RARE EARTHS, SPECIALITY& STRATEGIC METALSINVESTMENT SUMMIT

IRONMONGERS’ HALL, CITY OF LONDON ● THURSDAY, 17 MAR 2011www.ObjectiveCapitalConferences.com

Exploring the Karrat REE deposit in GreenlandHugh Mackay – Chairman, Avannaa Resources

Avannaa Resources

Exploring the Karrat REE deposit in Greenland

Objective Capital Rare Earths, Speciality & Strategic Metals Investment Summit

London, 17 March 2011

www.avannaa.com

Avannaa key facts

1. Founded in UK in 2006. Not listed. Focussed on Greenland exploration, where founders have worked since 1982

2. Experts at grassroots mineral exploration, experts on the geology of Greenland

3. Objective is to find giant deposits of gold, base metals and diamonds.

4. Focus on competitive edge in grassroots exploration and bring in development partners to take mines into production

Why Greenland?

• Excellent geology – the same geology in Australia, Canada and southern Africa hosts world class mineral deposits.

• Under-explored, high potential for significant discoveries

• Greenland government is pro-mining and single government agency acts as administrative partner

• No royalties, favourable deductions on capital, no ring-fencing

• 30 % corporate tax

• Simple logistics, extensive access to deep tidal water, ocean moderated climate

• Modern society with educated, problem-solving workforce

Management TeamDr. Nicholas Rose: CEO

Ph.D. Geology, Stanford University, 1989Active in Greenland since 1982 on a variety of research and mineral exploration projects, and has a total of 18 field seasons in Greenland. Research fellow at Lawrence Livermore National Laboratory (California) and University of Copenhagen. Managed projects for several mining exploration companies working in Greenland during the 1990’s including Inco, Quadrant Resources and Diamet and has worked as a geologist in exploration projects in Greenland since 1986. Excellent network in the Greenland geological and mining community.

Dr. Stefan Bernstein: Exploration Director Ph.D. Geology, University of Copenhagen, 1994Senior scientist in Danish geological community, including five years at the Geological Survey of Denmark and Greenland (GEUS). Resident in Greenland 2 years as leader of Denmark’s Arctic research station. 24 research and exploration seasons in all parts of Greenland including work with Platinova, Quadrant, NunaOil, RTZ, Strathcona, Corona and Teck. Intimate knowledge and direct involvement with most major deposit finds in Greenland within the last 15 years. Author of >30 scientific papers.

Hugh Mackay: ChairmanB.Sc. (Hons) Geology, University of Edinburgh, 1982; Sloan M.Sc., London Business School, 2001. International management experience in disciplined corporate environments in oil exploration with BP and Enterprise Oil. Management team in 3 start up companies culminating in $50 million trade sale of The Peak Group to AGR ASA. Special experience of exploration portfolio management and business development. Hands on experience of company start-up, managing growth, trade sale and mergers. Several expeditions to Greenland since 1982.

The Avannaa management team are also the founders of the company

LicencesLicence number Region km2

Award date Targets

2007/52 Disko 8 2007 Diamonds

2008/27 Saqqaq/Itilliarsuk 140 2008 Au, Fe

2008/33 Eqi 70 2008 Au

2010/05 Karrat REE 122 2010 REE

2010/20 Flammefjeld 14 2010 Mo, Au

2010/31 Nuussuaq 24 2010 Zn

2010/32 IC Christensen Land 405 2010 Cu

2011/30 ICC extension 4096 2011 Cu

2011/31 Kangerluarsuk 112 2011 SEDEX Pb-Zn

2011/40 Central East Greenland 1072 2011 Cu

Total 6063

Avannaa is a leading Greenland explorer

02468

10121416

Number of licences

01000200030004000500060007000

km2 under licence

Flammefjeld Mo/Au

Karrat REE

Projects

Qeqertaa diamond

SEDEX lead-zinc

Central East Greenland copper

Itilliarsuk gold, iron

IC Christensen Land copper

• Large tonnage• Open pit• HREO enriched• Next to coast

Karrat REE

Karrat REE location

HistoryNew rare earth element deposit, discovered by Avannaa2007: discovery during regional prospecting2008: verification2009: bulk sampling, prospecting - confirmed and enlarged deposit – applied for more ground2010: drill 1740m, bulk & channel sampling, prospecting

Licence data2010/05, 122 km2

2007/08, 84 km2

Karrat REE two locations

Umiamako Nuna UMIA

NiaqornakavsakNIAQ

10 km

NIAQ geology

• Host rock is Paleoproterozoic metasediments and metavolcanics of the Karrat Group

• REE mineralization is a lithologically distinct horizon of banded carbonates in an amphibolite unit

NIAQ

Stratigraphy

NIAQ looking southNIAQ 6,7,8NIAQ 1,2NIAQ 3,4,5

NIAQ Bulk

East

West

NIAQ cross section 3,4,5

NIAQ bulk sample siteUMIA

NIAQ

NIAQ

UMIA

NIAQ dimensions

• Tabular body hosting the REE• 1.5 km long, striking east west• True thickness pinches and swells from 10.3 to

32.5 m, structurally controlled• Dips south at 32o

• 56 m asl highest outcrop• 165 m bsl deepest drill penetration• 26 million tonnes is reasonable resource target• Open in two dimensions

NIAQ REE

• REE mainly hosted by bastnaesite, monazite, allanite and other REE silicates.

• TREO+ Y 1.36 wt% average in bulk sample. Up to 2.45% in core.

• HREO+Y 13.06% average in bulk sample. Up to 30% in core.

Calcium carbonate banded horizon

Magnetite

Bastnasite Calcite25 µm

BSE Electron Microprobe – Stanford University

Major Mineralogy• Calcium carbonate ~80-90%• Grunerite (Fe-Mg amphibole), Magnetite, Ilmenite, Fluorite, Anandite (Ba-S mica)Primary REE mineral• Bastnasite

Black layered carbonate

SEM BSE image – Stanford University

Major Mineralogy• Anandite (Ba-S mica) ~50-80%• Magnetite, Ilmenite, Calcite, Apatite, EdenitePrimary REE minerals• Bastnasite, Monazite, Allanite

CI Chondrite data after Anders and Greeves (1989)

La

Ce

Pr

Nd

Sm

EuGd

Tb

Dy

HoEr

TmYb

Lu

100

1000

10000

55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72

Sam

ple/

Ch

ondr

ite

Atomic Number

NIAQ Chondrite normalized core data

Working Theory

• Source fluid is from a ferrocarbonatite. • We believe that the mineralized horizon is not a

carbonatite based primarily on the overall whole rock chemistry.

• SiO2 content of the horizon varies between 15-25%, in a carbonatite we would expect to see values below 5%.

• CaO content varies between 18-20%, in a carbonatite we would expect to see values >30%.

Karrat vs. Bayan Obo

1

10

100

1000

10000

100000

La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Lu

Karrat

Ffe - Primary Ore

MFe

AeFe

RiFe

DFe

NIAQ 1.36 wt% TREO+Y, 13.06% HREO+Y

Element ppm*

Me2O3

factorRE2O3

ppm RE2O3 wt%RE203 in %

kg RE2O3

tonne

La 2245 1.173 2633.4 0.263% 19.3% 2.63Ce 5036.9 1.171 5898.2 0.590% 43.3% 5.90Pr 470.1 1.17 550.0 0.055% 4.0% 0.55Nd 2003.6 1.166 2336.2 0.234% 17.2% 2.34Sm 358.2 1.16 415.5 0.042% 3.1% 0.42Eu 106 1.158 122.7 0.012% 0.9% 0.12Gd 270.1 1.153 311.4 0.031% 2.3% 0.31Tb 38.8 1.151 44.7 0.004% 0.3% 0.04Dy 180.8 1.148 207.6 0.021% 1.5% 0.21Ho 28.2 1.146 32.3 0.003% 0.2% 0.03Er 69.1 1.143 79.0 0.008% 0.6% 0.08Tm 7.9 1.142 9.0 0.001% 0.1% 0.01Yb 42.6 1.139 48.5 0.005% 0.4% 0.05Lu 5.5 1.137 6.3 0.001% 0.0% 0.01Y 721.5 1.269 915.6 0.092% 6.7% 0.92Total 11584.3 13610.4 1.361% 100.0% 13.61*Analyses from average bulk sample nos 2523 - 2530Bold = critical supply issues in medium term

NIAQ key metrics

26 million tonnesAverage bulk sample

2014 FOB Feb 2011 FOB$ kg RE2O3 product 32$ 123$ $ tonne ore 432$ 1,669$ In ground value (billions) 11$ 43$

NIAQ 2014 FOB prices26 million tonnes ore

Element ppm*

Me2O3

factorRE2O3

ppm RE2O3 wt%RE203 in %

kg RE2O3

tonne2014 price kg RE203

RE2O3

product NIAQ $

kg NIAQ $

tonne ore

NIAQ in ground value $ billion

La 2245 1.173 2633.4 0.263% 19.3% 2.63 4.06$ 0.79$ 10.69$ 0.28$ Ce 5036.9 1.171 5898.2 0.590% 43.3% 5.90 2.08$ 0.90$ 12.27$ 0.32$ Pr 470.1 1.17 550.0 0.055% 4.0% 0.55 43.87$ 1.77$ 24.13$ 0.63$ Nd 2003.6 1.166 2336.2 0.234% 17.2% 2.34 46.06$ 7.91$ 107.61$ 2.80$ Sm 358.2 1.16 415.5 0.042% 3.1% 0.42 5.58$ 0.17$ 2.32$ 0.06$ Eu 106 1.158 122.7 0.012% 0.9% 0.12 1,086.10$ 9.80$ 133.32$ 3.47$ Gd 270.1 1.153 311.4 0.031% 2.3% 0.31 13.70$ 0.31$ 4.27$ 0.11$ Tb 38.8 1.151 44.7 0.004% 0.3% 0.04 1,166.09$ 3.83$ 52.08$ 1.35$ Dy 180.8 1.148 207.6 0.021% 1.5% 0.21 254.59$ 3.88$ 52.84$ 1.37$ Ho 28.2 1.146 32.3 0.003% 0.2% 0.03 66.35$ 0.16$ 2.14$ 0.06$ Er 69.1 1.143 79.0 0.008% 0.6% 0.08 48.92$ 0.28$ 3.86$ 0.10$ Tm 7.9 1.142 9.0 0.001% 0.1% 0.01 90.00$ 0.06$ 0.81$ 0.02$ Yb 42.6 1.139 48.5 0.005% 0.4% 0.05 25.00$ 0.09$ 1.21$ 0.03$ Lu 5.5 1.137 6.3 0.001% 0.0% 0.01 522.83$ 0.24$ 3.27$ 0.09$ Y 721.5 1.269 915.6 0.092% 6.7% 0.92 23.22$ 1.56$ 21.26$ 0.55$ Total 11584.3 13610.4 1.361% 100.0% 13.61 31.75$ 432.08$ 11.23$ *Analyses from average bulk sample nos 2523 - 2530Bold = critical supply issues in medium term

2014 FOB prices

NIAQ Feb 2011 FOB prices26 million tonnes ore

Element ppm*

Me2O3

factorRE2O3

ppm RE2O3 wt%RE203 in %

kg RE2O3

tonne

2011 price kg RE203

RE2O3

product NIAQ $ kg

NIAQ $ tonne ore

NIAQ in ground value S billion

La 2245 1.173 2633.4 0.263% 19.3% 2.63 92.10$ 17.82$ 242.53$ 6.31$ Ce 5036.9 1.171 5898.2 0.590% 43.3% 5.90 95.10$ 41.21$ 560.92$ 14.58$ Pr 470.1 1.17 550.0 0.055% 4.0% 0.55 140.50$ 5.68$ 77.28$ 2.01$ Nd 2003.6 1.166 2336.2 0.234% 17.2% 2.34 156.00$ 26.78$ 364.45$ 9.48$ Sm 358.2 1.16 415.5 0.042% 3.1% 0.42 95.10$ 2.90$ 39.52$ 1.03$ Eu 106 1.158 122.7 0.012% 0.9% 0.12 800.00$ 7.21$ 98.20$ 2.55$ Gd 270.1 1.153 311.4 0.031% 2.3% 0.31 58.00$ 1.33$ 18.06$ 0.47$ Tb 38.8 1.151 44.7 0.004% 0.3% 0.04 800.00$ 2.62$ 35.73$ 0.93$ Dy 180.8 1.148 207.6 0.021% 1.5% 0.21 460.00$ 7.01$ 95.48$ 2.48$ Ho 28.2 1.146 32.3 0.003% 0.2% 0.03 66.35$ 0.16$ 2.14$ 0.06$ Er 69.1 1.143 79.0 0.008% 0.6% 0.08 340.00$ 1.97$ 26.85$ 0.70$ Tm 7.9 1.142 9.0 0.001% 0.1% 0.01 90.00$ 0.06$ 0.81$ 0.02$ Yb 42.6 1.139 48.5 0.005% 0.4% 0.05 33.40$ 0.12$ 1.62$ 0.04$ Lu 5.5 1.137 6.3 0.001% 0.0% 0.01 365.00$ 0.17$ 2.28$ 0.06$ Y 721.5 1.269 915.6 0.092% 6.7% 0.92 113.00$ 7.60$ 103.46$ 2.69$ Total 11584.3 13610.4 1.361% 100.0% 13.61 122.65$ 1,669.33$ 43.40$ *Analyses from average bulk sample nos 2523 - 2530Bold = critical supply issues in medium term

February 2011 FOB prices

NIAQ comparison

All values based on 2014 FOB, company data from websites and SEDAR as at 20 Nov 2010. Mkt Cap FT.com 13 Dec 2010.

2800

343

2500

352 268 211 145365

46216 107

1

10

100

1000

10000

$-$10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 M

kt cap S million

Skg

REO

$kg REO vs Mkt Cap

$ kg REO Mkt Cap $

Umiamako Nuna Drill site

Potential REE mineralisation observed in field at several locations. 200m section tested by drilling in two holes. Possible extraction by simple quarry.

Looking north toward summitLooking south from summit

Support Services

• ALS Chemex• AMEC• Moose Mountain• P-MET• PFU-APS• SGS Lakefield• Stanford University• Wardrop

Bulk sample

Comminution and characterisation

Non mags

Mags

Roasting Magneticseparation

Water/Mildacid leaching

Acid leaching

Flotation

Calcine

Conc.

Acid leaching

Lixivium

Lixivium

Lixivium

Ion exchange/ Precipiation

Ion exchange/ Precipiation

Ion exchange/ Precipiation

PreferredPossible

Less possible

Metallurgy NIAQ

Next steps

• Current activity– Commercial modelling– Metallurgical testing– Scoping level

assessment

• Future activityNI 43-101 compliant:– Indicated resource– Preliminary Economic

Assessment

Contact

Avannaa Resources LimitedDronningens Tværgade 48 st.tv

1302 København KDenmark

e-mail enquiries to:hgm@avannaa.com

telephone: +44 7771 660 539

www.avannaa.com