AURELIA METALS LIMITED — Capital/Financing Update 2012

Dec 9, 2012

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ASX: YTC
10 Dec 2012
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COMPANY UPDATE HERA PROJECT COMMENCES

HERA PROJECT COMMENCES

• Hera Project Commences – Mining contractors mobilised

• Hera Project set to become NSW’s newest gold mine

EXPLORATION UPDATE

• Hera North lens extended: 4.0m @ 163g/t Ag, 4.9% Pb and 8.7% Zn

• New gold target 12km south of Hera – rock chips to 2.5g/t Au

• New copper-cobalt target at Nymagee – rock chips to 1.5% Co and 0.8% Cu

• Nymagee-Hera DHEM survey to commence mid-December

YTC Resources Limited (“YTC” or the “Company”) is pleased to provide the following Company Update.

HERA PROJECT COMMENCES

YTC is very pleased to announce it has reached an early works agreement with its preferred underground mining contractors, Pybar Mining Services (‘Pybar’) to commence immediate site establishment and equipment mobilization to the Hera Project site (“Early Works Agreement”).

Under the Early Works Agreement, YTC and Pybar are targeting the commencement of the Hera decline portal in January 2013. The Early Works Agreement will transition to the full underground mining contract on completion of the Conditions Precedent to the Project Financing agreed between YTC and Glencore as announced to the ASX on 22 November 2012.

YTC’s MD Rimas Kairaitis said:

“YTC is delighted to be commencing the Hera Project which now stands to be NSW’s newest gold mine. The commencement of construction is an exciting next step into building what the Company believes will evolve into a significant gold and base metals production centre.“

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HERA PROJECT CONSTRUCTION SCHEDULE

With the commencement of works under the Pybar Early Works Agreement, the project construction timeline, subject to conditions precedent to the funding, has now been set, and critical path items are discussed below. A summary of the Hera Project construction schedule and major contractors is presented below.

	Quarter
	Mar-13	Jun-13	Sep-13	Dec-13	Mar-14	Jun-14	Sep-14	Dec-14
Mine
Mine: Ore to the ROM
Full Scale Ore Production
Mill
Mill Construction
Mill Practical Completion
Mill Commissioning
Mill Acceptance
MillingRampUp
Full Scale Mill Production
Tailings Dam
Stage 1
Mine Camp
Stage 1
Stage 2
Stage 3
Revenue
Firstgold sales
First base metal sales

HERA DECLINE

The commencement of the Hera portal and decline and the establishment of the first production levels and ventilation represents the key critical path to production for the Hera Project. Under the Early Works Agreement with Pybar, the Company is targeting commencement of the Hera decline portal in January 2013.

PROCESS PLANT

The Company is currently finalising a Scope of Works and associated EPC (fixed price, turnkey, lump sum) contract with Gekko Systems of Ballarat, for the construction and delivery of the Hera Project Process Plant.

EARTHMOVING

Major earthmoving activities at the Hera Project including the Tailings Storage Facility (TSF) and the surface dams will be completed under a continuation of the earthmoving contract with Neill Earthmoving based in Nyngan NSW. Neill Earthmoving completed the Stage 1 earthworks including the box cut and access roads in April 2012.

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LONG LEAD TIME ITEMS AND CONTRACTS

YTC has identified the following key long lead time items and orders for in-time delivery been placed or will be placed early 2013:

• Vent fan – under order

• Sewage treatment plant – under order

• Raise Bore Contract – Under final negotiation, expected to be let in early 2013

• Transformer – order to be placed shortly

A number of key long lead items will also be placed on finalisation of the EPC Process Plant contract which include:

• Derrick Screens

• Ball Mill

Recent Hera Project Construction Photos

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Pybar Worksop Construction

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Installing Decline Power Station

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Completed Site Access Road

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Completed Boxcut

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CONSTRUCTION PROJECTS COMPLETED

YTC has already completed a number of key construction milestones at the Hera Project including:

• Main access road

• Borefield and pump & pipe reticulation

• Clear and line contractors laydown area

• Boxcut

• Magazine and access roads

• Decline sedimentation ponds

• Site drainage and evaporation ponds

• Camp car park

These construction projects have been completed under the existing Part 5 approval and each allows YTC to ‘fast start’ the full-scale Hera Project construction which now commences with the mobilisation of underground contractors to site.

PERMITTING UPDATE

On 1 August 2012 YTC announced it had received NSW Government major project approval. The Company has since received approval from the Dams Safety Committee (DSC) and clearance under the Federal EPBC Act.

A Mining Lease Application (MLA 417) was lodged in January 2012, and the final Mining Operations Plan (MOP) was submitted on 4 December 2012. The final Environmental Protection Licence (EPL) application was lodged on the 22 November 2012. The legislated processing time to grant of the EPL is 60 days.

Site mobilisation and portal and decline establishment will continue under the Part 5 (exploration decline) approval until the Mining Lease is granted.

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EXPLORATION UPDATE - HERA

HERA NORTH ZONE EXTENDED

Results have been received from drill hole HRD049 into the high grade lead-zinc-silver rich Hera North Zone. Hole HRD049 was drilled approximately 50m above hole HRD042W1 (11m @ 107g/t Ag, 7.2% Pb and 12.3% Zn) and intersected further high grade results:

HRD049: 4.0m @ 0.11g/t Au, 163g/t Ag, 4.9% Pb and 8.7% Zn

This result extends the vertical extent of the Hera North Lens for over 150m. The southern extent of this particular lens has been limited by weak mineralisation intersected in holes HRD050 and HRD048 (refer accompanying long section), however the Hera North Lens remains open on a northerly plunge .

HERA MINERALISATION OPEN TO SOUTH

Results have been received for drill hole HRD043, which was drilled at the southern end of Hera testing a shallow DHEM conductor. The hole drilled just above the plate and recorded an unusual, wide intersection of 58m grading >1% Pb+Zn.

HRD043: 58m @ 0.51% Pb and 0.55% Zn from 335

Although below ore grade, the intersection confirms the Hera mineralisation remains open to the south . This hole is the southernmost hole at Hera at this level (refer accompanying long section).

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Hera Deposit Long Section
Looking West – scale as shown
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FURTHER DOWNHOLE EM (DHEM)

Following the success of the 2012 down hole EM (DHEM) programme and its role in the discovery of the Hera North lens and the open zone intersected in hole HRD040, further DHEM has been planned to commence in mid-December and is expected to be complete before the end of the year.

NEW GOLD TARGET 12KM SOUTH OF HERA

Ground investigation of an untested gravity high approximately 12km south of Hera identified mineralised outcrops with strong rock chip results up to 2.5g/t Au and 0.1% Pb. A subsequent soil survey delineated a coherent north-west trending gold anomaly over 400m at >10ppb Au with peak values at 50ppb Au (refer figure below).

The gold-in-soil values are higher than the response over the Hera deposit and the gold anomaly is coincident with the gravity high. This prospect has been named Federation and will be prioritised for drill testing in 2013.

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EXPLORATION UPDATE - NYMAGEE

NEW COPPER-COBALT TARGET AT NYMAGEE

Reconnaissance mapping at Nymagee re-discovered the historic Queens Cross mine shaft located approximately 350m north east of the Nymagee copper mine. The Queens Cross mine is recorded as an historic gold mine however rock chip sampling of outcrop and mullock recorded strong copper values (to 0.8% Cu) and very high grade cobalt (to 1.5% Co).

The Queens Cross mine may lie on a NW trending fault structure which appears to control the main Nymagee orebody. Further follow up exploration including drill testing will be completed in early 2013.

NYMAGEE DRILLING UPDATE

Hole NMD081, drilled approximately 100m below hole NMD075 (18m @ 1g/t Au, 23g/t Ag, 0.9% Cu, 0.6% Pb and 1.3% Zn) did not return significant results. The hole has been cased for follow up DHEM survey.

Hole NMD082, drilled approximately mid-way between Nymagee and Nymagee North intersected weak iron and base metal sulphides in the target zone. The hole has been cased for follow up DHEM survey.

Hole NMD083 is a deep hole beneath the main Nymagee orebody, drilled to provide a platform for deep DHEM survey. The hole has drifted approximately 70m south of target and may have drifted south of a bounding fault to the Nymagee mineralisation. The hole is due to complete at around 1,000m depth and will be cased for a follow up DHEM survey. No significant mineralisation in the hole has been observed.

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Nymagee Deposit Long Section
Looking West – scale as shown
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Table 1: Collar summary for drill holes in this release

Hole	**GDA_E **	**GDA_N **	DIP	AZI_MGA	Depth	Comments
HRD049	435935	6447541	-55	66.3	399.4	Hera North
HRD043	436792	6446917	-60	250.3	528	Hera South

Table 2: Intersection summary for drill holes in this release

	From (m)			Est true width (m)	Au (g/t)	Cu (%)	Pb (%)	Zn (%)	Ag (g/t)
Hole		To (m)	Intercept (m)							Comments
HRD043	335	393	58	37	-	-	0.5	0.55	-	Hera South
HRD049	278	282	4	2.7	0.11	-	4.9	8.7	163	Hera North Lens

Competent Persons Statement

The information in this report that relates to Exploration Results is based on information compiled by Rimas Kairaitis, who i s a Member of the Australasian Institute of Mining and Metallurgy. Rimas Kairaitis has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Mr Kairaitis consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

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About the Hera Gold and Base Metals Deposit

The Hera Project is located 100km south-east of Cobar and is hosted in Cobar Basin rocks which also host the world-class mineral deposits at CSA, The Peak and Endeavor.

The Hera deposit was discovered by Pasminco in 2001 and advanced to pre-feasibility by Triako Resources in the period 2002 to 2006, before Triako was the subject of a takeover by CBH Resources Limited. YTC acquired the Hera Project from CBH Resources in September 2009.

The Hera deposit represents multiple lenses of high grade, sub-vertical gold and base metal mineralisation. The central Main lens represents the bulk of the deposit tonnes and extends for approximately 600m along strike.

In September 2011, YTC released a Definitive Feasibility Study (‘DFS”) on mining and processing of the Hera deposit to establish an underground mine producing gold, silver, lead, and zinc as Stage 1 of an integrated mine development with Nymagee. The study confirms the technical and financial viability of the development of the Hera deposit. Stage 1 development will see the establishment of the Hera gold mine and construction of a processing facility at the Hera site.

YTC received State Government Approval for the Hera Project in August 2012 and announced a major project funding package with Glencore International AG (‘Glencore’) on the 22[nd] November 2012.

Stage 2 Feasibility studies will look at the optimum strategy for the integration of the Nymagee deposit into the Hera development.

YTC considers that exploration upside exists not only in the extension of the existing lenses, but also in the interpretation of Hera to evolve into a major gold-base metal system consistent with the pedigree of Cobar-style deposits.

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Hera Project – Completed Boxcut

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About the Nymagee Joint Venture

YTC has a 95% interest in the Nymagee JV tenements which are located immediately north of YTC’s 100% owned Hera gold-base metal deposit.

YTC has announced a maiden resource at Nymagee of 8.1Mt @ 1.2% Cu, 0.3%Pb, 0.7% Zn and 9g/t Ag.

The Joint Venture includes the Nymagee Copper Mine which last operated in 1918, and has recorded historical production of 422,000t @ 5.8% Cu.

YTC is the manager and operator of the Joint Venture and undertaking exploration at Nymagee to pursue the combined development of Nymagee and Hera.

The Nymagee Mine Joint Venture includes the following Exploration Licences and Mining Leases which cover both the historic Nymagee Copper Mine as well as linking the tenement coverage of the Hera-Nymagee corridor.

• EL 4458, EL 4232, ML 53, ML 90, ML 5295, ML 5828 and PLL 847

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Massive sulphide mineralisation – Nymagee Copper Deposit