ORBMINCO LIMITED — Capital/Financing Update 2011

Dec 12, 2011

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13th December 2011,

ASX Release, By e-lodgement

La Paz Rare Earth Elements (“REE”) Project Highlights

• Large maiden JORC resource calculated

• NI 43-101 report due to be completed prior to Christmas 2011

• Deposit is not fully delineated, leaving room for ~~a~~ significant increases in tonnage

• High percentage of HREE (“Heavy Rare Earth Elements”)

• Deposit is amenable to open-pit mining, surface to 100ft delineated to date

• Positive preliminary metallurgical test work completed by SRC (“Saskatchewan Research Council ”) in Canada

• Insignificant Uranium and Thorium, < 10ppm

• Ownership 100% AusAmerican and land titles are flawless and unencumbered

• Excellent infrastructure available for development

The Directors of Australian-American Mining Corporation Limited (“AusAmerican” or “the Company”) are pleased to announce that significant milestones have been reached on the 100% owned La Paz Rare Earth Elements project located in La Paz county in the state of Arizona in the United States of America. A maiden indicated resource of 16.2 million tonnes at 373.4 ppm (using a 300 ppm cut off) for 12.1 million pounds (lbs) Rare Earth Elements (“REE”) and an inferred resource of 112 million tonnes at 371 .5 ppm (using a 300 ppm cut off) for 83.5 million pounds (lbs) REE.

The total resource currently stands at 128.2 million tonnes at 371.5 ppm for 95.6 million pounds (lbs) REE.

An NI 43-101 report is being prepared and will be completed prior to Christmas 2011.

Australian American Mining Corporation Ltd ABN 99 073 155 781 572 Hay Street, Perth, WA, Australia, 6000 PO Box 1788, West Perth, WA, Australia, 6872

Telephone: (08) 9325 5568 Facsimile: (08) 9325 5574

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Further, preliminary test work to date is most encouraging, with overall TREO (“Total Rare Earth Oxides“) recovery of 68.1% after concentration to an average grade of 1248 ppm.

AusAmerican Executive Chairman Mr Jim Malone said: “We are very excited about our La Paz REE project. The project has been advanced significantly in a very short time period since its discovery 15 months ago and this is a credit to the AusAmerican team. It is now an advanced project that can be compared very favorably with its peers given the significant positive characteristics it demonstrates such as size, location, a high percentage of HREE’s, great infrastructure, favourable mining characteristics and very low concentrations of deleterious elements such as thorium and uranium” .

Indicated resource

Indicated resource	Indicated resource	Indicated resource	Indicated resource	Indicated resource
	Tonnes (Millions)	Grade above cut off (ppm)	Cut off (ppm)	Ore (REE Million lbs)
Red bed Host rock (upper plate)	0.4	411.2	300	0.3
Altered Gneiss Host Rock (lower plate)	15.8	369.8	300	11.8
Total indicated	16.2	373.4	300	12.1
Inferred resource
	Tonnes (Millions)	Grade (ppm)	Cut off (ppm)	Ore (Million lbs)
Red bed Host rock (upper plate)	7.2	369.8	300	5.4
Altered Gneiss Host Rock (lower plate)	104.8	371.6	300	77.9
Total inferred	112	371.5	300	83.5
Total resource	128.2	371.5	300	95.6

Australian American Mining Corporation Ltd ABN 99 073 155 781 572 Hay Street, Perth, WA, Australia, 6000 PO Box 1788, West Perth, WA, Australia, 6872 Telephone: (08) 9325 5568 Facsimile: (08) 9325 5574

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Metallurgical and concentrate processes test work

Saskatchewan Research Council (SRC) located in Saskatoon, Canada was identified to conduct the metallurgical test work. This test work was supervised by Dr Jack Zhang, who is an experienced process engineer and metallurgist and who has knowledge of the Chinese REE projects. Also of importance was the high level of technology offered by SRC, which has been developed specifically for this sort of test work. The analytical work was undertaken by SRC Geoanalytical Laboratory which is accredited by the Standards Council of Canada under ISO-17025.

Preliminary test work to date is most encouraging with overall TREO (“Total Rare Earth Oxides“) recovery of 68.1% after concentration to an average grade of 1248 ppm. (The recovery factor is based on actual test work and an assumed increase in overall recovery based on that work and work about to commence). The next phase of metallurgical test work will focus on optimising extraction of the rare earths from concentrate. Core taken during Phase II drilling will be delivered to the SRC laboratories for this work.

Geological report

A geological report has been prepared by John Petersen and Dr Bernhard Free and is attached. Dr Free has significant experience with REE deposits and the geology and chemistry associated with REE deposits. The conclusions of this report are as follows;

• The La Paz REE deposit is unique in its geologic and mineralogical framework;

• The deposit is not fully delineated leaving room for significant increase in tonnage;

• Excellent infrastructure combines with reduced socio-political impact on future mining operations; the project is located on Bureau of Land Management (“BLM”) and State-owned land, away from population centers. Therefore, relatively few impediments to permitting are anticipated.

• Mineralisation is remarkably homogeneous throughout the entire host rock complex;

• No deleterious substances are present in significant amounts. Uranium and Thorium average < 10ppm;

• The title of the tenements is flawless and unencumbered;

• Ownership of the tenements is 100% AusAmerican; and

• Arizona is a recognized, mining - friendly jurisdiction.

In summary, Petersen and Free commented : “the inherent qualities of the project such as very large volume, excellent infrastructure, open-pit mining potential and encouraging preliminary metallurgical test work are compelling reasons to rank the project as highly competitive among its peers”.

In addition to this geological report an independent NI 43-101 report is being prepared and will be completed prior to Christmas 2011.

Australian American Mining Corporation Ltd ABN 99 073 155 781 572 Hay Street, Perth, WA, Australia, 6000 PO Box 1788, West Perth, WA, Australia, 6872

Telephone: (08) 9325 5568 Facsimile: (08) 9325 5574

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High percentage of HREE

See below the tables which breakdown the percentage of individual REE’s. In comparison with most other REE projects, La Paz has a high percentage HREE’s assemblage.

(*Note that the division of rare earth elements into light and heavy categories used in this table are based upon work of Grupta and Krishnamurthy, 2005, Extractive Metallurgy of Rare Earths, p 61: CRN Press; and that Yttrium is included with the HREE by convention)

Light REE*	% in Gneiss	% in Red Bed
La	18%	19%
Ce	37%	38%
Pr	4%	4%
Nd	17%	16%
Sm	3%	3%
Eu	1%	1%
Gd	3%	3%
Total LREE	83%	84%
Heavy REE^	% in Gneiss	% in Red Bed
Tb	0.5%	0.5%
Dy	2.2%	2%
Ho	0.5%	0.5%
Er	1.2%	1%
Tm	0.2%	0.2%
Yb	1%	1%
Lu	0.1%	0.1%
Y	11.3%	10.7%
Total HREE	17%	16%

Australian American Mining Corporation Ltd ABN 99 073 155 781 572 Hay Street, Perth, WA, Australia, 6000 PO Box 1788, West Perth, WA, Australia, 6872 Telephone: (08) 9325 5568 Facsimile: (08) 9325 5574

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Progress to Date

The deposit was discovered by AusAmerican geological staff in August 2010, and has seen rapid advancements since then:

• Deposit discovery, mapping, sampling, and numerous geochemical analysis of surface materials (August 2010-July 2011).

• Phase 1 percussion drilling programme: 195 hole, 5000 + metres (July-August 2011).

• Detailed physical metallurgical test work performed by Dr Jack Zhang of SRC (AugustOctober 2011).

• In-house interim report completed by Dr Bernie Free and John Petersen (Nov 2011).

• Maiden resource calculated (December 2011)

Next Steps

• Completion of an independent NI 43-101 (Christmas 2011)

• Next phase of extraction metallurgical test work by SRC will commence within the week and is due to be completed by March 2012. This test work will investigate numerous rare earth element extraction options through various methodologies.

• In addition to the current metallurgical test work being conducted by SRC, AusAmerican have contracted an independent preliminary scoping study (also called a Preliminary Economic Assessment) to be prepared by Mineral Engineering Technical Services Ltd (“METS”) of Perth, Western Australia. This study will run in parallel with the SRC test work, and commercialise the work of SRC, providing the templates for plant and equipment and operating and capital costing.

• Phase II diamond drilling programme commenced 1 December and will conclude end of March 2012: 6 holes for a minimum of 1,000 metres to test depth extensions and obtain core for further metallurgical test work.

• Subject to the results of the SRC test work, and having demonstrated a positive outcome in the scoping study, a feasibility study will commence in mid-2012 which would also include initial steps in permitting.

• Additional drilling programs would also be planned to not only increase the total resource, but to meet NI 43-101 reserve criteria.

Sincerely,

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Jim Malone Executive Chairman

Australian American Mining Corporation Ltd ABN 99 073 155 781 572 Hay Street, Perth, WA, Australia, 6000 PO Box 1788, West Perth, WA, Australia, 6872 Telephone: (08) 9325 5568 Facsimile: (08) 9325 5574

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Note – Conversion Factors for REE’s to REO’s

Analytical data on samples submitted from the La Paz Project are reported out by the laboratory as parts per million of the various metals and not as oxides.

However, current market releases are couched in terms of oxides and not as metals, and it is therefore necessary to convert the laboratory parts per million Rare Earth Elements metals into market-friendly parts per million Rare Earth Elements Oxides

The table found below gives the conversion factors used by SRC for this purpose. Beginning with the metals concentration (REE) the element-dependent “converting factor” is used to determine the equivalent oxide concentration.

REE	to	REO
	Converting
	Factor
Sc	1.5338	Sc2O3
Y	1.2699	Y2O3
La	1.1728	La2O3
Ce	1.2284	CeO2
Pr	1.2082	Pr6O11
Nd	1.1664	Nd2O3
Sm	1.1596	Sm2O3
Eu	1.1579	Eu2O3
Gd	1.1526	Gd2O3
Tb	1.1762	Tb4O7
Dy	1.1477	Dy2O3
Ho	1.1455	Ho2O3
Er	1.1435	Er2O3
Tm	1.1421	Tm2O3
Yb	1.1387	Yb2O3
Lu	1.1372	Lu2O3

Competent person

The review of exploration activities and results contained in this report is based on information compiled by Mr. Denis Geldard, Chief Executive Officer and Executive Director of Australian-American Mining Corporation Limited (“AusAmerican” or “Company”). Mr Geldard is a member of the Australasian Institute of Mining and Metallurgy. Mr Geldard is considered a competent person pursuant to paragraph 8 of the JORC Code and has significant experience relevant to the style of mineralisation and types of deposits under consideration. Mr Geldard consents to the inclusion of this information in the form and context of this announcement.

Australian American Mining Corporation Ltd ABN 99 073 155 781 572 Hay Street, Perth, WA, Australia, 6000 PO Box 1788, West Perth, WA, Australia, 6872 Telephone: (08) 9325 5568 Facsimile: (08) 9325 5574

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The attached geological report was prepared by Mr. John Petersen and Dr Bernhard Free. Both gentlemen are geologists and consultants of the Company. Dr Free is a member of the American Institute of Mining and Metallurgy. Dr Free is considered a competent person pursuant to paragraph 8 of the JORC Code and has significant experience relevant to the style of mineralisation and types of deposits under consideration. Dr Free consents to the inclusion of this information in the form and context of this announcement. The resource estimation was calculated by Mr David Boyer, M.Sc, CPG, and RG. Mr Boyer is a member of the American Institute of Professional Geologists and is considered a competent person pursuant to paragraph 8 of the JORC code and has significant experience relevant to the style of mineralisation and types of deposits under consideration. Mr Boyer consents to the inclusion of this information in the form and context of this announcement.

Cautionary note to U.S investors

The United States Securities and Exchange Commission limits disclosure for US reporting purposes to mineral deposits that a company can economically and legally extract or produce. We may use terms in the release such as “reserves”, “resources”, “geological”, “proven”, “probable”, “measured”, “indicated” or “inferred” which may not be consistent with the reserve definitions established by the SEC. US investors are urged to consider closely the disclosure in our annual reports. You can review and obtain copies of these filings from our website.

This announcement contains forward looking statements. These statements relate to future events, or our future financial performance. We have attempted to identify forward looking statements by terminology including “anticipates”, “believes”, “can”, “continue”, “could”, “estimates”, “expects”, “intends”, “may”, “plans”, “potential”, “predicts”, “should” or “will” or the negative of these terms or other comparable terminology. The statements are only predictions and involve known and unknown risks, uncertainties and other factors. The following factors, among others, could cause our actual results and performances to differ materially from the results and performance projected in, or implied by, the forward looking statements:

• Our history of losses and expectation of further losses.

• The effect of poor operating results on our company.

• Our ability to expand our operations in both new and existing prospects and our ability to develop or acquire new prospects.

• Or ability to develop new prospects and our performance in detecting and producing uranium for yellow cake.

• Our ability to raise capital.

• Our ability to fully utilize and retain new executives.

• Negative publicity surrounding our product.

• Trends in consumer tastes in energy.

• The impact of litigation.

• The impact of Federal, state, local or foreign government regulations.

• The effect of competition in our industry.

• Economic and political conditions generally.

Australian American Mining Corporation Ltd ABN 99 073 155 781

572 Hay Street, Perth, WA, Australia, 6000 PO Box 1788, West Perth, WA, Australia, 6872

Telephone: (08) 9325 5568 Facsimile: (08) 9325 5574

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Further information:

For further information please contact Jim Malone at jim.malone@ausamerican.com or on +1 520 907 3657 or Denis Geldard , CEO AusAmerican on +61 89325 5568 or denis.geldard@ausamerican.com

North American Investor Relations Manager: Peter Barnes on +1 646 269 3073.

Australian American Mining Corporation Ltd ABN 99 073 155 781 572 Hay Street, Perth, WA, Australia, 6000 PO Box 1788, West Perth, WA, Australia, 6872 Telephone: (08) 9325 5568 Facsimile: (08) 9325 5574