ORBMINCO LIMITED — Capital/Financing Update 2013

Sep 8, 2013

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9[th] September, 2013

ASX Release, By e-lodgement

AusAmerican to acquire high grade copper mine in Nevada, USA

• Historical high grade copper resource with production history

• Significant infrastructure and ground holding

• Near term production plan

• Toll treatment option

 New Board appointment

United States-focused diversified resource company Australian-American Mining Corporation Limited (ASX: AIW) (“AusAmerican” or “the company”) is pleased to report that it has entered into a letter of intent to acquire a 50% interest in the Victoria Copper Mine located south east of Elko in the state of Nevada, USA.

“This acquisition represents a significant milestone for the company” Managing Director, Mr Richard Holmes said. “We believe that we will be able to rehabilitate the mine and be in production by mid-2014”.

Further, Mr Holmes said “This project adds significantly to our copper portfolio in the USA, a jurisdiction in which we feel very comfortable given its size, security, infrastructure, cost advantages and importantly, demand for copper. The project is highly attractive to AusAmerican due to its relatively low entry cost, near term production potential and excellent exploration upside opportunities. This acquisition will enable AusAmerican to self-fund exploration and the further development of the Victoria Mine, Blue Bell and De Soto copper projects”.

The Project

The Victoria copper mine is located in an established mining region 120km southeast of Elko in the eastern part of Nevada, USA (see figure 1).

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Figure 1: Location of the Victoria copper mine, Nevada

The mine was discovered and explored underground by Anaconda Copper in the 1940’s. It was operated by Anaconda from 1975 to 1977, producing ore from both an open pit and an underground mine. The mine closed due to declining copper prices in 1977. The mine briefly started again in 1980 and closed a short time later as the operator, Day Mines, was taken over. When producing, the underground at the Victoria copper mine operated at 1,000 tons per day via sub level caving. Production statistics are presented in Table 1.

Period	Tons Milled	Copper Grade	Silver Grade	Concentrate Grade
Anaconda Open Pit (Feb 1976 – August 1976)	526,000	2.5%	~10g/t	29.9%
Anaconda Underground (Sept 1976 – August 1977)	297,000	1.8%	~10g/t	30.4%
Day Mines Underground (June 1980 – Feb 1981)	166,961	1.5%	~10g/t	28.8%
Total	989,961	2.1%	~10g/t	29.8%

Table 1: Production statistics for the Victoria copper mine (NB: figures are reported in U.S. short tons).

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The Victoria copper project has reported reserves remaining as follows:

	Tons	Copper Grade (%)	Contained Metal (Cu Tons)
Victoria – Proven	1,382,000	2.4	32,477
Victoria –Probable	148,383	2.5	3,724
Victoria –Possible	906,650	1.4	1,2784
Eugenia – Probable	250,000	2.6	6,250
Total	2,687,033	2.1	55,235

Table 2 Victoria copper mine reserve remaining (NB: tons are U.S. short tons)

The historical estimate presented in Table 2 for the Victoria copper mine is not reported in accordance with the JORC code and it is uncertain that following evaluation and/or further exploration that the resource or reserve estimate will ever be reported in accordance with the JORC code. See Appendix 1 for further disclosure and relevant information.

The project has core infrastructure in place; a power line, which powered the original mine and milling operation is still operational and provides power to a local telecommunication station. The project is located 17 km from State Highway 93 on unsealed road. The underground workings are in excellent condition and readily accessible; a decline measuring ~5m x 3.5m is in place down to the 6990 level. The two lowest levels, the 6990 and the 7030 are partially developed through a series of extraction drives. A schematic cross section is shown in figure 2.

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Figure 2: Cross section showing underground mine workings.

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Mineralisation at the Victoria copper mine is localised at the western margin of an elongate, elliptically shaped breccia pipe formed on the nose and south limbs of an east-west-trending anticline. The ore body forms a crescent-shaped deposit roughly 75m by 90m in plan and plunges to the west at 45 to 55 degrees. (See fig 3) From exposures on the lower levels and from limited drilling, it appears that mineralization is migrating south and south easterly around the crescent with increasing depth and still remains open at depth. The ore mineralogy consists of chalcopyrite, bornite, chalcocite and bismuthinite.

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Figure 3: Mineralisation outlined from mapping and sampling on the Victoria 7110 level

The Victoria project consists of 5 patented mining claims and 121 unpatented claims (10.5km[2] ). The project also includes 2.5km[2] of private land which includes significant water rights. AusAmerican has a first right of refusal on a further 389 unpatented claims (33.7km[2] ) in the Dolly Varden Mining district (see figure 4).

AusAmerican considers the project and regional exploration potential to be excellent. The small Eugenia deposit (2 km) from the Victoria copper mine is a massive sulphide deposit which was discovered using rudimentary geophysics; the deposit had no surface exposure. There are several high priority targets identified by Anaconda Copper which require testing.

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Figure 4 Claim blocks in the Dolly Varden Mountains showing the Victoria project (Taylor Western Resources claims) and the regional claims where AusAmerican has a first right of refusal (Cardigan-West Resources).

Company Plans, Project Financing and Processing Option

AusAmerican plans to redevelop the Victoria copper mine and commence production by the mid2014. The company has received financing terms from US based financiers and will now move to final due diligence with the option to acquire the interest locked in. The final definitive

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agreement and the financing is subject to due diligence which the company believes will be completed by the end of November 2013. Final details of the definitive agreement and the financing terms will be released when they are concluded.

Discussions are being held with a local copper producer expressing keen interest in toll treating the Victoria ore. These negotiations are expected to be concluded in the near future. The Joint Venture partner has previously secured a toll treating agreement with the party.

Details of the Transaction

AusAmerican has entered into a Letter of Intent with Taylor Western Resources LLC to earn 50% of the project on the following terms:

• 1) Invest US$5.5m on mine development and/or regional exploration

• 2) Option payments of

• a. US$0.5m on signing of definitive agreements

• b. US$1m on commencement of rehabilitation of the underground workings

• c. US$1m on commencement of production

• d. US$1m on 12 month anniversary of (c)

• 3) First right of refusal on the remaining 50% of the project

AusAmerican will manage and operate the Joint Venture.

New Board appointment

The company is delighted to announce that Mr Ben Mead will join the company as a Director; effective immediately. Mr Mead has had considerable experience in the management of ASXlisted and private companies in the mineral, energy and aluminium sectors. Mr Mead, who resides in Park City, Utah, in the USA, was instrumental in introducing the transaction to the company and in assisting the company in its negotiations with the project’s owners. Mr Mead will continue to assist with the due diligence, development, financing and on-going management of the project in his role as US based Director residing close to the project.

Sincerely,

Richard Holmes Managing Director

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Appendix 1 – Supporting information as per the “Requirements applicable to reports of historical and foreign estimates for material mining projects”, ASX listing Rules Chapter 5

1 The historical resources/reserves reported were produced by Anaconda Mining LLC in 1975 and subsequently modified/updated by Hecla Mining Company in 1983.

2 The terms used to report mineral reserves in this report (Proven, Probable and Possible) were commonly used by the mining industry in the USA for economic evaluations of ore deposits and represent the portions of a mineral resource that were considered economically viable. The terms are Proven and Probable are considered to be synonymous with the JORC code Proved and Probable. The term Possible is not consistent with the JORC code and represents material which has the lowest confidence but has still been subject to an economic evaluation and could only be considered to be the equivalent of Inferred under the JORC code.

3 AusAmerican considers that the reserve estimate for the Victoria copper mine to be material as the grade, the presence of infrastructure and the existing access via significant underground workings imply the potential for a financially viable underground operation. The joint venture partners have expended a considerable amount of time and money preparing a plan to operate an underground mine and toll treat the ore.

4 AusAmerican considers the historical estimate presented to be reliable as evidenced by:

• a) Production history and reconciliation data.

• b) Drilling density

• c) Underground sampling and geological mapping

5 The historical estimate is based upon 44 surface diamond drill holes (~11,520m), 48 underground diamond drill holes (~3,675m) and extensive underground face sampling data. The key assumptions are not known.

6 An international consulting company reviewed the data in 2008 for a transaction involving a company listed on the Canadian TSX-V. The company concluded that the projects resource/reserve were not NI43-101 compliant and could only be considered as inferred.

7 The company intends to rehabilitate the underground access decline and dewater the mine. This will facilitate access to the lower levels of the mine which can be geologically mapped and sampled. The company will also undertake a diamond drilling program to twin a number of historical drill hole intersections to confirm the extent of mineralisation. It is anticipated that this will provide enough information to enable the calculation of JORC compliant resource and reserves.

8 The company will fund the items in (7) through a debt financing package. The company intends to start work once funding has been confirmed.

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9 The historical reserve estimate for the Victoria copper mine is not reported in accordance with the JORC code and it is uncertain that following evaluation and/or further exploration that the resource or reserve estimate will ever be reported in accordance with the JORC code.

A competent person has not done sufficient work to classify the historical estimate as a mineral resource or ore reserve in accordance with the JORC code.

It is uncertain that following evaluation and/or further exploration work that the historical estimates will be able to be reported as mineral resources or ore reserves in accordance with the JORC code.

10 The information in this document that relates to the historical estimate is based on information compiled by Richard Holmes, Managing Director, AusAmerican Mining who is a Member of the Australian Institute of Mining and Metallurgy. Mr Holmes is a full-time employee of AusAmerican Mining and has sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which has been undertaken to qualify as a Competent Person as defined by the 2012 edition of the “Australian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Holmes consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.

About Australian American Mining Corporation

AusAmerican Mining is a multi-commodity international exploration company led by a proven technical team that is focused on discovering and defining high-quality projects featuring strong grades, meaningful size and mining-friendly addresses. All of its projects are currently located in the United States of America (“USA”).

ENDS

For further information, please contact:

Richard Holmes Managing Director +61 8 9481 0799 rholmes@ausamerican.com