HAVILAH RESOURCES LIMITED - Merger & Acquisition 2012

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63 Conyngham St Glenside SA 5065 Ph: 08 8338 9292 Fax: 08 8338 9293 A.C.N. 112 712 115

11 May 2012

The Manager Company Announcements Office Australian Securities Exchange 10th Floor, 20 Bond Street SYDNEY NSW 2000

Dear Sir/Madam

Notice of despatch of Target’s Statement in respect to off-market takeover bid by Havilah Resources NL for all of the Shares and Listed Options of Curnamona Energy Limited

Curnamona Energy Limited refers to its Target’s Statement lodged with ASX on 4 May 2012, prepared in response to Havilah Resources NL’s Bidder’s Statement dated 30 April 2012.

We advise that the Target’s Statement was despatched to shareholders today.

Please note the following key dates:

Offer Opens : 9 May 2012 Conditions Notice Date : 4 June 2012 Close Date : 11 June 2012

Yours faithfully Curnamona Energy Limited

Ken Williams Deputy Chairman

Enquiries should be directed to Mr Ken Williams, Deputy Chairman, on (08) 8338 9292.

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TARGET’ S STATEMENT

in response to the off-marke t takeover offer by

HAVILAH RES O URCES NL

(ACN 077 435 520)

to acquire all the ordinary shares and listed options issued by

Curnamona E n ergy Limited

(ACN 112 712 115)

The independen t director of Curnamona rec o mmends you ACCEPT the Offers in the absence of a Superior Propos a l and a Material Adverse E v ent.

This is an important document and should be read in its entirety. If you do not understand it or are in doubt as to how to act you should consult your legal, financial or other professional adviser immediately.

Legal Adviser to Curnamona

IMPORTANT INFORMATION

Target’s Statement

On 9 March 2012 Havilah Resources NL ( Havilah ) announced an off-market takeover bid for all the issued shares and listed options in Curnamona Energy Limited ( Curnamona ), and on 13 April 2012 announced an amendment to the consideration to be offered for the listed options. On 30 April 2012 Havilah lodged the Bidder’s Statement dated 30 April 2012 with the Australian Securities and Investments Commission and served the Bidder’s Statement on Curnamona. This Target’s Statement dated 4 May 2012 is given by Curnamona in response to the Bidder’s Statement, under Part 6.5 of Chapter 6 of the Corporations Act, in compliance with Section 638 of the Corporations Act. A copy of this Target's Statement has been lodged with the Australian Securities and Investments Commission and the Australian Securities Exchange. Neither the Australian Securities and Investments Commission, the Australian Securities Exchange, nor any of its officers take any responsibility for the content of this Target’s Statement.

Disclaimer Regarding Forward Looking Statements

This Target’s Statement contains various forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including statements as to the implied value of the Offers. Curnamona Securityholders should note that those forwardlooking statements are inherently subject to uncertainties in that they may be affected by a variety of known and unknown risks, variables and factors which could cause actual values or results, performance or achievements to differ materially from the expectations described in such forward-looking statements. These risks, variables and factors include, but are not limited to, those risks identified in Section 7 of this Target’s Statement.

Curnamona does not give any assurance that the anticipated results, performance or achievements expressed or implied in those forward-looking statements will be achieved.

None of Curnamona, Curnamona’s officers and employees, any person named in this Target’s Statement with their consent or any person in the preparation of this Target’s Statement, makes any representation or warranty (express or implied) as to the accuracy or likelihood of fulfilment of any forward looking statement, or any events or results expressed or implied in any forward looking statement, except to the extent required by law. Curnamona Securityholders are cautioned not to place undue reliance on forward looking statements. The forward looking statements in this Target’s Statement reflect views held only as at the date of this Target’s Statement.

Disclaimer as to Information

The information on Havilah in this Target’s Statement has been prepared by Curnamona using publicly available information (including that contained in the Bidder’s Statement). The information in this Target’s Statement concerning Havilah has not been independently verified by Curnamona. Accordingly, subject to the Corporations Act, Curnamona does not make any representation or warranty, express or implied, as to the accuracy or completeness of such information.

Independent Expert’s Report

The Independent Expert’s Report set out in Appendix B of this Target’s Statement has been prepared by the Independent Expert for the purposes of this Target’s Statement and the Independent Expert takes full responsibility for that report. Curnamona does not accept or assume any responsibility for the accuracy or completeness of the Independent Expert’s Report, other than factual information provided by Curnamona to the Independent Expert for the purposes of the Independent Expert’s Report.

Rounding

A number of figures, amounts, percentages, prices, estimates, calculations of value and fractions in this Target’s Statement are subject to the effect of rounding. Accordingly, the actual calculation of these figures may differ from the figures set out in this Target’s Statement.

Privacy

Curnamona has collected your information from the Curnamona register of securityholders for the purpose of providing you with this Target’s Statement. The type of information Curnamona has collected about you includes your name, contact details and information on your securityholding in Curnamona. Without this information, Curnamona would be hindered in its ability to issue this Target’s Statement. The Corporations Act requires the name and address of securityholders to be held in a public register. Your information may be disclosed on a confidential basis to Curnamona’s related bodies corporate and external service providers (such as the share registry of Curnamona and print and mail service providers) and may be required to be disclosed to regulators such as the Australian Securities and Investments Commission. If you would like the details of your information held by Curnamona, please contact Computershare Investor Services Pty Limited at:

Level 5, 115 Grenfell Street Adelaide, South Australia 5000 Ph: +61 8 8236 2300

Notice to Foreign Holders

The distribution of this Target’s Statement may, in some jurisdictions, be restricted by law or regulation. Accordingly, persons who come into possession of this Target’s Statement should inform themselves of, and observe, those restrictions. Any failure to comply with such restrictions may constitute a violation of applicable laws or regulations.

This Target’s Statement has been prepared in accordance with Australian law and the information contained in this Target’s Statement may not be the same as that which would have been disclosed if this Target’s Statement had been prepared in accordance with the law and regulations outside Australia.

No Account of Personal Circumstances

This Target’s Statement does not take into account the individual investment objectives, financial situation and particular needs of each Curnamona Securityholder and it does not contain personal financial and taxation advice. Curnamona encourages you to seek independent financial and taxation advice before making a decision as to whether or not to accept the Offers for your Curnamona Securities.

Information Line

Havilah has set up an information line for Curnamona Securityholders to address any questions you may have in relation to the Offers (see the Bidder’s Statement).

CORPORATE DIRECTORY

Directors

Keith Robert Johnson (Chairman) Christopher William Giles (Director) Kenneth Graham Williams (Director) Phillip John Staveley (Director)

Company Secretary

Edward James Grose

Registered Office

63 Conyngham Street GLENSIDE SA 5065

Internet Address

www.curnamona-energy.com.au

ASX codes

Curnamona Shares CUY Curnamona Listed Options CUYO

Solicitors to Curnamona

Watsons Lawyers Ground Floor, 60 Hindmarsh Square ADELAIDE SA 5000

DEPUTY CHAIRMAN’S LETTER ............................................................................................. 1
SUMMARY OF THE HAVILAH OFFERS ................................................................................. 3
HOW TO ACCEPT THE OFFERS ............................................................................................ 5
ESTIMATED DATES FOR KEY EVENTS ................................................................................ 6
1. WHY YOU SHOULD ACCEPT THE OFFERS ................................................................. 7
2. CURNAMONA DIRECTOR RECOMMENDATION ........................................................ 11
3. YOUR CHOICES AS CURNAMONA SECURITYHOLDERS ........................................ 12
4. IMPORTANT INFORMATION ABOUT HAVILAH’S OFFERS ...................................... 15
5. ABOUT HAVILAH .......................................................................................................... 22
6. ABOUT CURNAMONA .................................................................................................. 23
7. OTHER IMPORTANT CONSIDERATIONS FOR CURNAMONA SECURITYHOLDERS
. 24
8. ADDITIONAL INFORMATION ....................................................................................... 27
9. GLOSSARY .................................................................................................................... 35
APPENDIX A – KEY TERMS OF TAKEOVER BID IMPLEMENTATION AGREEMENT ..... 40
APPENDIX B – INDEPENDENT EXPERT’S REPORT .......................................................... 43

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DEPUTY CHAIRMAN’S LETTER

4 May 2012

Dear Curnamona Securityholders,

On 9 March 2012 Curnamona and Havilah announced a proposed merger, by way of a conditional off-market takeover by Havilah for all the shares and listed options in Curnamona not currently held by Havilah. A subsequent announcement on 13 April 2012 detailed amendments to the consideration to be offered for the listed options. The proposed Merger is to proceed by way of two offers, the first being a share for share offer, and the second being an option for option offer. Havilah is offering:

(a) Curnamona Shareholders one Havilah Share for every five Curnamona Shares held; and
(b) Curnamona Listed Optionholders one Havilah Listed Option for every five Curnamona Listed Options held.

Havilah is an ASX listed mineral exploration company, exploring for copper, gold, iron ore, cobalt, tin and other base metals. Havilah controls more than 6500 km[2] of contiguous tenements in the highly mineralised Curnamona Province in north-eastern South Australia. Havilah has identified significant mineral deposits at its six major projects all within the Curnamona Province.

The proposed Merger has the support of Phillip Staveley, Curnamona’s independent director, who recommends that you ACCEPT Havilah’s Offers, subject to there being no Superior Proposal, and no Material Adverse Event having occurred. Mr Staveley’s reasons for recommending that securityholders accept the Offers (outlined in section 1 of this Target’s Statement) are as follows:

the Share Offer represents a substantial premium to the value of Curnamona Shares prior to the Announcement;
the Listed Option Offer is an attractive offer to Curnamona Listed Optionholders given the lack of liquidity and the exercise price of the Curnamona Listed Options;
the Independent Expert has concluded that the Offers are fair and reasonable to Curnamona Securityholders;
if the Merger succeeds, it will give Curnamona Securityholders the full benefit of Havilah’s portfolio of projects, and a more diversified risk profile;
if the Merger succeeds, Curnamona Securityholders are likely to benefit from being a securityholder in a larger more widely held company that has greater resources to manage both companies’ projects;
Havilah is likely better placed to raise the substantial development capital required to develop Curnamona’s projects;
Curnamona has modest cash reserves and is very likely to require a capital raising in the next year, absent ongoing financial support from Havilah. If the Merger does not

proceed, Curnamona Securityholders face the prospect of significant dilution from future capital raisings to fund and develop the company’s projects;

if the Merger does not proceed, there is a risk that Curnamona’s share price will fall upon the lapsing of the Havilah bid; and
Havilah’s 45.37% shareholding in Curnamona is a significant deterrent to any alternative bidder.

Each Director (with the exception of Mr Phillip Staveley, who does not hold any Curnamona Securities) intends to accept the Offers in respect of all Curnamona Shares and Listed Options respectively controlled by them, subject to there being no Superior Proposal, and no Material Adverse Event having occurred.

The Offers are subject to a number of conditions, which are detailed in full in section 14 of the Bidder’s Statement.

The Bidder’s Statement, which you received in the package with this Target’s Statement, outlines the details of the Offers and contains a personalised Acceptance Form, with instructions on how to accept the Offers. Please note that the Offers are scheduled to close at 7:00pm Adelaide time on 11 June 2012 (unless extended). To accept the Offers, follow the instructions outlined in sections 12.6 and 13.6 of the Bidder’s Statement and printed on the Acceptance Form that accompanies the Bidder’s Statement.

This Target’s Statement discusses the Offers and the reasons for Mr Staveley’s recommendation that you accept the Offers. It also outlines your choices as a Curnamona Securityholder and other matters relevant to you in making your decision as to whether you accept either one or both of the Offers. You are encouraged to read this Target’s Statement and the Bidder’s Statement in their entirety and to seek independent advice from your financial, taxation and other professional advisers prior to making any decision in respect of the Offers.

Yours sincerely

Kenneth Williams

Deputy Chairman Curnamona Energy Limited

SUMMARY OF THE HAVILAH OFFERS

The following provides an overview of the Offers. You should read this Target’s Statement and the Bidder’s Statement in full before making any decision whether to accept either one or both of the Offers.

both of the Offers.
OFFERS	Havilah is offering to acquire all Curnamona Shares and
	Curnamona Listed Options by way of an off-market takeover
	bid.
OFFER CONSIDERATION	Share Offer
	Havilah is offering Curnamona Shareholders one new Havilah
	Share for every five Curnamona Shares held.
	The Share Offer values all the Curnamona Shares at
	approximately A$9,124,0401.
	Listed Option Offer
	Havilah is also offering Curnamona Listed Optionholders one
	new Havilah Listed Option for every five Curnamona Listed
	Options held.
	The Listed Option Offer values all the Curnamona Listed Options at approximately A$858,9202.
	In respect of Foreign Holders of Curnamona Securities see
	sections 12.9 and 13.9 of the Bidder’s Statement for an
	explanation as to what consideration will be offered for your
	Curnamona Securities.
HAVILAH SECURITIES	The terms of the Havilah Securities are set out in section 5 of
	the Bidder’s Statement.
	There are approximately 101.3 million Havilah Shares on issue
	as at 3 May 2012.
	There are approximately 20 million Havilah listed options on
	issue as at 3 May 2012, with an exercise price of $0.50 each
	and expiring on 30 October 2013.
	The Havilah Listed Options to be issued as consideration under
	the Listed Option Offer will form a new class of Havilah Options
	that will be quoted on ASX.
	Havilah is an ASX listed mineral exploration company.
	Information on Havilah is set out in section 3 of the Bidder’s
	Statement.
	If you wish to sell the Havilah Securities you receive under the
	Offers, you should contact your stockbroker to discuss how to
	arrange the sale.

1 Valuation is based on an implied value of the Share Offer of 13.8 cents per Curnamona Share, which is calculated based on the closing price of Havilah Shares on 1 March 2012, (being the last ASX trading day before each company entered a trading halt to consider and negotiate the proposed Merger), the issued share capital of Curnamona on that same date, and taking into account the ratio of Havilah Shares to Curnamona Shares offered under the Offer. Note the implied value of the Offer will fluctuate with movements in the market value of Havilah Shares.

2 Valuation is based on an implied value of the Listed Option Offer of 5.2 cents per Curnamona Listed Option, which has been determined based on a Black-Scholes valuation of the Havilah Listed Options undertaken by Havilah on 12 April 2012, the number of issued Curnamona Listed Options on that same date, and taking into account the ratio of Havilah Listed Options to Curnamona Listed Options offered under the Offer. Please note that Black-Scholes valuation may not reflect the market value of the Havilah Listed Options once quoted on ASX.

CONDITIONS OF THE	In summary, the Offers are conditional on:
OFFERS	• Havilah and its Associates having a Relevant Interest in
	at least 90% (by number) of all Curnamona Shares;
	• both the Share Offer and the Listed Option Offer being
	declared unconditional before the end of the Offer Period;
	• the exercise or cancellation of all Curnamona Director
	Options;
	• receipt of all required regulatory approvals;
	• no legal restraint or prohibition adversely affecting the
	Offers;
	• Curnamona conducting its business in the ordinary
	course;
	• no material adverse change in relation to Curnamona;
	• no prescribed occurrence in relation to Curnamona; and
	• representations regarding Curnamona’s issued securities
	remaining true and correct.
	If the conditions of the Offers are not satisfied or waived by the
	Closing Date, the Offers will lapse and you will retain your
	Curnamona Securities.
	See section 14 of the Bidder’s Statement for the full details of
	the conditions of the Offers.
INDEPENDENT	The Independent Expert, Value Adviser Associates, has
EXPERT’S REPORT	concluded that the Offers are fair and reasonable to Curnamona
	Securityholders (see Independent Expert’s Report in Appendix
	B of this Target’s Statement)
INDEPENDENT	The independent Director of Curnamona, Mr Phillip Staveley,
DIRECTOR’S	recommends that youACCEPTthe Offers subject to there
RECOMMENDATION	being no Superior Proposal, and no Material Adverse Event
	having occurred.
CLOSING DATE	The Offers are due to close at 7pm Adelaide time on 11 June
	2012 unless they are withdrawn or extended by Havilah.
FURTHER INFORMATION	Havilah has set up an information line for Curnamona
	Securityholders to address any questions you may have in
	relation to the Offers (see the Bidder’s Statement). If you
	require further information, please call +61 8 8338 9292.

HOW TO ACCEPT THE OFFERS

You should read this Target’s Statement and the Bidder’s Statement in full before making a decision on whether to accept either one or both of the Offers.

You should read this Target’s Statement and the Bidder’s Statement in full before making a decision on whether to accept either one or both of the Offers.	You should read this Target’s Statement and the Bidder’s Statement in full before making a decision on whether to accept either one or both of the Offers.

ADDRESS FOR ACCEPTANCE OF OFFERS	The Bidder’s Statement contains a personalised Acceptance Form and reply paid envelope. The completed Acceptance Form and all other documents required by the instructions on the Acceptance Form should be sent to: Postal Address Computershare Investor Services Pty Ltd, GPO Box 1326, Adelaide SA 5001 Delivery address Computershare Investor Services Pty Ltd, Level 5, 115 Grenfell Street, Adelaide SA 5000
HOW TO ACCEPT THE OFFERS	If your Curnamona Shares or Curnamona Listed Options are held on a CHESS sub-register (ie. your Holder Identification Number commences with an ‘X’), do one of the following: (a) contact your Controlling Participant (typically your stockbroker) and instruct them to initiate acceptance on your behalf; or (b) complete and sign the Acceptance Form in accordance with the instructions on it and mail it, together with all other documents required by the instructions on the Acceptance Form, to the address shown above. If your Curnamona Shares or Curnamona Listed Options are held on an issuer-sponsored sub-register (ie. your Security Holder Reference Number commences with an “I”), complete and sign the Acceptance Form in accordance with the instructions on it and mail it, together with all other documents required by the instructions on the Acceptance Form, to the address shown above. See sections 12.6 and 13.6 of the Bidder’s Statement for full details on how to accept the Offers.
CLOSING DATE FOR ACCEPTANCE	Your acceptance of the Offers must be completed before the end of the Offer Period (i.e. before 7:00pm Adelaide time on 11 June 2012), unless the Offer Period for the relevant Offer is extended. You should be aware that if you accept one or both of the Offers, you will give up your rights to sell the corresponding Curnamona Securities that you hold on the ASX, or otherwise deal in those Curnamona Securities, including by way of acceptance of any superior offer that may emerge, unless the Offer(s) is/are withdrawn or, in certain limited circumstances, you are allowed to withdraw your acceptance.

ESTIMATED DATES FOR KEY EVENTS

ESTIMATED DATES FOR KEY EVENTS
Key Events	Estimated Date
Announcement of the proposed Merger	9 March 2012
Date of Bidder’s Statement	30 April 2012
Date of Target’s Statement	4 May 2012
Register Date	8 May 2012, 7.00pm (Adelaide time).
Bidder’s Statement and Target’s Statement to be sent to Curnamona Securityholders	9 May 2012
Conditions Notice Date	4 June 2012
Scheduled closing date of Offers	11 June 2012, 7.00pm (Adelaide time).

1. WHY YOU SHOULD ACCEPT THE OFFERS

1.1 Summary of Reasons

The independent Director of Curnamona, Mr Phillip Staveley, recommends that Curnamona Securityholders ACCEPT the Share Offer and the Listed Option Offer, subject to there being no Superior Proposal, and no Material Adverse Event having occurred, for the following reasons:

(a) the Share Offer represents a substantial premium to the value of Curnamona Shares prior to the Announcement;
(b) the Listed Option Offer is an attractive offer to Curnamona Listed Optionholders given the lack of liquidity and the exercise price of the Curnamona Listed Options;
(c) the Independent Expert has concluded that the Offers are fair and reasonable to Curnamona Securityholders;
(d) if the Merger succeeds, it will give Curnamona Securityholders the full benefit of Havilah’s portfolio of projects, and a more diversified risk profile;
(e) if the Merger succeeds, Curnamona Securityholders are likely to benefit from being a securityholder in a larger more widely held company that has greater resources to manage both companies’ projects;
(f) Havilah is likely better placed to raise the substantial development capital required to develop Curnamona’s projects;
(g) Curnamona has modest cash reserves and is very likely to require a capital raising in the next year, absent ongoing financial support from Havilah. If the Merger does not proceed, Curnamona Securityholders face the prospect of significant dilution from future capital raisings to fund and develop the company’s projects;
(h) if the Merger does not proceed, there is a risk that Curnamona’s share price will fall upon the lapsing of the Havilah bid; and
(i) Havilah’s 45.37% shareholding in Curnamona is a significant deterrent to any alternative bidder.

Each of the Directors (other than Mr Phillip Staveley, who does not hold any Curnamona Securities) currently intend to accept or procure acceptance of the Offers in respect of all the Curnamona Shares and Curnamona Listed Options they respectively own or control, subject to there being no Superior Proposal, and no Material Adverse Event having occurred, for the reasons outlined above.

Each of these reasons is discussed in more detail below.

1.2 The Share Offer represents a substantial premium to the value of Curnamona Shares prior to the Announcement

The consideration under the Share Offer comprises 1 Havilah Share for every 5 Curnamona Shares.

Based on the closing price of Havilah Shares on the ASX on 1 March 2012, being the last ASX trading day before each company entered a trading halt to consider and negotiate the proposed Merger ( Last Trading Day ), the implied value of the Share Offer is 13.8 cents per Curnamona Share, which represents:

(a) a 72.5% premium to 8 cents, the closing price of Curnamona Shares on the ASX on the Last Trading Day;
(b) a 87.2% premium to 7.37 cents, the VWAP of Curnamona Shares on the ASX for the 30 ASX trading days up to and including the Last Trading Day;
(c) a 89.3% premium to 7.29 cents, the VWAP of Curnamona Shares on the ASX for the 60 ASX trading days up to and including the Last Trading Day; and
(d) a 96.0% premium to 7.04 cents, the VWAP of Curnamona Share on the ASX for the 90 ASX trading days up to and including the Last Trading Day.

Curnamona Securityholders should be aware that the prices of Curnamona and Havilah Shares (and the implied value of the Share Offer) may fluctuate upwards or downwards prior to the close of the Share Offer.

1.3 The Listed Option Offer is an attractive offer to Curnamona Listed Optionholders

The exercise price of the Curnamona Listed Options is 35 cents per Curnamona Share which is 70.7% higher than the market price of Curnamona Shares of 20.5 cents per Curnamona Share on 3 May 2012, being the last trading day prior to the date of this Target’s Statement. Accordingly, the Curnamona Listed Options are (at current market prices) unlikely to be exercised by Curnamona Listed Optionholders. The market for Curnamona Listed Options is also relatively illiquid with only 1,324,588 Curnamona Listed Options being traded in the period from the date they were issued up to the Announcement Date.

A Black-Scholes valuation undertaken by Havilah on 12 April 2012, has valued the Havilah Listed Options for which Curnamona Listed Options would be exchanged for an acceptance of the Listed Option Offer at 26 cents[3] , giving the Curnamona Listed Options an implied value of 5.2 cents. The Listed Option Offer therefore represents an attractive offer to Curnamona Listed Optionholders, having regard to the fact that the Curnamona Listed Options are currently well out of the money and there was very little liquidity in the market for Curnamona Listed Options up to the Announcement Date.

1.4 The Independent Expert has concluded that the Offers are fair and reasonable

Curnamona engaged Value Adviser Associates as an independent expert to provide a report as to whether the Offers are fair and reasonable to Curnamona Securityholders. The Independent Expert assessed the value of Curnamona Shares to be $0.11 per share, and assessed the value of the consideration (Havilah Shares) to be $0.13 to $0.35 per equivalent Curnamona Share.

As the value of the consideration to be received by Curnamona Shareholders under the Share Offer equals or exceeds the value of Curnamona Shares, in the opinion of the Independent Expert, the Share Offer is fair and, consistent with ASIC Regulatory Guide 111, also reasonable.

The Independent Expert assessed the value of the Curnamona Listed Options to be between $0.005 and $0.019 per listed option, and assessed the value of the consideration (Havilah Listed Options) to be $0.04 to $0.06 per equivalent Curnamona Listed Option.

As the value of the consideration to be received by Curnamona Listed Optionholders under the Listed Option Offer exceeds the value of Curnamona Listed Options, in the

3 This may not reflect the market value of the Havilah Listed Options once they are quoted on ASX. The independent expert, Value Adviser Associates, has valued the Havilah Listed Options in the range of $0.22 and $0.29. For further information, please see the Independent Expert’s Report in Appendix B of this Target’s Statement.

opinion of the Independent Expert, the Listed Option Offer is fair and, consistent with ASIC Regulatory Guide 111, also reasonable.

The Independent Expert’s Report dated 4 May 2012 is set out in Appendix B to this Target’s Statement.

1.5 The Merger will give Curnamona Securityholders the full benefit of Havilah’s portfolio of projects, and a more diversified risk profile

Curnamona currently has access to ten of Havilah’s exploration licences, pursuant to a Tenements Access Agreement ( Access Agreement ) between Curnamona and Havilah dated 17 February 2005. The Access Agreement allows Curnamona to access those tenements for the purpose of exploring for, and if applicable, mining and processing uranium, which has been or may be discovered on those tenements, and no other mineral.

If the Merger succeeds, Curnamona Securityholders will have the full benefit of Havilah’s portfolio of projects. This will include all tenements held by Havilah or which it has rights in respect of, and will not be restricted to only those tenements the subject of the Access Agreement and only uranium contained within those tenements.

Further, the fact that the Merger will give Curnamona Securityholders the full benefit of Havilah’s portfolio of projects will mitigate against any risks of having an investment in an exclusively uranium exploration company. These risks include the following:

(a) changes in current and future government policy and regulation with respect to uranium exploration and mining;
(b) public debate on the relative dangers and benefits of uranium as an energy source will continue into the foreseeable future and may result in regulatory changes which could affect Curnamona’s operations;
(c) uranium prices are subject to volatility caused by a number of factors, including international economic and political trends, alternative energy sources, global and regional demand and technological advances. Adverse changes in government policy in countries using nuclear power may also affect the price at which uranium is sold.

Please refer to Section 3 of the Bidder’s Statement and the Independent Expert’s Report set out in Appendix B to this Target’s Statement for more detailed information about Havilah’s projects.

1.6 Havilah is a larger more widely held company

As at 3 May 2012, Havilah had 101,323,723 shares on issue held by 2,641 shareholders, with a market capitalisation of $108,416,383[4] . This compares to 66,116,234 Curnamona Shares on issue as at that same date held by 1,232 shareholders (of which Havilah held 45.37%), with a market capitalisation of $13,553,828[5] . There is also significantly more liquidity in Havilah Shares than Curnamona Shares, which is by comparison very thinly traded. In the three months leading up to the Announcement Date, 7,400,238 Havilah Shares were traded, in comparison to 1,167,902 Curnamona Shares. Accordingly, if the Merger succeeds Curnamona shareholders will be shareholders in a larger and more widely held and liquid company.

4 Based on the closing price of Havilah Shares of $1.07 as at 3 May 2012 (being the last practicable day before the date of this Target’s Statement)

5 Based on the closing price of Curnamona Shares of $0.205 as at 3 May 2012 (being the last practicable day before the date of this Target’s Statement)

1.7 Havilah has greater resources and is likely better placed to raise capital

Havilah has greater resources available to it to manage and advance Curnamona’s projects.

According to Havilah’s most recent quarterly report (lodged with ASX on 29 February 2012), Havilah held approximately $5,142,000 in cash at the end of the January 2012 quarter, compared to Curnamona’s cash reserves of $1,523,000 as at the end of the same quarter (according to Curnamona’s most recent quarterly report lodged with ASX on 29 February 2012). It is likely Havilah also has greater access to equity funding due to the diversity and quality of its asset portfolio and the advanced stage of development of its exploration projects. This is most recently evidenced by the agreement reached by Havilah with MMG Exploration Pty Ltd ( MMG ) in September 2011 pursuant to which MMG took a placement of 4,000,000 Havilah Shares at an issue price of $1.25 to raise $5 million.

The increased cash reserves and access to equity funding means there is more likely to be finances available to fund the further exploration and future development of Curnamona’s projects.

1.8 Prospect for significant dilution if the Merger does not proceed

Curnamona has modest cash reserves and is very likely to require a capital raising in order to remain a going concern, absent ongoing financial support from Havilah. Havilah has recently issued a letter of financial support for Curnamona, agreeing to provide ongoing financial support to enable Curnamona to pay its debts as and when they fall due for a period of not less than one year from 4 April 2012.

If the Merger is not successful and no Superior Proposal emerges, Curnamona will likely need to undertake significant capital raisings to increase its cash reserves to continue the development of its projects, with such capital raisings likely to be required within the next 12 months. This may result in a significant dilution of existing shareholdings if Curnamona is unable to find a funding partner for its projects.

1.9 Risk of fall in share price and listed option price if the Merger does not proceed

If the Merger is not successful and no Superior Proposal emerges, it is possible that the price of the Curnamona Shares and the price of Curnamona Listed Options could fall back to or below the levels they were traded at prior to the Announcement Date.

Curnamona Shares and Curnamona Listed Options have traded at a VWAP of $0.1254 and $0.0514 respectively for the period from 5 March 2012 (being the date Curnamona came out of a trading halt and made a preliminary announcement of the proposed Merger) to 3 May 2012, being the ASX trading day immediately preceding the date of this Target’s Statement.

1.10 Havilah’s shareholding a deterrent to any alternative bidder

Havilah’s substantial shareholding in Curnamona (45.37%) is a significant deterrent to any other company considering a takeover of Curnamona, and would necessitate the support of Havilah for any alternative offer to be successful. As such, the likelihood of another bidder emerging with a Superior Proposal is remote.

2. CURNAMONA DIRECTOR RECOMMENDATION

2.1 The Curnamona Directors

As at the date of this Target’s Statement, the Curnamona Directors are:

Name	Position
Keith Robert Johnson	Chairman
Christopher William Giles	Director
Kenneth Graham Williams	Director
Phillip John Staveley	Director

2.2 Recommendation

The independent Director of Curnamona, Mr Phillip Staveley, recommends that you ACCEPT the Offers in respect of all your Curnamona Securities, subject to there being no Superior Proposal, and no Material Adverse Event having occurred. The reasons for this recommendation are set out in Section 1 of this Target’s Statement. Mr Staveley’s fiduciary duties in respect of the recommendation requires him to consider all relevant circumstances, including any Superior Proposal.

Messrs Johnson, Giles and Williams have abstained from making a recommendation in relation to the Offers. Messrs Johnson, Giles and Williams all hold directorships, shares and options in each of Havilah and Curnamona, and therefore consider that it is not appropriate to make a recommendation to Curnamona Shareholders in relation to the Offers.

2.3 Directors’ current intentions

Each of the Directors (with the exception of Mr Phillip Staveley, who does not hold Curnamona Securities) currently intend to accept or procure acceptance of the Offers in respect of all the Curnamona Securities they own or control, subject to there being no Superior Proposal, and no Material Adverse Event having occurred.

2.4 Personal circumstances

It is not possible for Mr Staveley’s recommendation to take into account your personal circumstances, such as the size or nature of your Curnamona Security holding, your investment strategy or your tax position. Accordingly, and particularly if you are a smaller Curnamona Securityholder, you should seek advice from your financial, taxation or other professional adviser before making any decision in relation to your holding of Curnamona Securities.

In considering whether to accept either one or both of the Offers, the Curnamona Directors encourage you to:

read the whole of this Target’s Statement and the Bidder’s Statement;
have regard to your individual risk profile, portfolio strategy, tax position and financial circumstances;
ensure that you understand the consequences of accepting either one or both of the Offers;
consider the choices available to you, as detailed in Section 3 of this Target’s Statement;
obtain financial advice from your broker or financial adviser in relation to the Offers or relevant Offer; and
obtain taxation advice on the effect of accepting either one or both of the Offers.

3. YOUR CHOICES AS CURNAMONA SECURITYHOLDERS

3.1 Choices for Curnamona Shareholders

If you are a Curnamona Shareholder, you have three choices available to you in relation to the Share Offer for the Curnamona Shares you hold. These choices are summarised below.

Note that the independent director of Curnamona, Mr Phillip Staveley, recommends that you ACCEPT the Share Offer for all of your Curnamona Shares subject to there being no Superior Proposal, and no Material Adverse Event having occurred.

Each of the Directors (with the exception of Mr Phillip Staveley, who does not hold Curnamona Shares) currently intend to ACCEPT the Share Offer in respect of the Curnamona Shares they own or control subject to there being no Superior Proposal, and no Material Adverse Event having occurred.

(1) Accept the Share Offer

You may elect to accept the Share Offer and receive 1 Havilah Share for every 5 Curnamona Shares held.

See Section 4.10 of this Target’s Statement for explanation on how fractional entitlements will be dealt with.

If you accept the Share Offer and send in all documents required by the relevant Acceptance Form you will receive your Havilah Shares up to one month after that acceptance, unless the Share Offer is still conditional when acceptance occurs, and in that case Havilah Shares will be received up to one month after the Share Offer becomes unconditional. In any event Havilah Shares under the Share Offer will be received no later than 21 days after the end of the Offer Period, provided the Share Offer becomes unconditional.

If you accept the Share Offer you will not be able to sell your Curnamona Shares to anyone else, either on the ASX or by accepting any Superior Proposal that may emerge unless either the Share Offer is unsuccessful or the Share Offer is extended by a period of more than one month while it is still conditional (refer to section 4.11 of this Target’s Statement).

The tax implications of accepting the Share Offer depends on a number of factors and will vary according to your personal circumstances. A general description of the taxation consequences of accepting the Offers are set out in section 10 of the Bidder’s Statement and referred to in Section 7.4 of this Target’s Statement.

(2) Sell your Curnamona Shares on market through the ASX

During the Offer Period, you may elect to sell your Curnamona Shares on market through the ASX for cash, provided you have not already accepted the Share Offer for those Curnamona Shares. If you sell your Curnamona Shares on market through the ASX, you will receive a cash amount according to the prevailing market value of the Curnamona Shares, less any brokerage payable.

If you elect to sell your Curnamona Shares on market through the ASX you will lose the right to participate in the Share Offer or any other proposal that may emerge (with respect to those Curnamona Shares that have been sold), and may receive less than the value of the Havilah Shares offered pursuant to the Share Offer.

If you sell your Curnamona Shares on market through the ASX you may be liable for capital gains tax on the sale (consult your financial and taxation adviser for further information in relation to this) and may incur a brokerage charge.

(3) Take no action

If you do not wish to accept the Share Offer in relation to your Curnamona Shares and do not wish to sell your Curnamona Shares on market through the ASX you may do nothing, in which case you will have rejected the Share Offer.

If you choose to do nothing and Havilah becomes entitled to compulsorily acquire your Curnamona Shares under the Corporations Act (as it intends to do, as discussed in section 7 of the Bidder’s Statement), you would receive the same consideration as Curnamona Shareholders who accepted the Share Offer, but some time later. Refer to section 4.13 of this Target’s Statement for details on compulsory acquisition.

3.2 Choices for Curnamona Listed Optionholders

The Curnamona Listed Options have been admitted to the Official List and can be traded on the ASX. If you are a Curnamona Listed Optionholder, you have four choices available to you in relation to the Listed Option Offer for the Curnamona Listed Options you hold. These choices are summarised below.

Note that the independent director of Curnamona, Mr Phillip Staveley, recommends that you ACCEPT the Listed Option Offer for all of your Curnamona Listed Options subject to there being no Superior Proposal, and no Material Adverse Event having occurred.

Each of the Directors (with the exception of Mr Phillip Staveley, who does not hold Curnamona Listed Options) currently intend to ACCEPT the Listed Option Offer in respect of the Curnamona Listed Options they own or control subject to there being no Superior Proposal, and no Material Adverse Event having occurred.

(1) Accept the Listed Option Offer

If you are a Curnamona Listed Optionholder, you may elect to accept the Listed Option Offer and receive 1 Havilah Listed Option for every 5 Curnamona Listed Options you hold.

See Section 4.10 of this Target’s Statement for explanation on how fractional entitlements will be dealt with.

If you accept the Listed Option Offer and send in all documents required by the relevant Acceptance Form you will receive your Havilah Listed Options up to one month after that acceptance, unless the Listed Option Offer is still conditional when acceptance occurs, and in that case Havilah Listed Options will be received up to one month after the Listed Option Offer becomes unconditional. In any event Havilah Listed Options under the Listed Option Offer will be received no later than 21 days after the end of the Offer Period, provided the Listed Option Offer becomes unconditional.

If you accept the Listed Option Offer you will not be able to sell your Curnamona Listed Options to anyone else, either on the ASX or by accepting any Superior Proposal that may emerge unless either the Listed Option Offer is unsuccessful or the Listed Option Offer is extended by a period of more than one month while it is still conditional (refer to section 4.11 of this Target’s Statement).

The tax implications of accepting the Listed Option Offer depends on a number of factors and will vary according to your personal circumstances. A general

description of the taxation consequences of accepting the Offers are set out in section 10 of the Bidder’s Statement and referred to in Section 7.4 of this Target’s Statement.

(2) Exercise your Curnamona Listed Options and accept the Share Offer in respect of the resultant Curnamona Shares or sell those Curnamona Shares on market through the ASX

You may choose to exercise your Curnamona Listed Options in accordance with their terms (including payment of the exercise price) and either accept the Share Offer in respect of the resultant Curnamona Shares or sell those Curnamona Shares on market through the ASX. Please be aware that, as at the date of this Target’s Statement, the Curnamona Share price is well below the exercise price of the Curnamona Listed Options (refer to Section 1.3 of this Target’s Statement for further details) and you should seek professional advice before taking this course of action.

Consult your financial or taxation adviser for further information in relation to the taxation implications of exercising the Curnamona Listed Options and either accepting the Share Offer in respect of the resultant Curnamona Shares or selling those Curnamona Shares on market through the ASX.

(3) Sell your Curnamona Listed Options on market through the ASX

During the Offer Period, you may elect to sell your Curnamona Listed Options on market through the ASX for cash, provided you have not already accepted the Listed Option Offer for those Curnamona Listed Options. If you sell your Curnamona Listed Options on market through the ASX, you will receive a cash amount according to the prevailing market value of the Curnamona Listed Options, less any brokerage payable.

If you elect to sell your Curnamona Listed Options on market through the ASX you will lose the right to participate in the Listed Option Offer or any other proposal that may emerge (with respect to those Curnamona Listed Options that have been sold), and may receive less than the value of the Havilah Listed Options offered pursuant to the Listed Option Offer.

If you sell your Curnamona Listed Options on market through the ASX you may be liable for capital gains tax on sale (consult your financial and taxation adviser for further information in relation to this) and may incur a brokerage charge.

(4) Take no action

If you do not wish to accept the Listed Option Offer in relation to your Curnamona Listed Options and do not wish to sell your Curnamona Listed Options on market through the ASX you may do nothing, in which case you will have rejected the Listed Option Offer.

If you choose to do nothing and Havilah becomes entitled to compulsorily acquire your Curnamona Listed Options under the Corporations Act (as it intends to do, as discussed in section 7 of the Bidder’s Statement), you would receive the same consideration as Curnamona Listed Optionholders who accepted the Listed Option Offer, but some time later. Refer to section 4.13 of this Target’s Statement for details on compulsory acquisition.

4. IMPORTANT INFORMATION ABOUT HAVILAH’S OFFERS

4.1 Havilah’s Offers

Havilah is offering to acquire all of your Curnamona Securities, including any Curnamona Shares which become registered in your name in the register of shareholders of Curnamona during the period from the Register Date to the end of the Offer Period due to the conversion of, or exercise of rights attached to, other securities convertible into Curnamona Shares which are on issue on the Register Date, for the consideration detailed in section 4.2 and on and subject to the terms and conditions of Havilah’s Offer, which are set out in Section 14 of the Bidder’s Statement.

The Offers extend to any person who becomes registered or entitled to be registered as the holder of any of your Curnamona Securities during the period from the Register Date to the end of the Offer Period.

4.2 Havilah Offer consideration

The consideration being offered by Havilah under the Share Offer is 1 Havilah Share for every 5 Curnamona Shares.

The consideration being offered by Havilah under the Listed Option Offer is 1 Havilah

Listed Option for every 5 Curnamona Listed Options.

4.3 Conditions of the Offers

The Offers are subject to certain conditions, the full details of these conditions are set out in section 14 of the Bidder’s Statement. In summary, the Offers are subject to the following conditions:

(a) Havilah and its Associates having a Relevant Interest in at least 90% of the Curnamona Shares;
(b) both the Share Offer and the Listed Option Offer being declared unconditional before the end of the Offer Period;
(c) receipt of all required regulatory approvals;
(d) no legal restraint or prohibition adversely affecting the Offers;
(e) Curnamona conducting its business in the ordinary course;
(f) no material adverse change in relation to Curnamona;
(g) no prescribed occurrence occurs in relation to Curnamona without the prior written approval of Havilah; and
(h) representations regarding Curnamona’s issued securities continue to be true and correct.

The Offers are also conditional upon all Curnamona Director Options being exercised or cancelled at least 7 days before the Conditions Notice Date. As at the date of this Target’s Statement, there are a total of 4,000,000 Curnamona Director Options on issue. The details of the Curnamona Director Options are set out in Section 8.5 of this Target’s Statement.

Curnamona Directors may however decide in their sole discretion to exercise their Curnamona Director Options and so receive Curnamona Shares, and then accept the Share Offer for the Curnamona Shares issued upon exercise of the Curnamona Director Options, subject to there being no Superior Proposal and no Material Adverse Event.

Pursuant to the Takeover Bid Implementation Agreement, both Curnamona and Havilah have agreed to use their respective reasonable endeavours to procure the Curnamona Director Options are exercised or cancelled 7 days before the Conditions Notice Date.

As at the date of this Target’s Statement, the Curnamona Directors are not aware of any matter which would cause a breach of any of the conditions attaching to the Offers.

4.4 Notice of status of conditions

Sections 12.15 and 13.15 of the Bidder’s Statement indicates that Havilah will give a Notice of Status of Conditions for each Offer to the ASX and Havilah on 4 June 2012. Havilah is required to set out in its Notice of Status of Conditions:

(a) whether the relevant Offer is free of any or all of the conditions;
(b) whether, so far as Havilah knows, any of the conditions have been fulfilled; and
(c) Havilah’s voting power in Curnamona.

If the Offer Period for one or both of the Offers is extended by a period before the time by which the Notice of Status of Conditions is to be given, the date for giving the Notice of Status of Conditions for the Offer that has been extended will be taken to be postponed for the same period. In the event of such extension, Havilah will be required to give notice to ASX and Curnamona that states the new date for the giving of the Notice of Status of Conditions.

If a condition is fulfilled (so that the Offer becomes free of that condition) during the Offer Period for that Offer but before the date on which the Notice of Status of Conditions is required to be given, Havilah must, as soon as practicable, give the ASX and Curnamona a notice that states that the particular condition has been fulfilled.

Pursuant to the terms of the Takeover Bid Implementation Agreement, if a condition is waived, such a waiver must be made in respect of both the Share Offer and the Listed Option Offer (and not only one of the Offers).

4.5 Lapse of Offers

The Offers will lapse if the Offer conditions are not freed or fulfilled by the end of the Offer Period. If an Offer lapses, all contracts resulting from the acceptance of that Offer and all acceptances that have not resulted in binding contracts will be void and you will be free to deal with the corresponding Curnamona Securities that you hold as you see fit.

4.6 Strategy of Havilah following the proposed Merger

The information contained in this Section 4.6 is extracted from section 7 of the Bidder’s Statement (with necessary changes made). The Curnamona Directors have no information which suggests to them that this information may be inaccurate or misleading. The Bidder’s Statement contains more detailed information than is contained in this Section 4.6.

(1) Overview of intentions

This section sets out the intentions of Havilah on the basis of the facts and information concerning Curnamona which are available to Havilah at the time of preparation of the Bidder’s Statement and the existing circumstances affecting the business of Curnamona so far as they are known to Havilah, in relation to the following:

(a) the continuation of, and changes to, Curnamona's business and assets;
(b) the compulsory acquisition of Curnamona's Shares and Curnamona Listed Options and delisting of Curnamona; and
(c) the future employment of present employees of Curnamona.

All statements of intention in this section are statements of current intention only and may change as new information becomes available and/or circumstances change.

(2) Background to intentions

It is Havilah’s current intention to maintain Curnamona’s tenements and work towards the development of its uranium resources. These assets, if brought to development, may be valuable for Havilah and the Merged Group.

The exploration tenements that Curnamona holds in its own right have good potential for base metal mineralisation. Havilah will aim to conduct exploration for these base metals on the Curnamona exploration licenses. If the Merger does not proceed, Curnamona may have difficulty in raising new capital or attracting a funding partner for its assets. While Curnamona has an estimated uranium resource, there are technical problems relating to the commercial extraction.

(3) Intentions following Havilah acquiring 90% of more of Curnamona Shares

If Havilah acquires a relevant interest in 90% or more of the Curnamona Shares, it has the following intentions:

(a) Corporate Matters

(i) Proceed with the compulsory acquisition of the outstanding Curnamona Shares and Curnamona Listed Options in accordance with the provisions of the Corporations Act.
(ii) Make arrangements for Curnamona to be removed from the official list of ASX.

If at the end of the Offer Period Havilah holds acceptances for more than 90% of Curnamona Listed Options but less than 90% of Curnamona Shares, then Havilah does not, at this time, intend to declare the Offers to be unconditional and seek to compulsorily acquire all outstanding Curnamona Options. Havilah will however reassess this position at the relevant time, particularly if it holds close to 90% of the Curnamona Shares.

(b) Operations, developments and exploration

Curnamona’s activities will be managed internally by Havilah once the Merger is complete and accounting systems adjusted to track the costs associated with the Curnamona as a division of Havilah. The staff and

executive directors of Havilah will manage and carry out work on Curnamona’s projects as Havilah management considers appropriate.

One geologist works in Curnamona who manages the field crew. It is Havilah’s intention that the employees will be transferred to Havilah. No loss of knowledge is anticipated.

(4) Intentions if Havilah acquires less than 90% of Curnamona Shares

The Offers are subject to a number of conditions, being the defeating conditions, including a condition that Havilah and its Associates acquire a relevant interest in 90% or more of the Curnamona Shares on issue. Havilah does not currently intend to waive this condition. However, if it does not acquire 90% or more of the Curnamona Shares on issue, but waives that condition, then Havilah has the following intentions.

(a) Corporate matters

Havilah intends to maintain Curnamona’s listing on ASX while it meets ASX requirements for maintaining a listing and it is cost effective to do so. If Havilah becomes entitled at some later time to exercise general compulsory acquisition rights under the Corporations Act, it would exercise those rights.

(b) Assumption of control of Board and management

Subject to the Corporations Act and the constitution of Curnamona, Havilah will seek to remove one member of the Board of Curnamona to reflect Havilah’s proportionate ownership interest in Curnamona. Havilah will seek, through its nominees on the board of Curnamona, to implement the intentions detailed in section 7.3 of the Bidder’s Statement to the extent that they are consistent with Curnamona being a controlled entity of Havilah and are considered to be in the best interests of all Curnamona Shareholders.

Subject to the above, it is the present intention of Havilah on the basis of the information concerning Curnamona which is known to it at the date of the Bidder’s Statement and the existing circumstances affecting the business of Curnamona, that:

(i) the business of Curnamona will be otherwise continued in substantially the same manner as it is presently being conducted;
(ii) no other major changes will be made to the business of Curnamona;
(iii) there will not be any other redeployment of the fixed assets of Curnamona; and
(iv) the present employees of Curnamona will be employed by Havilah.

4.7 Offer Period

Unless an Offer is extended or withdrawn, each Offer will be open for acceptance from 9 May 2012 until 7:00pm Adelaide time on 11 June 2012.

The circumstances in which Havilah may extend or withdraw an Offer are set out in sections 4.8 and 4.9 of this Target’s Statement.

4.8 Extension of Offer Period

Havilah may extend the Offer Period for one or both of the Offers at any time before giving the Notice of Status of Conditions in respect of the relevant Offer(s) (referred to in Section 4.4 of this Target’s Statement) while the relevant Offer(s) is/are subject to conditions. However, if all the conditions are satisfied or waived, Havilah may extend the Offer Period for one or both of the Offers at any time before the end of the Offer Period for the Offer(s) that is/are extended.

Additionally, the Offer Period for an Offer will be automatically extended if, within the last 7 days of the Offer Period Havilah improves the consideration offered under that Offer. If this occurs, the Offer Period for that Offer will be automatically extended so that it ends 14 days after the date Havilah improves the consideration offered under that Offer.

4.9 Withdrawal of Offers

Havilah may not withdraw an Offer if you have already accepted it. Before you accept an Offer, Havilah may withdraw that Offer with the written consent of ASIC and subject to the conditions (if any) specified in such consent. If Havilah withdraws an Offer, all contracts arising from its acceptance will automatically be void.

4.10 Fractional Entitlements

If, as a result of accepting an Offer, you become entitled to a fraction of a Havilah Share or Havilah Listed Option, then your entitlement will be rounded down to the nearest whole Havilah Share or Havilah Listed Option. Refer to sections 12.2 and 13.2 of the Bidder’s Statement for further details.

4.11 Effect of acceptance

The effect of acceptance of an Offer is set out in sections 12.7 and 13.7 of the Bidder’s Statement. You should read these provisions in full to understand the effect which acceptance will have on your ability to exercise the rights attaching to your Curnamona Securities and the representations and warranties which you give by accepting one or both of the Offers.

In particular you should note that once you accept an Offer, you will only be able to withdraw that acceptance in very limited circumstances. Specifically, you may only withdraw acceptance of an Offer if:

(a) the Offer is still subject to a defeating condition; and
(b) Havilah varies the Offer in a way that postpones, for more than one month, the time when Havilah needs to meet its obligations under the Offer. This will occur if Havilah extends the Offer Period by more than one month whilst the Offer is still subject to conditions.

4.12 When you will receive consideration (in the form of Havilah Securities) for your Curnamona Securities if you accept an Offer

In the usual case, you will be allocated the Havilah Securities in consideration for the sale of your Curnamona Securities on or before the later of:

(a) one month after the date the relevant Offer becomes or is declared unconditional; and

(b) one month after the date you accept the relevant Offer if the Offer is, at the time of acceptance, unconditional,

but in any event (assuming the relevant Offer becomes or is declared unconditional), no later than 21 days after the end of the relevant Offer Period. There are, however, certain exceptions to the above time frames for receiving the Offer consideration. Refer to sections 12.8 and 13.8 of the Bidder’s Statement for full details of when you will receive the Offer consideration.

4.13 Compulsory Acquisition

If during or at the end of the relevant Offer Period Havilah has (together with its associates) a Relevant Interest in at least:

(a) with respect to the Share Offer, 90% (by number) of Curnamona Shares, and has (together with its associates) acquired at least 75% (by number) of the Curnamona Shares Havilah has offered to acquire under the Share Offer; and
(b) with respect to the Listed Option Offer, 90% (by number) of Curnamona Listed Options, and has (together with its associates) acquired at least 75% (by number) of the Curnamona Listed Options Havilah has offered to acquire under the Listed Option Offer,

then pursuant to Part 6A.1 Division 1 of the Corporations Act, Havilah will be entitled to compulsorily acquire any Curnamona Shares or Curnamona Listed Options (as applicable) in respect of which it has not received acceptance of the relevant Offer.

You should be aware that, if your Curnamona Securities are compulsorily acquired, you are not likely to receive payment until at least one month after the compulsory acquisition notices are dispatched to you.

If Havilah does not become entitled to compulsorily acquire Curnamona Shares or Curnamona Listed Options in accordance with Part 6A.1 Division 1 of the Corporations Act, it may nevertheless become entitled to exercise general compulsory acquisition rights under Part 6A.2 Division 1 of the Corporations Act.

Havilah has indicated in section 7 of the Bidder’s Statement that it intends to proceed to compulsory acquisition of the outstanding Curnamona Shares and Curnamona Listed Options, if it meets the required thresholds.

4.14 Foreign Holders

If you are a Foreign Holder, you should be aware that the Offers in jurisdictions outside Australia may be restricted by law, and you should seek advice and observe any such restrictions. Any such failure to comply with such restrictions may constitute a violation of applicable securities laws.

The Offers do not constitute offers in any place in which, or to persons to whom, it would not be lawful to make the offers. Havilah in its absolute discretion will determine whether to issue Havilah Securities to Foreign Holders as consideration for the Offers, having regard to any such restrictions.

In respect of those Havilah Securities which Foreign Holders would have become entitled to receive but for the restrictions outlined above, Havilah will:

(a) arrange for the Havilah Securities to which you and all other Foreign Holders under the Offers would have been entitled but for sections 12.9 or 13.9 of the Bidder’s Statement to be issued to a nominee approved by ASIC;

(b) cause the nominee to offer for sale those Havilah Securities within 30 Business Days after the end of the relevant Offer Period in such a manner, at such a price and on such other terms and conditions as are determined by the nominee;
(c) pay or procure the payment to you the amount ascertained in accordance with sections 12.9 or 13.9 of the Bidder’s Statement.

Refer to sections 12.9 and 13.9 of the Bidder’s Statement for a more detailed description on how entitlements will be calculated, the timing of the payment to Foreign Holders and any applicable restrictions.

5. ABOUT HAVILAH

Havilah is an ASX listed mineral exploration company, exploring for copper, gold, iron ore, cobalt, tin and other base metals in South Australia. Havilah was officially admitted to the ASX on 18 March 2002.

Havilah holds exploration licences covering more than 6,500 km[2] of the well mineralised Curnamona Province in north-eastern South Australia. Exploration work has identified significant mineral prospects and deposits resulting in a substantial inventory of copper, gold, molybdenum, cobalt, iron, and, as a result of its acquisition of all the shares in Geothermal Resources Limited in December 2011, geothermal energy. Regional exploration has been highly successful with the discovery of two new iron ore deposits in a newly emerging iron ore district in north eastern South Australia.

6. ABOUT CURNAMONA

Investors should refer to Curnamona’s Quarterly Activities Report and Half-Yearly Report for the period ending 31 January 2012 for the recent operating and financial history of Curnamona, available at Curnamona’s website at www.curnamonaenergy.com.au.

Curnamona is an ASX listed exploration company with the aim of discovering and developing tertiary sand-hosted uranium deposits within the Curnamona uranium province of South Australia.

6.1 Principal assets

Curnamona holds exploration rights over more than 6,800km[2] of terrain in South Australia. These exploration rights include exploration licences held by Curnamona covering more than 2,500km[2] , and access rights to ten exploration licences held by Havilah covering over 4,300km[2] . Curnamona also holds a retention lease over 248ha within one of the latter exploration licences.

Key features of Curnamona’s exploration projects are summarised below. These assets are more fully described on Curnamona’s website at www.curnamonaenergy.com.au, and in the Curnamona 2011 Annual Report which was issued on 21 October 2011.

(1) Oban Project Retention Lease 123 (Curnamona 100%)

The Oban prospect is located 100 kilometres north of Cockburn in South Australia. The Oban mineralisation is hosted by a horizontal lignitic, pyritic and carbonaceous lower sand member of the Eocene Eyre Formation at depths of between 80-90 metres. It is overlain by impervious clayey sediments of the Namba Formation and underlain by similarly clayey material.

Testing at Oban has included delineation drilling and In Situ Recovery ( ISR ) trials to determine the recoverability of uranium detected in drilling. Results have been disappointing and additional sonic core drilling was undertaken to resolve recovery issues.

(2) Other Exploration Targets (Curnamona 100% of Tertiary mineralisation)

Other exploration is aimed at locating Honeymoon-style uranium mineralisation within the well defined Yarramba and other palaeochannels.

6.2 Operations

Curnamona has commenced rehabilitation of the initial wellfield at Oban in co-operation with Environmental Protection Authority of South Australia (EPA) and the South Australian Department for Manufacturing, Innovation, Trade, Resources and Energy (DMITRE).

Curnamona is continuing its investigations into the possible reasons for poor leaching results from the circulation tests carried out between June 2010 and September 2011. Bench scale tests were initiated using an alkaline solution as the leachate (instead of acid) with promising results. A new round of permitting will be required if this process is to be trialled at Oban in the future.

Also, methods to better define the locations of the organic clay bands have been investigated, including sonic coring and Resistivity/Spontaneous Potential logging. Acquisition of sonic coring drilling equipment continues to be investigated.

7. OTHER IMPORTANT CONSIDERATIONS FOR CURNAMONA SECURITYHOLDERS

All the information set out in this Target’s Statement should be carefully considered, together with the risks normally associated with companies of a similar nature to Havilah and, in particular, those risks described in section 9 of the Bidder’s Statement.

This Section 7 outlines some of the other important considerations and risks for Curnamona Securityholders who choose to accept the Offers as recommended by the independent Director of Curnamona, Mr Phillip Staveley, subject to there being no Superior Proposal and no Material Adverse Event having occurred. If any one of the risks identified in the Bidder’s Statement or any of the following risks materialise, then Havilah’s financial condition, prospects and share price could be materially and adversely affected.

7.1 The value of the Offers is not fixed

In making his recommendation, the independent Director of Curnamona, Mr Phillip Staveley, has considered, among other things, the implied value of the Offers. As at the following dates or periods, the implied value of the Share Offer was:

13.8 cents per Curnamona Share as at 1 March 2012 (being the last trading day prior to each company entering into a trading halt to consider and negotiate the then proposed Merger) ( Last Trading Day );
13.69 cents per Curnamona Share for the 30 ASX trading days up to and including the Last Trading Day;
12.98 cents per Curnamona Share for the 60 ASX trading days up to and including the Last Trading Day;
12.3 cents per Curnamona Share for the 90 ASX trading days up to and including the Last Trading Day; and
21.4 cents per Curnamona Share as at 3 May 2012.

The implied value of the Share Offer has been calculated taking into account the terms of the Share Offer and the price of the Havilah Shares and Curnamona Shares quoted on the ASX as at the above specified dates or for the above specified periods.

Please note that the implied value of the Share Offer as stated in this Target’s Statement is calculated as at particular dates but the implied value of the Share Offer will fluctuate with movements in the market value of Havilah Shares. The market value of Havilah Shares will change over time and may fluctuate for a variety of reasons, including movements in the price of iron ore, copper, gold and other commodities, exchange rate movements, changes in the operating performance of Havilah’s assets, changes in the political risk profile of Havilah’s assets, or other factors which impact the operating or financial performance of Havilah. Curnamona Shareholders are urged to obtain updated quotes on the price of Curnamona Shares and Havilah Shares. You can access these prices online and free of charge as follows:

Curnamona: Australian Stock Exchange, code CUY http://www.asx.com.au
Havilah: Australian Stock Exchange, code HAV http://www.asx.com.au

The implied value of the Share Offer at any given time can be calculated using this simple formula:

Implied Value = (NHS/NCS) x HAV Share price

Where:

NHS is the number of Havilah Shares offered under the Share Offer (i.e. 1)

NCS is the number of Curnamona Shares to be exchanged under the Share Offer (i.e. 5)

For example, the implied value of the Share Offer of $0.138 per Curnamona Share was obtained using this calculation:

(1/5) x $0.69 (HAV Share price on 1 March 2012[6] )

With respect to the Listed Option Offer, as the Havilah Listed Options offered pursuant to that Offer will form a new class of listed options, the market price at which Havilah Listed Options will trade is currently unknown.

As a result, the implied value of the Listed Option Offer has been calculated using a Black-Scholes valuation of the Havilah Listed Options and taking into account the ratio of Havilah Listed Options to Curnamona Listed Options offered under the Listed Option Offer.

The Black-Scholes valuation undertaken by Havilah on 12 April 2012 valued the Havilah Listed Options at 26 cents, giving the Curnamona Listed Options an implied value of 5.2 cents each.

Please note that a Black Scholes valuation is calculated as at particular dates, based on certain variables including the Havilah Share price, volatility and the risk free interest rate. These variables can fluctuate for a variety of reasons, and such fluctuations may impact on the implied value of the Listed Option Offer. There is no guarantee that once quoted, the Havilah Listed Options will trade at the value arrived at using the BlackScholes model.

A valuation has also been undertaken by the independent expert, Value Adviser Associates as at 4 May 2012, which valued the Havilah Listed Options in the range of $0.22 to $0.29 cents. For further details please refer to the Independent Expert’s Report in Appendix B of this Target’s Statement.

7.2 Form of consideration offered to Curnamona Securityholders

Havilah has not included a cash component in the Offers. Therefore, if you accept one or both of the Offers you will not immediately realise value on your investment. Rather, Havilah is offering Havilah Securities as consideration for Curnamona Securities. As a result, the value of the Offer to Curnamona Securityholders will be affected by an increase or decrease in the price of Havilah Securities.

There are risks associated with any investment in the share market and you should be aware you will bear the risk of an investment in Havilah Securities if you accept one or both of the Offers.

The price of Havilah Securities may be affected in the short term due to the issue of Havilah Securities to accepting Curnamona Securityholders. This will depend on factors that cannot be predicted by the Curnamona Directors, such as how the market perceives the proposed Merger in terms of adding value to Havilah and how many Curnamona Securityholders attempt to realise their investment by selling their Havilah Securities.

If you accept one or both of the Offers you will not receive your Havilah Securities immediately. Havilah Securities under the Offers will be received up to one month after acceptance, unless the Offers are still conditional when acceptance occurs, and in that

6 The last ASX trading day prior to both companies being placed into a trading halt to consider and negotiate the proposed Merger.

case Havilah Securities will be received up to one month after the Offers become unconditional. In any event Havilah Securities under the Offers will be received no later than 21 days after the end of the relevant Offer Period (provided the Offers become unconditional). If you elect to accept one or both of the Offers, then during the period from when you accept the relevant Offer, you will not be able deal in your Curnamona Shares or Options (as applicable) or in the Havilah Securities to be received under the relevant Offer.

The independent Director of Curnamona, Mr Phillip Staveley, considers that each Offer is attractive despite these risks because of the size of the premiums referred to in section 7.1 above and other benefits described in Section 1 of this Target’s Statement.

The latest price for Havilah Shares can be obtained from the ASX website (www.asx.com.au) using the code “HAV”.

7.3 Other risks of the Offers

In the Bidder’s Statement Havilah has identified a number of risk factors in relation to the proposed Merger. Please refer to Section 9 of the Bidder’s Statement for further details in relation to these risk factors. If any one of these risks materialises, Havilah’s and the Merged Group’s business, financial condition, prospects and share price could be materially and adversely affected.

If the Merger does not succeed, and absent any ongoing financial support from Havilah, Curnamona’s existing cash reserves are unlikely to be sufficient to cover the expenditure required to further explore and develop its tenements and Curnamona will likely need to seek to raise capital before the end of 2012. There is no assurance that Curnamona will be able to raise the capital it requires or that it will be able to find a funding partner when additional funding is required or that the terms associated with providing such funding will be satisfactory to Curnamona. In the event that Curnamona fails to obtain sufficient funding when required, Curnamona may be forced to delay or eliminate plans for further exploration of its tenements, sell existing assets or reduce its general operations.

7.4 Curnamona Securityholder tax issues

The Australian taxation consequences of accepting the Offers in relation to your Curnamona Securities are set out in Section 10 of the Bidder’s Statement. Please note that the taxation information provided in the Bidder’s Statement is a general description of the Australian taxation consequences and does not take into account the specific consequences of any particular Curnamona Securityholder. It is recommended that Curnamona Securityholders seek their own professional advice in relation to the tax consequences applicable to their individual circumstances.

8. ADDITIONAL INFORMATION

8.1 Curnamona Directors’ Relevant Interests and dealings in Curnamona Securities

(1) Relevant Interests in Curnamona securities

The only Curnamona Securities on issue are Curnamona Shares and Curnamona Options. As at the date of this Target’s Statement, your Directors had a Relevant Interest in the following Curnamona securities:

Name of Director	Number of Curnamona Shares	Number of Curnamona Listed Options	Number of Curnamona Unlisted Options
Mr Keith Robert Johnson Mr Christopher William Giles Mr Kenneth Graham Williams Mr Phillip John Staveley	1,810,000 4,448,028 259,600 Nil	452,500 1,312,007 64,900 Nil	1,800,000 1,800,000 400,000 Nil

(2) Dealings in Curnamona securities

No Curnamona Director has acquired or disposed of a Relevant Interest in any Curnamona securities within the period of four months immediately preceding the date of this Target’s Statement.

8.2 Curnamona Directors’ Relevant Interests and dealings in Havilah Securities

(1) Relevant Interests in Havilah securities

As at the date of this Target’s Statement, your Directors had a Relevant Interest in the following Havilah securities:

Name of Director	Number of Havilah Shares	Number of Listed Havilah Options	Number of Unlisted Havilah Options
Mr Keith Robert Johnson Mr Christopher William Giles Mr Kenneth Graham Williams Mr Phillip John Staveley	4,258,097 11,260,439 235,873 Nil	731,134 2,737,412 53,575 Nil	3,500,000 3,500,000 800,000 Nil

(2) Dealings in Havilah securities

No Curnamona director acquired or disposed of a Relevant Interest in any Havilah securities within the period of four months immediately preceding this Target’s Statement.

8.3 Benefits and Agreements with Curnamona Directors

(1) Benefits in connection with retirement from office

As a result of the Offers no benefit (other than a benefit which can be given without member approval under the Corporations Act) has been or will be given to a person in connection with the retirement of that person, or someone else, from a board or managerial or executive office in Curnamona or a related body corporate of Curnamona.

(2)

Agreements connected with or conditional on the Offers

There is no agreement made between any Director and any other person in connection with or conditional on the outcome of the Offers other than:

(a) in the Directors’ capacity as holders of Curnamona securities or Havilah securities; and
(b) the agreement by Geocom Pty Ltd and Maptek Pty Ltd, owned by Messrs Giles and Johnson respectively, to waive early termination fees referred to in section 8.12.
(3) Benefits from Havilah

None of the Directors of Curnamona have agreed to receive, or is entitled to receive, any benefit from Havilah in connection with or which is conditional on the outcome of the Offer other than in their capacity as a holder of Curnamona securities and Havilah securities.

(4) Interest of Directors in contracts with Havilah

None of the Directors have any interest in any contract entered into by Havilah other than:

(a) in the case of all Directors other than Mr Phillip Staveley, in their capacity as a holder of Havilah Shares and Havilah Options and in their capacity as directors of Havilah; and
(b) in the case of Messrs Giles and Johnson, in their capacity as owners of Geocom Pty Ltd and Maptek Pty Ltd respectively, being companies that have entered consultancy agreements and a management services agreements with Havilah.

8.4 Composition of the Boards

Messrs Williams, Johnson and Giles each hold directorships, shares and options in each of Havilah and Curnamona.

Mr Williams has not, on behalf of Havilah, participated, attended meetings of the board of directors of Havilah, or been involved in any negotiations relating to the Takeover Bid Implementation Agreement, the Offers or (subject to the below) the preparation of the Bidder’s Statement. Mr Williams has been involved in preparation of the Bidder’s Statement to the extent only that his involvement has been required to ensure that the due diligence investigations necessary to prepare the Bidder’s Statement have been undertaken and to approve the copy of the Bidder’s Statement for lodgement with ASIC pursuant to section 633 of the Corporations Act.

Similarly, Messrs Johnson and Giles have not participated, attended Board meetings, or been involved in any negotiations relating to the Takeover Bid Implementation Agreement, the Offers, or the adoption of this Target’s Statement on behalf of

Curnamona. Messrs Johnson and Giles have been involved in preparation of the Target’s Statement to the extent only that their involvement has been required in undertaking the due diligence investigations necessary to prepare and verify the Target’s Statement.

Each company has sought its own independent legal advice with respect to the Offers.

For the reasons outlined above, Messrs Johnson, Giles and Williams are of the opinion that it is not appropriate to make a recommendation to Curnamona Securityholders in relation to the Offers, and as such, have abstained from making any such recommendation.

8.5 Issued capital

As at the date of this Target’s Statement, Curnamona’s issued capital consisted of 66,116,234 fully paid ordinary Shares and 16,517,743 Curnamona Listed Options.

Curnamona also had 5,450,000 Curnamona Unlisted Options on issue as at the date of this Target’s Statement, as follows:

(a) 260,000 Curnamona Employee Options with an exercise price of 36 cents and an expiry date of 31 March 2014;
(b) 1,190,000 Curnamona Employee Options with an exercise price of 31 cents and an expiry date of 23 December 2014; and
(c) 4,000,000 Curnamona Director Options with an exercise price of 31 cents and an expiry date of 23 December 2014.

8.6 Curnamona Director Options

Under the Takeover Bid Implementation Agreement, Havilah and Curnamona have both agreed to use their reasonable endeavours to procure the Curnamona Director Options are exercised or cancelled or the holder of Curnamona Director Options has irrevocably agreed to the cancellation of the Curnamona Director Options subject only to the Offers becoming free of all defeating conditions at least 7 days before the Conditions Notice Date, and Havilah will provide Curnamona will such assistance as it is reasonably able to provide to procure the exercise or cancellation of the Options.

It is the present intention of each of the Curnamona Directors (other than Mr Phillip Staveley who does not hold any Curnamona Director Options) to agree, 7 days before the Conditions Notice Date, to the cancellation of their Curnamona Director Options, subject only to the Offers becoming free of all defeating conditions. Any of the Curnamona Directors may however decide in their sole discretion to exercise their Curnamona Director Options and so receive Curnamona Shares, and then accept the Share Offer for the Curnamona Shares issued upon exercise of the Curnamona Director Options, subject to there being no Superior Proposal and no Material Adverse Event.

8.7 Curnamona Employee Options

Under the Takeover Bid Implementation Agreement, Havilah must, before the end of the Offer Period, seek each Curnamona Employee Optionholder’s consent for cancellation of the Curnamona Employee Options held by it for the Employee Option Consideration subject to all conditions of the Takeover Bid being satisfied or waived by the end of the Offer Period, and subject to Curnamona obtaining any necessary waiver from the ASX of Listing Rule 6.23.2 so as to permit the cancellation of the Curnamona Employee Options for the Employee Option Consideration without obtaining the approval of Curnamona Shareholders.

Curnamona lodged an application with ASX on 20 April 2013 for a waiver of ASX Listing Rule 6.23.2 to permit the cancellation of the Curnamona Employee Options for consideration.

8.8 Substantial holders

Based on the substantial holding notices provided to Curnamona as at the day prior to the date of this Target’s Statement, the only substantial holder of Curnamona Shares is Havilah holding 30,000,003 Curnamona Shares, representing 45.37% of Curnamona’s issued share capital.

8.9 Continuous disclosure

Curnamona is a disclosing entity under the Corporations Act and is subject to regular reporting and disclosure obligations under the Corporations Act and the Listing Rules. These obligations require Curnamona to notify the ASX of information about specified matters and events as they occur for the purpose of making that information available to the market. In particular, Curnamona has an obligation (subject to limited exceptions) to notify the ASX immediately on becoming aware of any information which a reasonable person would expect to have a material effect on the price or value of Curnamona Shares.

Copies of the documents filed with the ASX may be obtained from the ASX website at www.asx.com.au and Curnamona’s website at www.curnamona-energy.com.au.

In addition, Curnamona will make copies of the following documents available for inspection at Curnamona’s offices which are located at 63 Conyngham Street, Glenside SA 5065 (between 9:00am and 5:00pm on Business Days):

(a) Annual Report 2011, lodged with the ASX on 21 October 2011;
(b) Half Year Accounts for the period ending 31 January 2012, lodged with ASX on 4 April 2012;
(c) Curnamona’s Constitution, lodged with the ASX on 20 March 2006; and
(d) any document lodged by Curnamona with the ASX between the lodgement of the Annual Report 2011 and the date of this Target’s Statement.

Copies of documents lodged with ASIC in relation to Curnamona may be obtained from, or inspected at, an ASIC office.

8.10 Changes in financial position

So far as is known to any Curnamona Director, the financial position of Curnamona has not materially changed since 31 January 2012[7] and the date of this Target’s Statement, other than due to the impact of:

(a) the retention of the Independent Expert to prepare the Independent Expert’s Report in Appendix B of this Target’s Statement at a cost of $45,000-47,000. This includes fees payable to Optiro Pty Ltd for preparation of the specialist geological report to be included in the Independent Expert’s Report;
(b) legal fees payable to Watsons Lawyers for advice in relation to the Takeover Bid Implementation Agreement and the Offers and preparation of this Target’s Statement estimated to be $55,000; and

7 Being the date of Curnamona’s most recent audited financial report (Half Year Accounts for the period ending 31 January 2012), lodged with ASX on 4 April 2012.

(c) the retention of the independent Director, Mr Phillip Staveley, whose fees will be $20,000 per annum plus $1,200 per day for additional work over and above normal director’s duties; and
(d) normal field and operating expenses, including drilling and rehabilitation expenses, and salaries and wages of employees, estimated to be $270,000.

Due to Curnamona’s limited cash reserves and difficulty accessing funding, on 4 April 2012, Havilah provided Curnamona with a letter of support, guaranteeing that Havilah would provide Curnamona with financial support (if required) for a period of not less than one year to support the ‘going concern’ requirements of the auditors.

8.11 Takeover Bid Implementation Agreement

Curnamona has entered into a Takeover Bid Implementation Agreement with Havilah dated 9 March 2012 ( Takeover Bid Implementation Agreement ), under which Havilah agreed to make the Offers, Curnamona agreed to comply with certain exclusivity obligations and the parties agreed to exchange confidential information for the purposes of preparing the Bidder’s Statement and this Target’s Statement. A complete copy of the Takeover Bid Implementation Agreement was released to the ASX on 9 March 2012. The Takeover Bid Implementation Agreement was amended by a Deed of Amendment executed by Curnamona and Havilah and announced on ASX on 13 April 2012.

The key terms of the Takeover Bid Implementation Agreement are summarised in Appendix A of this Target’s Statement.

8.12 Material Contracts

Curnamona has identified material contracts to which Curnamona is a party as containing change of control or change of ownership provisions which may be triggered as a result of the Offer or which may be terminated if the Merger succeeds. A summary of those contracts and the relevant provisions is set out below.

(1) Consultancy Agreements between Geocom Pty Ltd ( Geocom ), Maptek Pty Ltd ( Maptek ) and Curnamona ( Consultancy Agreements ) and Management Services Agreement between Curnamona and Maptek ( Management Services Agreement )

Curnamona entered into Consultancy Agreements with Geocom (a company wholly owned by Mr Giles) and Maptek (a company wholly owned by Mr Johnson) in February 2005. Curnamona also entered into a Management Services Agreement with Maptek in February 2005.

Both the Consultancy Agreements and the Management Services Agreement contain a ‘termination payout’ clause whereby Curnamona would be entitled to terminate the agreement provided it pays Geocom or Maptek (as appropriate) a lump sum payment equivalent to the amount which Geocom or Maptek would have received had the agreement continued to the end of its term.

Geocom and Maptek have both agreed that they will waive any termination payments payable by Curnamona due to early termination of the Consultancy Agreements or Management Services Agreement, subject to fulfilment or waiver of the conditions of the Offers. It has been further agreed between those parties that the Consultancy Agreements (due to expire on 19 April 2012) will be extended on a month to month basis until the conclusion of the Merger.

8.13 Other information reasonably required by Curnamona Securityholders and their professional advisers to make an informed assessment

This Target’s Statement is required to include all the information that Curnamona Securityholders and their professional advisers would reasonably require to make an informed assessment of whether to accept the Offers, but:

only to the extent to which it is reasonable for investors and their professional advisers to expect to find this information in this Target’s Statement; and
only if the information is known to any of the Curnamona Directors.

The Curnamona Directors (with the exception of Messrs Johnson and Giles, who have not been involved in consideration or the negotiation of the Offers on behalf of Curnamona) are of the opinion that the information that Curnamona Securityholders and their professional advisers would reasonably require to make an informed assessment of whether to accept the Offers is:

the information contained in the Bidder’s Statement dated 30 April 2012;
the information contained in this Target’s Statement;
Curnamona’s Half-Yearly Report for the period ending 31 January 2012; and
the information contained in Curnamona’s releases to the ASX prior to the date of this Target’s Statement and news releases and public announcements made by Havilah to the ASX since the Announcement Date.

8.14 ASIC modifications

Curnamona has not sought any modifications to, or exceptions from, the Corporations Act by ASIC in respect of the Offers or this Target’s Statement.

8.15 Consents

(1) Watsons Lawyers

Watsons Lawyers has given and not withdrawn its consent before the date of this Target’s Statement to being named in this Target’s Statement as legal adviser to Curnamona in the form and context in which it is so named. Watsons Lawyers do not make or purport to make any statement that is included in this Target’s Statement and there is no statement in this Target’s Statement which is based on any statement of Watsons Lawyers. Watsons Lawyers specifically disclaim responsibility for any statement included in this Target’s Statement.

(2) Independent Expert

The Independent Expert has consented to the:

(i) inclusion of the Independent Expert’s Report as Appendix B to this Target’s Statement; and
(ii) inclusion in this Target’s Statement of statements made by the Independent Expert or said to be based on the Independent Expert’s Report, and to all references to those statements, in the form and context in which they are respectively included,

and has not withdrawn that consent as at the date of this Target’s Statement.

The Independent Expert has not caused or authorised the issue of this Target’s Statement and takes no responsibility for any part of it other than the Independent Expert’s Report and the references to its name.

(3) Optiro Pty Ltd

Optiro Pty Ltd has consented to the:

(i) inclusion of the document entitled ‘Valuation of the mineral assets of Curnamona Energy Limited’ ( Report and Valuation ) as part of the Independent Expert’s Report in Appendix B to this Target’s Statement; and
(ii) inclusion in this Target’s Statement of statements made by Optiro Pty Ltd or said to be based on the Report and Valuation, and to all references to those statements, in the form and context in which they are respectively included,

and has not withdrawn that consent as at the date of this Target’s Statement.

Optiro Pty Ltd has not caused or authorised the issue of this Target’s Statement and takes no responsibility for any part of it other than the Report and Valuation and the references to its name.

(4) Competent persons statements

Curnamona’s technical exploration and mining information contained in this Target’s Statement was compiled by Mr Mark Randell. Mr Randell is a member of the Australian Institute of Mining and Metallurgy and is employed by the Company. Mr Randell has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the JORC Code 2004. Mr Randell consents to the inclusion in this Target’s Statement of the matters based on his information in the form and context in which it appears, and has not withdrawn that consent as at the date of this Target’s Statement.

(5) Directors

This Target’s Statement contains statements which are made by, or statements said to be based on statements made by, Curnamona Directors. Each of the Curnamona Directors has consented to the inclusion of each statement they have made in the form and context in which the statement appears and have not withdrawn that consent as at the date of this Target’s Statement.

(6) ASIC Class Order 01/1543

As permitted by ASIC Class Order 01/1543 this Target’s Statement contains statements which are made, or based on statements made, in documents lodged by Havilah with ASIC or given to the ASX, or announced on the Company Announcements Platform on the ASX, by Havilah. Pursuant to the Class Order, the consent of Havilah is not required for the inclusion of such statements in this Target’s Statement. Any Curnamona Securityholder who would like to receive a copy of any of those documents may obtain a copy (free of charge) during the Offer Period by contacting the Havilah shareholder line on +61 8 8338 9292.

As permitted by ASIC Class Order 03/635, this Target’s Statement may include or be accompanied by certain statements:

(a) fairly representing a statement by an official person; or

(b) from a public official document or a published book, journal or comparable publication.

In addition, as permitted by ASIC Class Order 07/429, this Target’s Statement contains share price trading data sourced from the ASX without its consent.

9. GLOSSARY

9.1 Defined terms

In this Target’s Statement, the following words have these meanings unless the contrary intention appears:

Acceptance Form means the form entitled “Acceptance Form” which you will have received in the package which contained this Target’s Statement and the Bidder’s Statement.

Announcement Date means 9 March 2012 being the date the Announcement was lodged with ASX.

Announcement means the announcement issued by Curnamona entitled ‘Takeover Bid Implementation Agreement with HAV’ dated 9 March 2012.

ASIC means the Australian Securities and Investments Commission.

Associate has the meaning given in Division 2 of Part 1.2 of the Corporations Act as if section 12(1) of the Corporations Act includes reference to the Takeover Bid Implementation Agreement.

ASX means ASX Limited or the financial market operated by it, as the context requires.

Bidder’s Statement means Havilah’s Offer Document and Bidder’s Statement dated 30 April 2012.

Board means the Board of Directors of Curnamona.

CHESS sub-register means Clearing House Electronic Sub-register System, an electronic book-entry register of holdings of approved securities, managed by ASX Settlement Corporation Pty Ltd, a wholly owned subsidiary of the Australian Securities Exchange.

Competing Proposal means a bona fide proposal or offer by any person with respect to any transaction (by purchase, scheme of arrangement, takeover bid or otherwise) that may result in any person (or group of persons) other than Havilah or its related entities or associates:

(a) acquiring a voting power of more than 20% in Curnamona or any subsidiary of Curnamona;
(b) acquiring an interest in all or a substantial part of the assets of Curnamona or any subsidiary of Curnamona; or
(c) otherwise acquiring control within the meaning of section 50AA of the Corporations Act of, or merging or amalgamating with, Curnamona or any subsidiary of Curnamona.

Conditions Notice Date means the conditions notice date under the Offer.

Corporations Act means the Corporations Act 2001 (Cth).

Curnamona means Curnamona Energy Limited (ACN 115 281 144) of 63 Conyngham Street, Glenside SA 5065.

Curnamona Director Option means a Curnamona Unlisted Option held by a Director.

Curnamona Directors means all the Directors of Curnamona collectively, from time to time.

Curnamona Employee Option means a Curnamona Unlisted Option that is not a Curnamona Director Option.

Curnamona Employee Option Consideration means the consideration to be offered by Havilah to acquire a Curnamona Employee Option which is calculated by reference to the terms and conditions of the Takeover Bid made by Havilah in accordance with the Takeover Bid Implementation Agreement, with appropriate adjustment for certain factors, including relevant exercise prices, volatility of the market price of the underlying Curnamona Shares, and the time value of money.

Curnamona Employee Optionholder means the holder of a Curnamona Employee Option.

Curnamona Listed Option means a Curnamona Option quoted on ASX and expiring on 29 November 2013.

Curnamona Listed Optionholder means the holder of a Curnamona Listed Option.

Curnamona Option means an option to subscribe for a Curnamona Share (and for the avoidance of doubt, includes Curnamona Listed Options, Curnamona Unlisted Options, Curnamona Director Options and Curnamona Employee Options).

Curnamona Securities means Curnamona Shares and/or Curnamona Listed Options.

Curnamona Securityholder means the holder of a Curnamona Share and/or a Curnamona Listed Option.

Curnamona Share means one fully paid ordinary share in the issued capital of Curnamona.

Curnamona Shareholder means the holder of a Curnamona Share.

Curnamona Unlisted Option means a Curnamona Option that is not a Curnamona Listed Option.

Director means a Director of Curnamona.

Foreign Holder means a holder of Curnamona Securities whose address shown in the Curnamona register of members is in a place outside of Australia and its external territories and New Zealand.

Havilah means Havilah Resources NL (ACN 077 435 520) of 63 Conyngham Street, Glenside SA 5065.

Havilah Listed Option means an option to be quoted on ASX to subscribe for a Havilah Share at $0.75 each and expiring on 23 March 2014 and otherwise having the terms and conditions set out in section 5.7 of the Bidder’s Statement.

Havilah Option means an option to subscribe for a Havilah Share.

Havilah Prescribed Occurrence means:

(a) Havilah converting all or any of its shares into a larger or smaller number;
(b) Havilah or a subsidiary of Havilah (other than Curnamona) resolving to reduce its share capital in any way or reclassifying, combining, splitting or redeeming or repurchasing directly or indirectly any of its shares;

(c) Havilah or a subsidiary of Havilah (other than Curnamona):
(i) entering into a buy-back agreement; or
(ii) resolving to approve the terms of a buy-back agreement under the Corporations Act;
(d) Havilah or a subsidiary of Havilah (other than Curnamona) issuing shares, securities or other instruments convertible into shares, debt securities or granting an option over its shares, or agreeing to make such an issue or grant such an option other than issuing shares pursuant to the exercise of existing convertible securities; or
(e) Havilah or a subsidiary of Havilah (other than Curnamona) making any change or amendment to its constitution;
(f) an Insolvency Event occurring in relation to Havilah or a subsidiary of Havilah (other than Curnamona);

provided that a Havilah Prescribed Occurrence will not include any matter:

(g) fairly disclosed to Curnamona on or before the date of the Takeover Bid Implementation Agreement (including as a result of disclosures made to ASX);
(h) occurring as a result of any matter, event or circumstance required by the Takeover Bid Implementation Agreement, the Offers or the transactions contemplated by them; or
(i) approved in writing by Curnamona.

Havilah Securities means Havilah Shares and/or Havilah Listed Options.

Havilah Share means a fully paid ordinary share in the issued capital of Havilah.

Havilah Shareholder means the holder of a Havilah Share.

Independent Expert means Value Adviser Associates.

Independent Expert’s Report means the report in Appendix B of this Target’s Statement.

Insolvency Event means being in liquidation or provisional liquidation or bankruptcy or provisional bankruptcy or under administration, having a controller, receiver, receiver and manager or analogous person appointed to it or any of its property, being taken under section 459F(1) of the Corporations Act (or its statutory equivalent in any other jurisdiction) to have failed to comply with a statutory demand, being unable to pay its debts or otherwise insolvent, dying, ceasing to be of full legal capacity or otherwise becoming incapable of managing its own affairs for any reason, becoming an insolvent under administration (as defined in section 9 of the Corporations Act (or its statutory equivalent in any other jurisdiction)), entering into a compromise or arrangement with, or assignment for the benefit of, any of its members or creditors or any analogous event, the making of an order by a court for the winding up of a person, or a person resolving that it be wound up.

Issuer Sponsored Holding means those shares held on the register that records uncertificated holdings of shares under Listing Rule 8.2.

JORC Code means the code published by the Joint Ore Reserves Committee which provides minimum standards for public reporting.

Listed Option Offer means Havilah’s offer to acquire all of the Curnamona Listed Options that Havilah does not control, including all Curnamona Listed Options on issue as at the end of the Offer Period.

Listing Rules means the Listing Rules of the ASX.

Material Adverse Event means any change, event, effect, occurrence or state of facts that is, or would reasonably be expected to be, material and adverse to the assets, liabilities (including contingent liabilities that may arise through outstanding, pending, or threatened litigation or otherwise), business, operations, financial condition or prospects of Havilah or any of its subsidiaries taken as a whole.

Merged Group means Havilah and each of its subsidiaries following its acquisition of all or a majority of the Curnamona Shares not held by Havilah.

Merger means the proposed off-market takeover of Curnamona by Havilah.

Notice of Status of Conditions in respect of an Offer, means Havilah’s notice disclosing the status of the conditions to the Offer which is required to be given by section 630(3) of the Corporations Act.

Offer or Offers means the Share Offer or the Listed Option Offer or both the Share Offer and the Listed Option Offer, as the context requires.

Offer Period in respect of an Offer, means the period during which the Offer will remain open for acceptance in accordance with the terms of the Offer.

Official List means the Official List of ASX.

Register Date means the date set by Havilah under section 633(2) of the Corporations Act, being 8 May 2012 at 7.00pm Adelaide time.

Related Body Corporate has the meaning given in section 50 of the Corporations Act.

Relevant Interest has the meaning given in sections 608 and 609 of the Corporations Act.

Restricted Securities means those Curnamona Securities subject to ASX imposed restrictions.

Share Offer means Havilah’s offer to acquire all of the Curnamona Shares that Havilah does not control, including all Curnamona Shares on issue as at the end of the Offer Period.

Superior Proposal means a Competing Proposal that in the opinion of the Board acting in good faith and on the basis of financial advice that supports the determination of the Board:

(a) is reasonably capable of being valued and completed, taking into account both the nature of the Competing Proposal and the person or persons making it; and
(b) is more favourable to Curnamona Securityholders than the Offers, taking into account all terms and conditions of the Competing Proposal.

Takeover Bid Implementation Agreement means the agreement described in section 8.11 of this Target’s Statement.

Takeover Bid means Havilah’s offer to acquire all the Curnamona Shares and all the Curnamona Listed Options.

Target’s Statement means this Target’s Statement dated 4 May 2012 given by Curnamona in response to the Bidder’s Statement dated 30 April 2012.

VWAP means volume weighted average closing price of a security.

9.2 Interpretation

The following rules of interpretation apply unless the context requires otherwise:

(1) unless specified otherwise, all words and phrases in this Target’s Statement shall have the meanings given to them (if any) in the Corporations Act;
(2) a gender includes all genders and wording denoting the singular includes the plural and vice versa;
(3) a reference to a person includes a body corporate, an unincorporated body or other entity and conversely;
(4) the table of contents and headings are used for convenience only and do not affect interpretation;
(5) a reference to any instrument (such as an agreement, announcement or statement) is to that instrument (or, if required by the context, to a part of it) as amended, novated, substituted or supplemented from time to time;
(6) where an expression is defined, another part of speech or grammatical form of that expression has a corresponding meaning and “including” and similar expressions are not and must not be treated as words of limitation;
(7) $ or A$ is a reference to the lawful currency of Australia;
(8) all references to time in this Target’s Statement are to Adelaide, South Australia time, unless otherwise stated.

9.3 Approval

Signed for and on behalf of Curnamona Energy Limited by a Director authorised to sign this Target’s Statement pursuant to a resolution passed by the Curnamona Directors on 4 May 2012:

DATED: 4 May 2012

Kenneth Williams Acting Chairman

Curnamona Energy Limited

APPENDIX A – KEY TERMS OF TAKEOVER BID IMPLEMENTATION AGREEMENT

In summary, the key terms of the Takeover Bid Implementation Agreement entered into between Curnamona and Havilah on 9 March 2012 are as follows:

(1) No Solicitation

From the date of execution of the Takeover Bid Implementation Agreement until the end of the Offer Period, Curnamona and its officers, employees, agents and professional advisers must not solicit, initiate, participate in any discussions or disclose any non-public information relating to a proposal that may result in another person (or entity) other than Havilah:

(a) acquiring voting power of more than 20% in Curnamona;
(b) acquiring a substantial interest in the assets of Curnamona; or
(c) otherwise acquiring control of (or merging with) Curnamona

( Competing Proposal ).

The ‘No Solicitation’ clause referred to above does not prohibit any action or inaction by Curnamona if compliance with the clause would, in the opinion of the Board of Curnamona, constitute a breach of any of the statutory or fiduciary duties of the Directors of Curnamona, provided that the approach by the third party was not facilitated by or as a result of a breach of the ‘No Solicitation’ clause.

Until the end of the Offer Period, Curnamona must immediately notify Havilah if it receives a Competing Proposal.

(2) Takeover Offer

(a) As soon as reasonably practicable after the Announcement Date, Havilah must serve on Curnamona the Bidder’s Statement which includes an offer on the terms and conditions no less favourable to securityholders than the Offer Terms outlined in the schedule to the Takeover Bid Implementation Agreement, and must use its reasonable endeavours to co-ordinate despatch of the Bidder’s Statement to Curnamona Shareholders at the same time as the Target’s Statement is despatched.
(b) The independent Director of Curnamona, Mr Phillip Staveley, will recommend that Curnamona Securityholders accept Havilah’s Offers; and Mr Phillip Staveley and Mr Kenneth Williams will announce that they will accept Havilah’s Offer in respect of any Curnamona Shares they own or control, subject in each case to:
(i) the Independent Expert stating that the Takeover Bid is fair and reasonable to Curnamona Securityholders other than Havilah;
(ii) there being no Superior Proposal; and
(iii) no Material Adverse Event having occurred in respect of Havilah.

(3)

Facilitation Of Offer

(a) During the Offer Period, Curnamona will support and promote the Takeover Bid, including meeting with shareholders, analysts, management, customers, press and other parties if requested to do so by Havilah, subject to:

(i) the Independent Expert stating that the Takeover Bid is fair and reasonable to Curnamona Securityholders other than Havilah;
(ii) there being no Superior Proposal; and
(iii) no Material Adverse Event having occurred in respect of Havilah.
(b) Curnamona agrees not to do anything which will be likely to result in any of the conditions of the Takeover Bid being breached (or not being capable of being satisfied).
(c) Before the end of the Offer Period, Havilah must seek each Curnamona Employee Optionholder’s consent for cancellation of the Curnamona Employee Options held by it for the Employee Option Consideration subject to all conditions of the Takeover Bid being satisfied or waived by the end of the Offer Period, and subject to Curnamona obtaining any necessary waiver from the ASX of Listing Rule 6.23.2 so as to permit the cancellation of the Curnamona Employee Options for the Employee Option Consideration.
(d) From the date of execution of the Takeover Bid Implementation Agreement until the end of the Offer Period, each of Havilah and Curnamona must:
(i) conduct its business in the usual and ordinary course consistent with past practice;
(ii) maintain the value of its business, assets and relationships with suppliers, customers and employees; and
(iii) not dispose of the whole or any part of its business for an amount greater than $500,000 in the case of Curnamona and $1,000,000 in the case of Havilah.

(4) Curnamona Director Options

Both Havilah and Curnamona will use their reasonable endeavours to procure the Curnamona Director Options are exercised or cancelled or the holder of Curnamona Director Options has irrevocably agreed to the cancellation of the Curnamona Director Options subject only to the Offers becoming free of all defeating conditions at least 7 days before the Conditions Notice Date, and Havilah will provide Curnamona will such assistance as it is reasonably able to provide to procure the exercise or cancellation of the Options.

(5) Termination

The Takeover Bid Implementation Agreement may be terminated by a party (by immediate notice to the other party) if:

(a) the other party is in material breach of the Takeover Bid Implementation Agreement, and that breach is not remedied within 10 business days of it receiving notice of the breach from the other party;
(b) Havilah withdraws the Offers, or the Offers lapse for any reason (including nonsatisfaction of a condition of the Offers); or
(c) a Material Adverse Event occurs.

The Takeover Bid Implementation Agreement may be terminated by Curnamona (by immediate notice to Havilah) if:

(a) a Havilah Prescribed Occurrence occurs; or

(b) a Superior Proposal is made or publicly announced for Curnamona by a third party, which is recommended by the Independent Director, and Havilah does not offer to vary the terms of the Takeover Bid in a manner which the Board of Curnamona determines is more favourable to Curnamona Securityholders than the Superior Proposal, and implements that variation of the Takeover Bid.

APPENDIX B – INDEPENDENT EXPERT’S REPORT

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Curnamona Energy Limited

Independent Expert’s Report in relation to proposed takeover by Havilah Resources NL

4 May 2012

Disclaimer: The following documents are provided as Supporting Documents to this proposal only. The documents remain the property of Value Adviser Associates Pty Ltd at all times. is granted permission to use these documents for the sole purpose of evaluating Value Adviser Associates’ proposal. The documents and information provided therein shall not be construed as advice or relied upon in making any investment decisions.

Value Adviser Associates Pty Ltd ABN 54 131 852 607

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Independent Expert’s Report in relation to the takeover offer by Havilah Resources NL ........................................................................................................................... 1 Introduction and Purpose of the Report ....................................................................................................... 1 Summary of Opinion ......................................................................................................................................... 2 Other Matters ..................................................................................................................................................... 2 Outline of the Havilah Offers ................................................................................................................. 3 Price and structure ........................................................................................................................... 3 Operational framework if Offer is accepted .............................................................................. 4 What would change if the Havilah offer is accepted? ............................................................ 4 What would not change if the Havilah offer is accepted? ..................................................... 4 Other Material Information ............................................................................................................. 4 Scope of the Report ............................................................................................................................... 6 Purpose of the Report ...................................................................................................................... 6 Meaning of “Fair and Reasonable” .............................................................................................. 6 Shareholder’s Decision .................................................................................................................... 7 Taxation Implications ....................................................................................................................... 7 Profile of Curnamona ............................................................................................................................. 8 History and Overview ....................................................................................................................... 8 Financial Information ....................................................................................................................... 8 Historical Financial Performance .................................................................................................................... 8 Forecasts ............................................................................................................................................................. 9 Financial Position ............................................................................................................................................... 9 Cash Flows ........................................................................................................................................................ 11 Capital Structure ............................................................................................................................. 11 Options .............................................................................................................................................................. 11 Major Shareholders.......................................................................................................................................... 12 Havilah Director’s interests in Curnamona Securities ................................................................................ 12 Dividends and Capital Management ......................................................................................................... 13 Share Price Performance .............................................................................................................. 13 Material Contracts ......................................................................................................................... 14 Profile of Uranium Industry ................................................................................................................... 16 Overview .......................................................................................................................................... 16 Uranium mines in Australia ............................................................................................................ 17 Expansion of Australia’s Uranium Production ............................................................................................. 18 Key Factors in Utilising Australia’s Uranium Resources ............................................................................... 18 Market Value of Curnamona .............................................................................................................. 20 Definition of Market Value ............................................................................................................ 20 Valuation Methodology and Approach ................................................................................... 20 Market Value of Curnamona ....................................................................................................... 20 Market Value of Curnamona Options ......................................................................................................... 21 Profile of Havilah ................................................................................................................................... 24 History and Overview ..................................................................................................................... 24 Advanced Pre-Development Projects ....................................................................................... 25 Kalkaroo Copper-Gold Project (100%) ........................................................................................................ 25 Mutooroo Copper-Cobalt Project (100%)................................................................................................... 26 Portia Gold Project (100%) ............................................................................................................................. 28 North Portia Copper-Gold Project (100%) ................................................................................................... 29 Maldorky Iron Ore Project .............................................................................................................................. 29 Exploration Projects ........................................................................................................................ 29

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Prospect Hill Project ......................................................................................................................................... 30 Lilydale Iron Ore Project (100%) .................................................................................................................... 30 Financial Information ..................................................................................................................... 30 Historical Financial Performance .................................................................................................................. 30 Forecasts ........................................................................................................................................................... 31 Financial Position ............................................................................................................................................. 31 Cash Flows ........................................................................................................................................................ 32 Information about Havilah Securities .......................................................................................... 33 Issued Securities ............................................................................................................................................... 33 Dividends ........................................................................................................................................................... 34 Rights and liabilities attaching to the Havilah Shares offered ................................................................. 34 Voting ................................................................................................................................................................ 34 Dividends ........................................................................................................................................................... 34 Winding Up ....................................................................................................................................................... 34 Transfer of Securities ........................................................................................................................................ 34 Sale of Non-Marketable Holdings ................................................................................................................. 34 Havilah employee share plan ....................................................................................................................... 34 Havilah Top 20 Shareholders ......................................................................................................................... 34 Director’s interests in Havilah Securities ....................................................................................................... 35 Share Price Performance .............................................................................................................. 35 Industry Analysis ................................................................................................................................... 38 Gold 38 Gold production, consumption and price movements ........................................................................... 38 Copper ............................................................................................................................................. 39 Copper production, consumption and price movements ...................................................................... 39 Cobalt ............................................................................................................................................... 40 Molybdenum ................................................................................................................................... 41 Iron Ore ............................................................................................................................................. 42 Market Value of Havilah...................................................................................................................... 44 Definition of Market Value ............................................................................................................ 44 Valuation Methodology and Approach ................................................................................... 44 Market Value of Havilah ............................................................................................................... 45 Valuation of Havilah’s Copper/Gold Tenements ...................................................................................... 45 Valuation of Maldorky Project ...................................................................................................................... 47 Valuation of Prospect Hill Project ................................................................................................................. 47 Curnamona Energy Limited ........................................................................................................................... 48 Geothermal Resources ................................................................................................................................... 48 Valuation Summary ........................................................................................................................ 48 Valuation Cross Check .................................................................................................................. 49 Value of Havilah Option ................................................................................................................................. 49 Evaluation of the Havilah Offer ........................................................................................................... 51 Fairness.............................................................................................................................................. 51 Reasonableness .............................................................................................................................. 51 Implications if Havilah does not acquire 90% or more of the shares of Curnamona .......................... 52 Risks to investments in Havilah ....................................................................................................................... 52 Curnamona Directors intend to accept the Offer .................................................................................... 52 Appendix 1 – Statement of Qualifications and Declarations ........................................................... 1 Appendix 2 – Valuation Methodologies.............................................................................................. 3 Capitalisation of Earnings ............................................................................................................... 3 Discounted Cash Flow ..................................................................................................................... 3 Net Realisable Value of Assets ....................................................................................................... 4 Market Based Assessments ............................................................................................................. 4 Recent Offers..................................................................................................................................... 4

Appendix 3 – Description of Comparable Companies and Transactions ...................................... 5

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Comparable Company Resources .............................................................................................. 7 Appendix 4 – Sources of Information................................................................................................... 9 Appendix 5 – Financial Services Guide ............................................................................................ 11

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3 May 2012

The Independent Directors c/o Ken Williams and Phil Staveley Curnamona Energy Limited 63 Conyngham Street Glenside SA 5065

Dear Sirs

Independent Expert’s Report in relation to the takeover offer by Havilah Resources NL

Introduction and Purpose of the Report

On 9 March 2012, Havilah Resources NL [“Havilah”] announced its intention to make takeover offers [“the Offers”] for all of the ordinary shares and listed options in Curnamona Energy Limited [“Curnamona”] on the basis of one Havilah share for every five Curnamona shares [“the Share Offer”] and one Havilah listed options for every five Curnamona listed options [“the Listed Option Offer”]. The Offers are subject to a number of conditions, including Havilah acquiring a relevant interest in at least 90 per cent of the ordinary shares in Curnamona.

The directors have prepared a target’s statement [the “Target’s Statement”]. Curnamona’s independent director, Mr Phillip Staveley, has recommended that the shareholders of Curnamona accept the Offers, subject to there being no superior proposal, and no material adverse event having occurred in respect to Havilah.

There is a legal requirement (Section 640 of the Corporations Act) for an independent expert’s report [“IER”] to be prepared in respect of the Offers as Havilah holds greater than 30% of Curnamona’s issued capital and has three common directors on the Curnamona board. The directors of Curnamona have requested Value Adviser Associates Pty Ltd [“VAA”] to prepare an IER to assist the shareholders and listed option holders of Curnamona in assessing the merits of the Offers. This report sets out VAA’s opinion as to whether the Offers are fair and reasonable to the shareholders and listed option holders of Curnamona.

Assessment framework

Regulatory Guide 111 – Content of Expert Reports [“RG111”] sets out the assessment framework (paragraph 111.10 et seq) that requires the expert to separately determine if an offer is fair and, in the event that it is not, whether it is reasonable.

Under RG111 an offer is ‘fair’ if the value of the offer price or consideration is equal to or greater than the value of the securities the subject of the offer.

An offer is ‘reasonable’ if it is fair. It might also be ‘reasonable’ if, despite being ‘not fair’, the expert believes that there are sufficient reasons for security holders to accept the offer in the absence of any higher bid before the close of the offer.

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Summary of Opinion

We have assessed the value of Curnamona shares to be $0.11 per share. We have assessed the value of the consideration (Havilah shares) to be $0.13 to $0.35 per equivalent Curnamona share.

As the value of the consideration to be received by Curnamona shareholders under the Share Offer equals or exceeds the value of Curnamona shares, in the opinion of Value Adviser Associates, the Share Offer is fair. Consistent with RG111 the Share Offer is also, therefore, reasonable.

VAA has concluded that the market value of a Curnamona option is between $0.005 and $0.019.

The Listed Option Offer is one Havilah listed option per five Curnamona listed option.

VAA has concluded the market value of a Havilah option is in the range from $0.22 to $0.29, equivalent to an offer of $0.04 to $0.06 per Curnamona listed option.

As the Listed Option Offer exceeds our valuation range for Curnamona, we consider the Listed Option Offer is fair to the option holders of Curnamona. Consistent with RG111 the Listed Option Offer is also, therefore, reasonable.

Other Matters

This report constitutes general financial product advice only and has been prepared without taking into consideration the individual circumstances of the shareholders and listed option holders of Curnamona. The decision to accept or reject the Share Offer and the Listed Option Offer is a matter for individual shareholders and listed option holders. Shareholders and listed option holders of Curnamona should consider the advice in the context of their own circumstances and preferences. Shareholders and listed option holders of Curnamona who are in doubt as to the action they should take in relation to the Offers should consult their own professional adviser.

VAA has prepared a Financial Services Guide in accordance with the Corporations Act, 2001. This is included in Appendix 5 to this report.

Our opinion is made as at the date of this letter and reflects circumstances and conditions as at that date. This letter must be read in conjunction with the full report.

Yours faithfully

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Michael Churchill CEO

Mark Gemmola Senior Corporate Adviser

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Outline of the Havilah Offers

On 9 March 2012, Curnamona Energy Limited [“Curnamona”] announced that it had entered into a binding Takeover Bid Implementation Agreement [”TBIA”] with Havilah Resources NL [“Havilah”]. Subsequently, on 13 April 2012 Curnamona announced that it had executed a Deed of Amendment to the TBIA with Havilah.

Havilah is offering:

One of its ordinary shares for every five shares in Curnamona [“Share Offer”]; and
One Havilah Listed Option for every five Curnamona listed options [“Listed Option Offer”].

Together these are referred to as the “Havilah Offers” or “the Offers”.

Havilah is currently the major shareholder of Curnamona with 45.38% (30,000,003) of Curnamona’s total shares as at 16 April 2012.

The key details of the takeover bid are set out in the TBIA dated 9 March 2012 that has been lodged with the Australian Securities Exchange [“ASX”] and is annexed to Curnamona’s ASX announcement of the Offer on 9 March 2012. Details of a subsequent amendment to the TBIA relating to the consideration to be offered in respect of the Curnamona listed options was released to ASX on 13 April 2012.

The Havilah Offers are subject to a number of conditions outlined in Schedule 1 of the TBIA, including the following:

Before the end of its Offers Period[1] , Havilah and its associates have relevant interests in at least 90% (by number) of all shares;
Before the end of its Offers Period, Havilah has obtained any regulatory approval required in respect of its intended ownership of Curnamona and its operation of the business for Curnamona; and
Between the Announcement Date and the end of the Offers Period (each inclusive), no Material Adverse Change[2] occurs.

The key elements of the Offers as outlined in the Bidder’s Statement are as follows:

Price and structure

Havilah offers to purchase all Curnamona shares on the issue of 1 Havilah share to Curnamona shareholders for every 5 Curnamona shares held;
Havilah offers to purchase all Curnamona listed options on the issue of 1 Havilah listed option to Curnamona shareholders for every 5 Curnamona listed options held;
Havilah Shares to be issued under the Offer will rank equally in all respects with existing Havilah Shares on issue at the Register Date;

1 Defined on page 3 of the TBIA

2 As defined in the TBIA and set out on page 3 of the Bidder’s Statement

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Havilah listed options to be issued under the Offer will form a new class of Havilah options to be quoted on ASX.
With regard to material events since 31 January 2012, on 4 April 2012 Havilah issued a letter of support for Curnamona that covenanted to provide ongoing financial support to enable Curnamona to pay its debts as and when they fall due for a period of not less than one year from 4 April 2012, being the date of signing the Curnamona financial report for the half year ended 31 January 2012;
If Havilah acquires a relevant interest of 90% or more of the shares of Curnamona, it intends to:
- Proceed with the compulsory acquisition of the outstanding shares; and
- – Make arrangements for Curnamona to be removed from the official list of the ASX.
If Havilah does not acquire 90% or more of the shares of Curnamona, and waives its condition to acquire 90% or more, it intends to maintain Curnamona’s listing on ASX while it meets ASX requirements for maintaining a listing and it is cost effective to do so. If Havilah becomes entitled at some later time to exercise general compulsory acquisition rights under the Corporations Act, it would exercise those rights.
If Havilah acquires all Curnamona Shares, Havilah will remain the entity listed on the ASX and will be the ultimate holding company for all companies within the new Merged Group.

Operational framework if Offer is accepted

The business of Curnamona will be continued in substantially the same manner as it is presently being conducted.

What would change if the Havilah offer is accepted?

Havilah will manage Curnamona’s activity internally once the acquisition is complete and accounting systems will be adjusted to track the costs associated with the Curnamona division of Havilah. The staff and executive directors of Havilah will manage and carry out work on Curnamona’s projects as Havilah management considers appropriate.
Havilah will seek to remove one member of the Board of Curnamona to reflect Havilah’s proportionate ownership interest in Curnamona.

What would not change if the Havilah offer is accepted?

No major changes will be made to the business of Curnamona;
There will not be any other redeployment of the fixed assets of Curnamona;
The present employees of Curnamona will be employed by Havilah, including one geologist works in Curnamona who manages the field crew. No loss of knowledge is anticipated.

Other Material Information

No Curnamona Shares have been purchased by or issued to Havilah in the four months before the release of the Bidder’s Statement;
The Offer extends to new Curnamona shares, as follows:

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For the purposes of section 633(2) of the Corporations Act, the date for determining the people to whom this Bidder’s Statement is sent is the Register Date;
Should any Curnamona Options be exercised after the Register Date and prior to the close of the Offer, then the Offer will extend to any person who becomes registered or entitled to be registered as the holder of Curnamona Shares before the close of the Offer;
If additional Curnamona Shares are issued after the end of the Offer Period, subject to Havilah being entitled to compulsorily acquire Curnamona Shares under Chapter 6A of the Corporations Act, Havilah may compulsorily acquire any Curnamona Shares issued after the end of the Offer Period.
No Havilah Shares or Havilah Listed Options will be issued on the basis of this document and the Offer contained in this document after the date that is 13 months after the date of the Bidder's Statement;

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Scope of the Report

Purpose of the Report

Section 640 of the Corporations Act, 2001 (the “Corporations Act”) requires that a target’s statement made in response to a takeover offer for shares in an Australian public listed company must be accompanied by an Independent Expert’s Report [“IER”] if:

the bidder’s voting power in the target is 30 per cent or more; or
for a bidder who is, or includes, an individual – the bidder is also a director of the target; or
for a bidder who is, or includes, a body corporate – a director of the bidder is also a director of the target.

The IER must state whether, in the opinion of the independent expert, the takeover offer is fair and reasonable to the target company’s shareholders and provide reasons for forming that opinion.

Havilah has a relevant interest of 30,000,003 Curnamona shares as at 16 April 2012. These shares represent 45.38% of the issued share capital of Curnamona.

Havilah disclosed in the Bidder’s Statement that it has three directors in common with Curnamona.

Accordingly, there is a legal requirement for an IER to be prepared in respect of the Offer.

All amounts are expressed in Australian dollars unless otherwise stated.

Meaning of “Fair and Reasonable”

There is no legal definition provided for “fair and reasonable”. In preparing this report, VAA has had regard to relevant regulatory guides issued by ASIC, with particular reference to ASIC Regulatory Guide 111: Content of expert reports .

ASIC Regulatory Guide 111 establishes certain guidelines in respect of independent expert’s reports prepared for the purposes of the Corporations Act. ASIC Regulatory Guide 111 sets out the view of ASIC on the operation of Section 640 of the Corporations Act and comments on the meaning of “fair and reasonable” in the context of a takeover offer. Specifically, ASIC Regulatory Guide 111 states that:

an offer is “fair” if the value of the offer price or consideration is equal to, or greater than, the value of the securities that are the subject of the offer. This comparison should be made assuming 100 per cent ownership of the target and should not consider the percentage holding of the bidder or its associates in the target; and
an offer is “reasonable” if it is “fair”. An offer may also be “reasonable” if, despite not being “fair”, there are sufficient reasons for security holders to accept the offer in the absence of any higher bid before the close of the offer. ASIC has identified the following as some of the factors which an expert might consider when deciding whether a bid is reasonable:
the bidder’s pre-existing voting power in securities in the target;
– other significant security holding blocks in the target;
the liquidity of the market in the target’s securities;

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taxation losses, cash flow or other benefits through achieving 100 per cent ownership of the target;
any special value of the target to the bidder, such as particular technology, the potential to write off outstanding loans from the target, etc;
the likely market price if the offer is unsuccessful; and
the value to an alternative bidder and likelihood of an alternative offer being made.

Shareholder’s Decision

This report constitutes general financial product advice only and has been prepared without taking into consideration the individual circumstances of shareholders and listed option holders. The decision to accept or reject the Havilah Offers is a matter for individual shareholders and listed option holders. Shareholders and listed option holders should consider the advice in the context of their own circumstances, preferences and risk profiles. Shareholders and listed option holders should also have regard to the Bidder’s Statement, the Target’s Statement [and its supplementaries] in relation to the Havilah Offers. Shareholders and listed option holders who are in doubt as to the action they should take in relation to the Offers should consult their own professional adviser.

Taxation Implications

In the event that a shareholder disposes of their shares or a listed option holder disposes of their listed options pursuant to the Havilah Offers, they will face taxation consequences.

Section 10 of the Bidder’s Statement provides general taxation information for Curnamona shareholders and listed option holders. While this does not constitute taxation advice, VAA recommends the information to Curnamona shareholders and listed option holders.

If in doubt as to the taxation implications relating to the Havilah Offers, shareholders and listed option holders should consult their own financial or taxation adviser.

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Profile of Curnamona

History and Overview

Havilah was formed in late 1996 to explore for gold and other metals in South Australia. In 2004, due to a renewed interest in uranium as a fuel for the nuclear power industry, Havilah formed Curnamona Energy Limited, specifically to explore for uranium deposits on its exploration licences. Havilah was aware that historic exploration results dating back more than four decades showed that its tenements in the Curnamona Province held potential for discovery of uranium deposits.

In April 2005, Havilah sponsored a capital raising and ASX listing of Curnamona via a 1:8 priority entitlements offer of shares in Curnamona to Havilah shareholders. This issue was oversubscribed and raised $5.6 million. Following a subsequent placement of $6 million in April 2007, Havilah retained a 45.4% interest in Curnamona.

Curnamona secured exclusive exploration and development rights for all Tertiary sediment hosted uranium deposits that it discovers on Havilah’s tenements in the Curnamona Province via a tenement access agreement.

Since listing on the ASX, Curnamona Energy has undertaken exploration on the Havilah tenements in the Curnamona Province, as well as several tenements that it has acquired in its own right. The target is Tertiary age, sand-hosted uranium deposits that are amenable to low cost in situ recovery [“ISR”] extraction methods.

The Oban prospect is located 60 kilometres north of Cockburn in South Australia. The Oban mineralisation is hosted by a horizontal lignitic, pyritic and carbonaceous lower sand member of the Eocene Eyre Formation at depths of between 80-90 metres. It is overlain by impervious clayey sediments of the Namba Formation and underlain by similarly clayey material.

Testing at Oban has included delineation drilling and ISR trials to determine the recoverability of uranium detected in drilling. Results have been disappointing and additional sonic core drilling was undertaken to resolve recovery issues.

Other exploration is aimed at locating Honeymoon-style uranium mineralisation within the well-defined Yarramba and other palaeochannels.

Financial Information

Historical Financial Performance

The financial performance for the period 2008 to 2011 is summarised in TABLE 1:

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TABLE 1 CURNAMONA ENERGY LIMITED – AUDITED STATEMENT OF FINANCIAL PERFORMANCE

Curnamona Energy Limited		Half year ended
Income statement for the financial year ended 31 July	2008 2009 2010 2011	31 January 2012
Revenue Depreciation and amortisation expense Management fees Insurance expense Annual leave expense Share-based payments Directors fees ASX listing fees Shareholder administration expenses Audit fees Finance costs Printing expense Motor vehicle expense Salary expense Consulting fees Exploration expenditure written off Other expenses	608,546 410,175 281,925 196,448 (193,705) (238,729) (206,589) (204,492) (168,259) (176,574) (178,852) (178,852) (15,812) (24,415) (20,115) (20,592) (13,248) (16,659) (2,279) (30,679) (2,901,464) (117,920) (65,124) (342,916) (20,000) (20,000) (20,000) (20,000) (39,989) (24,890) (23,651) (25,761) (28,127) (20,160) (15,349) (27,224) (32,500) (29,000) (29,000) (30,500) (20,908) (34,260) (28,773) (17,223) (17,094) (6,000) (2,135) (4,500) (6,244) (2,727) (6,138) (1,362) - - (72,944) (36,159) - - (23,300) - - - - - (26,656) (25,020) (26,897) (17,859)	110,478 (89,646) (89,426) (6,877) - (36,797) (10,000) (2,274) (12,963) (7,500) (4,264) (4,950) - (42,044) - (3,243,994) (9,177)
Loss before tax Income tax expense	(2,875,460) (326,179) (439,221) (761,671) - - - (7,907)	(3,449,434) -
Net loss for the year Other comprehensive income	(2,875,460) (326,179) (439,221) (769,578) - - - -	(3,449,434) -
Total comprehensive income for the year	(2,875,460) (326,179) (439,221) (769,578)	(3,449,434)

Source: Curnamona Energy Limited, Annual Reports 2008, 2009, 2010 and 2011, Bidder’s Statement

The following key points should be noted in respect of the financial performance set out above:

The largest component of non-operating revenue is interest received on bank deposits. Reduction in interest received over the period FY2008 to FY2011 is due to the reduction in bank deposits from $8.5 million to $2.3 million.
The largest component of costs is management fees and share based payments. However, in practice, the largest cash expenditure, as noted below, is the exploration and evaluation costs. These costs are capitalised and therefore do not show up in the Income Statement.
The Net Loss for the year has increased from $326,179 (FY2009) to $769,578 (FY2011). The Net Loss for FY2008 was significantly higher due to expensing of the issue of options to Directors

Forecasts

No profit forecasts are available for Curnamona.

Financial Position

The financial positions of Curnamona as at 31 July 2011 and for previous financial years are summarised in TABLE 2.

We have been advised by Curnamona that the financial position of Curnamona has not materially changed since 31 January 2012 and the date of the Target’s Statement, other than due to the impact of:

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The retention of the Independent Expert to prepare the IER at a cost of $45,500. This includes fees payable to Optiro Pty Ltd for preparation of the specialist geological report to be included in the IER;
Legal fees payable to Watsons Lawyers for advice in relation to the Takeover Bid Implementation Agreement and the Offers and preparation of the Target’s Statement, estimated to be $55,000; and
The retention of the independent Director, Mr Phillip Staveley, whose fees will be $20,000 per annum plus $1,200 per day for additional work over and above normal director’s duties;
Normal field and operating expenses, including drilling and rehabilitation expenses, and salaries and wages of employees, estimated to be $270,000.

TABLE 2 CURNAMONA ENERGY LIMITED – AUDITED STATEMENT OF FINANCIAL POSITION

Curnamona Energy Limited Balance sheet as at 31 July	2008 2009 2010 2011	31 January 2012
Current Assets Cash and cash equivalents Trade and other receivables Other Total Current Assets Non-Current Assets Exploration and evaluation expenditure Plant and equipment Other financial assets Total Non-Current Assets	8,535,071 6,464,838 4,195,694 2,291,362 1,522,544 63,011 88,827 40,968 26,152 26,860 21,760 17,940 15,968 16,217 13,543 8,619,842 6,571,605 4,252,630 2,333,731 1,562,947 3,283,488 5,444,904 7,048,774 8,387,968 5,720,732 1,058,438 995,498 1,014,616 811,305 721,659 - - - 300,000 300,000 4,341,926 6,440,402 8,063,390 9,499,273 6,742,391
TOTAL ASSETS	12,961,768 13,012,007 12,316,020 11,833,004 8,305,338
Current Liabilities Trade and other payables Borrowings Provisions Total Current Liabilities Non-Current Liabilities Borrowings Provisions Other Total Non-Current Liabilities	292,671 324,187 167,912 135,039 96,687 100,113 167,925 133,909 117,694 52,637 45,864 62,523 64,802 48,050 131,730 438,648 554,635 366,623 300,783 281,054 151,194 257,705 123,827 6,133 - - - - 142,418 53,251 50,000 50,000 50,000 50,000 50,000 201,194 307,705 173,827 198,551 103,251
TOTAL LIABILITIES	639,842 862,340 540,450 499,334 384,305
NET ASSETS	12,321,926 12,149,667 11,775,570 11,333,670 7,921,033
Equity Issued capital Reserves Accumulated losses	13,054,453 13,114,752 13,114,752 13,099,499 13,099,499 3,096,462 3,190,083 3,255,207 3,598,138 3,634,935 (3,828,989) (4,155,168) (4,594,389) (5,363,967) (8,813,401)
TOTAL EQUITY	12,321,926 12,149,667 11,775,570 11,333,670 7,921,033

Source: Curnamona Energy Limited, Annual Reports 2008, 2009, 2010 and 2011, Bidder’s Statement

The following key points should be noted in relation to the above statements of financial position:

The major assets are cash and capitalised exploration expenditure;
The other non-current liabilities include deferred income (government grants received) for exploration activities;
The market capitalisation of Curnamona (approximately $5 million) before the announcement of the Offers is significantly lower than the book value of net assets ($7.9 million). By implication, therefore, the book value does not currently reflect the market’s view of the value of Curnamona’s assets.

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Cash Flows

The cash flows for the half year ended 31 July 2011 and for previous financial years are summarised in TABLE 3.

TABLE 3 CURNAMONA ENERGY LIMITED – AUDITED STATEMENT OF CASH FLOWS

		Half year ended
Cash flow statement for the financialyear ended 31 July	2008 2009 2010 2011	31 January 2012
Cash flow from operating activities Other receipts from customers Payments to suppliers Interest and other costs of finance paid Net cash used in operating activities Cash flow from investing activities Interest received Payment for bank guarantee deposit Payments for exploration and evaluation Payments for plant and equipment Net cash used in investing activities Cash flow from financing activities Repayment of borrowing Proceeds from issue of equity securities Payments for share issue costs Proceeds from issue of options Proceeds from borrowing Net cash(used in) /provided by financing activities	49 66,224 104,529 49,610 65,353 (383,868) (463,013) (409,119) (231,219) (211,868) (20,908) (34,260) (28,773) (17,223) (4,264) (404,727) (431,049) (333,363) (198,832) (150,779) 608,497 343,951 186,456 151,152 51,485 - - - (300,000) - (1,369,785) (2,017,667) (1,728,636) (1,398,417) (598,334) (564,010) (175,789) (225,707) (1,181) - (1,325,298) (1,849,505) (1,767,887) (1,548,446) (546,849) (80,185) (155,679) (167,894) (133,909) (71,190) 986,000 36,000 - 3,195 - - - - (26,355) - - - - 15 - - 330,000 - - - 905,815 210,321 (167,894) (157,054) (71,190)
Net decrease in cash	(824,210) (2,070,233) (2,269,144) (1,904,332) (768,818)
Cash at beginning of financialyear	9,359,281 8,535,071 6,464,838 4,195,694 2,291,362
Cash at end of financialyear	8,535,071 6,464,838 4,195,694 2,291,362 1,522,544

Source: Curnamona Energy Limited, Annual Reports 2008, 2009, 2010 and 2011

The following key points should be noted in respect of the cash flows set out above:

The main cash inflow during the period FY2008 to FY2011 is from capital raising;
The main cash outflow during the period FY2008 to FY2011 is due to exploration and evaluation, and plant and equipment; and
Net cash has declined by $6,243,709 over the period from FY2008 to FY2011.

Capital Structure

The total number of ordinary shares on issue at 16 April 2012 was 66,116,234.

Options

The balance of share options that have been granted to directors and employees of Curnamona as reported in the 2011 Annual Report at 31 July 2011 is set out in TABLE 4.

TABLE 4 CURNAMONA ENERGY LIMITED – SHARE OPTIONS

Grant Date	Number	Exercise Price	Expiry Date
Employees
23 March 2009	260,000	0.36	31 March 2014
24 December 2010	1,190,000	0.31	23 December 2014
Directors
24 December 2010	4,000,000	0.31	23 December 2014

Source: Target’s Statement

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Major Shareholders

TABLE 5 sets out the top twenty shareholders in Curnamona as at 3 May 2012.

TABLE 5 CURNAMONA ENERGY LIMITED – MAJOR SHAREHOLDERS

Holder Name	Shares Held
Havilah Resources NL Trindal Pty Ltd IFG Trust (Jersey) Limited Dr Keith Robert Johnson Mr Christopher William Giles Mr Mark Alexander Landau + Mrs Smaragdi Emerald Landau Woolsthorpe Investments Limited Gregorach Pty Ltd SA Capital Funds Management Ltd JP Morgan Nominees Australia Ltd Prof Geoffrey Driscoll + Mrs Jan Driscoll Mrs Janet Moyes Mr Michael Mornane Stutt Mr Jimi Markopolos + Mrs Mary Markopolos Woolsthorpe Limited Trindal Pty Ltd Mr Graham Wayne Branson + Mrs Henriette Hovijd Branson Superannuation A/C> M & K Korkidas Pty Ltd Mr William John Goodes + Mrs Lesley Anne Goodes Account> Mr Malcolm Arnold Haines + Mrs Jennifer Haines	30,000,003 2,873,028 1,652,522 1,510,000 1,500,000 870,000 857,010 660,100 521,264 515,198 500,000 500,000 443,930 423,700 407,875 373,600 373,289 356,487 352,000 304,640
Total number of shares held by the Top 20 shareholders	44,994,646

Holder Name

Shares Held

Havilah Resources NL
Trindal Pty Ltd
IFG Trust (Jersey) Limited
Dr Keith Robert Johnson
Mr Christopher William Giles
Mr Mark Alexander Landau + Mrs Smaragdi Emerald Landau
Woolsthorpe Investments Limited
Gregorach Pty Ltd
SA Capital Funds Management Ltd
JP Morgan Nominees Australia Ltd
Prof Geoffrey Driscoll + Mrs Jan Driscoll
Mrs Janet Moyes
Mr Michael Mornane Stutt
Mr Jimi Markopolos + Mrs Mary Markopolos
Woolsthorpe Limited
Trindal Pty Ltd
Mr Graham Wayne Branson + Mrs Henriette Hovijd Branson Superannuation A/C>
M & K Korkidas Pty Ltd
Mr William John Goodes + Mrs Lesley Anne Goodes Account>
Mr Malcolm Arnold Haines + Mrs Jennifer Haines

30,000,003
2,873,028
1,652,522
1,510,000
1,500,000
870,000
857,010
660,100
521,264
515,198
500,000
500,000
443,930
423,700
407,875
373,600
373,289
356,487
352,000
304,640

Total number of shares held by the Top 20 shareholders

44,994,646

Source: Bidder’s Statement

As can be seen in the above table, the top 20 shareholders in Curnamona accounted for approximately 68% of the total issued capital as at 3 May 2012.

Havilah is the major shareholder of Curnamona, holding approximately 45% of the total issued capital as at 3 May 2012.

Havilah Director’s interests in Curnamona Securities

As at the date of the Bidder’s Statement, the Directors of Havilah had the following Interests in Curnamona Securities:

TABLE 6 HAVILAH DIRECTOR’S INTERESTS IN CURNAMONA SHARES

Director	Number of	Number of	Number of
	Curnamona	Curnamona	Curnamona
	Shares	Listed Options	Unlisted Options
K R Johnson C W Giles K G Williams	1,810,000 4,448,028 259,600	452,500 1,312,007 64,900	1,800,000 1,800,000 400,000
Total	6,517,628	1,829,407	4,000,000

Source: Bidder’s Statement

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Dividends and Capital Management

Curnamona has not paid any dividends to date and there is no anticipated dividend.

Share Price Performance

FIGURE 1 sets out Curnamona’s share price history between 18/04/2005 and 16/04/2012.

FIGURE 1 CURNAMONA ENERGY LIMITED – HISTORICAL SHARE PRICE (2005 TO 2012)

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----- Start of picture text -----

Share Price (AUD)
3.00
2.50
2.00
1.50
1.00
0.50
-
----- End of picture text -----

Source: Bloomberg

There was a significant increase in the share price of Curnamona during 2007, peaking at $2.85 during April. In response to an ASX query on the reasons for the spike, Curnamona indicated that it was probably due to the company announcing plans to commence a field leach trial at the Oban deposit. This period also coincided with significant public discussion on carbon abatement legislation in Australia which led to a renewed interest in uranium as an energy source. In late 2007 the Curnamona share price fell significantly at the onset of the Global Financial Crisis and has continued to fall steadily since.

A detailed view of the Curnamona share price over the past three months is provided in FIGURE 2. The price spiked from about $0.07 per share to $0.12 per share in early March and has traded in the range $0.10 - $0.12 per share since. The price spike in March coincided with the announcement of the Havilah Offers.

FIGURE 2 CURNAMONA ENERGY LIMITED – HISTORICAL SHARE PRICE (LAST 3 MONTHS)

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----- Start of picture text -----

Share Price (AUD)
0.13
0.12
0.11
0.10
0.09
0.08
0.07
0.06
----- End of picture text -----

Source: Bloomberg

FIGURE 3 shows the trading volume of Curnamona shares over the past 12 months. The average number of shares traded per day over that period is approximately 56,000. While there have been about four significant spikes in trading volume, there has been no observable change in the share price of Curnamona as a result.

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FIGURE 3 CURNAMONA ENERGY LIMITED – 12 MONTH HISTORICAL SHARE PRICE AND TRADING VOLUME

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----- Start of picture text -----

0.18 600,000
0.15 500,000
0.13
400,000
0.10
300,000
0.08
200,000
0.05
0.03 100,000
0.00 0
Share Price (LHS) Daily Trading Volume (RHS)
$
----- End of picture text -----

Source: Bloomberg

FIGURE 4 compares the share prices of Curnamona with other Australian uranium exploration companies, Alliance Resource Limited, Toro Energy Limited, Mindax Limited and Oklo Resources Limited. FIGURE 4 shows that the share prices of the various uranium exploration companies have generally trended upwards in 2006 before declining from 2008 onwards.

FIGURE 4 URANIUM EXPLORATION COMPANIES – SHARE PRICE COMPARISON ($/SHARE)

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----- Start of picture text -----

3.0
2.5
2.0
1.5
1.0
0.5
0.0
Alliance Resource Limited Toro Energy Limited Curnamona Energy Mindax Limited Oklo Resources Ltd.
Source: ASX
----- End of picture text -----

Material Contracts

There are material contracts[3] to which Curnamona is a party and which contain change of control or change of ownership provisions which may be triggered as a result of the Offer or which may be terminated if the takeover succeeds:

Consultancy Agreements between Geocom Pty Ltd [“Geocom”], Maptek Pty Ltd [“Maptek”] and Curnamona [“Consultancy Agreements”]; and
• Management Services Agreement between Curnamona and Maptek [“Management Services Agreement”].

Curnamona entered into Consultancy Agreements with Geocom (a company wholly owned by Mr Giles) and Maptek (a company wholly owned by Mr Johnson) in

3 Summarised at Section 8.10 of the Target’s Statement

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February 2005. Curnamona also entered into a Management Services Agreement with Maptek in February 2005.

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Profile of Uranium Industry

Overview

Uranium is principally used as nuclear reactor fuel.

Australia has the world’s largest recoverable reserves of uranium with an estimated 1,163 kt of Reasonably Assured Reserves recoverable at less than $80/kg uranium as at December 2008[4] . This represents about 31% of the known world reserves. The estimated Australian reserves will last about 140 years at current Australian production levels. Australia also has substantial potential for the discovery of new uranium resources.

TABLE 7 summarises the major reserves and resources in Australia.

TABLE 7 AUSTRALIAN URANIUM RESERVES AND RESOURCES

Mine or deposit	Reserves	Measured &	Inferred Resources
		Indicated Resources
	(t U3O8)	(t U3O8)	(t U3O8)
Ranger	16,000	7,000	109,000
Olympic Dam	347,500	1,707,000	737,600
Beverley		21,000
Honeymoon		2,900
Jabiluka	67,700	16,440	57,500
Four Mile		14,000	17,700
Kintyre		25,600	2,400
Yeelirrie		52,500
Wiluna		11,000
Mulga Rock			27,100
Valhalla		24,765	5,860

Source: World Nuclear Association website

Australian production and exports of uranium over the period 2002-03 to 2010-11 are provided in TABLE 8.

TABLE 8 AUSTRALIAN URANIUM PRODUCTION AND EXPORTS

		2002-03	2003-04	2004-05	2005-06	2006-07	2007-08	2008-09	2009-10	2010-11
Production	tonnes U3O8	9,149	9,533	10,964	9,949	9,581	10,095	10,278	7,150	7,035
Exports	tonnes U3O8	9,592	9,099	11,215	10,252	9,518	10,151	10,114	7,555	6,950
Exports	$A million	427	364	475	545	658	887	1,030	758	610

Source: World Nuclear Association website

World uranium consumption has increased by 1.5 per cent per year since 2000, reaching 36,176 PJ (64.6 kt Uranium) in 2008. Nuclear power accounted for 6.2 per cent of global primary energy consumption and 14.8 per cent of world electricity generation in 2007[5] .

Australia's uranium is sold strictly for electrical power generation only, and safeguards are in place to ensure this. Australia is a party to the Nuclear Non-Proliferation Treaty [“NPT”] as a non-nuclear weapons State. In addition to these international arrangements Australia requires customer countries to have entered a bilateral safeguards treaty which is more rigorous than NPT arrangements.

4 Source: ABARE, 2010

5 Source: ABARE, 2010

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Uranium mines in Australia

There are three operating uranium mines in Australia and a fourth is currently in commissioning phase.

Ranger

The Ranger mine and associated town of Jabiru is about 230 kilometres east of Darwin, in the Northern Territory. The mine opened in 1981 at a production rate of approximately 3,300 tonnes per year [“t/yr”] of uranium oxide and has since been expanded to 5,500 t/yr capacity. Mining of the present pit commenced in 1997. Treatment is conventional acid leach.

Ranger is owned by Energy Resources of Australia Ltd [“ERA”], a 68.4% subsidiary of Rio Tinto.

Olympic Dam

Olympic Dam, located about 560 km north of Adelaide, commenced operations in 1988 through a joint venture of Western Mining Corporation and BP Minerals. The massive deposit is underground, some 350 metres below the surface, and is the largest known uranium orebody in the world. The large underground mine produces copper, with gold and uranium as major by-products. Annual production capacity for uranium oxide has been expanded from 1,800 to 4,600 tonnes U3O8.

Olympic Dam is now owned by BHP Billiton, following its 2005 takeover of WMC Resources. BHP Billiton is undertaking a major feasibility study on greatly expanding the mine, and in 2009 it released the 4,600 page environmental impact statement for the project. This was approved by state and federal governments in October 2011. The plan is to develop a large open pit with associated infrastructure over 11 years and lift uranium production to 19,000 tonnes U3O8 per year.

Beverley

The small Beverley mine in South Australia started operation late in 2000, 520 kilometres north of Adelaide. It was licensed to produce 1,180 t/yr U3O8 and reached this level in 2004, though production has declined since. It is owned and operated by Heathgate Resources Pty Ltd, an associate of General Atomics in the USA. In December 2010 the company received government approval to mine the Beverley North deposits, which will maintain production through the Beverley plant.

Honeymoon

The Honeymoon mine in South Australia is in the process of commissioning by Uranium One in 2011. Initial production of 20 tonnes U3O8 was recorded to the end of September 2011. The owners received government approval to proceed with mine development in November 2001 but reassessed its ore reserves and finally moved to development in 2007. In 2008 Mitsui agreed to join the project as 49% joint venture partner, and a construction contract was then let. In 2012 production is expected to be 275 tonnes U3O8 before eventually ramping up to 400 t/yr.

Prospective Mines

The Jabiluka uranium deposit in the Northern Territory was discovered in 1971-73, 20 kilometres north of Ranger. It has resources of over 130,000 tonnes of uranium oxide, and is one of the world's larger high-grade uranium deposits. A mining lease was granted in 1982 but development was stalled due to disagreements with the Aboriginal traditional owners. Commonwealth approval was withdrawn in 1983 and development ceased. In 1991 ERA, the operator of the adjacent Ranger mine, bought the Jabiluka lease from Pancontinental for A$125 million.

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In 1996 further approvals were given and development of the underground mine proceeded with a 1,150 metre access decline and a further 700 metres of excavation around the orebody. However, mining was deferred until agreement could be reached regarding treatment of Jabiluka ore at the Ranger mill. ERA (whose parent company is Rio Tinto) will not proceed with the mine until there is agreement from the local Mirrar Aboriginal people.

In May 2008 Quasar Resources, an affiliate of Heathgate Resources, applied for a mining licence for the Four Mile deposit adjacent the Beverley mine. Initial production was envisaged as 680 t/yr U3O8 rising to 2,000 t/yr. However, the project has been delayed by legal wrangles between the partners.

Toro Energy Limited [“Toro”] is a uranium explorer and developer operating in Western Australia, the Northern Territory, South Australia and in the African country of Namibia. Toro’s principal asset is the Wiluna Project, which is located in Western Australia. This project is at an advanced stage in government assessment and approval, with Toro planning to commit to construction late next year for first production in 2013. The Wiluna Project hosts a series of shallow (generally less than 10m deep) calcrete deposits with a Measured, Indicated and Inferred resource of 50.1 Mlbs of contained U3O8. The Wiluna Project has a 10-14 year mine life at the rate of around 1,000 tpa of uranium oxide. Resource definition drilling during 2012 and 2013 on tenements will indicate whether the mine life and capacity could be extended.

Expansion of Australia’s Uranium Production

In the medium to long term, Australia’s production of uranium is expected to increase significantly, reflecting Australia’s large low-cost uranium resources, proposed new mines and increasing world demand for uranium. ABARE forecasts world demand to grow strongly driven by strong growth in world nuclear electricity generation, although this view was developed before the incident at the Fukushima plant in Japan in March 2011. Given that there are no plans for Australia to have a commercial nuclear power industry or enrichment facilities prior to 2030, all of Australia’s uranium production will continue to be exported

In the medium term, ABARE forecasts Australia’s mine production to increase by around 8 per cent per year to reach 6,170 PJ (11 kt) by 2014–15. ABARE identifies future growth in uranium production to come from Four Mile, Honeymoon, Oban and Crocker Well projects in South Australia and Yeelirrie, Kintyre, Lake Maitland and Wiluna uranium projects in Western Australia as well as the expansion at the Olympic Dam mine. Based on planned projects and the likelihood of additional currently less advanced projects entering production before 2030, ABARE projects Australian uranium mine production will increase at an average annual rate of 12 per cent to around 11,760 PJ (21 kt) by 2029–30. The ABARE forecasts only include uranium projects that have progressed to, or beyond, a prefeasibility stage of development.

Key Factors in Utilising Australia’s Uranium Resources

Presently uranium is not used to produce electricity in Australia and as a result Australia does not consume any of its locally produced uranium.

The following factors are viewed as being key to the successful development of uranium resources in Australia[6] .

Recently there has been renewed interest worldwide in nuclear power, although this may be severely impacted by the incident at the Fukushima plant in Japan in March 2011. However, with electricity produced by uranium producing no direct carbon emissions demand for uranium is expected to increase in the future.

6 Source: ABARE, 2010

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Successful exploration and development of uranium deposits is dependent on several factors including state government policy, prices, production costs, ability to demonstrate best practice environmental and safety standards, and community acceptance of uranium development.
In Australia, new and expanding uranium mines require environmental and development approvals prior to any development occurring. The approval process period for the development of a uranium mine can be lengthy and costly if it is not well managed. Companies are required to provide a detailed environmental assessment for a uranium development proposal, which is assessed by both Australian and state/territory governments before approval to develop is granted.

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Market Value of Curnamona

Definition of Market Value

VAA has valued Curnamona on a market value basis. Business valuers typically define market value as:

“The price that would be negotiated in an open and unrestricted market between a knowledgeable, willing but not anxious buyer and a knowledgeable, willing but not anxious seller acting at arm’s length.”

Our valuation of Curnamona is based on 100 per cent ownership, as required by ASIC Regulatory Guide 111, and thus incorporates a premium for control. When considering the value on a per share basis, we have adopted the number of undiluted shares on issue as it is unlikely that the Curnamona options will be exercised as discussed further on page 23.

Market value does not incorporate special value. Special value is the additional value that may accrue to a particular purchaser. In a competitive bidding situation, potential purchasers may be prepared to pay part, or all, of the special value that they expect to realise from the acquisition to the seller.

Valuation Methodology and Approach

Appendix 2 provides details of the principal methodologies available with which to value a project, a business or the shares in a company. We also provide an assessment of the applicability of each methodology to valuing Curnamona. Our conclusion is that many of the methodologies commonly adopted by valuers will not be appropriate to value Curnamona. A summary of the reasons is as follows:

Curnamona currently does not generate any operational revenue or earnings stream and has not done so in previous years;
The magnitude and timing of any future cash flows from Curnamona cannot be forecast since there have not been any discovery of potentially commercial resources of uranium;
There is no active market that provides an observable price for the assets of Curnamona.

The principal assets held by Curnamona are exploration rights over more than 6,800 square kilometres in South Australia that are prospective for uranium resources. The Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports [“the VALMIN Code”] provides a set of fundamental principles and supporting recommendations regarding good professional practice to assist those involved in the preparation of IERs that are required for the valuation of mineral assets.

The VALMIN Code requires that only competent persons may undertake valuations within the Code framework. This means that the valuer must have relevant education, qualifications, experience, professional expertise and hold appropriate licences.

Therefore, in order to value Curnamona we have relied on a valuation report prepared by Optiro Pty Ltd [“Optiro”] prepared in accordance with the requirements of the VALMIN Code.

A copy of the Optiro report is provided in Appendix 6.

Market Value of Curnamona

Curnamona Energy holds exploration licences and rights over more than 6,800 square kilometres in the northeast of South Australia. In its report Optiro observes that the licences

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host uranium mineralisation at the Oban prospect and at the Lake Namba and Yarramba prospects. The Oban prospect is located 60 km north of the Honeymoon uranium deposit and was discovered in the early 1980s.

Our review of the uranium industry in Australia demonstrated that considerable growth is expected driven by increased international demand for uranium as a fuel for electricity production. In addition, current Government policies are generally supportive of uranium production, as evidenced by the number of prospective developments in Australia. Optiro has provided a report that values the uranium mineral assets contained within the licences held by Curnamona.

As a result we believe that the Optiro report provides an appropriate basis to assess the value of Curnamona exploration assets.

Optiro used two different methods to determine the value of the mineral assets relating to the uranium mineralisation within the exploration licences held by Curnamona.

A summary of Optiro’s valuation results is provided in the following table:

		Value ($ million)
Method
	Low	High	Preferred

Comparable Transactions	3.76	4.11	3.93
Geoscientific Ratings	3.43	7.10	5.26
Overall	3.43	7.10	5.26

Source: Optiro 2012

In valuing Curnamona’s exploration assets, we have adopted the Optiro valuation. That is, the value range for 100% of the company’s exploration assets is $3.43 million to $7.10 million, with a preferred valuation of $5.26 million.

Optiro has not valued the other assets and liabilities of Curnamona. We have assumed that the book value of all other assets of Curnamona reflects their market value. Therefore, in order to value the equity in Curnamona, we have:

Substituted the Optiro value for the exploration assets for the book value of exploration assets in the most recent Curnamona balance sheet (31 January 2012); and
Made adjustments for the updates to Curnamona’s financial position listed on page 10 of this report.

As a result, we have determined the total value of Curnamona to be $7.1 million.

The total number of Curnamona Shares is 66,116,234. The valuation of $7.1 million results in a valuation of $0.11 per Curnamona share.

Market Value of Curnamona Options

The Curnamona options are American options with the following characteristics:

Exercise price of $0.35;
Expiry date of 29 November 2013;
There are 16,517,743 million options outstanding.

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We have estimated the value of the Curnamona options to be in the range of $0.005 and $0.019.

The lower end of our range of $0.005 is based on the 3 month VWAP of Curnamona options prior to the Offer date.

We note that the options traded relatively infrequently prior to the Listed Option Offer. Bloomberg recorded trades on the 15 February of 123,945 options at $0.005. Prior to that date the most recent trade was on the 11 October 2011.

TABLE 9 CALCULATION OF CURNAMONA OPTION VWAP PRIOR TO THE OFFER

Period	Volume	Turnover	VWAP ($/option)
1 week	N/A	N/A	N/A
1 month	126,445	669.7	0.0053
3 months	126,445	669.7	0.0053
6 months	180,195	1,944.7	0.0111
12 months	643,932	22,712.3	0.0353

Source: Bloomberg

Given the infrequency of trade we have also estimated the value of the option based on the Binomial option pricing model. This is the upper end of our range.

As at the Announcement date the options were trading “out of the money” as Curnamona shares at the Listed Option Offer date were $0.08, or well below the strike price of the options of $0.35.

Therefore the only value of the options as at the Announcement date relates to that likelihood that Curnamona’s share price will exceed the exercise price at some point prior to the expiry date (noting the options are American and can be exercised at any point prior to expiry).

The inputs to the binomial option pricing model of the listed Curnamona options are as follows:

Share price of Curnomona = $0.08
Exercise price of Options = $0.35
Share price volatility = 120% (p.a.)
Risk free rate = 3% (p.a.)
Time period = 1.58 years

Share price volatility was estimated based on historical volatility over a period similar to the time remaining before expiry.

Based on these inputs we assess the value of a listed Curnamona option to be $0.019 as at the date of the Listed Option Offer.

We therefore conclude that the value of the Curnamona options was in the range of $0.005 to $0.019.

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Since we have determined that the Curnamona options are out of the money and therefore unlikely to be exercised, we have calculated the value of the Curnamona shares on an undiluted basis.

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Profile of Havilah

History and Overview

Havilah formed in late 1996 to explore for gold and other metals in South Australia. In 1997 Lion Selection Group Ltd became a cornerstone investor in Havilah and subsequently invested $1.9m. Havilah listed on the ASX on 21 March 2002, following a successful $6m capital raising.

Since that time Havilah has acquired exploration licences in the Curnamona Province in north-eastern South Australia that covers more than 6,500 square kilometres. In November 2004 Havilah announced it had discovered a major copper-gold-molybdenum deposit at Kalkaroo plus growing mineral resources at several other projects, notably North Portia, Portia and Mutooroo.

In April 2005, Havilah sponsored the ASX listing of Curnamona Energy Limited [“Curnamona Energy”], a vehicle formed specifically to hold its Tertiary uranium exploration interests in the Curnamona Province. Havilah retains a 45.4% interest in Curnamona Energy. In June 2005, Havilah divested its original Gawler Craton properties in return for a 10% holding in Monax Mining Limited [“Monax Mining”].

Havilah sponsored the Initial Public Offering of Geothermal Resources Limited, a specialist geothermal exploration and development company, which listed on the ASX on 21 March 2006. In November 2011 Havilah, which previously held 58.8% of Geothermal Resources [‘Geothermal”], acquired the remaining shares following an offer to Geothermal shareholders of one Havilah share for every four Geothermal shares.

The following diagram provides a summary of the Havilah company structure.

FIGURE 5 STRUCTURE OF HAVILAH

Havilah Resources NL

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----- Start of picture text -----

100% 45.4% 100%
Curnamona Gawler Curnamona Geothermal
Province Craton Energy Resources
Exploration Exploration Limited Limited
100% interest in more
than 20 Exploration Exploring for tertiary Geothermal
Licences in 3.3% 14.9% uranium on Exploration Licences
Curnamona Province Monax Pernatty Havilah’s and its over potential ‘hot
Mining EL 2979 own Exploration rocks’ Frome Project
Limited Red Metal Licences Penola-Robe Project
farm-in
----- End of picture text -----

Kalkaroo 124.5 Mt @ 0.50% Cu, 0.38 g/t Au Mutooroo 13.1 Mt @ 1.48% Cu Portia 720,000 t @ 2.9 g/t Au North Portia 11.3 Mt @ 0.89% Cu, 0.64 g/t Au, 500 ppm Mo Maldorky 147 Mt @ 30.1% Fe, indicated resource Prospect Hill 164,000 t @ 0.89% Sn

Source: Havilah

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On 6 September 2011 Havilah announced that it had signed an Option and Joint Venture Agreement with MMG Exploration Pty Ltd [“MMG”] relating to exploration of all Havilah’s Curnamona Craton exploration licences lying north of the Barrier Highway. The Agreement excludes Kalkaroo EL 4645 and ML 6354 covering the Portia and North Portia deposits. The agreement relates to joint participation in any new development projects identified within the exploration licences.

Havilah will retain 100% ownership of the exploration licences and may continue with exploration of them on its own account. During the term of the Agreement, Havilah will be obliged to offer MMG a 60% participating interest in any new discoveries it makes for which it is seeking a development partner. In the event MMG elects to participate in a Havilah discovery, MMG will reimburse Havilah twice its verifiable exploration expenditure.

MMG has also agreed to take a placement of 4,000,000 Havilah shares at an issue price of $1.25 per share, raising $5,000,000 for Havilah. The issue price per share is at more than 100% premium to the traded price prior to the announcement.

Advanced Pre-Development Projects

Havilah currently has 6 main projects within the Curnamona Craton and these are summarised below.

Kalkaroo Copper-Gold Project (100%)

Kalkaroo is a medium size copper-gold deposit containing 622,500 tonnes of copper and over 2 million ounces of gold.

Kalkaroo was explored by a number of major mining groups in the past including Placer, Newcrest Mining and MIM Exploration, who completed more than 45,000 metres of drilling in the region. Following a detailed evaluation of all historic exploration data, Havilah developed a 3D geological model of an interpreted copper resource envelope which it commenced drill testing in July 2004.

Over the following six months Havilah completed twenty-one 100m spaced drill traverses over a strike length of 2,000 metres and achieved wide ore grade copper and gold intersections. Subsequent drilling campaigns expanded the mineralisation to the west, in an area known as West Kalkaroo.

In 2011 conducted additional drilling and metallurgical testing on the Kalkaroo deposit and 3D modelling was undertaken on the gold cap (which contains no copper) that lies above the main ore body. Together these led to a revision of the measured and indicated JORC resources.

The JORC[7] resources for Kalkaroo are provided in TABLE 10.

Molybdenum, while ubiquitous in the Kalkaroo ore body, was excluded from the resource estimate although a discrete inferred resource of 4.5 million tonnes of 615 ppm molybdenum was defined within a section of the main copper-gold ore body.

7 All JORC resources quoted in this report have been taken from Havilah Resources ASX releases, which have been prepared by competent persons.

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TABLE 10 KALKAROO JORC RESOURCES

	Unit	Measured	Indicated
Cold Cap Resource	Mt	18,690,000
Contained Gold	g/t	0.74
Resources	Mt	85,890,000	38,620,000
Copper	%	0.81	0.68
Gold	g/t	0.41	0.33
Contained Copper	tonnes	622,500
Contained Gold	ounces	2,006,000

Source: Havilah

Heads of Agreement with Glencore

In 2007 Glencore International [“Glencore”] entered into a Heads of Agreement [“HOA”] with Havilah to fund a $14 million feasibility study on the Kalkaroo project. As part of the HOA, Glencore had the option to arrange project financing for the subsequent mining joint venture taking a 14% interest in the project and the right to sell all products of the project by funding 100% of its development costs.

On 25 July 2011 Havilah advised that Glencore had decided not to participate in the project, thus triggering Havilah’s right to repay the $14 million of feasibility funding by the issue of A$7 million of ordinary shares in Havilah and the balance of $7 million is a conditional liability that will only be repaid from 10% of Havilah’s share of any future mining profits from Kalkaroo if the project proceeds.

Havilah issued 10,153,756 shares to the value of $7,000,000 in two tranches of 7,326,408 and 2,827,348 on 21 October 2011 and 7 December 2011 respectively. The remaining $7,000,000 has been recorded as a reduction to capitalised exploration expenditure effectively offsetting previously incurred expenditure that was funded by Glencore.

Strategic Review

Havilah commenced a strategic review of the business in late 2011. A key outcome is that Havilah will sell down its 100% interest in the Kalkaroo copper-gold deposit with the aim of generating an immediate cash return for shareholders and to provide funding for other development projects. Standard Chartered Bank was appointed as corporate advisor to manage the formal sale process and to provide ongoing corporate advice.

Mutooroo Copper-Cobalt Project (100%)

Mutooroo is a lode-style massive sulphide deposit located in South Australia about 60 km west of Broken Hill containing a JORC Measured + Indicated + Inferred Resource of 13.1 million tonnes of 1.48% copper plus appreciable cobalt, gold and sulphur.

The Mutooroo copper mine was worked in the period between 1887-1914, with reported production of some 6,000 tonnes of mostly hand-picked oxidised material, including 2,557 tonnes of 6.58% copper and a parcel of 218 tonnes of 19.3% copper.

More than 30 diamond drill holes were completed by Broken Hill South in the 1970s into the deeper sulphide bearing portion of the lode zone resulting in a sulphide copper resource estimate of 8.7 million tonnes of 1.9% copper, although this estimate may not comply with current JORC reporting requirements.

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Since that time the prospect lay dormant until Havilah commenced exploration in 2005. Havilah’s initial objective was to drill the largely untested top 200 metres of the lode system for an open pit deposit.

TABLE 11 MUTOOROO JORC RESOURCES

	Tonnes	Copper	Gold	Cobalt	Contained	Contained	Contained
	(Mt)	(%)	(g/t)	(%)	Copper	Gold	Cobalt
					(tonnes)	(ounces)	(kg)

Measured + Indicated + Inferred Sulphide	12,529,912	1.53	0.23	0.14	191,707	92,665	17,542,000
Measured Oxide	598,047	0.56	0.08	0.04	N/A	N/A	N/A

Source: Havilah

A preliminary plan for the Mutooroo copper-cobalt deposit was scoped by consultants Maptek in 2005 to determine the viability of developing the deposit using open pit mining techniques. The mine plan developed would result in total overburden removal of 25,780,000 m[3] and total ore mined of 7,500,000 tonnes including oxidised ore. Mining schedules were based on producing 700,000 tonnes of ore per annum from the mine. The proposed mine will have an open cut pit around 1,000 metres long and up to 160 metres deep.

Metallurgical test work to date has identified two simple mineral processing options:

Bulk sulphide beneficiation where the heavy sulphides (pyrrhotite and the chalcopyrite) are separated by a simple gravity plant. Tertiary crushing only is required; and
A flotation plant, involving a ball mill circuit and separation of the chalcopyrite fraction and the pyrrhotite/pyrite fraction. At the smelter the pyrrhotite/pyrite component would be roasted to extract the cobalt and the copper, with the sulphur being used for sulphuric acid manufacture and the iron used as an iron ore feed.

Further detailed metallurgical studies will be required to determine mill requirements and estimated recovery factors.

Havilah is currently investigating three potential development options in order to maximise the value of the Mutooroo deposit. These are:

Construct a roaster with a throughput of approximately 500,000 tpa and market the acid by-product in South Australia, to take advantage of the high local demand. However, Havilah’s studies indicate that the cost for this option is more than $300 million, which will require a joint venture partner to assist in financing the project.
Use a combination of magnetic and gravimetric separation and ship the sulphide concentrate produced to an offshore smelter/roaster. This alternative requires significantly lower capital expenditure and would result in a lower net return to Havilah, but cash‐flow could be achieved earlier.
Given the high density of sulphides in the ore, a Direct Shipping Ore (DSO) option is also potentially viable.

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Portia Gold Project (100%)

Portia has a JORC Inferred Resource of 67,000 ounce of gold in a 1-4 metre thick layer of silty material lying immediately on the bedrock. The average grade of gold is 2.9g/t in 720,000 tonnes of ore.

Copper mineralisation was first discovered in the area by Marathon Petroleum in the 1980s. The Pasminco-Werrie Gold joint venture followed up in the mid-to late 1990s and discovered widespread copper, gold, molybdenum, lead and zinc mineralisation in the Benagerie Dome. The joint venture completed a considerable amount of drilling and geophysical work and outlined numerous promising prospects, including Portia and North Portia.

Havilah acquired Pasminco’s 70% interest in the joint venture from the receivers of Pasminco, and subsequently purchased the remaining 30% to give it 100% ownership of the entire area.

To date Havilah has completed more than 200 drill holes at Portia targeting both a rich eluvial or detrital gold layer that rests on weathered bedrock and the primary gold source in the underlying bedrock.

Initially Havilah assessed an open cut mine and the geotechnical slope angle required for the pit wall was recommended at a shallow angle. This low wall angle, coupled with a gold price of $600 per oz, made open cut mining at Portia a marginal proposition. Extensive geotechnical work at Kalkaroo, where the same overburden material occurs, has resulted in a better understanding of the material and a steeper angle for the pit walls. These new parameters, plus an increased gold price, when applied to the Portia open cut mine design have improved the project economics.

The following diagram shows the profile of the proposed open cut mine at Portia.

FIGURE 6 PORTIA OPEN PIT GOLD MINE PROFILE

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Source: Havilah website

The proposed gold processing would be based on gravity methods only with no chemicals or reagents involved. The following diagram demonstrates the proposed process. Havilah has been granted a mining lease and is currently seeking approval of the Mining and Rehabilitation Plan.

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FIGURE 7 PORTIA GOLD PROJECT METALLURGICAL FLOW CHART

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Source: Havilah website

North Portia Copper-Gold Project (100%)

Located 400 metres north of the Portia Gold Project, North Portia contains a Indicated + Inferred JORC Resource of 11.3 million tonnes of 0.89% Cu, 0.44 g/t Au and 500 ppm Mo. This translates to a metal inventory of 101,000 tonnes copper, 175,000 oz gold and 5.65 million kg of molybdenum. A native title agreement and Mining Lease (ML 6346) are in place over the North Portia deposit.

Havilah has completed three rounds of percussion and air-core drilling that have specifically targeted the shallower secondary copper-gold resource outlined by earlier Pasminco – Werrie Gold drilling. This has returned high grades of copper and significant gold and molybdenum in the weathered zone.

Maldorky Iron Ore Project

Havilah recently discovered the Maldorky iron ore deposit in northeastern South Australia near the border with New South Wales. The Maldorky iron ore project lies 28 km south of the Transcontinental Railway, 300 km east of Port Pirie.

Drilling to date has outlined a JORC Indicated Resource of 147 million tonnes containing ‐ 30.1% iron, applying an 18% Fe cut off grade. This translates to 59 million tonnes of ‐ premium grade magnetite rich product (>60% Fe) containing very low levels of impurities.

The shallow dip of the iron formation and negligible overburden are favourable for a low cost open pit mining operation. Development of the project is also favoured by the flat open terrain suitable for construction of a 26 km long haul road between the project site and the railway line.

Exploration Projects

Havilah holds more than 6,500 km[2] of 100% owned exploration licences in the Curnamona Province of northeastern South Australia. Havilah operates its own RC drilling rig and its exploration team are continuously testing various prospects throughout this large area. Two of the more advanced promising exploration projects are briefly described below.

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Prospect Hill Project

The Prospect Hill tin project is located in the northern Flinders Ranges of South Australia. Previous shallow drilling by Marathon Petroleum in the early 1980’s established a JORC Inferred Resource of 172,000 tonnes of 1.15% tin. It remained unexplored for almost two decades until re-kindling of interest by the current high tin prices.

In October 2007 Havilah completed a 19 hole, 1,195 metre drilling programme and economic grades of tin mineralization were confirmed in several holes on the South Ridge prospect. A second round of drilling completed in July 2008 comprised 24 holes for 2,231 metres.

Havilah has utilised drill data from the South Ridge Prospect area to estimate a JORC Indicated Resource of 302,000 tonnes @ 0.64% Sn. Within this resource, 164,000 tonnes @ 0.89% Sn is contained within a preliminary open pit design.

Lilydale Iron Ore Project (100%)

Havilah’s other recent discovery is the Lilydale iron ore project, which lies 50 km southeast of Yunta and is located on the Transcontinental Railway, some 200 km east of Port Pirie. A shallow drilling program carried out in February 2010, targeted the area of highest combined gravity and magnetic response, with encouraging results. Further drilling is planned in the near future.

Financial Information

Historical Financial Performance

The financial performance for the period from financial year 2008 to 2011 and for the halfyear 2012 is summarised in TABLE 12.

Havilah has chosen to early adopt AASB 10 “Consolidated Financial Statements” as at 1 August 2011. As a result it consolidated its shareholding in Curnamona under the requirements of AASB 10. Previously Curnamona was treated as an investment in associate and was accounted for under the equity method consistent with AASB 128. Therefore, the presentation of the financial accounts for Havilah as at 31 January 2012 has been prepared on this different basis to the previous accounts.

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TABLE 12 HAVILAH RESOURCES LIMITED – AUDITED STATEMENT OF FINANCIAL PERFORMANCE

HAVILAH RESOURCES NL Income statement for the financial year ended 31 July 2008 2009 2010	2011	31 January 2012
Revenue 1,674,288 895,077 400,564 249,016 141,017 Other income 165,042 - - 153,363 0 Depreciation and amortisation expense (296,207) (214,108) (198,087) (162,026) (176,106) Insurance expense (59,143) (156,307) (103,250) (113,646) (44,034) Annual leave expense (70,272) (28,419) - - - Management fee and consulting fee expense (427,861) (346,777) (403,790) (346,632) (243,622) Consultant fees - - - (69,003) (58,879) Legal fees (66,970) (9,022) (18,105) (38,605) (61,396) Directors fees (55,000) (45,000) (45,000) (48,417) (44,157) Audit and tax fees (102,675) (72,000) (82,000) (75,500) (26,500) ASX listing fees & shareholder administration fees (145,907) (96,730) (79,286) (129,831) (97,795) Finance costs - Interest on finance leases (44,914) (34,869) (30,987) (23,947) (11,014) Printing expense (47,851) (18,269) (7,008) - (19,800) Computer charges (34,232) (41,459) (31,871) (27,135) (11,623) Telecommunications expense - (51,236) (2,873) - - Salary expense - - (16,742) (74,817) - Exploration expenditure written off - (36,929) (59,740) (21,110) (3,243,994) Share based payments (5,265,568) (169,788) (67,365) (1,414,039) (280,544) Share of loss of associate entity - using equity method (1,134) (148,020) (199,318) (349,235) - Impairment of other financial assets (59,821) (594,453) (76,208) - (68,833) Other expenses (96,592) (38,676) (95,638) (97,664) (36,748)
Loss before tax (4,934,817) (1,206,985) (1,116,704) (2,589,227) (4,284,028)
Income tax expense (752,250) (11,227) - (10,297) (207,658)
Loss for the year (5,687,067) (1,218,212) (1,116,704) (2,599,524) (4,491,686)

Source: Havilah Annual Reports 2008 to 2011, Havilah Half Year Report 2012 Note: The income to 31 January 2012 is for the half year

The following key points should be noted in respect of the financial performance set out above:

Revenue mainly comprises interest on bank deposits and services revenue;
The largest expense item in the Income Statement is the management fee and consulting fee. However, in practice, the largest cash expenditure, as noted below, is the exploration and evaluation costs. These costs are capitalised and therefore do not appear in the Income Statement.

Forecasts

No profit forecasts are available for Havilah.

Financial Position

The audited financial positions of Havilah as at 31 January 2012, 31 July 2011 and for previous financial years are summarised in TABLE 13.

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TABLE 13 HAVILAH RESOURCES LIMITED – AUDITED STATEMENT OF FINANCIAL POSITION

HAVILAH RESOURCES NL Balance sheet as at 31 July 2008 2009 2010	2011	31 January 2012
Current Assets Cash and cash equivalents 18,291,831 10,653,345 6,492,540 2,711,706 6,664,666 Trade and other receivables 207,498 133,045 28,640 113,326 58,532 Other 76,630 37,738 27,123 35,434 39,003
Total Current Assets 18,575,959 10,824,128 6,548,303 2,860,466 6,762,201
Non-Current Assets Exploration and evaluation expenditure 21,629,498 29,064,082 32,750,661 35,811,599 36,240,316 Investment accounted for using the equity method 5,355,393 5,249,858 5,080,093 4,886,480 - Other financial assets 941,078 346,625 270,417 465,333 691,583 Plant and equipment 954,464 759,712 747,315 820,485 1,492,422
Total Non-Current Assets 28,880,433 35,420,277 38,848,486 41,983,897 38,424,321
TOTAL ASSETS 47,456,392 46,244,405 45,396,789 44,844,363 45,186,522
Current Liabilities Trade and other payables 2,056,615 296,117 268,887 395,703 636,477 Borrowings 153,500 173,817 143,688 97,785 114,724 Provisions 140,737 169,156 134,360 145,658 263,587 Other - - 14,000,000 14,000,000 -
Total Current Liabilities 2,350,852 639,090 14,546,935 14,639,146 1,014,788
Non-Current Liabilities Borrowings 336,780 162,983 150,141 52,356 27,340 Provisions - - - 44,450 100,834 Other 15,338,360 16,168,571 2,445,738 2,445,738 2,495,738 Total Non-Current Liabilities 15,675,140 16,331,554 2,595,879 2,542,544 2,623,912 TOTAL LIABILITIES 18,025,992 16,970,644 17,142,814 17,181,690 3,638,700
NET ASSETS 29,430,400 29,273,761 28,253,975 27,662,673 41,547,822
Equity Issued capital 25,446,287 25,446,287 25,446,287 25,881,381 39,714,202 Reserves 8,202,633 8,403,598 8,495,501 10,043,300 9,400,820 Accumulated losses (5,142,088) (5,894,706) (6,880,514) (9,435,080) (11,893,668)
Equity attributable to owners of the Company 28,506,832 27,955,179 27,061,274 26,489,601 37,221,354
Non-controlling interest 923,568 1,318,582 1,192,701 1,173,072 4,326,468
TOTAL EQUITY 29,430,400 29,273,761 28,253,975 27,662,673 41,547,822

Sources: Havilah Annual Reports 2006 to 2011, Havilah Half Year Report 2012

The following key points should be noted in relation to the above statements of financial position:

The company has significant levels of cash from capital raisings that will be used to fund exploration and evaluation expenditure;
The non-current investments are investments in Curnamona Energy Limited and Geothermal; and
The other current liability relates to the Glencore agreement described earlier. This liability will be met by the issue of Havilah shares.

Cash Flows

The cash flows for the half year ended 31 January 2012, the year ended 31 July 2011 and for previous financial years are summarised in TABLE 14.

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TABLE 14 HAVILAH RESOURCES LIMITED – STATEMENT OF CASH FLOWS

HAVILAH RESOURCES NL Cash flow statement for the financial year ended 31 July 2008 2009 2010 2011	31 January 2012
Cash flow from operating activities Receipts from customers 220,835 281,991 156,330 33,651 1,889 Payments to suppliers (986,965) (698,910) (907,724) (966,732) (633,570) Interest and other costs of finance paid (44,914) (34,869) (30,987) (23,947) (11,014)
Net cash used in operating activities (811,044) (451,788) (782,381) (957,028) (642,695)
Cash flow from investing activities Interest received 1,526,361 587,740 303,790 218,070 139,380 Payments for bank guarantee deposits - - - (190,000) - Payments for exploration and evaluation (12,057,905) (9,281,711) (3,730,719) (2,851,340) (2,280,797) Government grant received for exploration activities 590,560 830,211 277,166 - - Cash and cash equivalents deconsolidated 14,000,000 - - - - Net cash inflow from acquisition (450,219) 2 - - - Proceeds from sale of petroleum exploration licence - - - 200,000 - Payment for costs associated with sale of exploration licence - - - (5,000) - Payments for plant and equipment (8,511,084) (19,356) (20,690) (235,196) (36,738)
Net cash used in investing activities (4,902,287) (7,883,114) (3,170,453) (2,863,466) (2,178,155)
Cash flow from financing activities Proceeds from issue of equity securities 34,240 - - 222,560 5,001,625 Proceeds from issue of equity securities by subsidiaries - 887,320 - - - Payments for share issue costs - - - (39,237) (687,274) Proceeds from issue of share options - - - 25 0 Payments for share issue costs in subsidiaries - (37,424) - - 300,000 Repayment of borrowings (165,909) (153,480) (207,971) (143,688) (131,904) Other - - - - -
Net cash(used in)/provided by financing activities (131,669) 696,416 (207,971) 39,660 4,482,447
Net decrease in cash (5,845,000) (7,638,486) (4,160,805) (3,780,834) 1,661,597 Cash at the beginning of the year 24,136,831 18,291,831 10,653,345 6,492,540 5,003,069
Cash at the end of theyear 18,291,831 10,653,345 6,492,540 2,711,706 6,664,666

Sources: Havilah Annual Reports 2006 to 2011, Havilah Half Year Report 2012 Note: The cash flow to 31 January 2012 is for the half year

The following key points should be noted in respect of the cash flows set out above:

Cash flow deficits from operating activities is mainly driven by payment to suppliers;
Cash flow deficits from investing is mainly driven by payment for exploration and evaluation, and cash flow incoming is from interest received and government grant received; and
There is a substantial amount of cash in the company accounts which will be used to fund additional exploration and development.

Information about Havilah Securities

Issued Securities

As at 16 April 2012, Havilah has:

101,323,223 fully paid ordinary shares on issue all of which are quoted on ASX and may be freely traded;
20,149,472 Listed Options quoted on ASX. These options have an exercise date of the 30 October 2013 and an exercise price of $0.50;
10,410,000 Director and Employee Options on issue which are not quoted on the ASX.

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Dividends

Havilah has not paid any dividends. Havilah reviews its corporate dividend policy regularly and will continue to do so.

Rights and liabilities attaching to the Havilah Shares offered

A summary of the rights which relate to Havilah Shares are set out below. This summary does not purport to be exhaustive or constitute a definitive statement of the rights and liabilities of Havilah’s Shareholders.

Voting

At a general meeting of Havilah on a show of hands, every member present in person, or by proxy, attorney or representative has one vote and upon a poll, every member present in person, or by proxy, attorney or representative has one vote for every Share held by them.

Dividends

The Shares will rank equally with all other issued Shares in the capital of Havilah and will participate in dividends out of profits earned by Havilah from time to time. Subject to the rights of holders of Shares of any special preferential or qualified rights attaching thereto, the profits of Havilah are divisible amongst the holders of Shares in proportion to the Shares held by them irrespective of the amount paid up or credited as paid up thereon. The Directors may from time to time pay to Shareholders such interim dividends as in their judgement the position of Havilah justifies.

Winding Up

Upon paying the application moneys, Shareholders will have no further liability to make payments to Havilah in the event of Havilah being wound up pursuant to the provisions of the Corporations Act.

Transfer of Securities

Generally, the Shares and Options in Havilah will be freely transferable, subject to satisfying the usual requirements of security transfers on the ASX. The Directors may decline to register any transfer of Shares but only where permitted to do so under its Constitution or the ASX Listing Rules.

Sale of Non-Marketable Holdings

The Company may take steps in respect of non-marketable holdings of Shares in Havilah to effect an orderly sale of those Shares in the event that holders do not take steps to retain their holdings in accordance with the Constitution and the ASX Listing Rules. For more particular details of the rights attaching to Havilah Shares, investors should refer to the Constitution of the Company.

Havilah employee share plan

Havilah operates an Employee share scheme as an incentive to employees and as a retention benefit to key employees.

Havilah Top 20 Shareholders

TABLE 15 sets out the top 20 shareholders in Havilah as at 16 April 2012.

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TABLE 15 HAVILAH RESOURCES LIMITED – TOP 20 SHAREHOLDERS

Holder Name	Shares Held
Glencopper SA Pty Ltd Trindal Pty Ltd (Trindal Super Fund A/C) IFG Trust (Jersey) Limited Rockland Pty Ltd MMG Exploration Ltd ACN 154 402 927 PTY LTD Woolsthorpe Investments Limited HSBC Custody Nominees (Australia) Limited Mrs Selvie Tjowasi Statsmin Nominees Pty Ltd Trindal Pty Ltd Statsmin Nominees Pty Ltd Citicorp Nominees Pty Limited Mr Brian Kenneth Murphy (Murphy’s Super Fund A/C) Prof Geoffrey Driscoll + Mrs Jan Driscoll (Driscoll Super Fund A/C) Mr Michael Mornane Stutt Sydney Fund Managers Ltd Mr Paul Clark Dr Keith Robert Johnson Willstreet PtyLtd	10,153,756 9,417,643 8,262,607 5,904,978 4,000,000 3,500,000 2,929,790 2,398,551 2,187,033 1,876,149 1,422,629 1,369,045 1,189,111 1,144,910 1,100,000 1,030,659 1,000,000 1,000,000 983,467 950,000
Total number of shares held by the Top 20 shareholders	61,820,328

Holder Name

Shares Held

Glencopper SA Pty Ltd
Trindal Pty Ltd (Trindal Super Fund A/C)
IFG Trust (Jersey) Limited
Rockland Pty Ltd
MMG Exploration Ltd
ACN 154 402 927 PTY LTD
Woolsthorpe Investments Limited
HSBC Custody Nominees (Australia) Limited
Mrs Selvie Tjowasi
Statsmin Nominees Pty Ltd
Trindal Pty Ltd
Statsmin Nominees Pty Ltd
Citicorp Nominees Pty Limited
Mr Brian Kenneth Murphy (Murphy’s Super Fund A/C)
Prof Geoffrey Driscoll + Mrs Jan Driscoll (Driscoll Super Fund A/C)
Mr Michael Mornane Stutt
Sydney Fund Managers Ltd
Mr Paul Clark
Dr Keith Robert Johnson
Willstreet PtyLtd

10,153,756
9,417,643
8,262,607
5,904,978
4,000,000
3,500,000
2,929,790
2,398,551
2,187,033
1,876,149
1,422,629
1,369,045
1,189,111
1,144,910
1,100,000
1,030,659
1,000,000
1,000,000
983,467
950,000

Total number of shares held by the Top 20 shareholders

61,820,328

Source: Bidder’s Statement

The top 20 shareholders in Havilah accounted for approximately 61.0% of the total issued capital as at 16 April 2012.

Director’s interests in Havilah Securities

As at the date of the Bidder’s Statement, the Curnamona Directors had the following Interests in Havilah securities:

TABLE 16 CURNAMONA DIRECTOR’S INTERESTS IN HAVILAH SECURITIES

Director	Number of Havilah	Number of Havilah	Number of Unlisted
	Shares	Options	Havilah Options
K R Johnson C W Giles K G Williams P Staveley	4,258,097 11,260,439 253,873 Nil	731,134 2,737,412 53,575 Nil	3,500,000 3,500,000 800,000 Nil
Total	15,772,409	3,522,121	7,800,000

Source: Bidder’s Statement, Target’s Statement

Share Price Performance

FIGURE 8 sets out Havilah’s share price history between 1 June 2006 and 16 April 2012:

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FIGURE 8 HAVILAH RESOURCES LIMITED – HISTORICAL SHARE PRICE
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Share Price (AUD)
3.50
3.00
2.50
2.00
1.50
1.00
0.50
-
Source: Bloomberg
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FIGURE 9 shows the trading volume of Havilah shares over the past 12 months. The average number of shares traded per day over that period is approximately 90,000. A significant spike in trading volume occurred in late May and early June 2011 and during that time a 40% increase in the share price of Havilah was observed. The increased trading volume and increase in share price occurred during a time where Havilah delivered several investor presentations in Australia and Singapore and an independent equities research company, BGF Equities, released a report that valued Havilah significantly above the prevailing share price.

FIGURE 9 HAVILAH RESOURCES LIMITED – HISTORICAL SHARE PRICE AND TRADING VOLUME

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0.80 1,200,000
0.70
1,000,000
0.60
800,000
0.50
0.40 600,000
0.30
400,000
0.20
200,000
0.10
0.00 0
18/04/2011 18/05/2011 18/06/2011 18/07/2011 18/08/2011 18/09/2011 18/10/2011
Share Price (LHS) Daily Trading Volume (RHS)
Source: Bloomberg
$
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The following summarises key events and announcements that may have affected share price movements over the period from 01/06/2006 and 16/04/2012.

Positive news regarding the size of the Kalkaroo resource based on drilling results in January 2007;
Upgrades to the gold reserves at Portia announced to the market in February 2007;
In July 2007 Havilah announced that it had reached agreement for Glencore to fund a $14 million feasibility study on the Kalkaroo copper project;
In March 2008 Havilah’s Chinese joint venture partner in the Mutooroo copper cobalt project, Heilongjiang Resources Limited, agreed to convert its earn in interest in the project to a direct equity interest in Havilah;

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In May 2008 Havilah announced high grade copper results from further drilling at Kalkaroo;
In November 2009 Havilah announced it had discovered iron ore following drilling at its Lilydale exploration tenement;
In August 2010 Havilah announced it had made a second iron ore discovery at Maldorky;
In July 2011 Glencore announced that it will sell its rights in the Kalkaroo mining tenements and the feasibility study to Havilah in consideration for the issue of $7 million in ordinary shares in Havilah.
In September 2011 MMG Exploration Pty Ltd agreed to take a placement of 4,000,000 Havilah shares at an issue price of $1.25, raising $5,000,000.

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Industry Analysis

Gold

Based on its diversity of special properties, gold is considered the most useful mineral. Gold has a variety of uses including jewellery, decoration, electronics and health. Gold is also a store of wealth and more than half the world’s gold is held by governments and banks.

Gold production, consumption and price movements

Gold is mainly consumed for jewellery manufacturing as evidenced by fabrication consumption being approximately 70% of supply over recent years.

TABLE 17 GOLD CONSUMPTION

	Unit	2006-2007 2007-2008 2008-2009 2009-2010 2010-2011f 2011-2012f
Supply YoY Growth Fabrication consumption YoY Growth Fabrication consumption as % of supply Price YoY Growth	t % t % % US$/oz %	3,942 3,959 4,318 4,261 4,034 3,880 na 0.43% 9.07% -1.32% -5.33% -3.82% 3,102 3,023 2,511 2,779 2,843 2,949 na -2.55% -16.94% 10.67% 2.30% 3.73% na 76.36% 58.15% 65.22% 70.48% 76.01% 639 823 874 1,092 1,372 1,593 na 28.79% 6.20% 24.94% 25.64% 16.11%

Source: ABARE

Despite recent rises in the gold price, jewellery demand grew significantly in 2010, underpinned by rising household incomes in several developing economies. This trend is expected to continue and to provide support for a forecast rise of 2 per cent in total gold fabrication consumption to 2,843 tonnes in 2011.

Investment demand for gold, as a store of value in periods of economic uncertainty, has provided significant support for the gold price. The effects of natural disasters in Japan, political instability in the Middle East and ongoing uncertainty surrounding the increase in public sector debt in some major world economies have encouraged investors to invest in gold as a low-risk asset.

Rising oil prices and expansionary monetary policy in many developed economies have also provided support for investment in gold as a hedge against inflation. A decline in the value of the US dollar against other major international currencies over the past year has also contributed to the higher gold price. Because the gold price is denominated in US dollars, a weaker US dollar will lead to an increase in the purchasing power of investors outside the United States and contribute to an increase in the gold price.

The chart below shows the gold price over the past 20 years.

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FIGURE 10 GOLD PRICE (USD/OUNCE)

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2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Source: Bloomberg
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Copper

Copper is a major industrial metal, ranked third after iron and aluminium in terms of quantities consumed due to its properties; singularly or in combination, of high ductility, malleability, and thermal and electrical conductivity, and its resistance to corrosion.

Copper production, consumption and price movements

Demand for copper is driven by electronics and electronic products, transportation, industrial machinery, and consumer, general products, and building construction which is the largest market; making copper a cyclical commodity.

Recent historical and short term forecast world copper production, consumption and prices are provided in TABLE 18.

TABLE 18 COPPER PRODUCTION, COMSUMPTION AND PRICES

Unit 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011f 2011-2012f	Unit 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011f 2011-2012f	Unit 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011f 2011-2012f	Unit 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011f 2011-2012f	Unit 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011f 2011-2012f	Unit 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011f 2011-2012f	Unit 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011f 2011-2012f	Unit 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011f 2011-2012f
Production (Primary refined metal)	kt	18,029	18,498	18,649	19,167	19,630	20,373
YoY growth	%	na	2.60%	0.82%	2.78%	2.42%	3.79%
Consumption	kt	18,108	18,094	18,243	19,135	19,808	20,437
YoY growth	%	na	-0.08%	0.82%	4.89%	3.52%	3.18%
Copper prices	US$/t	7,087	7,791	4,936	6,634	8,702	9,781
YoY growth	%	na	9.93%	-36.64%	34.40%	31.17%	12.40%

Source: ABARE

The copper consumption and production in 2011 and 2012 is forecast to grow strongly, which is expected to lead to price increases of 31.17% in 2011 and 12.40% in 2012 respectively.

The chart below shows the copper price over the past 20 years.

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FIGURE 11 COPPER PRICE (USD/TONNE)

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12,000
10,000
8,000
6,000
4,000
2,000
0
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Source: Bloomberg

The copper price reached a peak of $8,800/tonne on 11 May 2006. Thereafter, due to the impact of global financial crisis, the price fell sharply before recovering steadily between 2009 and 2011. In early 2011 the copper price reached more than $10,000/tonne, although it has fallen back more than 20% since then.

TABLE 19 shows that Australian mine output is expected to contribute 5.62% to world mine output in 2011 and 5.56% in 2012. In addition, Australian refined output is expected to contribute 2.51% to world refined output in 2011 and 2.47% in 2012.

TABLE 19 FORECAST AUSTRALIAN COPPER OUTPUT

Copper outlook	Unit	2011f	2012f
World mine output	kt	16,814	17,905
Australia mine output	kt	945	996
Australia as a % world	%	5.62%	5.56%
World refined output	kt	19,630	20,373
Australia refined output	kt	492	503
Australia as a % world	%	2.51%	2.47%

Source: ABARE

Cobalt

Cobalt is mainly extracted as a by-product of copper and nickel. Cobalt is used in magnets, ceramics, special glasses, and tools. It is a key alloying element in certain steels and alloys. The element when reacted with fatty acids is also a drier for oil based paints and varnishes. Cobalt is also essential to all animals, including humans. Trace amounts of cobalt are available in most diets.

Almost 50% of cobalt is used for batteries, and superalloys as shown below.

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FIGURE 12 COBALT USES (%)
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(Source: British Geological Survey )

From mid-2010 to 30/08/2 0 11 Cobalt price has been fluctuating betw e en $34,000USD/MT and $44,000USD/MT as sho w n in the following chart.

FIGURE 13 COBALT PRICE (USD/MT)

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45,000
43,000
41,000
39,000
37,000
35,000
33,000
31,000
29,000
27,000
25,000
2011
/
11
/
19/05/2010 19/07/2010 19/09/2010 19/11/2010 19/01/2011 19/03/2011 19/05/2011 19/07/2011 19/09/2011 19 19/01/2012 19/03/2012
----- End of picture text -----

Source: Bloomberg

Molybdenum

Molybdenum is commonl y a by-product of copper mining. It has the ability to withstand extreme temperatures an d has a high resistance to corrosion. Molybd e num is widely used as an alloy agent in stai n less steel. It is also used to manufacture aircraft parts and industrial motors. Producti o n and consumption of molybdenum is show n below.

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FIGURE 14 MOLYDENUM PRODUCTION AND CONSUMPTION

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World Production Consumption by Industry
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Source: London Metals Exchange

Over 60% of molybdenum production comes from North America a n d China, and over 60% is consumed for constructional steel and stainless steel.

The following chart shows t h e recent historical price of molybdenum.

FIGURE 15 MOLYBDENUM PRICE (USD/MT)

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40000
38000
36000
34000
32000
30000
28000
26000
24000
22000
20000
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Source: Bloomberg

Iron Ore

Iron ores contains iron r ich minerals from which metallic iron c an be extracted economically. The principl e minerals are Hematite (70% iron), and Mag n etite (72% iron).

Demand for Iron ore is driven by the steel industry, making Iron ore a c yclical commodity. Exports are driven by Aus t ralia and Brazil and imports are driven by China, Japan and Korea.

Iron ore prices have risen s h arply over the past 5 to 10 years, driven principally by the rapid industrialisation of China. In mid-February, iron ore spot prices were th e highest on record, reaching US$185 per tonn e for 62 per cent iron ore content free on board [“fob”]. These record prices supported some June 2011 quarter contract prices reaching US$172 per tonne, a 25 per cent incr e ase from the previous quarter. In 2012, A B ARE forecasts that contract prices will ease t o an average of US$146 per tonne, reflecti n g increased supply from Australia and Brazil.

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TABLE 20 shows the recent increase in iron ore exports from Australia and TABLE 21 shows the recent increases in prices and the forecast softening of prices as new supply comes on stream.

FIGURE 16 shows that there has been considerable volatility in the spot price for iron or over the past seven years.

TABLE 20 IRON ORE EXPORTS

	Unit	2009 2010 2011 2012
Australian Iron Ore Exports YoY Growth	Mt %	363 402 414 459 na 10.7% 3.0% 10.9%

Source: ABARE

TABLE 21 IRON ORE FORECAST PRICES

World Iron Ore Contract Prices		2009	2010	2011	2012	2013	2014	2015	2016
Nominal	US$/t	68	112	149	129	116	109	104	102
Real	US$/t	70	114	149	127	112	103	96	93

Source: ABARE

FIGURE 16 IRON ORE SPOT PRICE (USD/MT)

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250
200
150
100
50
-
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Source: Bloomberg

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Market Value of Havilah

Definition of Market Value

Value Adviser Associates has valued Havilah on a market value basis. Our valuation is based on 100 per cent ownership, as required by ASIC Regulatory Guide 111, and thus incorporates a premium for control.

Valuation Methodology and Approach

Appendix 2 – Valuation Methodologies provides details of the principal methodologies available with which to value a project, a business or the shares in a company. However, many of these methodologies will not be appropriate to value Havilah for the following reasons:

Havilah does not currently generate any operational revenue or earnings stream and have not done so in previous years;
The magnitude and timing of any future cash flows from Havilah cannot be forecast with any degree of certainty. Any cash flow projections will be largely influenced by events that are difficult to predict such as the results of further exploration, mine plans, costs of project development, funding arrangements and future commodity prices. Therefore, any forecast of future cash flows is so uncertain as to make them effectively meaningless in a valuation.

Our approach in valuing Havilah is to consider each project and investment of the company and determine the preferred methodology for each. The total value of the company then becomes a sum-of-the-parts valuation. Our preferred valuation approach for each is summarised in TABLE 22. Further details are provided below.

TABLE 22 PREFERRED VALUATION METHODOLOGY

Project / Investment	Approach
Kalkaroo	Apply benchmark value per tonne of copper equivalent to JORC resources
Mutooroo	Apply benchmark value per tonne of copper equivalent to JORC resources
North Portia	Apply benchmark value per tonne of copper equivalent to JORC resources
Portia	Apply benchmark value per tonne of gold equivalent to JORC resources
Maldorky	Apply benchmark value per tonne of iron-ore equivalent to JORC resources
Lilydale	Assign nil value
Prospect Hill	Apply benchmark ratio of EV to value of contained metal in resource
Geothermal Resources	Adopt valuation of Geothermal from IER prepared in August 2011
Curnamona Energy (45%)	Market valuation based on share price

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The benchmark approach is our preferred methodology for valuing Havilah’s resources that have JORC estimates of metal content. The benchmarks are derived from the enterprise value of companies that are comparable to Havilah in terms of resource types and stages of development.

For Havilah’s investment in Geothermal Resources, we have adopted the valuation of 100% of the company determined by Value Adviser Associates in an Independent Expert Report prepared in August 2011.

For Havilah’s investment in Curnamona Energy we have adopted 45.38% of the valuation calculated earlier in this document.

We have not attempted to value the exploration areas or exploration prospects, including the Lilydale project, for which there is no JORC resource. Therefore, we cannot estimate the value of the exploration projects, including Lilydale, with any reasonable robustness. In this circumstance, we believe it is reasonable to assign a nil value to all exploration projects. This should not be regarded as implying that there is no upside value to these assets.

Market Value of Havilah

We summarise our market value of 100 per cent of Havilah as follows.

We have undertaken a valuation of the JORC resources identified by Havilah using benchmarks from other copper, gold and iron ore exploration and development companies. The list of copper companies identified as comparable is provided in TABLE 31 in Appendix 3. The list of iron ore companies identified as comparable is provided in TABLE 33.

The approach we have taken is to calculate the enterprise value [“EV”] per tonne of copper equivalent for a range of comparable companies. The EV was calculated as at 16 April 2012 according to the following formula:

Enterprise Value = Market Capitalisation + Debt – Cash

These variables for each company were sourced from Bloomberg.

The mass of copper equivalent (in tonnes) for each company was calculated using benchmark prices for each commodity as at 16 April 2012. Where possible, spot prices quoted on the London Metals Exchange were used, although in some instances Bloomberg data was adopted.

Valuation of Havilah’s Copper/Gold Tenements

We have calculated a benchmark value per tonne of copper equivalent based on the analysis in TABLE 23. We have adopted a value of $60 per tonne of copper equivalent as appropriate for Havilah taking into account the stage of development of its resources, contained metal, and grade of copper. In arriving at this figure, we made the following observations:

Copper Strike Limited has an EV of -$8 per tonne of copper equivalent. It is one of two companies on the list with a market capitalisation lower than its book value of equity. The market capitalisation of Copper Strike is lower than its cash reserves, hence the negative value per tonne of copper.
The average of the remaining companies is $60 per tonne of copper equivalent, recognising there is a wide range of values from $11 to $135 per tonne of copper. On a mass weighted basis, the EV is $58 per tonne of copper equivalent.

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In our opinion, the closest benchmark to Havilah in terms of copper grade and tonnes of copper equivalent is Rex Minerals. Its EV is $76 per tonne of copper equivalent.

TABLE 23 ENTERPRISE VALUE PER COPPER EQUIVALENT

Name	Market Cap	Total Debt	Cash	Enterprise Value	Share of	Cu Equivalent	EV per
	($m)	($m)	($m)	($m)	Project	(tonnes)	tonne Cu eq
Golden Cross Resources Ltd	12	0	4	8	100%	766,445	11
Indophil Resources NL	487	0	196	291	35%	17,779,617	47
Copper Strike Ltd	10	0	18	-8	100%	184,694	-41
Marengo Mining Ltd	226	0	33	193	100%	3,923,451	49
Silver Swan Group Ltd	7	0	4	3	100%	22,945	133
Aussie Q Resources Ltd	27	0	3	23	100%	574,461	40
Metminco Ltd	289	0	44	245	100%	4,436,053	55
Empire Resources Ltd	6	0	2	5	100%	231,013	20
Rex Minerals Ltd	191	0	56	134	100%	1,757,028	76
Augur Resources Ltd	13	0	4	10	100%	385,310	26
Cudeco Ltd	641	0	145	496	100%	3,676,224	135

Source: Bloomberg, VAA Analysis

The resource prices adopted to determine the copper equivalent value were based on spot prices for each commodity as at 16 April 2012. These are shown in TABLE 24.

TABLE 24 RESOURCE PRICES AS AT 22 AUGUST 2011

TABLE 24 RESOURCE PRICES AS AT 22 AUGUST 2011
Mineral Unit Price per unit	Source
Copper USD/t 8,050 Gold USD/oz 1,652 Molybdenum USD/t 31,250 Silver USD/oz 32 Zinc USD/t 1,997 Nickel USD/t 21,000 Cobalt USD/t 30,780 Magnesium USD/t 2,900	Bloomberg Bloomberg Bloomberg LME / Bloomberg LME / Bloomberg LME LME / Bloomberg Bloomberg

We have calculated a benchmark value per tonne of gold equivalent based on the analysis in TABLE 23. We have adopted a value of $30 per ounce of gold equivalent as appropriate for Havilah. We calculated this as the average of the comparable gold companies, although Lachlan Star Limited was excluded from the analysis since its enterprise value per ounce is a significant outlier to the other observed values.

TABLE 25 ENTERPRISE VALUE PER GOLD EQUIVALENT

Name MARKET CAP TOTAL DEBT CASH ($m) ($m) ($m)	Enterprise Value ($m)	Share of Project	Au (ounces)	EV per ounce
Signature Metals Limited 39 0 0 Montezuma Mining Company 21 0 9 Lachlan Star Limited 128 9 14 Hill End Limited 14 0 1 Phoenix Gold Limited 31 0 1 Millennium Minerals 66 0 11 Aphrodite Gold 11 0 3 Alloy Resources Limited 3 0 1	38 11 123 13 30 55 8 2	100% 100% 100% 100% 100% 100% 100% 100%	1,207,865 560,800 1,171,000 234,400 1,385,000 1,245,607 1,033,000 98,700	32 20 105 54 22 44 8 15

Source: Bloomberg, VAA Analysis

The resultant valuation of Havilah’s copper and gold resources using an enterprise value of $60 per tonne of copper and $30 per ounce of gold equivalent is provided in TABLE 26.

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TABLE 26 VALUATION OF HAVILAH’S COPPER/GOLD RESOURCES

Mineral	Kalkaroo Mutooroo North Portia Portia Total
Copper tonnes Gold ounces Molybdenum tonnes Cobalt tonnes	622,500 191,700 101,101 2,006,000 92,700 234,522 0 0 5,680 0 17,542 0
Copper Equivalent tonnes EV per tonne copper equivalent $ million Gold Equivalent ounces EV per ounce gold equivalent $ million Value $ million	1,034,194 277,803 171,283 60 67,000 30 62.1 16.7 10.3 2.0 91.0

Source: VAA Analysis

Valuation of Maldorky Project

We have adopted a similar approach to the valuation of Maldorky. We have calculated a benchmark value per tonne of iron ore equivalent based on the analysis in TABLE 27. We have adopted a value of $510 per kilo tonne [“kt”] of iron ore equivalent as appropriate for Havilah taking into account the stage of development of its resources, contained metal, and grade of iron ore. In arriving at this figure, we made calculated the average EV per kt of iron ore of the comparable companies, although Iron Clad Mining was excluded from the average since it is an outlier to the other results.

We compared the EV per kt or iron ore for different grades of iron ore but found no correlation. For example, the average grade of iron ore for Iron Clad Mining and Lincoln Minerals is about 26%, the average grade for Brockman Resources is 42% and for the others about 55%.

TABLE 27 ENTERPRISE VALUE PER IRON ORE EQUIVALENT

Name	Market Cap	Total Debt	Cash	Enterprise Value	Share of	Iron Ore	EV per
	($m)	($m)	($m)	($m)	Project	(kt)	kt Fe
Iron Clad Mining	67	0	10	57	80%	69,152	1,025
Brockman Resources	364	0	38	326	100%	1,157,291	282
Lincoln Minerals	23	0	2	21	100%	26,380	799
Iron Ore Holdings	236	0	68	167	100%	432,048	387
Flinders Mines	337	0	24	313	100%	538,340	582

Source: Bloomberg, VAA Analysis

The resultant valuation of Havilah’s Maldorky project using an enterprise value of $510 per kt of iron ore equivalent is provided in TABLE 26.

TABLE 28 VALUATION OF HAVILAH’S MALDORKY PROJECT

Maldorky Valuation
Iron Ore Resources	kt	147,000
EV per tonne iron ore	$/kt	510
Enterprise Value	$ million	75.0

Valuation of Prospect Hill Project

Havilah has identified a JORC Indicated resource of 302,000 tonnes @ 0.64% tin at Prospect Hill. However, as there are relatively few tin exploration companies in Australia we are unable to adopt the same valuation methodology as for the copper/gold prospects and Maldorky.

Instead our valuation approach for Prospect Hill is firstly to determine ratio of EV to value of contained metal based on the comparable copper companies identified earlier. Our

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analysis shows that the average ratio across the companies is 2%. Tin has a higher margin than copper - 0.64% tin at a tin price of USD24,000 per tonne[8] is equivalent to $154 per tonne whereas copper with a grade of 0.9% and a price of $8,800 per tonne is equivalent to $79 per tonne.

Applying the 2% ratio to the Prospect Hill resource at a tin price of USD24,000 per tonne and adjusting for the higher margin results in a valuation of the resource of $2.0 million.

Curnamona Energy Limited

Earlier we determined the market value of 100% of Curnamona’s ordinary shares as at 16 April 2012 was $7.1 million.

Havilah owns a 45.38% stake in Curnamona. We calculate the value of this holding at $3.3 million.

Geothermal Resources

In August 2011 we prepared an Independent Expert Report undertaking a valuation of Geothermal Resources Limited.

In that report we determined the market value of 100% of Geothermal’s ordinary shares as at 22 August 2011 was $4,447,875. Since that time, Havilah has acquired all of Geothermal’s shares and Geothermal has been delisted from the ASX.

We are not aware of any material event that would affect the market valuation of Geothermal between August 2011 and April 2012. Therefore, for the purpose of this valuation, we have adopted the August valuation of $4.4 million for 100% of Geothermal.

Valuation Summary

A summary of our valuation of Havilah is provided in TABLE 29

TABLE 29 HAVILAH VALUATION SUMMARY

TABLE 29 HAVILAH VALUATION SUMMARY
Project / Investment	Value($ million)
Kalkaroo Mutooroo North Portia Portia Maldorky Lilydale Prospect Hill Geothermal Resources Curnamona Energy (45%)	62.1 16.7 10.3 2.0 75.0 0.0 2.0 4.4 3.3
Valuation of Havilah	175.8

The total number of Havilah shares currently is 101,323,223.

Based on a valuation of $175.8 million for Havilah, this amounts to a value per share of $1.74.

8 Source: LME

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Valuation Cross Check

We have considered the reasonableness of our valuation derived using the market based assessment using a valuation cross check. The approach we have adopted is to calculate the VWAP of Havilah’s shares over various periods prior to the date that Havilah announced its intention to acquire the remaining Curnamona shares (1 March 2012). This is presented in TABLE 30.

TABLE 30 VOLUME WEIGHTED AVERAGE PRICE OF HAVILAH SHARES

Period Prior to 1 March 2012	VWAP Havilah Share Price ($ per share)
1 week	0.65
1 month	0.68
3 months	0.64
6 months	0.61
12 months	0.61

Source: VAA Analysis

The closing price prior to the trading halt before the announcement (1 March 2012) was $0.64 per share.

Based on the above observations regarding the Havilah share price, we have adopted a price of $0.64 per share for the valuation of Havilah, representing the VWAP over the month prior to the announcement. The number of issued Havilah shares as at 16 April 2012 was 101,323,223. This values Havilah at $64.8 million.

There is significant difference between the value of Havilah derived using the two approaches. However, this is not unreasonable given that Havilah is a mining exploration and development company that currently does not have any producing assets and, as yet, has not generated any revenue from mining. The wide valuation range reflects the uncertainty surrounding the future outcomes for each of Havilah’s identified resources.

Value of Havilah Option

The Listed Option Offer is one listed Havilah option for every five listed Curnamona Options.

The listed Havilah options are American options with the following characteristics:

Exercise price of $0.75
Expiry date of 23/03/14

As the listed Havilah options are not yet listed we have no traded prices as the basis for the value of the Listed Option Offer to Curnomona option holders. We have valued the options using the Binomial option pricing model.

The inputs to the binomial option pricing model of the listed Havilah options are as follows:

Share price of Havilah at Listed Option Offer date = $0.69
Exercise price of Options = $0.75
Share price volatility = 60% to 80% (p.a.)
Risk free rate = 3% (p.a.)

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Time period = 2 years

Share price volatility was estimated based on historical volatility over a period similar to the time remaining before expiry. We have included a range of between 60% to 80% p.a.

Based on these inputs we assess the value of a listed Havliah option to be in the range of $0.22 to $0.29 as at the date of the Listed Option Offer.

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Evaluation of the Havilah Offer

Fairness

In forming our opinion, VAA has concluded that the market value of Curnamona is $0.11 per share, on an undiluted basis. Our valuation range represents the underlying market value of Curnamona on a controlling basis.

The Havilah Offer is one Havilah share per five Curnamona shares.

VAA has concluded the market value of Havilah is in the range from $0.64 per share to $1.74 per share, equivalent to an offer of $0.13 to $0.35 per Curnamona share.

As the Havilah Share Offer exceeds our valuation range for Curnamona, we consider the Havilah Offer is fair to the shareholders of Curnamona.

However, we observe that the upper range of our Havilah valuation, and therefore the upper range of the consideration, is significantly higher than the valuation based on the current share market price. For Curnamona Shareholders to realise this value from the Offer, share market investors in Havilah will need to recognise that greater value exists in Havilah’s assets.

VAA has concluded that the market value of a Curnamona option is between $0.005 and $0.019.

The Havilah Offer is one Havilah listed option per five Curnamona listed option.

VAA has concluded the market value of a Havilah option is in the range from $0.22 to $0.29, equivalent to an offer of $0.04 to $0.06 per Curnamona share.

As the Havilah Option Offer exceeds our valuation range for Curnamona, we consider the Havilah Option Offer is fair to the option holders of Curnamona.

Reasonableness

ASIC Regulatory Guide 111 states that an offer is reasonable if it is fair.

Above we concluded that the Offers are fair. Therefore, they are also reasonable.

Notwithstanding that there is no requirement to address reasonableness issues, we believe the Curnamona shareholders may wish to consider the following matters in making their assessment of whether to accept the offer.

Curnamona’s cash resources are limited and may be insufficient to continue funding the minimum amounts necessary to maintain all its tenements, absent ongoing financial support from Havilah.
Curnamona shares and listed options are thinly traded.
Curnamona is a single commodity company. In contrast, Havilah controls a number of mineral resources which are close to production.
Significant upside exists in the Havilah price as evidenced by the agreement to issue Havilah capital at $1.25 (see ASX announcement of 6 September 2011).
In VAA’s assessment it is unlikely that an alternative, superior offer is likely to be made to Curnamona shareholders.

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Value Adviser Associates is unable to provide definitive advice as to the likely share price of Curnamona in the event the offer from Havilah lapses. Share price movements are affected by many financial and economic events outside the control of Curnamona.
Curnamona has modest cash reserves and is very likely to require a capital raising in the next year, absent ongoing financial support from Havilah. If this occurs, Curnamona Shareholders and Curnamona Listed Optionholders face the prospect of significant dilution from future capital raisings to fund and develop its projects.
Shareholders should be aware that there is a possibility, but no certainty, that a superior offer will be made by Havilah or an alternative bidder. However, at this time there is no alternative bidder.

Implications if Havilah does not acquire 90% or more of the shares of Curnamona

Shareholders should be aware of the potential implications of not accepting the Havilah Offer in the event that Havilah acquires less than 90 per cent of Curnamona shares and waives its condition to acquire 90% or more.

The Bidder’s Statement indicates that in this event, Havilah intends to maintain Curnamona’s listing on ASX while it meets ASX requirements for maintaining a listing and it is cost effective to do so. If Havilah becomes entitled at some later time to exercise general compulsory acquisition rights under the Corporations Act, it would exercise those rights.

Risks to investments in Havilah

With regard to the risks associated with acceptance of the Offers and the subsequent shareholding and option holding in the Havilah group, Curnamona shareholders and option holders need to consider the risks that may have an adverse impact on the future performance of the Merged group and the value of Havilah shares and options.

On the basis of our analysis of the industries associated with Curnamona and Havilah, and reviewing the assessment of risks provided in Section 9 of the Bidder’s Statement, VAA considers the key investment risks to be:

Volatility in metal prices with potentially reduced prices;
The quality and quality of reserves is less than currently indicated;
Unanticipated geological conditions increase operational costs;
Approvals required for operations are not given or delayed;
Development consents are not forthcoming or difficult to acquire.

Curnamona Directors intend to accept the Offer

The Target’s Statement indicates that the Curnamona Directors intend to accept the Offers in respect of all Curnamona shares and listed options respectively controlled by them, subject to, in the case of Mr Staveley, there being no superior proposal, and no material adverse event having occurred.

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Appendix 1 – Statement of Qualifications and Declarations

Value Adviser Associates is qualified to provide this report. It is the corporate authorised representative of Capital Value Securities, which holds an Australian Financial Services Licence under the Corporations Act. The director of Capital Value Securities responsible for this report has not provided financial advice to either Curnamona or Havilah in relation to this takeover offer.

Prior to accepting this engagement, VAA considered its independence with respect to Curnamona and Havilah with reference to ASIC Regulatory Guide 112: Independence of experts . VAA has previously prepared an Independent Expert Report for Havilah in 2011 in relation to the acquisition of Geothermal. In our opinion, we are independent of Curnamona and Havilah.

This report has been prepared specifically for the non-associated shareholders of Curnamona. Neither VAA nor any member or employee thereof undertakes responsibility to any person, other than a non-associated shareholder of Curnamona, in respect of this report, including any errors or omissions howsoever caused.

The statements and opinions given in this report are given in good faith and the belief that such statements and opinions are not false or misleading. In the preparation of this report VAA has relied upon and considered information believed after due inquiry to be reliable and accurate. VAA has no reason to believe that any information supplied to it was false or that any material information has been withheld from it. VAA has evaluated the information provided to it by Curnamona, its advisors, as well as other parties, through inquiry, analysis and review, and nothing has come to its attention to indicate the information provided was materially mis-stated or would not afford reasonable grounds upon which to base this report. VAA does not imply and it should not be construed that it has audited or in any way verified any of the information provided to it, or that its inquiries could have verified any matter which a more extensive examination might disclose. The information we have had regard to in the preparation of this report is set out in Appendix 4 – Sources of Information.

The information provided to VAA has been evaluated through analysis, enquiry and review to the extent it considered necessary for the purposes of forming an opinion. Value Adviser Associates does not warrant that its enquiries have identified or verified all the matters that a formal audit or due diligence may disclose. Accordingly, this report and the opinions contained in it should be considered more in the nature of a commercial and financial review rather than a comprehensive audit or due diligence.

Curnamona has provided an indemnity to VAA for any claims arising out of any misstatement or omission in any material or information provided to it in the preparation of this report.

This report should be read in its entirety to ensure that no isolated statements, analyses or other factors are construed out of context. The preparation of an opinion is a complex process and subject to professional judgement. The overall opinion is not to partial analysis or summary.

VAA provided draft copies of this report to the independent directors and management of Curnamona for their comments as to factual accuracy, as opposed to opinions, which are the responsibility of VAA alone. Changes made to this report as a result of this review by the independent directors and management of Curnamona have not changed the methodology or conclusions reached by VAA.

VAA will receive a professional fee based on time spent in the preparation of this report, estimated at $15,000 (exclusive of GST). This fee is not contingent on the outcome of the

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Offer. VAA will not be entitled to any other pecuniary or other benefit whether direct or indirect, in connection with the making of this report.

Mr Michael Churchill, a director of VAA, has assumed overall responsibility for this report. He has over 25 years’ experience in providing financial advice and valuation advice and has professional qualifications appropriate to the advice being offered.

Mr Mark Gemmola, an employee of VAA, has also been involved in the preparation of this report. He has over 15 years of commercial and advisory experience in areas such as accounting and providing financial/valuation advice. Mark has professional qualifications appropriate to the advice being offered.

In the preparation of this report VAA has had regard to relevant Regulatory Guides issued by ASIC. It is not intended that the report should be used for any other purpose than to be sent to the Shareholders of Curnamona. In particular, it is not intended that this report should be used for any other purpose other than as an expression of its opinion as to whether or not the Offer is fair and reasonable for the Shareholders.

The financial forecasts considered in the preparation of this report reflect the judgment of directors and management of Curnamona based on present circumstances, as to both the most likely set of conditions and the course of action it is most likely to take. It is usually the case that some events and circumstances do not occur as expected or are not anticipated. Therefore, actual results during the forecast period will almost always differ from the forecast and such differences may be material. To the extent that our conclusions are based on forecasts, we express no opinion on the achievability of those forecasts.

VAA consents to the issue of this report in the form and context in which it is included in the Target’s Statement to be sent to the Shareholders.

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Appendix 2 – Valuation Methodologies

There are a number of valuation methodologies available with which to value a project, a business or the shares in a company. The principal methodologies used are:

capitalisation of earnings;
discounted cash flow;
net realisable value of assets;
market based assessments; and
recent offers.

Each of these methodologies is appropriate in certain circumstances. The decision as to which methodology to utilise generally depends upon the methodology most commonly adopted in valuing the asset in question and the availability of appropriate information.

Capitalisation of Earnings

The capitalisation of earnings methodology involves capitalising the earnings of a project, a business or a company at an appropriate multiple, which reflects the risks underlying the earnings together with growth prospects.

This methodology requires consideration of the following factors:

estimation of future maintainable earnings having regard to historical and forecast operating results, abnormal or non-recurring items of income and expenditure and other factors. Future maintainable earnings is generally based on net profit after tax, EBIT, EBITA or EBITDA;
determination of an appropriate earnings multiple reflecting the risks inherent in the business, growth prospects and other factors;
earnings multiples applied to net profit after tax are known as price earnings multiples and are commonly used in relation to listed public companies. Earnings multiples applied to EBIT, EBITA or EBITDA are known, respectively, as EBIT, EBITA or EBITDA multiples, and are commonly used in respect of companies comprising a number of businesses where debt cannot be precisely allocated or in acquisition scenarios where the purchaser is likely to control gearing;
an adjustment for financial debt, in the event maintainable earnings are based on EBIT, EBITA or EBITDA; and
an assessment of any surplus assets and liabilities, being those which are not essential to the generation of the future maintainable earnings.

This methodology is appropriate where a company or business is expected to generate a relatively stable record of earnings.

Neither Curnamona nor Havilah have profitable operations. Accordingly this methodology is not appropriate to employ in the assessment of value of either company.

Discounted Cash Flow

The discounted cash flow methodology involves calculating the net present value of cash flows that are expected to be derived from future activities. The forecast cash flows are discounted by a discount rate that reflects the time value of money and the risk inherent in cash flows.

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This methodology is particularly appropriate in valuing projects, businesses and companies that are in a start-up phase and are expecting considerable volatility and/or growth in earnings during the growth phase, as well as businesses with a finite life (such as oil and gas fields). The utilisation of this methodology generally requires management to be able to provide long term cash flows for the subject company, asset or business.

Curnamona management have not prepared cashflow forecasts and Havilah has not prepared cashflow forecasts for any of its projects.

We understand that an independent valuation has been prepared of the Kalkaroo project based on a discounted cashflow employing assumptions developed by management and the valuer. This valuation has recently been provided to Havilah and VAA understands that the directors have accepted the valuation. The valuation indicates a range of values for the Kalkaroo project between $40 million and $190 million with an expected value of $50 million. VAA has not verified the assumptions employed in the Kalkaroo valuation but notes that the credentials of the valuer, approach, methodology and data sources are likely to provide a reliable indication of the value of this project.

Save for the cashflow forecast prepared by the valuer of the Kalkaroo project, there are no cashflow forecasts available. Our review of the available information indicates that there is no reliable basis for estimating cashflows for any of the projects other than Kalkaroo.

Accordingly, no discounted cashflow valuations have been undertaken by VAA.

High level estimates of capital costs, production rates, metal prices and mine costs have been discussed with management and, where possible, cross-checked to the operating parameters of companies operating similar facilities in order to arrive at benchmark values, as discussed further below.

Net Realisable Value of Assets

The net realisable value of assets methodology involves the determination of the net realisable value of the assets of a business or company, assuming an orderly realisation of those assets. This value includes a discount to allow for the time value of money and for reasonable costs of undertaking the realisation. It is not a valuation on the basis of a forced sale, where assets may be sold at values materially different to their market value.

This methodology is appropriate where a project, a business or company is not making an adequate return on its assets or where there are surplus non-operational assets.

The absence of an observable market in Curnamona’s tenements prevents the use of this methodology with respect to Curnamona’s principal assets. However, analysis of the comparable listed companies permits an estimate to be undertaken of the implied value of Curnamona’s resource as compared with the comparable uranium exploration companies.

Market Based Assessments

Market based assessments relate to the valuation of companies, the shares of which are traded on a stock exchange. While the relevant share price could, prima facie, constitute the market value of the shares, such market prices usually reflect the prices paid for small parcels of shares and as such do not include a control premium relevant to a significant parcel of shares.

Recent Offers

Where a recent genuine offer has been made for a company, business unit or asset, that offer may be used as a basis for valuation of the company, business unit or asset.

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Appendix 3 – Description of Comparable Companies and Transactions

TABLE 31 COMPARABLE COMPANIES - COPPER

Company	Details
Golden Cross Resources Ltd	Golden Cross Resources Ltd is a mineral explorer with a copper-gold focus. Its major activity is the Copper Hill copper-gold project in central NSW which contains 619,000 tonnes of copper and 1.64 million ounces of gold of which an estimated 85% falls within the optimum pit shell.
Indophil Resources NL	Indophil NL holds a 37.5% interest alongside Xstrata in one of the world’s largest, low-cost copper deposits, the Tampakan copper gold project in the southern Philippines. On the latest estimate, the Tampakan project is a 2.4 billion tonne mineral resource containing 13.9 million tonnes of copper and 16.2 million ounces of gold.
Copper Strike Limited	Copper Strike is a mineral exploration and development company focused on finding and developing copper and related base metals in eastern Australia. Its most advanced project is at Einasleigh in North Queensland. Copper Strike recently sold its interest in the Walford Creek deposit (3,900 inferred tonnes copper) for $2.5 million.
Marengo Mining Limited	Marengo Mining is an Australian-based resources company focused on developing the Yandera copper-molybdenum project in PNG.
Silver Swan Group Limited	Silver Swan Group is an Australian listed gold and base metals explorer with projects in the Murchison province, Western Australia and the Gawler Craton, South Australia. Silver Swan’s principal focus is the Quinns area, located 55km south of Meekatharra, for volcanogenic massive sulphide (Cu-Zn-Ag-Au) mineralisation.
Aussie Q Resources Ltd	Aussie Q Resources Ltd is a mineral exploration company that holds ten (three under joint venture) highly prospective copper/molybdenum exploration permits in the Rawbelle district, centred 30 km to the west of the town of Monto approximately 150 km from Gladstone.
Metminco Limited	Metminco Limited is a base and precious metals company focused on Latin America with a portfolio of assets at various stages of development in Peru and Chile. Its major asset is the Los Calatos large scale copper molybdenum exploration project.
Empire Resources Limited	Empire Resources is a gold and copper-focused exploration company. Its major tenement position is at the Youanmi base metals province in Western Australia and has an indicated and inferred resource of 1.07 million tonnes at 1.82% copper and 0.78g/t gold.
Rex Minerals Limited	Rex Minerals is an Australian minerals exploration and development company with large-scale copper-gold projects on the Yorke Peninsula, South Australia. Rex Minerals has made an initial large-scale copper-gold discovery at the Hillside Project.
Discovery Minerals Limited	Discovery Metals’ major asset is the Boseto Copper Project in north-west Botswana. Production at the site is expected to commence in the first half of 2012.
Augur Resources Limited	Augur Resources is a resource development company, with a focus on copper, gold and nickel projects within the Lachlan Fold Belt of central NSW. Augur discovered the Homeville nickel and cobalt deposit in 2008 that has JORC inferred resource of 12.2Mt at 0.91% nickel and 0.06% cobalt.
Cudeco Limited	Cudeco Limited is a Queensland based exploration company whose principal asset is the Rocklands copper project.

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TABLE 32 COMPARABLE COMPANIES – GOLD

Company	Details
Signature Metals Limited	Signature Metals Limited explores and mines natural resources in areas of Africa.
Montezuma Mining Company	Montezuma Mining Company Limited acquires and explores for mineral interests in Australia and overseas. The Company mines for gold, copper-lead- zinc, nickel, and copper-gold targets.
Lachlan Star Limited	Lachlan Star Limited is a mineral exploration company.
Hill End Limited	Hill End Gold Limited is involved in the exploration and production of gold.
Phoenix Gold Limited	Phoenix Gold Ltd. explores for gold. The Company has agreements to acquire properties in the Zuleika-Carbine and Kunanalling Shear Zones and the Ora Banda-Grants Patch in Australia.
Millennium Minerals	Millennium Minerals Limited mines, explores and develops metal resources in the East Pilbara region of Western Australia.
Aphrodite Gold	Aphrodite Gold Ltd. is a gold mining company. The Company was formed for the purpose of acquiring and bringing into production the Aphrodite Gold Project near Kalgoorlie in Western Australia.
Alloy Resources Limited	Alloy Resources Ltd. explores for minerals. The Company holds properties in gold mining areas in Western Australia.

TABLE 33 COMPARABLE COMPANIES – IRON ORE

Company	Details
Ironclad Mining	Ironclad Mining Limited explores for and produces minerals. The Company is focused on iron ore exploration and production.
Brockman Resources	Brockman Resources Limited explores for gold, nickel and base metals in Western Australia. The Company also has interest in the Credo Project that explores for gold in the Kalgoorlie region of Australia.
Lincoln Minerals	Lincoln Minerals Limited is a mineral exploration and production company. The Company explores for uranium, base metals (lead, zinc, copper, nickel, and silver), gold, iron ore, and iron oxide.
Cazaly Resources	Cazaly Resources Limited is a gold exploration and mining company operating in Western Australia. The Company's projects include the Kununalling Project, East Kalgoorlie Project and the Mt Vetters Project.
Iron Ore Holdings	Iron Ore Holdings Ltd. explores for iron ore. The Company operates in Western Australia.
Flinders Mines	Flinders Mines Limited is an iron ore exploration and development company. The Company focuses on iron ore in the Pilbara region of Western Australia. Flinders Mines Ltd also explores for diamond and phosphate in South Australia and the Northern Territory.

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Comparable Company Resources

TABLE 34 below is a summary of the resources of the comparable copper companies:

TABLE 34 COMPARABLE COMPANY RESOURCES - COPPER

Name	Measured Indicated Inferred Copper Resources (tonnes)	Measured Indicated Inferred Gold Resources (ounces)
Golden Cross Resources Ltd Indophil Resources NL Copper Strike Ltd Marengo Mining Ltd Silver Swan Group Ltd Aussie Q Resources Ltd Metminco Ltd Empire Resources Ltd Rex Minerals Ltd Augur Resources Ltd Cudeco Ltd	244,100 158,400 90,700 5,500,000 5,000,000 3,300,000 0 133,400 24,150 453,592 861,825 1,632,932 5,654 6,822 2,701 0 220,403 63,201 0 433,914 3,015,389 0 3,610 56,857 0 211,000 1,259,000 0 0 48,949 193,520 231,610 62,220	714,000 406,800 210,600 7,000,000 5,600,000 3,500,000 0 59,968 4,051 0 0 2,200,000 4,470 4,975 1,839 0 0 0 0 0 0 11,177 74,133 745,684 0 228,270 1,170,287 0 0 57,987 16,662 29,378 17,318

Name	Measured Indicated Inferred Molybdenum Resources (tonnes)	Measured Indicated Inferred Silver Resources (ounces)
Golden Cross Resources Ltd Indophil Resources NL Copper Strike Ltd Marengo Mining Ltd Silver Swan Group Ltd Aussie Q Resources Ltd Metminco Ltd Empire Resources Ltd Rex Minerals Ltd Augur Resources Ltd Cudeco Ltd	0 0 0 63,180 62,790 48,000 0 0 0 20,412 30,844 41,277 0 0 0 0 49,230 13,581 0 42,279 211,892 0 0 0 0 0 0 0 0 1,547 0 0 0	0 0 0 0 0 0 0 2,893,891 684,887 0 0 42,000,000 65,267 74,173 27,991 0 9,220,589 2,792,268 0 0 0 0 0 0 0 0 0 0 0 911,219 0 0 0

Name	Measured Indicated Inferred Zinc Resources (tonnes)	Measured Indicated Inferred Nickel Resources (tonnes)
Golden Cross Resources Ltd Indophil Resources NL Copper Strike Ltd Marengo Mining Ltd Silver Swan Group Ltd Aussie Q Resources Ltd Metminco Ltd Empire Resources Ltd Rex Minerals Ltd Augur Resources Ltd Cudeco Ltd	0 0 0 0 0 0 0 0 0 0 0 0 5,283 10,338 3,717 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 110,000 0 0 0

Name	Measured Indicated Inferred Cobalt Resources (tonnes)	Measured Indicated Inferred Magnesium Resources (tonnes)
Golden Cross Resources Ltd Indophil Resources NL Copper Strike Ltd Marengo Mining Ltd Silver Swan Group Ltd Aussie Q Resources Ltd Metminco Ltd Empire Resources Ltd Rex Minerals Ltd Augur Resources Ltd Cudeco Ltd	0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7,300 16,662 29,378 17,318	0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,387,680 3,778,900 2,976,190

Source: Various Annual Reports, VAA Analysis

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TABLE 35 provides a summary of the resources of the comparable gold companies:

TABLE 35 COMPARABLE COMPANY RESOURCES – GOLD

	Name	Tenement Name	Measured Indicated Inferred Gold Resources (ounces Au)	Measured Indicated Inferred Measured Indicated Inferred Resources (Tonnes) Gold Grade (g/t)	Measured Indicated Inferred Measured Indicated Inferred Resources (Tonnes) Gold Grade (g/t)
1 2 3 4 5 6 7 8	Signature Metals Limited Montezuma Mining Company Lachlan Star Limited Hill End Limited Phoenix Gold Limited Millennium Minerals Aphrodite Gold Alloy Resources Limited	Konongo Peak Hill Jubilee Las Loas Toro/Socorro Tres Perlaas Chisperos Big Nuggett Hill End Red Hill Kunanalling Broad Dam Castle Hill Ora Banda / Grant Patch Carbine Zulieka Stockpiles Nullagine Aphrodite Palomino Bronco Filly Filly SW	0 687,070 779,620 0 436,000 125,000 0 6,300 40,500 0 73,000 37,000 0 348,000 135,000 0 1,332,000 1,126,000 0 36,000 43,000 0 143,000 78,000 28,100 37,700 181,000 0 0 89,200 38,000 40,000 166,000 0 84,000 236,000 20,000 273,000 266,000 0 97,000 300,000 0 0 78,000 0 41,000 22,000 0 19,000 0 715,301 393,878 220,194 0 451,000 582,000 0 53,150 12,525 0 2,117 0 0 8,091 0 0 22,817 0	0 13,123,500 23,355,000 0 9,170,000 2,255,000 0 100,000 505,000 0 2,837,875 1,438,375 0 18,038,000 10,496,250 0 103,563,000 116,728,667 0 1,017,818 1,337,300 0 1,262,000 944,000 77,400 180,400 642,200 0 0 849,000 492,417 777,500 2,868,111 0 1,306,200 3,862,947 182,941 5,306,438 5,515,067 0 1,508,350 5,183,333 0 0 1,426,941 0 510,040 273,680 0 492,417 0 18,538,212 9,959,039 6,169,405 0 3,670,000 6,390,000 0 655,938 104,994 0 41,408 0 0 161,301 0 0 90,396 0	0.00 2.03 1.85 0.00 1.46 1.72 0.00 1.95 2.49 0.00 0.80 0.80 0.00 0.60 0.40 0.00 0.40 0.30 0.00 1.10 1.00 0.00 3.50 2.60 11.30 6.50 8.80 0.00 0.00 3.30 2.40 1.60 1.80 0.00 2.00 1.90 3.40 1.60 1.50 0.00 2.00 1.80 0.00 0.00 1.70 0.00 2.50 2.50 0.00 1.20 0.00 1.20 1.23 1.11 0.00 3.83 2.83 0.00 2.52 3.71 0.00 1.59 0.00 0.00 1.56 0.00 0.00 7.85 0.00

Source: Various Annual Reports, VAA Analysis

TABLE 36 provides a summary of the resources of the comparable iron ore companies:

TABLE 36 COMPARABLE COMPANY RESOURCES – IRON ORE

Name Proved Probable Measured Indicated Inferred Iron Ore Resources ('000 tonnes)	Name Proved Probable Measured Indicated Inferred Iron Ore Resources ('000 tonnes)	Name Proved Probable Measured Indicated Inferred Iron Ore Resources ('000 tonnes)
Iron Clad Mining Brockman Resources Lincoln Minerals Iron Ore Holdings Flinders Mines	0 0 55,328 395,818 0 0 17,364 17,093 0 0	0 58,238 10,914 71,968 542,742 91,436 0 2,151 24,229 13,664 4,358 1,674 0 0 131,165

Source: Various Annual Reports, VAA Analysis

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Appendix 4 – Sources of Information

In preparing this report, we have had regard to the following sources of information:

TABLE 37 SOURCES OF INFORMATION

ABARE, Australian Energy Resource Assessment, 2010

ABARE, Australian Commodities Outlook, June Quarter 2011

Advanced Project Summaries by Havilah Resources

Bidder’s Statement (draft) 26 April 2012

Bloomberg

Code for the Technical Assessment and Valuation of Mining and Petroleum Assets and Securities for Independent Expert Reports “The VALMIN Code”, 2005 Edition

Curnamona Energy, response to Australian Stock Exchange price query, 29 March 2007

Curnamona Energy, Annual Report 2008, 2009, 2010, 2011

Curnamona Energy, ASX Media Release – Approach by Havilah Resources NL, 5 March 2012

Curnamona Energy, Presentation at Paydirt’s 2010 Uranium Conference Adelaide, 1-2 March 2010

Curnamona Energy, Prospectus 2005

Curnamona Energy, Takeover Bid Implementation Agreement, 9 March 2012

Curnamona Energy, Target Statement (draft) 27 April 2012

Gold demand trends, by World gold council for 2010 and 2011

Havilah Resources : Deep Value Copper-Gold Asset Opportunity in South Australia by BGF Equity research on June 2011

Havilah Resources NL, Annual Report 2008, 2009, 2010, 2011

Havilah Resources NL, ASX Media Release – Discussions with Curnamona Energy Ltd, 5 March 2012

Havilah Resources NL, Bidder's Statement (draft) 27 April 2012

Havilah Resources NL, Half Year Report, January 2012

Havilah Resources NL – Kalkaroo Project : Indicative Valuation Assessment on 8th July 2011

http://minerals.usgs.gov/minerals/pubs/commodity/copper/

Index Mundi : Copper world mine production by country

Index Mundi : Iron Ore world prices from http://www.indexmundi.com/commodities/?commodity=iron-ore&months=240

Iron ore background, from Mineral Information Institute

Iron ore spot prices hit record high in 2011 from The Australian (Business with Wall Street Journal) on 05th Jan 2011

Maldorky Iron Ore deposit – Resource statement by Havilah on 10th June 2011

Mutooroo Prospect, Scoping Study by Havilah Resources on 11th Oct 2005

Optiro Pty Ltd, Valuation of the Mineral Assets of Curnamona Energy Limited

Portia – two stage open cut mining plan by Havilah resources NL

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Portia Gold Project by Havilah resources from CY 2011 TO CY 2014 Published financial statements of below companies (used as comparables) : Strike Resources Limited, Iron Ore Holdings Limited, Golden West Resources Limited, Flinders Mines Ltd, Centrex Metals Limited, Mineral resource estimation and ore reserves, Augur Resources Limited, Aussie Q Resources, Copper Strike Limited, CuDeco Limited, Empire Resources Limited, Golden Cross Resources Limited, Hillgrove resources Limited, Indophil resources NL, Marengo Mining Limited, Metminco, Rex Minerals, BC Iron Limited, and Silver Swan Group S&P Commodity Trends Indicator by S&P on February 2008 Strategic Objectives for 2011 by Havilah Resources Target’s Statement (draft) 2 May 2012 Value Adviser Associates, Geothermal Resources Limited - Independent Expert’s Report in relation to proposed takeover by Havilah Resources NL, 30 September 2011

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Appendix 5 – Financial Services Guide

Issue Date: September 2011

Value Adviser Associates Pty Ltd ABN 54 131 852 607 (“Value Adviser Associates” or “we” or “us” or “our” as appropriate) provides general advice in relation securities to retail clients as an authorised representative of Capital Value Securities Pty Ltd ABN 46 123 674 886 (“CVS” or “licensee”) AFSL No 311705.

Financial Service Guide

In the above circumstances we are required to issue you, as a retail client, with a Financial Services Guide [FSG]. This FSG is designed to help retail clients make a decision as to their use of our general security advice.

This FSG includes information about:

Who we are and how we and the licensee can be contacted
The services we are authorised to provide under the licensee’s Australian Financial Services Licence
Remuneration that we, the licensee and any associates receive in connection with our general advice
The licensee’s complaints handling procedures and how you may access them.

The licensee has authorised this FSG.

Financial services we are authorised to provide

We hold Authorised Representative number 342572 authorising us to provide general security advice on behalf of the licensee.

General advice

We provide general advice, not personal advice because it has been prepared without taking into account your personal objectives, financial situation or needs.

You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice. Where the advice relates to the acquisition or possible acquisition of a financial product, you should also obtain a product disclosure statement relating to the product and consider that statement before making any decision about whether to acquire the product.

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Except for the fees referred to above, neither Value Adviser Associates, CVS nor any of their directors, employees or related entities receive any pecuniary benefit or other benefit directly or indirectly for or in connection with the provision of financial product advice.

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Referrals

We do not pay commissions or provide other benefits to any person for referring customers to CVS or us in connection with the advice that we are authorised to provide.

Associations and relationships

CVS is ultimately controlled and operates as part of Value Adviser Associates professional advisory practice. Our Directors may be executive directors of CVS.

From time to time, we may provide professional services to financial product issuers in the ordinary course of our business.

Complaints resolution

Internal complaints resolution process

As a holder of an Australian Financial Services Licence, CVS is required to have a system for handling complaints from retail clients to whom it and its representatives provide financial product advice. All complaints must be in writing, addressed to: The Complaints Officer, Capital Value Securities Pty Ltd, Level 2, 65 Southbank Boulevard, Southbank, Vic 3006.

When CVS receives a written complaint it will record the complaint, acknowledge receipt of the complaint within 15 days and investigate the issues raised. As soon as practicable and not more than 45 days after receiving the written complaint, it will advise the complainant in writing of its determination.

Referral to External Dispute Resolution Proposed Scheme

A complainant not satisfied with the outcome of the above process, or the licensee’s determination, has the right to refer the matter to the Financial Ombudsman Service Ltd [“FOS”]. FOS is an independent company that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial services industry.

Further details about FOS are available from the FOS website www.fos.org.au or by contacting them directly at: Financial Ombudsman Service Ltd. GPO Box 3, Melbourne Victoria 3001 or Toll free 1300 78 08 08 or by facsimile (03) 9613 6399.

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Contact details

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Value Adviser Associates Valuation of the mineral assets of Curnamona Energy Limited

J_1380

Principal Author: Jason Froud BSc Hons, MAusIMM

Principal Reviewer: Ian Glacken FAusIMM (CP), CEng

April 2012

Valuation of the mineral assets of Curnamona Energy Limited

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Perth Office

Level 4, 50 Colin Street West Perth WA 6005

Doc Ref: 20120403_J1380_Curnamona IGR and Valuation_Final.docx

Print Date: 9 May 2012

PO Box 1646 West Perth WA 6872 Australia

Tel: +61 8 9215 0000 Fax: +61 8 9215 0011

Number of copies:

Optiro: 1

Optiro Pty Limited ABN: 63 131 922 739 www.optiro.com

Value Adviser Associates: 1

Principal Author: Jason Froud Signature:
BSc Hons, MAusIMM
Date: 3 April 2012
Contributors:
Principal Reviewer: Ian Glacken Signature:
FAusIMM(CP), CEng
Date: 3 April 2012
Important Information
This Report is provided in accordance with the proposal by Optiro Pty Ltd (“Optiro”) to Value Adviser Associates and the
terms of Optiro’s Consulting Services Agreement (“the Agreement”). Optiro has consented to the use and publication of
this Report by Value Adviser Associates for the purposes set out in Optiro’s proposal and in accordance with the
Agreement. Value Adviser Associates may reproduce copies of this entire Report only for those purposes but may not
and must not allow any other person to publish, copy or reproduce this Report in whole or in part without Optiro’s prior
written consent.
Unless Optiro has provided its written consent to the publication of this Report by Value Adviser Associates for the
purposes of a transaction, disclosure document or a product disclosure statement issued by Value Adviser Associates
pursuant to the Corporations Act, then Optiro accepts no responsibility to any other person for the whole or any part of
this Report and accepts no liability for any damage, however caused, arising out of the reliance on or use of this Report by
any person other than Value Adviser Associates. While Optiro has used its reasonable endeavours to verify the accuracy
and completeness of information provided to it by Value Adviser Associates and on which it has relied in compiling the
Report, it cannot provide any warranty as to the accuracy or completeness of such information to any person.

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1.	EXECUTIVE SUMMARY .................................................................................5
2.	INTRODUCTION AND TERMS OF REFERENCE ................................................6
2.1.	INTRODUCTION ................................................................................................................. 6
2.2.	TERMS OF REFERENCE AND PURPOSE OF REPORT .............................................................. 6
2.3.	RESPONSIBILITY FOR THE REPORT AND DATA SOURCES ..................................................... 6
2.4.	LIMITATIONS AND EXCLUSIONS ......................................................................................... 7
3.	LOCATION AND ACCESS................................................................................7
4.	TENURE AND OWNERSHIP ...........................................................................8
4.1.	MATERIAL AGREEMENTS ................................................................................................... 9
5.	GEOLOGY AND MINERALISATION............................................................... 10
5.1.	OBAN PROSPECT.............................................................................................................. 11
5.2.	YARRAMBA PALAEOVALLEY DRAINAGE SYSTEM .............................................................. 12
5.3.	LAKE NAMBA PALAEOVALLEY DRAINAGE SYSTEM............................................................ 12
6.	EXPLORATION ............................................................................................ 13
7.	URANIUM PRICES....................................................................................... 13
8.	VALUATION CONSIDERATIONS................................................................... 14
9.	VALUATION APPROACH AND METHODOLOGY ........................................... 15
9.1.	GEOSCIENTIFIC RATING METHOD..................................................................................... 16
9.2.	COMPARABLE TRANSACTION METHOD............................................................................ 17
9.3.	JOINT VENTURE TERMS METHOD..................................................................................... 18
9.4.	APPRAISED VALUE METHOD ............................................................................................ 18
10.	VALUATION................................................................................................ 18
10.1.	COMPARABLE TRANSACTIONS AND JOINT VENTURE TERMS ............................................ 19
10.2.	GEOSCIENCIFIC RATING METHODS................................................................................... 22
10.3.	SUMMARY VALUATION ................................................................................................... 24
11.	PREVIOUS MINERAL ASSET VALUATIONS ................................................... 24
12.	DECLARATIONS BY OPTIRO ........................................................................ 24
12.1.	INDEPENDENCE ............................................................................................................... 24
12.2.	QUALIFICATIONS ............................................................................................................. 25
13.	REFERENCES............................................................................................... 25
14.	GLOSSARY OF ABBREVIATIONS AND TECHNICAL TERMS ............................ 26

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TABLES

Table 1.1	Valuation summary for Curnamona Energy’s exploration licences...........................................5
Table 4.1	Curnamona Energy – tenement schedule..................................................................................9
Table 9.1	Geoscientific rating criteria (modified by Optiro) ....................................................................17
Table 10.1	Selected transactions involving Australian exploration projects with uranium
	mineralisation...........................................................................................................................20
Table 10.2	Geoscientific rating criteria applied to uranium mineralisation potential...............................23
Table 10.3	Valuation summary for Curnamona Energy’s exploration licences.........................................24
FIGURES
Figure 3.1	Curnamona Energy’s exploration licence area location and schematic geology .......................8
Figure 5.1	Generalised Yarramba palaeovalley cross section ...................................................................10
Figure 7.1	Uranium (U3O8) price and ASX All Ordinaries index from May 2006 to March 2012
	(source: Intierra and Yahoo Finance) .......................................................................................14
Figure 10.1	Uranium transactions – area of property versus unit value with regression line ....................22

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1. EXECUTIVE SUMMARY

At the request of Value Adviser Associates, Optiro has prepared an Independent Geologist’s Report and valuation on the uranium mineral assets held by Curnamona Energy Ltd (Curnamona Energy). Optiro understands that this report may be used as a public document to support an Independent Expert Report to be prepared by Value Adviser Associates relating to a proposed takeover of Curnamona Energy Limited by Havilah Resources NL (Havilah) announced on 9 March 2012.

The report has been prepared in accordance with the requirements of the Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (the VALMIN Code, 2005). A site visit to Curnamona Energy’s Oban Project and exploration licences was undertaken by Mr Jason Froud between 19 March and 21 March 2012.

Curnamona Energy is a uranium exploration company holding exploration licences and rights over more than 6,800 km[2] of Tertiary age palaeochannel terrain in the northeast of South Australia. The licences host roll-front style uranium mineralisation at the Oban prospect and other identified uranium mineralisation at the Lake Namba and Yarramba prospects. The Oban prospect is located 60 km north of the Honeymoon uranium deposit and was discovered in the early 1980s.

Optiro considers that the assessment of uranium mineralisation is generally at an early stage. In forming its opinion of the fair market value of the uranium licences and rights Optiro used several different valuation methods, namely the Geoscientific rating method, comparable transactions and analysis of joint venture and farm-in agreements.

Optiro has determined the fair market value of uranium mineralisation within Curnamona Energy’s exploration licences at an effective valuation date of 3 April 2012. Optiro has selected the value derived from the Geoscientific rating method as the preferred valuation for the exploration potential of uranium mineralisation. Optiro’s opinion of the fair market value of the uranium potential is that it lies within the range A$3.43 M to A$7.10 M, with a preferred value of A$5.26 M (Table 1.1).

Table 1.1 Valuation summary for Curnamona Energy’s exploration licences

Mineral asset	Method		Value(A$M)
		Low	High	Preferred
Uranium mineralisation exploration potential	Comparable transactions Geoscientific ratings	3.76 3.43	4.11 7.10	3.93 5.26
Overall		3.43	7.10	5.26

The opinions expressed and conclusions drawn with respect to this valuation of the uranium mineral assets are appropriate at the valuation date of 3 April 2012. The valuation is only valid for this date and may change with time in response to variations in economic, market, legal or political conditions in addition to future exploration results.

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Valuation of the mineral assets of Curnamona Energy Limited

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2. INTRODUCTION AND TERMS OF REFERENCE

2.1. INTRODUCTION

Curnamona Energy listed on the Australian Securities Exchange on 18 April 2005 following Havilah’s decision to divest its uranium exploration interests within its Curnamona Craton exploration licences. Curnamona Energy is now a uranium exploration company holding exploration licences and rights over more than 6,800 km[2] of Tertiary age palaeochannel terrain in the northeast of South Australia. The licences host the Oban prospect, a discontinuous roll-front style uranium deposit in carbonaceous and pyritic palaeochannel sands, as well as other known uranium mineralisation at the Lake Namba and Yarramba prospects. The Oban prospect is located 60 km north of the Honeymoon uranium deposit and was discovered in the early 1980s.

2.2. TERMS OF REFERENCE AND PURPOSE OF REPORT

On 9 March 2012, Curnamona Energy announced that it had been approached on an exploratory basis by Havilah to engage in discussions which may lead to a firm proposal by Havilah to acquire all outstanding ordinary shares and listed options in Curnamona Energy not currently held by Havilah (Havilah held approximately 45.4% at the time of the announcement) by way of an off-market takeover bid.

At the request of Value Adviser Associates, Optiro has prepared an Independent Geologist’s Report and valuation on the uranium mineral assets held by Curnamona Energy. Optiro understands that this report may be used as a public document to support an Independent Expert Report to be prepared by Value Adviser Associates relating to a proposed takeover of Curnamona Energy Limited by Havilah Resources NL (Havilah) announced on 5 March 2012.

2.3. RESPONSIBILITY FOR THE REPORT AND DATA SOURCES

This report was prepared by Mr Jason Froud (Principal) and was reviewed by Mr Ian Glacken (Principal) of Optiro. The report has been prepared in accordance with the requirements of the Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (the VALMIN Code, 2005). The authors of this report are either Members or Fellows of the Australasian Institute of Mining and Metallurgy (AusIMM) and, therefore, are obliged to prepare mineral asset valuations in accordance with the Australian reporting guidelines as set out in the VALMIN Code. All values have been compiled in Australian dollar (A$) terms.

In developing its technical assumptions for valuation, Optiro has relied upon information provided by Curnamona Energy and its consultants, as well as information obtained from other public sources. The material on which this report is based includes internal and open-file project documentation, technical reports and the drillhole database.

Optiro has reviewed all relevant technical and corporate information made available by the management of Curnamona Energy, which was accepted in good faith as being true, accurate and complete, having made due enquiry. Optiro has sourced publically available information on recent transactions involving uranium properties and has had discussions with Mr Mark Randell, General

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Valuation of the mineral assets of Curnamona Energy Limited

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Manager, Exploration, Mr Ken Williams, Acting Chairman of Curnamona Energy and Drs Bob Johnson and Chris Giles, Directors of Curnamona Energy. Mr Jason Froud visited the Oban Project area and surrounding exploration licences between 19 March and 21 March 2012 and viewed core and drillhole cuttings from exploration drillholes.

2.4. LIMITATIONS AND EXCLUSIONS

The report is based mainly on information provided by Curnamona Energy, either directly from discussions and data provided, or from reports and correspondence with other organisations whose work is the property of Curnamona Energy.

The report is based on information made available to Optiro from 15 March 2012 up to the valuation date. Curnamona Energy has not advised Optiro of any material change, or event likely to cause material change, to the technical assessment of the mineral assets contained within the Oban Project or surrounding exploration licences. The report specifically excludes any aspects relating to legal issues, commercial and financing matters, land titles and agreements, excepting such aspects as may directly influence the technical assessment of the asset.

The conclusions expressed in this report are appropriate as at 3 April 2012. The valuation is only appropriate for this date and may change in time and response to variations to economic, market, legal or political factors, in addition to ongoing exploration results.

3. LOCATION AND ACCESS

Curnamona Energy’s exploration licences are located in South Australia, 400 to 500 km northeast of Adelaide and 50 to 100 km to the northwest of Broken Hill (Figure 3.1). Access to the exploration licences is by the sealed Barrier Highway from Adelaide to Broken Hill, and then via the unsealed Mulyungarie Station road and well maintained station tracks.

The region has a semi-desert climate, with average daily temperatures ranging from approximately 15�C in July to 33�C in January. The average rainfall is around 250 mm per annum, with rainfall occurring throughout the year.

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Figure 3.1 Curnamona Energy’s exploration licence area location and schematic geology

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4. TENURE AND OWNERSHIP

Curnamona Energy was formed in 2005 to explore for uranium within the Curnamona Craton group of licences held by Havilah northwest of Broken Hill. The exploration in these licences is subject to a Tenement Access Agreement between Havilah and Curnamona Energy signed in February 2005. In addition to this agreement, Curnamona Energy has applied for and been granted further exploration licences in its own right.

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Curnamona Energy’s tenure comprises uranium rights over ten exploration licences that are held by Havilah with a total area of 4,302 km[2] and a further ten licences 100% held by Curnamona Energy (2,540 km[2] ) (Table 4.1).

Table 4.1 Curnamona Energy – tenement schedule

Tenement number	Tenement name	Tenement holder	Area (km2)	Grant date	Expiry date
3694 4133 4225 4259 4260 4261 4262 4441 4691 4782 3748 3749 3750 3770 3771 3772 3820 3868 4218 4275	Emu Dam Chocolate Dam Lake Charles Lake Namba Swamp Dam Telechie Yalu Billeroo West Mulyungarie Benagerie Jacks Find Kopi Flat Thurlooka Yalkalpo East Moolawatana Billeroo Frome Coonee Yalkalpo Prospect Hill South	Havilah Resources NL (Uranium Rights) Havilah Resources NL (Uranium Rights) Havilah Resources NL (Uranium Rights) Havilah Resources NL (Uranium Rights) Havilah Resources NL (Uranium Rights) Havilah Resources NL (Uranium Rights) Havilah Resources NL (Uranium Rights) Havilah Resources NL (Uranium Rights) Havilah Resources NL (Uranium Rights) Havilah Resources NL (Uranium Rights) Curnamona Energy Curnamona Energy Curnamona Energy Curnamona Energy Curnamona Energy Curnamona Energy Curnamona Energy Curnamona Energy Curnamona Energy Curnamona Energy	614 59 322 516 53 347 491 176 1,139 585 103 750 585 76 483 129 53 136 195 30	6 Feb 07 30 Apr 08 24 Feb 09 27 Apr 09 27 Apr 09 27 Apr 09 27 Apr 09 10 Mar 10 24 Feb 11 13 Oct 11 19 Apr 07 19 Apr 07 19 Apr 07 11 May 07 11 May 07 11 May 07 2 Jul 07 30 Jul 07 12 Jan 09 30 Jun 09	5 Feb 12 29 Apr 12 23 Feb 13 26 Apr 13 26 Apr 13 26 Apr 13 26 Apr 13 9 Mar 13 23 Feb 13 12 Oct 13 18 Apr 12 18 Apr 12 18 Apr 12 10 May 12 10 May 12 10 May 12 1 Jul 12 29 Jul 12 11 Jan 12* 29 Jun 12
	Total		6,842

*Renewal in place or renewal application lodged

4.1. MATERIAL AGREEMENTS

In February 2005, Curnamona Energy entered into a Tenement Access Agreement with Havilah which grants Curnamona Energy the right of access to Havilah’s Curnamona Craton licences for the purpose of exploring for uranium, mining and processing uranium and developing and operating all related infrastructure. As consideration for the Uranium Rights and geological and other information, Curnamona Energy issued Havilah a total of 30 M ordinary shares and a further 1 M ordinary shares to Lynch Mining Pty Ltd.

The Tenement Access Agreement covers uranium mineralisation over the current exploration licences, namely EL 3694, 4133, 4225, 4259, 4260, 4261, 4262, 4441, 4691 and 4782.

Optiro understands that a native title claim (SAD6001/98 Adnyamathanha No.1 claim) is current over all, or part of exploration licences EL 3694, 3771, 3772, 3820, 4225, 4259, 4260, 4261, 4275, 4441, 4691 and 4782. Furthermore, a pre-notification has been lodged (Wilyakali Prenotification Stage Claim) which covers part of licences EL 4262 and 4133. Optiro notes that the native title claims do not preclude future exploration or mining, but rather require negotiation and potential conditions imposed on the licences from the traditional owners. The native title claims are not considered to

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materially effect the value of Curnamona Energy’s mineral assets and have been considered in the valuation process.

5. GEOLOGY AND MINERALISATION

Curnamona Energy‘s exploration areas lie in the Lake Frome region of northeastern South Australia. The current topography of the area is represented by a broad, flat depression bounded to the west, south and east by the Flinders, Olary and Barrier Ranges respectively (Figure 3.1).

During the Tertiary Period, approximately 20 to 40 million years ago (a considerably wetter period than present in this region), several major rivers flowed generally northwards from the Olary Ranges. These rivers incised broad valleys into the basement which locally includes Proterozoic and Cretaceous aged rocks. The river valleys are often several kilometres wide and drained into the precursor of what is currently Lake Frome. As the climate dried, the river valleys choked with sand of the Eyre Formation and were then buried beneath tens of metres of clay of the Namba Formation deposited in a vast ancient lake. Three of the ancient buried river valleys, namely the Yarramba, Lake Namba and Billeroo Palaeovalleys, have been recognised in the region since the 1960s and have been explored for uranium (Figure 5.1). Notably, the Yarramba palaeovalley hosts the Honeymoon uranium deposit which is currently being brought into production.

Curnamona Energy’s uranium exploration areas include approximately 60 km of the Yarramba Palaeovalley and 30 km of the Lake Namba Palaeovalley and their associated tributaries. The exploration area also covers what is interpreted to be a palaeo-lake margin which hosts Curnamona Energy’s Oban deposit.

Figure 5.1 Generalised Yarramba palaeovalley cross section

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Uranium mineralisation in the area falls into the sandstone-hosted, roll-front type deposit model. The host rocks are typically medium grained, well to poorly sorted and contain pyrite and organic (plant) matter. The organic matter is either disseminated or forms lignite seams.

Uranium is mobile under oxidising conditions and precipitates under reducing conditions, and thus the presence of a reducing environment is essential for the formation of uranium deposits in roll front deposits.

Sandstone with a slight dip, such as palaeochannels or on the margins of continental basins and coastal plains, is favourable for mineralisation as the rates of groundwater movement and oxygen intake are slowed enough to preclude destruction of reducing environments. Beds with low dips also provide large surface areas for the capture and introduction of uraniferous groundwater.

5.1. OBAN PROSPECT

The Oban prospect is located within EL 4262 and comprises a laterally extensive bed of Tertiary sand and clay, in contrast to the lateral confinement of a typical palaeochannel. The uranium mineralisation at Oban is hosted within a horizontal lignitic, pyritic and carbonaceous lower sand member of the Eyre Formation at depths of between 80 to 90 m. It is overlain by impervious clayey sediments of the Namba Formation and underlain by similarly clayey material of the Cretaceous basement. The mineralisation is interpreted to be a discontinuous, roll front. The prospect was first discovered in the early 1980s and subsequently followed up in 1998 prior to Curnamona Energy’s involvement.

Curnamona Energy drilled the deposit from 2006 and published an Inferred Resource in 2009. In July 2010, an initial in-situ leach test trial using a small scale processing plant was carried out with well circulation performing as anticipated. Circulation continued until mid-October 2010 but only low levels of uranium were detected in the leach solution. Further trials were then conducted using smaller pumps and restricted screens to determine if the leach solutions were bypassing the uranium mineralisation through more permeable sands. These trials also failed to leach significant uranium.

To further investigate the leach results, a series of three sonic core holes were drilled south of the initial leach pattern. Analysis of the cores confirmed the presence of uranium but also showed that a significant amount of mineralisation is hosted in lignitic clay which hindered the leachability of the uranium. The core holes were cased and screened and further leach trials were conducted between pairs of wells, with no significant uranium detected in the leach solutions.

Samples of core were examined by scanning electron microscopy and this showed that in addition to uranium minerals aggregating with pyrite, there are occurrences of phosphatic uranium which may not be leachable.

Optiro understands that Curnamona Energy is currently investigating the reason for the lack of uranium in the leach solutions and as a result of the poor leaching retracted their resource statement for Oban in their 2011 Annual Report. Curnamona Energy is currently drilling further holes to determine if parts of the deposit are unaffected by clay and therefore potentially leachable.

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5.2. YARRAMBA PALAEOVALLEY DRAINAGE SYSTEM

The Yarramba Palaeovalley, a Tertiary age braided river system, is interpreted to extend for over 100 km along the eastern side of the Benagerie Ridge, including some 60 km within Curnamona Energy’s licences (Figure 3.1). The palaeovalley has no surface expression, being covered by at least 50 m of predominantly clayey sediments of the Namba Formation. It generally ranges from 2 to 6 km wide within Curnamona Energy’s exploration area and is typically filled with 50 to 60 m of interbedded sands and clays of the Eyre Formation. A typical cross-section through the Yarramba Palaeovalley shows three upward fining sequence cycles with coarse sands at the base fining upwards to silty clays (Figure 5.1).

Several notable uranium ocurrences, namely the Honeymoon, Brooks Dam, Yarramba and East Kalkaroo prospects, have been discovered within the Yarramba Palaeovalley from 5 to 20 km upstream from the boundary of Curnamona Energy’s exploration areas.

The Honeymoon uranium deposit (not owned by Curnamona Energy and located 20 km to the south and outside of Curnamona Energy’s exploration licences) occurs where the lowermost sand layer is confined by an overlying carbonaceous clay and bedrock along the southern bank of the palaeovalley in a physical and chemical trap setting. The deposit extends for almost 1 km along the palaeovalley, is up to 400 m wide and is on average 6 m thick. This areal extent has been used by

Curnamona Energy as an approximate footprint for exploration targeting. The chief uranium minerals at Honeymoon are uraninite and coffinite associated with pyrite and organic carbon, reflecting the reducing environment of deposition. The Honeymoon and East Kalkaroo deposits (not owned by Curnamona Energy ) also coincidently occur where there is a marked restriction in the width of the palaeovalley as it flows through a narrow gap in a basement ridge, and near to the junction of a tributary stream that drains from an area of uranium-anomalous weathered granite to the south. Both of these factors play an important role in the localisation of the uranium mineralisation.

The Honeymoon style of mineralisation could potentially be repeated anywhere along the 60 km length of the Yarramba Palaeovalley that is within Curnamona Energy’s exploration area with uranium source rocks located through much of exploration area.

5.3. LAKE NAMBA PALAEOVALLEY DRAINAGE SYSTEM

Prior to Curnamona Energy’s involvement there had been minimal exploration of the Lake Namba Palaeovalley and so far there have been no significant uranium discoveries lying within it. Consequently, geological data for this palaeovalley is limited and the palaeovalley boundaries are not well-defined, particularly in the south where drillholes are sparse.

The Lake Namba Palaeovalley lies between the Yarramba and the Billeroo West Palaeovalleys, both of which host uranium deposits at Honeymoon and Gould’s Dam (not owned by Curnamona Energy and located outside of Curnamona Energy’s exploration licences) respectively. On the basis that the Lake Namba palaeovalley drains similar uranium enriched bedrock to its east and is filled with similar channel sands, the Lake Namba Palaeovalley is considered by Curnamona Energy to have similar prospectivity to the Yarramba Palaeovalley.

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Curnamona Energy completed drilling within EL 4259 and 4441 in 2010 identifying the Lake Namba palaeovalley and encountered numerous encouraging gamma responses. Of 62 rotary mud holes completed within the two licences, 20 (19 in EL 4259) returned grade-thickness values greater than 0.015 m% eU3O8.

6. EXPLORATION

The prime uranium exploration areas managed by Curnamona Energy are some 60 km along the Yarramba Palaeovalley and 30 km along the Lake Namba Palaeovalley and their associated tributaries. Both areas were poorly explored prior to Curnamona Energy’s involvement, mainly because they were largely bypassed by the uranium exploration boom of the late 1960s and early 1970s. During the period from 1980 to 1982, exploration was briefly revived and the downstream continuation of the Yarramba Palaeovalley became recognised just before activity ceased. Since that time the prospective areas have mainly been held by major companies whose primary focus has been on base metal exploration within basement rocks.

The Oban uranium prospect is hosted by an extensive bed of Tertiary sand, unlike the lateral confinement of a palaeovalley setting. More than 150 holes were drilled by Marathon Petroleum Australia Limited in the early 1980s. Paladin Resources Ltd also carried out additional drilling in the area in the late 1990s.

Since 2005, Curnamona Energy has been drilling rotary mud exploration holes using two owneroperated drill rigs and support equipment. Between 2005 and 2011 Curnamona Energy has completed more than 1,000 drillholes for almost 100,000 m. Holes are geologically logged but usually not geochemically analysed due to the high likelihood of downhole contamination.

In general, all drillholes are geophysically logged immediately after completion of drilling. Exceptions are holes that were abandoned at a shallow depth or holes which collapsed and could not be penetrated by the logging tools. Tools used routinely in this logging include gamma, induction and guard, the latter two being downhole electromagnetic methods.

Curnamona Energy’s gamma tool used for downhole geophysical analysis is calibrated at the end of each field season in the test pits in Adelaide managed by the South Australian Department of Land, Water and Biodiversity Conservation and routinely tested against a known source. This is not considered by Optiro to be adequate calibration of the gamma tool for resource definition drilling but acceptable for exploration purposes and relative measurements. The downhole electromagnetic surveys provide a measure of downhole conductivity and are used to assist interpretation of downhole lithologies.

7. URANIUM PRICES

A chart of the historical uranium (U3O8) price data coupled with the ASX All Ordinaries Index from May 2006 to March 2012 is included as Figure 7.1. Optiro notes that the uranium price reached a peak in mid-2007 and then declined, in line with the ASX All Ordinaries index, until the end of 2008. The ASX All Ordinaries index recovered and remained relatively steady until May 2011, when it again declined. The uranium price remained at low levels until August 2010 and peaked again in January

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During 2011 it decreased in line with the ASX All Ordinaries index and in response to the Fukushima reactor incident in Japan, with a small improvement in both during November 2011.

The current uranium spot price remains stable around US$51/lb U3O8. Optiro notes that RBC Capital Markets lifted its long term uranium price forecast to US$60/lb U3O8, up from US$55/lb U3O8, during a March 2012 quarterly review. RBC Capital Markets is forecasting uranium demand to grow by an average of 4.9% per annum from 2013 to 2020, driven by nuclear power growth in China. Conversely, RBC Capital Markets sees mine supply increasing by only 4.1% per annum over the same period with mine permitting slowing since the Fukushima incident.

For the selection of comparable transactions Optiro has used transactions that occurred after March 2009, representing a period of relative price stability.

Figure 7.1 Uranium (U3O8) price and ASX All Ordinaries index from May 2006 to March 2012 (source: Intierra and Yahoo Finance)

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8. VALUATION CONSIDERATIONS

There are a number of recognised methods used in valuing mineral assets. The most appropriate application of these various methods depends on several factors, including the level of maturity of the mineral asset, and the extent and reliability of information available in relation to the asset. The VALMIN Code classifies mineral assets according to the maturity of the asset:

Exploration areas - properties where mineralisation may or may not have been identified, but where a Mineral Resource has not been declared.
Advanced exploration areas - properties where considerable exploration has been undertaken and specific targets have been identified that warrant further detailed evaluation, usually by drill testing, trenching or some form of detailed geological sampling. A Mineral Resource may or may not have been estimated, but sufficient work will have been undertaken on at least one prospect to provide both a good understanding of the type of

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mineralisation present and encouragement that further work will elevate one or more prospects to the resource category.

Pre-development projects - properties where Mineral Resources have been identified and their extent estimated, but where a decision to proceed with development has not been made. This includes projects at an early assessment stage, on care and maintenance or where a decision has been made not to proceed with immediate development.
Development projects - properties for which a decision has been made to proceed with development, but which are not commissioned or are not operating at design levels.
Operating mines - mineral properties that have been fully commissioned and are in production.

The VALMIN Code defines value as the fair market value of a mineral asset. The fair market value is the amount of money (or the cash equivalent of some other consideration) for which the mineral asset should change hands on the valuation date in an open and unrestricted market between a willing buyer and a willing seller in an ‘arm’s length’ transaction, with each party acting knowledgeably, prudently and without compulsion. In times of high commodity prices and/or buoyant share market conditions the fair market value ascribed to mineral assets may be higher than their technical value. The fair market value of the mineral asset comprises:

The underlying or technical value which is an assessment of a mineral asset’s future economic benefit under a set of assumptions, excluding any premium or discount for market, strategic or other considerations.
The market component, which is a premium or discount relating to market, strategic or other considerations.

In assessing the value of Curnamona Energy’s uranium mineral assets, Optiro has considered both the technical value and the fair market value of the assets.

9. VALUATION APPROACH AND METHODOLOGY

In determining the appropriate valuation method(s) to be used for the tenements at Curnamona Energy’s project area, Optiro has taken into consideration the classification of these assets according to the categories defined in the VALMIN Code and the different methodologies that are generally accepted as industry practice for each classification. Generally there are three broad methods of valuation that are used for valuing mineral assets: these are the market approach, cost approach and income approach. The market and cost approaches are used for the grass-roots through to advanced exploration stages and the income approached is used for advanced projects with defined reserves to operating mines.

In relation to the uranium mineralisation potential the Curnamona Energy’s project areas are considered to range from early stage to advanced exploration projects. Valuation methodologies generally used for exploration properties are market and cost approaches. The valuation approaches that are generally adopted for exploration areas are defined as inferential methods and rely on comparative or subjective inputs, such as a “rule of thumb” or appraised value method. Such a method values the property in dollars per unit area.

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The methodologies considered by Optiro to determine a value for the exploration potential for uranium mineralisation within Curnamona Energy’s exploration licences are summarised below.

9.1. GEOSCIENTIFIC RATING METHOD

The most well known method of the Geoscientific ratings type is the modified Kilburn Geological Engineering/Geoscientific method which was developed by a Canadian geologist who wished to introduce a more systematic and objective way of valuing exploration properties. The Kilburn and similar rating approaches are acknowledged as industry-standard valuation tools. This method is Optiro’s preferred valuation tool for early stage exploration projects.

The Kilburn method uses a Geoscientific rating which has as its fundamental value a base acquisition cost (BAC) of the tenement. The BAC is the average cost to acquire a unit of exploration tenement (generally one square kilometre or one hectare) and maintain it for one year, including statutory fees and minimum expenditure commitments.

The determination of the BAC for the exploration licences and the exploration retention licence in South Australia considered the application and retention costs as set by the Government of South Australia Department for Manufacturing, Innovation, Trade, Resources and Energy – Minerals, and the average identification, administration and expenditure costs. The BAC applied to Curnamona Energy’s exploration licences is A$310/km[2] .

Four technical factors are then applied serially to the BAC of each tenement which enhance, downgrade or have no impact on the value of the property and which allow a value per tenement to be determined. The four technical factors are:

Off-property factor – relates to physical indications of favourable evidence for mineralisation, such as workings and mining on the nearby properties, which may or may not be owned by the company being valued. Such indications are mineralised outcrops, old workings through to world-class mines.
On-property factor – this is similar to the off property factor but relates to favourable indications on the property itself, such as mines with significant production.
Anomaly factor – the anomaly factor relates to the degree of exploration which has been carried out and the level and/or number of the targets which have been generated as a consequence of that exploration. Properties which have been subject to extensive exploration without the generation of sufficient or quality anomalies are marked down under the Kilburn approach.
Geological factor – this refers to the amount and exposure of favourable lithology and/or structure (if this is related to the mineralisation being valued) on the property. Thus properties which have a high coverage of favourable lithology and through-going structures will score most highly.

The ratings applied by Optiro are listed in Table 9.1.

This methodology is used to determine the technical value, and a fifth factor, reflecting the current state of the market, is applied to determine the market value. This market value determined from

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the Geoscientific rating method has been verified by consideration of the current market for uranium exploration properties in Australia.

Table 9.1 Geoscientific rating criteria (modified by Optiro)

Rating	Off-property factor	On-property factor	Anomaly factor	Geological factor
0.1				Generally unfavourable geological setting
0.5			Extensive previous exploration with poor results	Poor geological setting
0.9			Poor results to date	Generally favourable geological setting, under cover
1.0	No known mineralisation in district	No known mineralisation within tenement	No targets defined	Generally favourable geological setting
1.5	Mineralisation identified	Mineralisation identified	Target identified, initial indications positive
2.0	Resource targets identified	Exploration targets identified		Favourable geological setting
2.5			Significant intersections - not correlated on section
3.0	Along strike or adjacent to known mineralisation	Mine or abundant workings with significant previous production		Mineralised zones exposed in prospective host rocks
3.5			Several significant ore grade intersections that can be correlated
4.0	Along strike from a major mine(s)	Major mine with significant historical production
5.0	Along strike from world class mine

9.2. COMPARABLE TRANSACTION METHOD

The comparable market value approach is a market based approach and is an adaptation of the common real estate approach to valuation. For the purposes of mineral asset valuation, a valuer compiles and analyses transactions, converted to a 100% equity basis, of projects of similar nature, time and circumstance with a view to establishing a range of values that the market is likely to pay for a project. The comparable market approach:

is intuitive, easily understood and readily applied
implies a market premium/discount for the prevailing sovereign risk
captures market sentiment for specific commodities or locations
accounts for intangible aspects of a transaction (i.e. intellectual property).

The transactions deemed to be analogous to the mineral asset being valued are used to determine a unit price (e.g. $/km[2] or $/tonne metal, etc.) for the asset being valued. However, there is an intricate value dynamic between the quantity (size) and quality (grade or prospectivity) that may result in the exclusion of a large number of comparable transactions which in turn may undermine the accuracy of this method.

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The comparable market value approach is widely used throughout the minerals industry; however, the valuer must take into account that this approach is largely retrospective and cannot take into account anticipated or recent commodity or other market price movements.

9.3. JOINT VENTURE TERMS METHOD

The joint venture terms method is a variation of the comparable market value method. This technique involves transactions where only partial ownership of a project is acquired. The joint venture terms method provides the valuer with a larger acquisitions dataset than the comparable market value method, and consequently these approaches are often used simultaneously in mineral asset valuations.

It is recognised that the market will attribute a sliding-scale premium in accordance with the level of ownership acquired (i.e. a joint venture agreement for a 51% interest in a project may attract a market value significantly above that for an identical project in which a 49% interest is acquired). The valuer therefore needs to account for any potential associated with ownership premiums.

9.4. APPRAISED VALUE METHOD

The cost approach or Appraised Value method is founded on the assumption that the intrinsic value of the exploration tenement is based on the exploration expenditure, and that a highly prospective tenement will generally encourage a higher level of exploration expenditure.

This valuation methodology relies upon the premise that a project is at least worth what the owner has previously spent and/or committed to spending in the future. It considers historical and/or planned future expenditure on the mineral asset and includes the amount of expenditure that has been meaningfully used in the past to define a target or resource and the future costs in advancing the exploration.

The value of the property may be determined from the sum of past effective exploration expenditure (usually limited to the past three years) plus any committed exploration expenditure in the current year and the application of a prospectivity enhancement multiplier (PEM). The PEM is determined by the level of sophistication of the exploration for which positive exploration results have been obtained and usually ranges from 0.5 to 3.0.

The principal shortcomings of this method are that there is no consistent base from which to derive the valuation and there is no systematic approach taken in determining the PEM. Optiro places less reliance on values determined this method than those determined from the Geoscientific ratings and comparable transaction methods.

10. VALUATION

Optiro’s approach has been to use the following valuation methodologies for the exploration potential for uranium mineralisation within Curnamona Energy’s project licences:

the Geoscientific rating method
comparable transactions
joint venture terms.

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Optiro considered using the appraised market method, but as exploration expenditure over the Uranium Rights licences has been combined with Havilah expenditure this was not considered to be representative of the potential value of uranium mineralisation exploration.

Furthermore, Optiro considered valuing the Oban deposit separately and in addition to the exploration potential of Curnamona Energy’s exploration licences. However, considering that Curnamona Energy is yet to demonstrate reasonable prospects for eventual economic extraction of the mineralisation at Oban, Optiro has elected to value the Oban prospect on its exploration potential.

10.1. COMPARABLE TRANSACTIONS AND JOINT VENTURE TERMS

Optiro reviewed recent transactions involving Australian early-stage, uranium exploration projects. In order to obtain a dataset that is relevant under the current time and circumstance, Optiro has selected transactions that occurred after March 2009 (see Section 7 above) and which are prospective for igneous, sedimentary and unconformity related uranium mineralisation. Optiro selected 13 transactions that are considered to be of use in assessing the current market value attributed to uranium mineralisation potential similar to that at Curnamona Energy’s exploration licences. Optiro excluded properties with resources, defined exploration target tonnages and drilling results with high grade uranium mineralisation. The transactions selected by Optiro are listed in Table 10.1.

Optiro’s analysis of the transactions suggests that Australian early-stage, uranium exploration projects similar to Curnamona Energy’s exploration licences may attract market values in the range A$16/km[2] to A$3,900/km[2] on a 100% equity basis, with higher unit values being associated with small (<600 km[2] ) project areas.

Analysis of uranium transactions has indicated a strong negative relationship between the total area and the unit transaction values (Hinzer, 2006). The distribution of the transactions selected by Optiro, based on the total area and unit sales price, does indeed indicate a strong negative relationship, with smaller properties having higher unit transaction values (Figure 10.1). In Optiro’s opinion, two of the transactions (Woolgni West and Waterford) were traded at significantly lower values than the other ten properties and were thus excluded from the initial analysis of the data.

The relationship obtained from analysis of the 11 transactions in Figure 10.1 indicates that Curnamona Energy’s exploration licences may be expected to trade for approximately A$500/km[2] , indicating a market value in the order of A$3.42 M. In Optiro’s opinion, this value does not adequately ascribe value to the Oban mineralisation or the encouraging results encountered at Lake Namba or within the Yarramba Palaeovalley, and thus a premium of the order of 10 to 20% may be expected. This equates to a unit value of between A$550 and A$600/km[2] .

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Table 10.1 Selected transactions involving Australian exploration projects with uranium mineralisation

Project	Date	Transaction	Project	Area (km2)	Implied value (A$/km2)
Murphy - NT	Dec-08	JOGMEC acquired a 51% interest in Bondi Mining's Murphy project tenements by the commitment to spend $3.0 M on exploration over 3 years.	Project is within the Murphy Inlier which is prospective for unconformity uranium mineralisation. Along strike from the Westmoreland uranium deposits of Laramide resources.	9,056	650
Mundong Well and Mundong Well West - WA	Jul-09	Artemis Resources acquired an option to purchase KTL Technologies Ltd's 20% share of the E08/1609 (14 BL) covering the Mundong Well Project and 100% of the E8/1892 (47 BL) covering the Mundong West project for $0.1 M and 3 M Artemis shares.	Project consists of strongly mineralised zones within radiometrically anomalous Palaeoproterozoic granite and palaeochannels.	189	2,967
Birrindudu - NT	Sep-09	Toro Energy Ltd to drill a minimum of 4 diamond drillholes and expend a minimum of $1.0 M during initial 2 year earn-in period to acquire a 50.1% equity in the project (with Cameco Australia).	The Birrindudu project encompasses the regional unconformity between the Tanami Domain and the Birrindudu Basin. The geological setting is analogous with the Alligator Rivers uranium field in the Northern Territory that hosts Ranger and Jabiluka. Geophysical surveys have identified a number of anomalies.	1,535	1,300
Yalanda JV - SA	Sep-09	Adelaide Resources Limited and Southern Uranium Limited formed a joint venture, in which Southern Uranium can increase equity by 20% by spending $0.25 M over 2 years.	Project area prospective for bedrock uranium mineralisation within the Gawler Craton; has radiometric anomalies and rock chip results of up to 0.23% U.	758	1,649
Gardner Range Project - WA	Oct-09	Northern Uranium Ltd to earn a 60% interest in Manhattan Corporation Ltd's Gardner Range Project by expenditure of $1.05 M.	Project located in the Tanami region of WA. Consists of 4 granted exploration licences. Historic drilling within the project area intersected unconformity related uranium mineralisation in graphitic shale at a depth of 40 m.	550	3,182
Mundong Well - WA	Oct-09	Artemis Resources acquired KTL Technologies Ltd's 80% share of the exploration licence covering the Mundong Well Project for a purchase price of $400,000.	Project consists of strongly mineralised zones within radiometrically anomalous Palaeoproterozoic granite and palaeochannels.	127	3,937
Woolgni West - NT	Oct-09	Resource Star Ltd acquired 3 exploration licences from Jupiter Mines Ltd for $5,000.	Project located on the prospective margins of the highly endowed uranium province know as the Pine Creek geosyncline. Potential for sediment hosted redox style mineralisation in sandstone.	317	16

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Table 10.1 cont. Selected transactions involving Australian exploration projects with uranium mineralisation

Project	Date	Transaction	Project	Area (km2)	Implied value (A$/km2)
Waterford - Qld	Feb-10	China Yunnan Copper acquired one exploration tenement from Carpentaria Exploration for $20,000.	Project area is prospective for sediment hosted uranium mineralisation.	317	63
Mt Phillips, Hector Bore, Stanley, Nabberu, Hyden - WA	May-11	China Coal Geology Engineering Corporation entered farm-out agreement to invest $2 M for 60% equity interest, with option of increasing by 20% by investing a further $0.75 M over 3 years.	Project areas are considered to have potential for primary uranium, palaeochannel and surficial uranium in calcrete sourced from the Proterozoic granites of the Gascoyne province.	3,088	1,079
Allambi tenement - NT	Jun-11	Parker Resources NL entered into a farm-in/joint venture agreement with Excelsior Gold Limited to earn up to 70% interest for 0.25 M shares in Parker Resources, payment of $20,328 in rent and expenditure of $0.4 M in exploration within 3 years.	Project area prospective for sandstone style uranium mineralisation.	702	967
Central Energy projects - NT	Nov-11	Eclipse Uranium Ltd to acquire Central Energy Pty Ltd which has 5 Els and 22 ELAs in the Northern Territory for 35 M Eclipse Uranium Ltd shares.	Tenements prospective for unconformity related uranium mineralisation.	17,428	141
Rundall East - WA	Nov-11	Marmota Energy Limited agreed to earn 51% interest in uranium rights from Teck Australia Pty Ltd for A$1 M expenditure over 3 years and 0.5 M Marmota shares.	Seven tenements in regions considered prospective for palaeochannel, unconformity and sandstone hosted uranium mineralisation, located about 140 km from the Kintyre uranium deposit.	2,736	738
West Roxby - SA	Dec-11	Archer Exploration Limited signed a Heads of Agreement with BHP Billiton for an 80% interest in Archer’s five West Roxby tenements by spending A$3 M over three years.	The tenements host a number of undrilled exploration targets including potential IOCG targets at Island Lagoon and Evelyn Dam, a potential Athabasca unconformity uranium target at Apollo and several skarn targets.	3,482	862

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Figure 10.1 Uranium transactions – area of property versus unit value with regression line

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10.2. GEOSCIENCIFIC RATING METHODS

Optiro determined Geoscientific ratings for each tenement in reference to the off-property, onproperty, anomaly and geology factors for potential uranium mineralisation. The ratings are listed in Table 10.2.

Optiro assigned the ratings based on:

the favourable regional geology
the location of the project area within a recognised uranium bearing palaeovalley province that contains the Honeymoon, and to a lesser degree, the Beverly uranium deposits
the potential for uranium deposits to be exploited by relatively low cost, in-situ leach methods
the relatively low grades of uranium associated with the roll-front type deposits of the area
the generally sparse exploration coverage of the licences by current exploration data with respect to the footprint of uranium deposits such as Honeymoon
the further exploration and extraction potential at the Oban deposit
there being no impediment to exploration licence renewal and the anticipated reduction in licence size for EL 3749, 3750 and 3771 (53%, 38% and 20% reductions respectively)
the conceptual nature of exploration targets on licences EL 3749, 3750, 3771 and 3868
the potential for a conceptual Beverly type deposit on EL 4275
the intersection of uranium depleted sands and reduced prospectivity in the palaeovalley in licences EL 3748 and 4218
the potential that Mount Victoria may shed uranium enriched fluids to the north and the associated conceptual exploration target within licence EL 4261

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limited exploration potential on licences EL 3772 and 3820
licences EL 4691 and 4782 host parts of the Yarramba Palaeochannel but large parts of the licences have limited prospectivity.

Table 10.2 Geoscientific rating criteria applied to uranium mineralisation potential

Tt	Offproperty factor	Offproperty factor	Onproperty factor	Onproperty factor	Anomaly factor	Anomaly factor	Geology factor	Geology factor
enemen	Low	High	Low	High	Low	High	Low	High
EL 3694	1	1.5	1	1.5	1	1	0.5	0.9
EL 4133	1.5	1.5	1	1	1	1	0.5	0.9
EL 4225	1.5	1.5	1	1	0.9	1	0.9	1
EL 4259	1.5	1.5	1.5	2	1.5	1.5	1	1.5
EL 4260	1.5	1.5	1	1.5	0.9	1	0.9	1
EL 4261	1	1	1	1	0.9	1	0.9	1
EL 4262	1.5	1.5	1.5	2	2	2	1.5	2
EL 4441	1.5	1.5	1.5	2	1.5	1.5	0.9	1
EL 4691	1.5	1.5	1.5	2	1.5	2	1.5	2
EL 4782	1.5	1.5	1.5	2	1	1.5	1	1.5
EL 3748	1	1	1	1	0.5	0.9	0.9	1
EL 3749	1	1	1	1	0.9	1	0.5	0.9
EL 3750	1	1	1	1	0.9	1	0.5	0.9
EL 3770	1	1	1	1	0.5	0.9	0.9	1
EL 3771	1	1	1	1	0.9	1	0.5	0.9
EL 3772	1	1	1	1	0.9	1	0.5	0.9
EL 3820	1	1	1	1	0.9	1	0.5	0.9
EL 3868	1	1	1	1	0.9	1	0.5	0.9
EL 4218	1	1	1	1	0.5	0.9	0.9	1
EL 4275	1	1	1	1	1	1	0.9	1

Fair market value is the technical value (as determined by the Geoscientific ratings) plus a premium or discount to account for market, strategic considerations and special purposes. Optiro has examined the past and forecast uranium price and has elected to not to apply a premium or discount to this valuation.

The following assumptions have been used by Optiro in applying the Geoscientific ratings method to determine a value for the uranium mineralisation potential within Curamona Energy’s exploration licences:

BAC for South Australian exploration licence - A$310/km[2]
market factor for uranium properties - no premium or discount.

Based on the Geoscientific ratings of the uranium prospectivity within Curnamona Energy’s licences, rights and equity consideration, the licences are expected to have a value that lies in the range A$3.43 M to A$7.10 M, with a preferred value of A$5.26 M.

Optiro’s analysis of the transactions suggests that Australian early-stage, uranium exploration projects similar to Curnamona Energy’s may attract market values in the range A$141/km[2] to A$3,900/km[2] . Based on the Geoscientific ratings of the uranium potential of Curnamona Energy’s exploration licences an average value of A$769/km[2] has been determined. This is at the lower end

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of the range of market values indicated by the recent comparable transactions and primarily reflects the large licence area.

10.3. SUMMARY VALUATION

Optiro has applied a number of recognised valuation methods to derive a value estimate for the mineral assets relating to the uranium prospectivity within the exploration licences of Curnamona Energy.

Optiro’s opinion of the fair market value of uranium potential within the exploration licences, using the methodologies described above, is summarised in Table 10.3. Optiro has selected the values derived from the Geoscientific rating method as the preferred valuation for the exploration potential. This reflects the results obtained from the recent exploration and the geological potential in the as yet unexplored areas.

Table 10.3 Valuation summary for Curnamona Energy’s exploration licences

Mineral asset	Method		Value(A$M)
		Low	High	Preferred
Uranium mineralisation exploration potential	Comparable transactions Geoscientific ratings	3.76 3.43	4.11 7.10	3.93 5.26
Overall		3.43	7.10	5.26

In this report, Optiro has determined the current fair market value of the uranium potential within the exploration licences within Curnamona Energy’s exploration licences and rights as at 3 April 2012. Optiro’s opinion of the fair market value of these assets is that it is within the range A$3.43 M to A$7.10 M, with a preferred value of A$5.26 M. The values assigned to these mineral assets are in nominal Australian dollars (A$) and were prepared with an effective valuation date 3 April 2012.

11. PREVIOUS MINERAL ASSET VALUATIONS

Optiro is not aware of any previous valuations of Curnamona Energy’s licences.

12. DECLARATIONS BY OPTIRO

12.1. INDEPENDENCE

Optiro is an independent consulting and advisory organisation which provides a range of services related to the minerals industry including, in this case, independent geological services, but also resource evaluation, corporate advisory, mining engineering, mine design, scheduling, audit, due diligence and risk assessment assistance. The principal office of Optiro is at 50 Colin Street, West Perth, Western Australia, and Optiro’s staff work on a variety of projects in a range of commodities worldwide.

This report has been prepared independently and in accordance with the VALMIN and JORC Codes. The authors do not hold any interest in Curnamona Energy Limited, Havilah Resources NL, their associated parties, or in any of the mineral properties which are the subject of this report. Fees for the preparation of this report are being charged at Optiro’s standard rates, whilst expenses are

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reimbursed at cost. Payment of fees and expenses is in no way contingent upon the conclusions drawn in this report.

12.2. QUALIFICATIONS

The principal personnel responsible for the preparation and review of this report are Mr Jason Froud (Principal) and Mr Ian Glacken (Principal) of Optiro.

Mr Jason Froud [BSc (Hons), Grad Dip (Fin Mkts), MAusIMM] is a geologist with over 16 years experience in mining geology, exploration, resource definition, mining feasibility studies, reconciliation, consulting and corporate roles in gold, iron ore, base metal and uranium deposits principally in Australia and Africa. Jason has previously acted as a Competent Person and Independent Expert across a range of commodities with expertise in mineral exploration, grade control, financial analysis, reconciliation and quality assurance and quality control.

Mr Ian Glacken [BSc (Hons) Geology, MSc (Mining Geology), MSc (Geostatistics), FAusIMM (CP), CEng, MIMMM, DIC] is a geologist with 30 years experience worldwide in the mining industry. He specialises in resource audit and independent expert reports, and has in recent times compiled IGR reports for the IPO of Tusker Gold Ltd, the Finnish assets of Vulcan Resources Ltd and a report on the assets of Aditya Birla Ltd for an IPO, and has recently generated a report on the assets of two copper companies for a merger. Ian was formerly the Group General Manager Resources and Geology for a major consulting firm.

13. REFERENCES

Curnamona Energy Limited, 2005 to 2011. Annual Reports.

Curnamona Energy Limited, 2005. Prospectus.

Goulevitch, J. and Eupene, G. S., 1994. Geoscience rating for valuation of exploration properties – applicability of the Kilburn Method in Australia and examples of its use. Mineral Valuation Methodologies Conference, Sydney, 27-28 October 1994.

Havilah Resources NL and Curnamona Energy Limited, 2005. Tenement Access Agreement.

Hinzer, J., 2006. A Presentation on Market Based Valuation Practices in the Canadian Minerals Industry, November ,2006. Sourced from www.mlr.gov.cn.
JORC Code, 2004; “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australasian Institute of Geoscientists and Minerals Council of Australia (JORC), 2004 Edition.
McKay, A. and Miezitis, Y., 2001. Australia’s Uranium Resources, Geology and Development of Deposits. AGSO – Geoscience Australia, Mineral Resource Report 1.

Randell M., 2009. Mineral Resource Estimate, Oban Project. Curnamona Energy Limited.

VALMIN, 2005; “Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports”, prepared by the VALMIN Committee, a joint committee of the Australasian Institute of Mining and Metallurgy, Australasian Institute of Geoscientists and Mineral Industry Consultants Association with the participation of the Australian Securities and Investment Commission, the Australian Stock Exchange Limited, the Minerals Council of Australia the Petroleum Exploration Society of Australia, the Securities Association of Australia and representatives of the Australian financial section, 2005 Edition.

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14. GLOSSARY OF ABBREVIATIONS AND TECHNICAL TERMS

Term	Explanation
Abbreviations	A$ – Australian dollars, IOCG – iron oxide copper gold, km – kilometre, km2– square kilometre, lb – pound, m – metre, M – million, t – tonnes, ppm – parts per million, , US$ – United States dollars.
Chemical elements	O – oxygen, U - uranium.
arenite (arenaceous)	Sandstone-like sedimentary rock.
base metals	Copper, lead, zinc or tin, in general terms.
basement	In general terms, older rocks which are often covered by younger rocks.
diamond drilling	Drilling method which produces a cylindrical core of rock by drilling with a diamond tipped bit.
felsic	Silicate minerals, magmas, and rocks which are enriched in the lighter elements such as silica, oxygen, aluminium, sodium, and potassium.
geophysical survey	A survey that measures the physical properties of rock formations, commonly magnetism, specific gravity, electrical conductivity and radioactivity.
granite	A coarse grained intrusive felsic igneous rock.
gneiss	Metamorphosed igneous rocks or their equivalent.
induced polarisation	Survey over an area involving the application of an electric or magnetic field and measurement of the decay of voltage in the earth when the field is switched off.
intrusive	A body of igneous rock formed by the consolidation of magma intruded into other rocks.
JORC Code	The JORC Code provides minimum standards for public reporting to ensure that investors and their advisers have all the information they would reasonably require for forming a reliable opinion on the results and estimates being reported. The current version is dated 2004.
lacustrine	Formed in a lake environment.
magnetic geophysical survey	Survey over an area involving measurements of magnetic intensity of rocks in response to the earth’s magnetic field. Different rock compositions show varying degrees of magnetic intensity, which can be used to infer changes in geology.
metasediment	A sediment or sedimentary rock that shows evidence of having being subjected to metamorphism.
mineralisation	The process by which a mineral or minerals are introduced into a rock, resulting in a valuable deposit.
Palaeochannel/ palaeovalley	An old river channel, now filled in and perhaps covered with later rocks.
pyrite	Iron sulphide (FeS2).
radiometric survey	A survey pertaining to the measurement of geologic time by the study of parent and/or daughter isotopic abundances and known disintegration rates of the radioactive parent isotopes.
redox	interface between oxidising and reducing conditions.
resistivity	An electrical exploration survey in which current is introduced into the ground by two contact electrodes and potential differences are measured between two or more other electrodes.
roll-front	Roll-front uranium deposits are formed where groundwater in permeable sandstone or conglomerate encounters the interface between oxidising and reducing conditions.
sandstone	A sedimentary rock of sand size particles.
sedimentary	Rock forming process where material is derived from pre-existing rocks by weathering and erosion.
sediments	Loose, unconsolidated deposit of debris that accumulates on the Earth’s surface.
stratiform	Having a layered structure.
tenement	A generic term for an exploration or mining licence or lease.
unconformity	A structural break in the geological profile representing unrecorded time.
VALMIN Code	The Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets for Independent Expert Reports (2005).
volcanics	Rocks formed from the solidification of lava extruded on or erupted at the earth's surface.

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Appendix 6 – Optiro Report

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Page 13

AI assistant

HAVILAH RESOURCES LIMITED — Merger & Acquisition 2012

65038_rns_2012-05-10_0ffc0b6d-0059-4efd-a8b5-a87d76c3792d.pdf

Notice of despatch of Target’s Statement in respect to off-market takeover bid by Havilah Resources NL for all of the Shares and Listed Options of Curnamona Energy Limited

TARGET’ S STATEMENT

HAVILAH RES O URCES NL

Curnamona E n ergy Limited

Legal Adviser to Curnamona

IMPORTANT INFORMATION

Target’s Statement

Disclaimer Regarding Forward Looking Statements

Disclaimer as to Information

Independent Expert’s Report

Rounding

Privacy

Notice to Foreign Holders

No Account of Personal Circumstances

Information Line

CORPORATE DIRECTORY

Directors

Company Secretary

Registered Office

Internet Address

ASX codes

Solicitors to Curnamona

TABLE OF CONTENTS

DEPUTY CHAIRMAN’S LETTER

Deputy Chairman Curnamona Energy Limited

SUMMARY OF THE HAVILAH OFFERS

HOW TO ACCEPT THE OFFERS

ESTIMATED DATES FOR KEY EVENTS

1. WHY YOU SHOULD ACCEPT THE OFFERS

1.1 Summary of Reasons

1.2 The Share Offer represents a substantial premium to the value of Curnamona Shares prior to the Announcement

1.3 The Listed Option Offer is an attractive offer to Curnamona Listed Optionholders

1.4 The Independent Expert has concluded that the Offers are fair and reasonable

1.5 The Merger will give Curnamona Securityholders the full benefit of Havilah’s portfolio of projects, and a more diversified risk profile

1.6 Havilah is a larger more widely held company

1.7 Havilah has greater resources and is likely better placed to raise capital

1.8 Prospect for significant dilution if the Merger does not proceed

1.9 Risk of fall in share price and listed option price if the Merger does not proceed

1.10 Havilah’s shareholding a deterrent to any alternative bidder

2. CURNAMONA DIRECTOR RECOMMENDATION

2.1 The Curnamona Directors

2.2 Recommendation

2.3 Directors’ current intentions

2.4 Personal circumstances

3. YOUR CHOICES AS CURNAMONA SECURITYHOLDERS

3.1 Choices for Curnamona Shareholders

(1) Accept the Share Offer

(2) Sell your Curnamona Shares on market through the ASX

(3) Take no action

3.2 Choices for Curnamona Listed Optionholders

(1) Accept the Listed Option Offer

(2) Exercise your Curnamona Listed Options and accept the Share Offer in respect of the resultant Curnamona Shares or sell those Curnamona Shares on market through the ASX

(3) Sell your Curnamona Listed Options on market through the ASX

(4) Take no action

4. IMPORTANT INFORMATION ABOUT HAVILAH’S OFFERS

4.1 Havilah’s Offers

4.2 Havilah Offer consideration

4.3 Conditions of the Offers

4.4 Notice of status of conditions

4.5 Lapse of Offers

4.6 Strategy of Havilah following the proposed Merger

(1) Overview of intentions

(2) Background to intentions

(3) Intentions following Havilah acquiring 90% of more of Curnamona Shares

(a) Corporate Matters

(b) Operations, developments and exploration

(4) Intentions if Havilah acquires less than 90% of Curnamona Shares

4.7 Offer Period

4.8 Extension of Offer Period

4.9 Withdrawal of Offers

4.10 Fractional Entitlements

4.11 Effect of acceptance

4.12 When you will receive consideration (in the form of Havilah Securities) for your Curnamona Securities if you accept an Offer

4.13 Compulsory Acquisition

4.14 Foreign Holders

5. ABOUT HAVILAH

6. ABOUT CURNAMONA

HAVILAH RESOURCES LIMITED Merger & Acquisition 2012