BARYS RESOURCES LIMITED — Capital/Financing Update 2011

Dec 20, 2011

MATERIAL VARIATIONS TO AGREEMENT TO ACQUIRE 80% INTEREST IN COMVAL COPPER AND GOLD PROJECT IN PHILIPPINES

ANNOUNCEMENT

21 DECEMBER 2011

Overview

On 7 November 2011, Mining Group Limited (ASX:MNE) (Mining Group or Company) announced that it had signed a binding Heads of Agreement (HoA) with Cadan Resources Corporation (TSX.V:CXD) (Cadan) to acquire an 80% interest in Philco Mining Corp (PMC) which holds a 100% interest in exploration permits EP1 and EP2, which together comprise the Comval Project located in the Philippines (Transaction).

Mining Group and Cadan are now in the process of negotiating formal terms and conditions to more fully document the terms in the HoA. As part of those further negotiations, the parties have agreed to make a number of refinements to the terms previously agreed.

Material variations to HoA

The Company and Cadan have executed an Amendment Agreement – Binding Heads of Agreement in relation to the HoA. The material variations to the HoA are as follows:

• (a) Expenditure programme: As previously announced, Cadan’s 20% interest in PMC following completion of the Transaction, will be free carried until the Company has spent a minimum of AU$48 million on the Comval Project (Minimum Expenditure Condition). The parties have agreed that the Minimum Expenditure Condition will be satisfied by the Company over a period of 5 years (which period may be extended for up to a further 18 months in the event of the occurrence of a force majeure event or under-expenditure due to permitting delays in year 5) as follows:

• (i) Year 1: By funding and completing 10,000 metres of drilling on the Comval Project (Project), the production of an initial JORC resource statement, a scoping study, relogging of existing data and reconfiguration of existing sampling. If this work programme is not completed, the Company is entitled to satisfy the Year 1 obligations by contributing AU$5 million to PMC for approved Project expenditure. If the Company fails to satisfy the work programme and does not make the AU$5 million cash contribution to PMC in lieu, the Company’s interest in PMC will be diluted (by being transferred to Cadan) at the rate of 1.1% for every AU$1 million of under-expenditure (or pro-rata reduction for part thereof) (Dilution Rate);

• (ii) Year 2: By funding a further 12,500 metres of drilling on the Project and commencing a definitive feasibility study. If this work programme is not completed, the Company is entitled to satisfy the Year 2 obligations by contributing AU$5 million to PMC for approved Project expenditure. If the Company fails to satisfy the work programme and does not make the AU$5 million cash contribution to PMC in lieu, the Company’s interest in PMC will be diluted at the Dilution Rate;

• (iii) Year 3: By contributing further Project finance so that the total amount of Project financing by the Company in Year 3 when aggregated with cash contributed by the Company in Years 1 and 2, is at least AU$15 million. If it fails to meet the shortfall, then its interest in PMC will be diluted at the Dilution Rate;

173 MOUNTS BAY ROAD PERTH WESTERN AUSTRALIA 6000 TELEPHONE 08 9322 6424 FACSIMILE 08 9322 6778 www.mininggroup.net.au

• (iv) Year 4: By contributing further Project finance of AU$15 million for approved Project expenditure. If it fails to meet the shortfall, then its interest in PMC will be diluted at the Dilution Rate; and

• (v) Year 5: By contributing further Project finance of AU$18 million for approved Project expenditure.

If the Company contributes at least 50% of the Project finance in Year 5, but, as a result of permitting delays, Project expenditure (and therefore Project funding by Mining Group) does not reach AU$18 million in Year 5, then the Company is entitled to meet the shortfall in the next 12 months, up to a maximum of AU$9 million. If it fails to meet the shortfall, then its interest in PMC will be diluted at the Dilution Rate.

(b) Additional placement to Cadan: The Company has agreed to place to Cadan (or its nominee):

• (i) 2 million options to acquire ordinary, fully paid shares in the capital of Mining Group (to be issued at AU$0.01 each and exercisable at AU$0.20 each on or before 1 July 2014); and

• (ii) an additional 500,000 shares in the capital of the Mining Group at AU$0.20 per share,

for a total subscription sum of AU$120,000. Upon completion of this placement together with the other issues of securities pursuant to the Transaction, Cadan’s interest in the Company on a fully diluted basis will increase to approximately 17.1% (this assumes the Company makes all share and option issues to Cadan as contemplated in the revised proforma capital structure below).

• (c) Additional board representation: Cadan will be entitled to appoint 2 non-executive directors to the Company’s board of directors for so long as Cadan’s interest in Mining Group is 10% or more. If its interest falls below 10% (on an undiluted basis), then it will only be entitled to appoint 1 non-executive director to the board.

Cap on Net Profit Royalty Payable to Cygnet Capital Pty Ltd

In addition to the material variations outlined above, the parties have agreed that the 3% Net Profit Royalty payable to Cygnet Capital Pty Ltd will be capped at a maximum of AU$10 million over the 8 year life of the royalty.

Revised Pro-forma Capital Structure

	Shares	Options	CRC Interest (Fully diluted)	Total (Fully Diluted
Current issued capital1	26,051,251	11,473,323	Nil	37,524,574
Issued pursuant to capital raising2	15,000,000	Nil	Nil	15,000,000
Issued pursuant to Transaction3	3,100,000	2,000,000	5,100,000	5,100,000
Options to be issued as fees to Zeff Reeves	Nil	1,500,000	Nil	1,500,000
Options to be issued as fees to Cygnet	Nil	8,500,000	Nil	8,500,000
Conditional Consideration Shares to be issued to Cadan4	2,600,000	Nil	2,600,000	2,600,000
Shares to be issued to Cadan pursuant to the Batoto Option5	5,200,000	Nil	5,200,000	5,200,000
Total on completion of Transaction and Capital Raising6	51,951,251	23,473,323	12,900,000	75,424,574

Notes:

1. Assumes no further securities are issued prior to settlement of the Transaction, other than as set out in the table.

2. Assumes the capital raising is fully subscribed (the purpose of the capital raising is to raise funds to fund the Transaction and working capital).

3. Shareholder approval will be sought for the issue of 2,600,000 of these Shares. The additional 500,000 Shares and 2,000,000 Options will be issued to Cadan pursuant to the Company’s 15% placement capacity.

4. To be issued to Cadan when (and if) the Company’s share price trades at or above AU$1.00 for 30 consecutive days within 24 months from Settlement.

5. To be issued to Cadan if the Company exercises its exclusive option to acquire an 80% interest in Batoto Resources Corporation, the entity which controls EP-109-XI and APSA-246-X1 (Batoto Option). The Batoto Option must be exercised within 9 months from Settlement of the Transaction.

6. Assumes that no Options are exercised.

Revised Financial Effect of the Transaction

A revised pro-forma balance sheet is appended to this announcement as Appendix 1 showing the financial impact of the Transaction and the proposed capital raising on the Company.

AUTHORISED BY:

Shannon Coates Company Secretary

Contact:

Andrew Maurice Managing Director amaurice@mininggroup.net.au

P: + 61 8 9322 6424

M: + 61 410 642 660

Level 1, 173 Mounts Bay Road PERTH WA 6000

About Mining Group Limited

Mining Group Limited (ASX: MNE) is an ASX listed, Australian based exploration company established to explore, evaluate and acquire commercially significant resource projects in Australia and overseas.

Mining Group seeks to increase shareholder wealth by prudent exploration of its prospective Western Australian based Boorara, Teutonic and Lake Christopher Projects and by identification and evaluation of potential new mineral projects and opportunities in Australia and overseas suitable for acquisition and development by the Company. Mining Group has a strong Board and management team who collectively have considerable technical, commercial and corporate experience in the resources sector.

For more information visit the Mining Group website at www.mininggroup.net.au

A P P E N D I X 1 : R E V I S E D P R O F O R M A B A L A N C E S H E E T A S A T 3 0 J U N E 2 0 1 1

The table below sets out the impact of the Capital Raising and Transaction on the Company’s financial position.

Current Assets Cash and cash equivalents Receivables Advances Other receivables Total Current Assets Non Current Assets Advances to related parties Investment in associates Property, plant and equipment Mineral exploration and evaluation expenditure Total Non Current Assets Total Assets Current Liabilities Trade and other payables Interest bearing liabilities Deferred consideration Provisions Total Current Liabilities Non Current Liabilities Interest bearing liabilities Total Non Current Liabilities Total Liabilities Net Assets Equity Share capital Minority interest Reserves Accumulated losses Total Equity	MGL Audited 30 Jun 11 $ 2,573,939 - - 13,180 2,587,119 - - - 77,186 77,186 2,664,305 272,722 - - 1,548 274,270 - - 274,270 2,390,035 2,458,093 - - (68,058) 2,390,035	PMC Unaudited 30 Jun 11 $ 98,940 4,568,426 4,340 109,204 4,780,910 2,531,317 16,275 1,452,295 27,241,499 31,241,386 36,022,296 1,302 23,592,397 - - 23,593,699 13,730,430 13,730,430 37,324,129 (1,301,833) 54,250 - - (1,356,083) (1,301,833)	Subsequent events $ (934,625) - - - (934,625) - - - 1,000,0001 1,000,000 65,375 - - - - - - - - 65,375 250 - 65,125 - 65,375	Pro-forma Adjustments $ 557,2164 (4,568,426) - - (4,011,210) (2,531,317) (16,275) (1,305,779)2 (8,899,518) (12,752,889) (16,764,099) - (23,592,397) 1,780,000 54,250 (21,758,147) (3,853,372) (3,853,372) (25,611,519) 8,847,420 3,521,6635 1,953,6744 2,304,0004 1,068,083 8,847,420	Pro-forma Unaudited 30 Jun 11 $ 2,295,470 - 4,340 122,384
					2,422,194
					- - 146,516 19,419,167
					19,565,683
					21,987,877
					274,024 - 1,780,000 55,798
					2,109,822
					9,877,0583
					9,877,058
					11,986,880
					10,000,997
					6,034,256 1,953,674 2,369,125 (356,058)
					10,000,997

Notes

1. On 4 November 2011 the Company entered into a loan agreement with Cadan, under which Mining Group advanced $1,000,000 to Cadan.

2. PMC currently owns a Carbon In Pulp processing plant. It is envisaged that this plant will be transferred out of PMC either prior to or in the month after completion. The transfer will take place at book value with the corresponding debit being recognised as part settlement of part of the liability PMC has due to Cadan.

3. PMC’s statement of financial position will be restructured, all amounts due from and owed to Cadan and entities controlled by Cadan will be consolidated and all interest which has been accrued on these loans will be written off prior to completion. Post settlement of the Proposed Acquisition PMC will have amounts due to Cadan of approximately $9,877,050, these amounts are non-recourse and repayment is only required to commence within 12 months of revenue being generated from Commercial Production from the projects acquired in the Proposed Acquisition and can only be demanded post Commercial Production.

4. It is proposed that the Company will acquire an 80% interest in PMC. Through a combination of acquiring a 20% in interest in PMC and option over an additional 60% interest in PMC from Cadan and then immediately exercising this option. The cost of the 80% interest is made up of the following components.

Cost of Acquisition

Cost of Acquisition
Cash advance for acquisition of PMC 2,600,000 Mining Group shares issued at completion 2,000,000 Mining Group options issued at completion Cash paid at completion Cash based acquisition costs Issue of options over ordinary shares to Cygnet Capital Pty Ltd Deferred 2,600,000 Mining Group Shares Deferred portion of cash consideration	$1,000,000 $780,000 $384,000 $2,034,091 $204,606 $1,632,000 $780,000 $1,000,000
	$7,814,697