 MM t 725 MM t 701 MM tEnding Balance 1,000 MM t 1,000 MM t 999 MM t 997 MM t 993 MM t 956 MM t 916 MM t 876 MM t 836 MM t 797 MM t 757 MM t 717 MM t 693 MM t

Clay Mined:High Purity 0.00 MM t 0.00 MM t 0.01 MM t 0.01 MM t 0.02 MM t 0.03 MM t 0.03 MM t 0.03 MM t 0.03 MM t 0.03 MM t 0.03 MM t 0.03 MM t 0.03 MM t

Metallurgical 0.00 MM t 0.00 MM t 0.66 MM t 2.64 MM t 3.96 MM t 7.92 MM t 7.92 MM t 7.92 MM t 7.92 MM t 7.92 MM t 7.92 MM t 7.92 MM t 7.92 MM tTotal: 0.0 MM t 0.0 MM t 0.7 MM t 2.7 MM t 4.0 MM t 7.9 MM t 7.9 MM t 7.9 MM t 7.9 MM t 7.9 MM t 7.9 MM t 7.9 MM t 7.9 MM t

Production:High Purity t/y 350 t/y 1,400 t/y 3,150 t/y 4,550 t/y 6,300 t/y 6,300 t/y 6,300 t/y 6,300 t/y 6,300 t/y 6,300 t/y 6,300 t/y 6,300 t/y

Y/Y Change na #DIV/0! 300% 125% 44% 0% 0% 0% 0% 0% 0% 0% 0%

Metallurgical 0 t/y t/y 145,000 t/y 580,000 t/y 870,000 t/y 1,740,000 t/y 1,740,000 t/y 1,740,000 t/y 1,740,000 t/y 1,740,000 t/y 1,740,000 t/y 1,740,000 t/y 1,740,000 t/y 3Y/Y Change na na na 300% 50% 0% 0% 0% 0% 0% 0% 0% 0%

Pricing:High Purity C$250,000/t C$250,000/t C$250,000/t C$250,000/t C$250,000/t C$250,000/t C$250,000/t C$250,000/t C$250,000/t C$250,000/t C$250,000/t C$250,000/t C$250,000/t

/ Kg C$250/Kg C$250/Kg C$250/Kg C$250/Kg C$250/Kg C$250/Kg C$250/Kg C$250/Kg C$250/Kg C$250/Kg C$250/Kg C$250/Kg C$250/KgMetallurgical C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t

Rare earth and Scandium

Clay Throughput 0 MM t 0 MM t 1 MM t 3 MM t 4 MM t 8 MM t 8 MM t 8 MM t 8 MM t 8 MM t 8 MM t 8 MM t 8 MM tper day 0 / day 0 / day 1,904 / day 7,583 / day 11,371 / day 22,707 / day 22,707 / day 22,707 / day 22,707 / day 22,707 / day 22,707 / day 22,707 / day 22,707 / day

Recovery 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75%

GradesGallium 38 g /t 38 g /t 38 g /t 38 g /t 38 g /t 38 g /t 38 g /t 38 g /t 38 g /t 38 g /t 38 g /t 38 g /t 38 g /t

Scandium 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /tDysprosium 10 g /t 10 g /t 10 g /t 10 g /t 10 g /t 10 g /t 10 g /t 10 g /t 10 g /t 10 g /t 10 g /t 10 g /t 10 g /t

Yttrium 48 g /t 48 g /t 48 g /t 48 g /t 48 g /t 48 g /t 48 g /t 48 g /t 48 g /t 48 g /t 48 g /t 48 g /t 48 g /tNeodymium 68 g /t 68 g /t 68 g /t 68 g /t 68 g /t 68 g /t 68 g /t 68 g /t 68 g /t 68 g /t 68 g /t 68 g /t 68 g /t

Praseodymium 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /t 19 g /tLanthanum 76 g /t 76 g /t 76 g /t 76 g /t 76 g /t 76 g /t 76 g /t 76 g /t 76 g /t 76 g /t 76 g /t 76 g /t 76 g /t

OutputGallium kg kg 18,863 kg 75,636 kg 113,431 kg 226,498 kg 226,498 kg 226,498 kg 226,498 kg 226,498 kg 226,498 kg 226,498 kg 226,498 kg

Scandium kg kg 9,184 kg 36,823 kg 55,223 kg 110,269 kg 110,269 kg 110,269 kg 110,269 kg 110,269 kg 110,269 kg 110,269 kg 110,269 kgDysprosium kg kg 4,964 kg 19,904 kg 29,850 kg 59,605 kg 59,605 kg 59,605 kg 59,605 kg 59,605 kg 59,605 kg 59,605 kg 59,605 kg

Yttrium kg kg 23,828 kg 95,540 kg 143,281 kg 286,103 kg 286,103 kg 286,103 kg 286,103 kg 286,103 kg 286,103 kg 286,103 kg 286,103 kgNeodymium kg kg 33,508 kg 134,353 kg 201,489 kg 402,332 kg 402,332 kg 402,332 kg 402,332 kg 402,332 kg 402,332 kg 402,332 kg 402,332 kg

Praseodymium kg kg 9,184 kg 36,823 kg 55,223 kg 110,269 kg 110,269 kg 110,269 kg 110,269 kg 110,269 kg 110,269 kg 110,269 kg 110,269 kgLanthanum kg kg 37,727 kg 151,271 kg 226,861 kg 452,996 kg 452,996 kg 452,996 kg 452,996 kg 452,996 kg 452,996 kg 452,996 kg 452,996 kgg

PricingGallium C$759 /kg C$759 /kg C$759 /kg C$759 /kg C$759 /kg C$759 /kg C$759 /kg C$759 /kg C$759 /kg C$759 /kg C$759 /kg C$759 /kg C$759 /kg

Scandium C$2,080 /kg C$2,080 /kg C$2,080 /kg C$2,080 /kg C$2,080 /kg C$2,080 /kg C$2,080 /kg C$2,080 /kg C$2,080 /kg C$2,080 /kg C$2,080 /kg C$2,080 /kg C$2,080 /kgDysprosium C$1,550 /kg C$1,550 /kg C$1,550 /kg C$1,550 /kg C$1,550 /kg C$1,550 /kg C$1,550 /kg C$1,550 /kg C$1,550 /kg C$1,550 /kg C$1,550 /kg C$1,550 /kg C$1,550 /kg

Yttrium C$59 /kg C$59 /kg C$59 /kg C$59 /kg C$59 /kg C$59 /kg C$59 /kg C$59 /kg C$59 /kg C$59 /kg C$59 /kg C$59 /kg C$59 /kgNeodymium C$181 /kg C$181 /kg C$181 /kg C$181 /kg C$181 /kg C$181 /kg C$181 /kg C$181 /kg C$181 /kg C$181 /kg C$181 /kg C$181 /kg C$181 /kg

Praseodymium C$141 /kg C$141 /kg C$141 /kg C$141 /kg C$141 /kg C$141 /kg C$141 /kg C$141 /kg C$141 /kg C$141 /kg C$141 /kg C$141 /kg C$141 /kgLanthanum C$22 /kg C$22 /kg C$22 /kg C$22 /kg C$22 /kg C$22 /kg C$22 /kg C$22 /kg C$22 /kg C$22 /kg C$22 /kg C$22 /kg C$22 /kg

Other - Patent (Bauxite)Global Bauxite Market 100 MM t 100 MM t 101 MM t 102 MM t 103 MM t 108 MM t 114 MM t 120 MM t 126 MM t 132 MM t 139 MM t 146 MM t 150 MM t

% used for Alumina 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 85%Bauxite / Alumina 85 MM t 85 MM t 86 MM t 87 MM t 88 MM t 92 MM t 97 MM t 102 MM t 107 MM t 112 MM t 118 MM t 124 MM t 128 MM t

Alumina price C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t C$400/t C$400/tPotentail Market C$34,000 MM C$34,000 MM C$34,340 MM C$34,683 MM C$35,030 MM C$36,817 MM C$38,695 MM C$40,669 MM C$42,744 MM C$44,924 MM C$47,215 MM C$49,624 MM C$51,128 MM

Orbite Penitration Rate 0% 0% 0% 2% 4% 7.5% 10.0% 12.5% 0.0% 0.0% 0.0% 0.0% 0.0%Patentant Royalty 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%

Other - HematiteGrade 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9%Yield 98% 98% 98% 98% 98% 98% 98% 98% 98% 98% 98% 98% 98%

Output C$0/t 0.0 MM t 0.1 MM t 0.2 MM t 0.4 MM t 0.7 MM t 0.7 MM t 0.7 MM t 0.7 MM t 0.7 MM t 0.7 MM t 0.7 MM t 0.7 MM tPrice C$200/t C$200/t C$200/t C$200/t C$200/t C$200/t C$200/t C$200/t C$200/t C$200/t C$200/t C$200/t C$200/t

Other - SilicaGrade 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50%

Recovery 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95%Output 0 MM t 0 MM t 0 MM t 1 MM t 2 MM t 4 MM t 4 MM t 4 MM t 4 MM t 4 MM t 4 MM t 4 MM t 4 MM t

Price C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t

Magnesium OxideGrade 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%

Recovery 98% 98% 98% 98% 98% 98% 98% 98% 98% 98% 98% 98% 98%Output 0 MM t 0 MM t 0 MM t 0 MM t 0 MM t 0 MM t 0 MM t 0 MM t 0 MM t 0 MM t 0 MM t 0 MM t 0 MM t

Price C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t C$35/t Source: Jennings Capital Inc.

34


APPENDIX H: PROJECTED INCOME AND FREE CASH FLOW Exploration Orbite(TSX.ORT.A)Fiscal Year End: Dec. 31

Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Year 15 Year 20 Year 25 Year 30 Year 35 Year 40 Year 432011 2012 2013 2014 2015 2020 2025 2030 2035 2040 2045 2050 2053

Income StatementCore Revenues:

High Purity C$0.0 MM C$87.5 MM C$350.0 MM C$787.5 MM C$1,137.5 MM C$1,575.0 MM C$1,575.0 MM C$1,575.0 MM C$1,575.0 MM C$1,575.0 MM C$1,575.0 MM C$1,575.0 MM C$1,575.0 MMMetallurgical C$0.0 MM C$0.0 MM C$58.0 MM C$232.0 MM C$348.0 MM C$696.0 MM C$696.0 MM C$696.0 MM C$696.0 MM C$696.0 MM C$696.0 MM C$696.0 MM C$696.0 MMSub-Total: C$0 MM C$88 MM C$408 MM C$1,020 MM C$1,486 MM C$2,271 MM C$2,271 MM C$2,271 MM C$2,271 MM C$2,271 MM C$2,271 MM C$2,271 MM C$2,271 MM

Peripheral RevenuesRare earth and Scandium C$0.0 MM C$0.0 MM C$50.7 MM C$203.3 MM C$304.9 MM C$608.7 MM C$608.7 MM C$608.7 MM C$608.7 MM C$608.7 MM C$608.7 MM C$608.7 MM C$608.7 MM

Patent - Bauxite C$0.0 MM C$0.0 MM C$0 MM C$35 MM C$70 MM C$138 MM C$193 MM C$254 MM C$0 MM C$0 MM C$0 MM C$0 MM C$0 MMHematitte C$0.0 MM C$0.0 MM C$12 MM C$47 MM C$70 MM C$140 MM C$140 MM C$140 MM C$140 MM C$140 MM C$140 MM C$140 MM C$140 MM

Silica C$0.0 MM C$0.0 MM C$11 MM C$44 MM C$66 MM C$132 MM C$132 MM C$132 MM C$132 MM C$132 MM C$132 MM C$132 MM C$132 MMMagnesium Oxide C$0.0 MM C$0.0 MM C$0 MM C$1 MM C$2 MM C$4 MM C$4 MM C$4 MM C$4 MM C$4 MM C$4 MM C$4 MM C$4 MM

C$0 MM C$0 MM C$73.9 MM C$330 MM C$513 MM C$1,023 MM C$1,079 MM C$1,139 MM C$885 MM C$885 MM C$885 MM C$885 MM C$885 MM% of total revenue #DIV/0! 0.1% 15.3% 24.5% 25.7% 8.4% 32.2% 33.4% 28.0% 28.0% 28.0% 28.0% 28.0%

Total Revenues C$0.0 MM C$87.6 MM C$481.9 MM C$1,349.8 MM C$1,998.8 MM C$3,294.2 MM C$3,349.6 MM C$3,410.3 MM C$3,156.1 MM C$3,156.1 MM C$3,156.1 MM C$3,156.1 MM C$3,156.1 MM

Expenses:Min. & Trans - High Purity C$0.0000MM (C$0.00319 MM) (C$0.01 MM) (C$0.03 MM) (C$0.04 MM) (C$0.06 MM) (C$0.06 MM) (C$0.06 MM) (C$0.06 MM) (C$0.06 MM) (C$0.06 MM) (C$0.06 MM) (C$0.06 MM)

Min. & Trans - Metallurgical C$0.00MM C$0.00000MM (C$1.32 MM) (C$5.28 MM) (C$7.92 MM) (C$15.84 MM) (C$15.84 MM) (C$15.84 MM) (C$15.84 MM) (C$15.84 MM) (C$15.84 MM) (C$15.84 MM) (C$15.84 MM)Processing - High Purity C$0.0MM (C$0.43750 MM) (C$1.8 MM) (C$3.9 MM) (C$5.7 MM) (C$7.9 MM) (C$7.9 MM) (C$7.9 MM) (C$7.9 MM) (C$7.9 MM) (C$7.9 MM) (C$7.9 MM) (C$7.9 MM)

Processing - Metallurgical C$0.0MM C$0.00000MM (C$36.3 MM) (C$145.0 MM) (C$217.5 MM) (C$435.0 MM) (C$435.0 MM) (C$435.0 MM) (C$435.0 MM) (C$435.0 MM) (C$435.0 MM) (C$435.0 MM) (C$435.0 MM)Total: C$0.0MM (C$0.4 MM) (C$39.3 MM) (C$154.2 MM) (C$231.1 MM) (C$458.8 MM) (C$458.8 MM) (C$458.8 MM) (C$458.8 MM) (C$458.8 MM) (C$458.8 MM) (C$458.8 MM) (C$458.8 MM)SG&A (C$4.0 MM) (C$4.0 MM) (C$4.0 MM) (C$4.0 MM) (C$4.0 MM) (C$4.0 MM) (C$4.0 MM) (C$4.0 MM) (C$4.0 MM) (C$4.0 MM) (C$4.0 MM) (C$4.0 MM) (C$4.0 MM)

EBITDA (C$4.0 MM) C$83.1MM C$438.5MM C$1,191.5MM C$1,763.7MM C$2,831.4MM C$2,886.9MM C$2,947.6MM C$2,693.4MM C$2,693.4MM C$2,693.4MM C$2,693.4MM C$2,693.4MMEBITDA M argin - Core #DIV/0! 95.0% 89.4% 84.5% 84.2% 79.6% 79.6% 79.6% 79.6% 79.6% 79.6% 79.6% 79.6%

EBITDA M argin - Total: #DIV/0! 94.9% 91.0% 88.3% 88.2% 86.0% 86.2% 86.4% 85.3% 85.3% 85.3% 85.3% 85.3%

3.8% 4.1% 6.3% 6.6%Depreciation / Depletion C$0.00 MM (C$0.00 MM) (C$0.56 MM) (C$4.19 MM) (C$9.37 MM) (C$25.55 MM) (C$25.88 MM) (C$26.28 MM) (C$26.79 MM) (C$27.46 MM) (C$30.04 MM) (C$40.72 MM) (C$80.82 MM)

EBIT (C$4.0 MM) C$83.1 MM C$438.0 MM C$1,187.3 MM C$1,754.3 MM C$2,805.9 MM C$2,861.0 MM C$2,921.3 MM C$2,666.6 MM C$2,665.9 MM C$2,663.3 MM C$2,652.7 MM C$2,612.6 MMInterest Expense C$0.0 MM (C$0.1 MM) (C$5.3 MM) (C$10.0 MM) (C$14.3 MM) (C$14.3 MM) (C$1.9 MM) C$0.0 MM C$0.0 MM C$0.0 MM C$0.0 MM C$0.0 MM C$0.0 MM

EBT (C$4.0 MM) C$83.0 MM C$432.6 MM C$1,177.3 MM C$1,740.0 MM C$2,791.6 MM C$2,859.1 MM C$2,921.3 MM C$2,666.6 MM C$2,665.9 MM C$2,663.3 MM C$2,652.7 MM C$2,612.6 MMCurrent Income Tax C$1.4 MM (C$27.7 MM) (C$141.4 MM) (C$385.0 MM) (C$568.8 MM) (C$952.7 MM) (C$987.4 MM) (C$1,012.1 MM) (C$923.7 MM) (C$923.4 MM) (C$920.8 MM) (C$911.8 MM) (C$882.8 MM)Future Income Tax C$0.0 MM (C$1.4 MM) (C$10.0 MM) (C$27.0 MM) (C$40.2 MM) (C$24.3 MM) (C$13.2 MM) (C$10.3 MM) (C$9.6 MM) (C$9.7 MM) (C$11.3 MM) (C$16.6 MM) (C$31.6 MM)

Tax Rate 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0%

Net Income (C$2.6 MM) C$54.1 MM C$286.5 MM C$775.3 MM C$1,145.3 MM C$1,828.8 MM C$1,860.3 MM C$1,898.8 MM C$1,733.3 MM C$1,732.9 MM C$1,731.2 MM C$1,724.2 MM C$1,698.2 MM

EPS (C$0.01) C$0.19 C$0.98 C$2.66 C$3.93 C$6.27 C$6.38 C$6.51 C$5.95 C$5.94 C$5.94 C$5.92 C$5.83Operating Cash Flow (C$2.6 MM) C$55.4 MM C$297.1 MM C$806.5 MM C$1,194.9 MM C$1,878.7 MM C$1,899.4 MM C$1,935.5 MM C$1,769.7 MM C$1,770.0 MM C$1,772.6 MM C$1,781.5 MM C$1,810.6 MM

CFPS (C$0.01) C$0.28 C$1.30 C$3.23 C$4.49 C$6.45 C$6.52 C$6.64 C$6.07 C$6.07 C$6.08 C$6.11 C$6.21

Free Cash Flow (C$M)

Free Cash Flow to EquityNet Income (C$2.6 MM) C$54.1 MM C$286.5 MM C$775.3 MM C$1,145.3 MM C$1,828.8 MM C$1,860.3 MM C$1,898.8 MM C$1,733.3 MM C$1,732.9 MM C$1,731.2 MM C$1,724.2 MM C$1,698.2 MM

Future Income Taxes C$0.0 MM C$1.4 MM C$10.0 MM C$27.0 MM C$40.2 MM C$24.3 MM C$13.2 MM C$10.3 MM C$9.6 MM C$9.7 MM C$11.3 MM C$16.6 MM C$31.6 MMDepreciation C$0.0 MM C$0.0 MM C$0.6 MM C$4.2 MM C$9.4 MM C$25.6 MM C$25.9 MM C$26.3 MM C$26.8 MM C$27.5 MM C$30.0 MM C$40.7 MM C$80.8 MM

CAPEX (C$9.5 MM) (C$14.5 MM) (C$235.5 MM) (C$231.5 MM) (C$229.5 MM) C$0.0 MM C$0.0 MM C$0.0 MM C$0.0 MM C$0.0 MM (C$5.0 MM) (C$10.0 MM) (C$13.0 MM)Change in Net WC (C$0.4 MM) (C$0.7 MM) (C$23.6 MM) (C$23.0 MM) (C$23.0 MM) C$0.0 MM C$0.0 MM C$0.0 MM C$0.0 MM C$22.5 MM C$0.0 MM C$0.0 MM C$117.1 MM

Net Debt Issue (Repayment) C$0.0 MM C$1.3 MM C$86.8 MM C$76.9 MM C$68.9 MM (C$46.8 MM) (C$22.1 MM) C$0.0 MM C$0.0 MM C$0.0 MM C$0.0 MM C$0.0 MM C$0.0 MMFree Cash Flow to Equity (C$12.5 MM) C$41.6 MM C$124.8 MM C$628.9 MM C$1,011.4 MM C$1,831.9 MM C$1,877.3 MM C$1,935.5 MM C$1,769.7 MM C$1,792.5 MM C$1,767.6 MM C$1,771.5 MM C$1,914.7 MM

FCEPS

Free Cash Flow to Firm

EBITDA (C$4.0 MM) C$83.1 MM C$438.5 MM C$1,191.5 MM C$1,763.7 MM C$2,831.4 MM C$2,886.9 MM C$2,947.6 MM C$2,693.4 MM C$2,693.4 MM C$2,693.4 MM C$2,693.4 MM C$2,693.4 MMCurrent Taxes C$1.4 MM (C$27.7 MM) (C$141.4 MM) (C$385.0 MM) (C$568.8 MM) (C$952.7 MM) (C$987.4 MM) (C$1,012.1 MM) (C$923.7 MM) (C$923.4 MM) (C$920.8 MM) (C$911.8 MM) (C$882.8 MM)

CAPEX C$9.5 MM C$14.5 MM C$235.5 MM C$231.5 MM C$229.5 MM C$0.0 MM C$0.0 MM C$0.0 MM C$0.0 MM C$0.0 MM C$5.0 MM C$10.0 MM C$13.0 MMChange in Net WC (C$0.4 MM) (C$0.7 MM) (C$23.6 MM) (C$23.0 MM) (C$23.0 MM) C$0.0 MM C$0.0 MM C$0.0 MM C$0.0 MM C$22.5 MM C$0.0 MM C$0.0 MM C$117.1 MM

Free Cash Flow to Firm C$6.6 MM C$69.3 MM C$509.0 MM C$1,015.1 MM C$1,401.4 MM C$1,878.7 MM C$1,899.4 MM C$1,935.5 MM C$1,769.7 MM C$1,792.5 MM C$1,777.6 MM C$1,791.5 MM C$1,940.7 MMFCFPS

Source: Jennings Capital Inc.

35


APPENDIX I: LIST OF GLOBAL ALUMINA SMELTERS

Source: AME Group and Jennings Capital Inc.

Refinery Name Country Owners Refinery Name Country Owners Abbott Point Australia Chalco Xiaoyi Tianyuan China NAGove Alumina Australia AMP Limited, CSR Limited, and Rio Tinto Group Gardanne Alumina France Rio Tinto GroupKwinana Alumina Australia Alcoa Inc, and Alumina Limited Stade Alumina Germany Alcoa Inc, Dadco Alumina and Chemicals Ltd, and Norsk Hydro ASAOther Australia Ala Australia NA Distomon Alumina Greece Mytilineos Holdings S.A.Pinjarra Alumina Australia Alcoa Inc, and Alumina Limited Fria Alumina Guinea (Government), ArcelorMittal, and United Company Rusal

QAL Alumina Australia (Private), Kaiser Aluminum Corp, Rio Tinto Group, and United Company Rusal Sangaredi Guinea BHP Billiton Limited, Dubai Aluminium Co., Global Alumina Corporation, and Mubadala

Rio Tinto Yarwun Australia Rio Tinto Group Ajka Alumina Hungary MAL Magyar Aluminium Termelo es Kereskedelmi Zrt.Wagerup Alumina Australia Alcoa Inc, and Alumina Limited Magyarovar Alumina Hungary MAL Magyar Aluminium Termelo es Kereskedelmi Zrt.

Worsley Alumina Australia Alcoa Inc, BHP Billiton Limited, Kobe Alumina Associates, and Sojitz Corporation Aditya India Hindalco Industries Ltd

Gjandia Alumina Azerbaijan Azeralyuminii Andra Pradesh (Jindal) Alumina Projec India (Private)Birac Alumina Bosnia & Herzegovina Ukio Bankas AB Andrah Pradesh India National Aluminium Company Limited (NALCO)Mostar Alumina Bosnia & Herzegovina Mostar Aluminium Belgaum Alumina India (Private), and Hindalco Industries LtdABC Alumina Project Brazil Chalco, and Vale S.A Damanjodi Alumina India National Aluminium Company Limited (NALCO)Alumar Alumina Brazil Alcoa Inc, Alumina Limited, BHP Billiton Limited, and Rio Tinto Group Korba Alumina India (Government), and Vedanta Resources PLC

Alunorte Alumina Brazil Japan Alunorte Investment Co, Mitsubishi Corporation, Mitsui & Co Ltd, Nippon Amazon Aluminium Co., Ltd., Norsk Hydro ASA, Vale S.A, and Votorantim Group Lanjigarh India (Government), and Vedanta Resources PLC

Other Brazil Ala Brazil NA Mettur Alumina India (Government), and Vedanta Resources PLCOuro Preto Alumina Brazil Novelis Inc. Muri Alumina India (Private), and Hindalco Industries LtdPara Alumina Company (CAP) Brazil Dubai Aluminium Co., Norsk Hydro ASA, and Vale S.A Orissa India Vedanta Resources PLCPocos de Caldas Alumina Brazil Alcoa Inc Other India Ala India NASorocaba Alumina Brazil Votorantim Group Renukoot Alumina India Hindalco Industries LtdOther Cameroon Ala Cameroon NA Utkal Alumina India Hindalco Industries LtdVaudreuil Alumina Canada Rio Tinto Group Jajarm Alumina Iran Iran Alumina CompanyChalco Chongqing China Chalco Aughinish Alumina Ireland Glencore International AG, and United Company Rusal

Chalco Guangxi Huayin China Chalco, China Minmetals Corporation, and Guangxi Investment Group Company Limited (Co., Ltd.) Eurallumina Italy (Private), Glencore International AG, Rio Tinto Group, and United Company Rusal

Chalco Guangxi Pingguo Alumina China (Government), and Chalco Alpart Alumina Jamaica Glencore International AG, Kaiser Aluminum Corp, Norsk Hydro ASA, and United Company Rusal

Chalco Guizhou Alumina China (Government), and Chalco Ewarton Alumina Jamaica (Government), Glencore International AG, and United Company RusalChalco Henan Zhengzhou Alumina China Chalco Jamalco Alumina Jamaica (Government), Alcoa Inc, and Alumina LimitedChalco Henan Zhongzhou Alumina China Chalco Kirkvine Alumina Jamaica (Government), Glencore International AG, and United Company RusalChalco Shandong Alumina China (Government), ArcelorMittal, and Chalco Ehime Alumina Japan Sumitomo Chemical Company LimitedChalco Shanxi Alumina China (Government), and Chalco SAL Yokohama Alumina Japan Showa Denko K.KChalco Xingxian China National Aluminium Company Limited (NALCO) Shimizu Alumina Japan Nippon Light Metal Co., Ltd.Chalco Zhengzhou Light Metal China Chalco Pavlodar Alumina Kazakhstan Eurasian Natural Resources Corporation PLC

Chalco Zunyi China Chalco Podgorica Alumina Montenegro (Government), Kombinat Aluminijuma AD Podgorica, and United Company Rusal

Chongqing Bosai China BOSAI Minerals Group Co., Ltd. Cemtrade Alumina Romania ArcelorMittal, and United Company RusalChongqing Dingtai Tuoyuan China (Private) Tulcea Alumina Romania (Private), and Vimetco NVGuanlv China NA Achinsk Alumina Russia ArcelorMittal, and United Company RusalHenan Dengfeng China NA Bogoslovsk Alumina Russia ArcelorMittal, and United Company RusalHenan Luoyang Dongyangguang China (Private) Boksitogorsk Alumina Russia Glencore International AG, and United Company RusalHenan Luoyang Xiangjiang Wanji China NA Komi Alumina Project Russia United Company RusalHenan Pingdingshan Huiyuan China NA Pikalevo Alumina Russia (Private), S.C. Neferal S.A., and United Company RusalHenan Sanmenxia (Baotou) East Hope China (Private), East Hope Group, and Huanghe Aluminium & Power Group Uralsk Alumina Russia United Company RusalHenan Sanmenxia Kaiman (Coalmine) China (Private) Volkhov Alumina Russia NAHenan Sanmenxia Yixiang China NA Ma'aden Alumina Saudi Arabia (Private), Alcoa Inc, Alumina Limited, and Rio Tinto GroupHenan Yimei China (Private) Ziar Alumina Slovak Republic ZNSPHexiang China NA Talum Alumina Slovenia (Government)Jinzhong (East Hope) China NA San Ciprian Alumina Spain Alcoa Inc, and Alumina LimitedLubei Huagong China NA Suralco Alumina Suriname Alcoa Inc, Alumina Limited, and BHP Billiton LimitedOther China Ala China NA Seydisehir Alumina Turkey (Private), and Eti Mine WorksQingzhen China NA Nikolayev Alumina Ukraine (Government), (Private), and United Company RusalShandong Chiping Xinfa Huayu China Chiping Xinfa Aluminium Product Co., Ltd. Zaporozhsky Alumina Ukraine (Government), ArcelorMittal, and United Company RusalShandong Nanshan China Shandong Nanshan Aluminium Co., Ltd. Burntisland Alumina United Kingdom Rio Tinto GroupShandong Weiqiao China (Private) Baton Rouge Alumina USA LaRoche Chemical CoShanxi Jiaokou Alumina China (Private) Burnside Alumina USA Ormet Corporation

Shanxi Luneng Jinbei China (Government), and (Private) Gramercy Alumina USA Century Aluminum Company, Kaiser Aluminum Corp, Noranda Aluminum Holding Corporation, and Xstrata plc

Shanxi Tongde China NA Point Comfort Alumina USA Alcoa Inc, and Alumina LimitedShanxi Wusheng China NA Sherwin Alumina USA (Private), China Minmetals Corporation, and Glencore International AGShanxi Yangquan China Yankuang Group Co. Ltd. St. Croix Alumina USA Alcoa Inc, and Alumina LimitedWenshan Alumina China Yunnan Aluminum Co. Ltd. Bauxilum Alumina Venezuela Corporacion Venezolana de GuayanaWuchuan China NA Lam Dong Alumina Project (Nam Dong)Vietnam (Government), and VinacominXiaoyi Daxiaobao China NAXiaoyi Huaqing China NA

36

Jennings Capital Inc. Research Disclosures

Companies Ticker

Exploration Orbit V.S.P.A. Inc. TSXV-ORT.A

I, Ken Chernin, 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 Exploration Orbit V.S.P.A. Inc.

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 and limitations as set out above. Jennings Capital (USA) Inc. is a registered broker-dealer with the Securities and Exchange Commission and a member of the National Association of Securities Dealers Inc. THE FIRM THAT PREPARED THIS REPORT MAY NOT BE SUBJECT TO U.S. RULES WITH REGARD TO THE PREPARATION OF RESEARCH REPORTS AND THE INDEPENDENCE OF ANALYSTS. This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein. Any transaction in these securities by U.S. persons must be effected through either Westminster Securities Corporation, a U.S. broker-dealer registered with the Securities and Exchange Commission and a member of the National Association of Securities Dealers Inc. and the New York Stock Exchange Inc. or through Jennings Capital (USA) Inc., A U.S. broker-dealer registered with the Securities and Exchange Commission and a member of the National Association of Securities Dealers Inc. U.S. PERSONS This research report was prepared by an affiliate of Jennings Capital (USA) Inc. or other person that may not be registered as a broker-dealer in the United States. The firm that prepared this report may not be subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. 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 this report must be performed through Jennings Capital (USA) Inc.

U.K. 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 IS NOT SUBJECT TO U.K. RULES WITH REGARD TO THE PREPARATION OF RESEARCH REPORTS AND THE INDEPENDENCE OF ANALYSTS. 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 Markets Act 2000 (Financial Promotion) Order 2001. 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.

37

Distribution Ratings: Out of approximately 99 stocks in the Jennings Capital Inc. coverage universe, the ratings distribution is as follows:

BUY 53%SPECULATIVE BUY 41%HOLD 1%SELL 0%TENDER TO OFFER 0%UNDER REVIEW 5%RESTRICTED 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? 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 RESEARCHSales Stephen Calderwood, P.Eng., MBA, Vice-President, Co-Head of ResearchMark Knapp, PhD, MBA, Managing Director, Head of Institutional Sales [email protected] [email protected] 416.214.0600 Russell Stanley, CFA, MBA, Vice-President, Co-Head of ResearchMichael Capobianco, Vice President, Institutional Sales [email protected] [email protected] 416.214.0600Gordon Fernandes, Institutional Sales Gold/Base [email protected] 416.214.0600 Peter Campbell, P.Eng.Michael Graham, Institutional Sales [email protected] [email protected] 416.214.0600 Stuart McDougall, B.Sc.David Beasley, MBA, CFA, Quantitative Trading Strategist [email protected] [email protected] 416.214.0600 Alka Singh, CFA, MBA, B.Sc.

[email protected] 416.304.3964Ryan Walker, [email protected] 416.304.2194

Trading Oil & GasDoug Van Peteghem, Sr. Managing Director, Head of Trading Stephen Calderwood, P.Eng., MBA, Co-Head of [email protected] 416.214.0600 [email protected] 403.292.9483David Lawson, Branch Manager Gregory Chornoboy, B.Sc., P.Eng., [email protected] 416.214.0600 [email protected] 403.292.9485Tim Fisher, MBA, Vice President, Institutional Trading James Humen, [email protected] 416.214.0600 [email protected] 403.292.9487Earle D. McMaster, CFA, Sr. Institutional Trader, Managing [email protected] 416.214.0600 Special Situations

Russell Stanley, CFA, MBA, Vice-President, Co-Head of [email protected] 416.304.2178

INVESTMENT BANKING Ken CherninDaryl Hodges, M.Sc., President & CEO, Head of Investment Banking [email protected] [email protected] 416.304.2174 Marc Charbin, CA, CFADavid Donato [email protected] 416.304.2191Sr. Managing Director, Investment [email protected] 416.304.2189 Research AssociatesDavid McGorman Greg DoyleSr. Managing Director, Investment Banking [email protected] [email protected] 403.262.0900 Trenton Latos, P.Eng.

[email protected] 403.292.9484Syndication Spencer LangleyChristopher Syme, VP Syndication [email protected] [email protected] 416.304.2177 Bill Mantzoutsos, MBA

[email protected] 416.304.2184Grace Vong, [email protected] 416.304.3961

Research CoordinatorP. Lorelei [email protected] 416.304.2175

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 FundParticipating Organization of the Toronto Stock Exchange and the TSX Venture Exchange

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: 403.292-0970 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

jennings capital report oct. 7, 2011

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