RTG Mining Inc. — Management Reports 2014

Nov 12, 2014

Level 2, 338 Barker Road Subiaco WA 6008 Phone: +61 8 6489 2900 www.rtgmining.com

MANAGEMENT DISCUSSION AND ANALYSIS (“MD&A”) PERIOD ENDED SEPTEMBER 30, 2014

(All figures are in US dollars unless otherwise indicated and the effective date of this MD&A is 13 November 2014)

Introduction

Management’s discussion and analysis provides a review of the performance of RTG Mining Inc.’s (“RTG”, “Company” or the “Group”) operations and compares its performance with those of the preceding year and quarters. This discussion also provides an indication of future developments along with issues and risks that can be expected to impact future operations. The comparative financial information presented in the report relates to both RTG and Ratel Group Limited (“Ratel Group”). This report has been prepared on the basis of available information up to 30 September, 2014 and should be read in conjunction with the interim financial statements of the Company for the period ended 30 June 2014, the audited financial statements of the Company for the year ended 31 December 2013 and the related notes thereto, which have been prepared in accordance with International Financial Reporting Standards and the Annual Information Form (“AIF”) dated 31 March 2014 for 31 December 2013.

Additional information relating to the Company, including the Company’s Financial Statements and AIF can be found on SEDAR at www.sedar.com.

Cautionary Note Regarding Forward Looking Statements

Certain statements contained in this MD&A constitute forward looking statements within the meaning of applicable securities laws including, among others, statements made or implied relating to the Company’s objectives, strategies to achieve those objectives, the Company’s beliefs, plans, estimates and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward looking statements generally can be identified by words such as “objective”, “may”, “will”, “expect”, “likely”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or similar expressions suggesting future outcomes or events. Such forward looking statements are not guarantees of future performance and reflect the Company’s current beliefs based on information currently available to management. Such statements involve estimates and assumptions that are subject to a number of known and unknown risks, uncertainties and other factors inherent in the business of the Company and the risk factors discussed in the AIF and other materials filed with the securities regulatory authorities from time to time which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Those risks and uncertainties include, but are not limited to: the mining industry (including operational risks; risks in exploration and development; the uncertainties involved in the discovery and delineation of mineral deposits, resources or reserves; and the uncertainty of mineral resource and mineral reserve estimates); the risk of gold, copper and other commodity price and foreign exchange rate fluctuations; the ability of the Company to fund the capital and operating expenses necessary to achieve the business objectives of the Company; the uncertainty associated with commercial negotiations and negotiating with foreign governments; the risks associated with international business activities; risks related to operating in Nigeria, the Philippines and other international jurisdictions; environmental risk; the dependence on key personnel; and the ability to access capital markets.

Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date the statements were made and readers are advised to consider such forward looking statements in light of the risks set forth above. Except as required by applicable securities laws, the Company assumes no obligation to update or revise any forward looking statements to reflect new information or the occurrence of future events or circumstances.

Background and Review of Operations

RTG was incorporated on 27 December 2012 and is domiciled in the British Virgin Islands. On 28 March 2013, Ratel Group and RTG completed the merger (the “Merger”) of Ratel Group and Ratel Merger Ltd, a wholly-owned subsidiary of RTG. As a result, the surviving corporation formed by the Merger is a wholly-owned subsidiary of RTG. On 15 April 2013, the restructuring transaction was fully completed along with the satisfaction of the escrow release conditions pursuant to the private placement (the “Private Placement”) of 162,538,641 subscription receipts of RTG at C$0.13 each, raising gross proceeds in the order of C$21.1M. As a result, the previously issued ordinary shares of Ratel Group (the “Ratel Shares”) were exchanged for ordinary shares of RTG (the “RTG Shares”) and the surviving corporation formed by the Merger is a wholly-owned subsidiary of RTG. The 162,538,641 previously issued subscription receipts were automatically converted (for no additional consideration) into 162,538,641 RTG Shares and the gross proceeds of the Private Placement, less the commission payable to Haywood Securities Inc. as agent under the Private Placement and less the fees payable to the subscription receipt agent under the Private Placement, were released to RTG. The RTG Shares began trading on the TSX under the former symbol for the Ratel Shares, “RTG”, effective as of the open of markets on 15 April 2013.

Ratel Group was incorporated on 18 October 2010 and is domiciled in the British Virgin Islands. Both CGX Limited (“CGX”) and Zambian Mining Limited (“Zambian Mining”) were incorporated on 22 August 2006 and are also domiciled in the British Virgin Islands. Ratel Group, CGX and Zambian Mining were previously wholly owned subsidiaries of Ratel Gold (now St Augustine Gold & Copper Limited (“SAU”)). On 17 December 2010, the shares held by Ratel Gold (now SAU) were transferred to Ratel Group who acquired a 100% interest in Zambian Mining and CGX. Ratel Group was previously listed on the TSX on 4 January 2011 under the symbol “RTG” and pursuant to the Merger, has since ceased trading on the TSX. As of 1 May 2013, Ratel Group ceased to be a reporting issuer. CGX and Zambian Mining were incorporated to act as holding companies respectively for the interests in the Segilola Gold Project in Nigeria and the Mkushi Copper Project in Zambia (sold during the 2013 year, as discussed below).

On 4 June 2014, RTG completed the implementation of the schemes of arrangement (the “Schemes”) pursuant to the terms of the previously announced Scheme Implementation Deed dated February 24, 2014 (the “Deed”) between RTG and Sierra Mining Limited (“Sierra”) to acquire all of the outstanding securities of Sierra.

Pursuant to the Schemes, RTG acquired all of the outstanding shares of Sierra (“Sierra Shares”) and all of the outstanding listed options of Sierra (“Sierra Options”), and issued as consideration:

• (a) to eligible shareholders of Sierra, 3 new ordinary shares of RTG (“RTG Shares”) for every 10 Sierra Shares held and 1 new share purchase option of the Company (“RTG Option”) for every 30 Sierra Shares held; and

• (b) to eligible option holders of Sierra, 2 RTG Shares for every 10 Sierra Options held and 2 RTG Options for every 90 Sierra Options held.

The Company also acquired all unlisted Sierra Options (“Sierra Unlisted Options”), and issued as consideration to such holders of Sierra Unlisted Options:

• (a) 1 RTG Share for every 10 Sierra Unlisted Options exercisable at $0.20 each on or before July 1, 2014, together with 1 RTG Option for every 90 Sierra Unlisted Options held; and

• (b) 1 RTG Share for every 20 Sierra Unlisted Options exercisable at $0.25 each on or before July 1, 2015, together with 1 RTG Option for every 180 Sierra Unlisted Options held.

Pursuant to the Schemes, RTG has acquired a direct 40% interest in each of Mt Labo Exploration & Development Corporation, St Ignatius Exploration and Mineral Resources Corporation, Bunawan Mining Corporation and Oz Metals Exploration and Development Corporation and a further indirect 24% interest in Mt Labo Exploration and Development Corporation.

Mkushi Copper Project

A joint venture was entered into with African Eagle Resources (“AFE”) for the Mkushi Copper Project in Zambia whereby the Company’s wholly owned subsidiary Seringa Mining Limited (“SML”) acquired a 51% interest in the project through its 51% shareholding in Mkushi Copper Joint Venture Limited (“MCJVL”), which holds the mine tenements, with AFE retaining a 49% interest. SML was responsible for funding a bankable feasibility study, while AFE managed exploration initiatives outside the initial development zones, with funding proportional to the percentage interest held by each party in the project. The joint venture agreement was finalised and executed on 30 May 2007. SML prepared a detailed feasibility study. On 3 December 2012, AFE announced it had sold its 49% interest to Elephant Copper Ltd (“Elephant Copper”) who we have now also sold our interest in the joint venture to, as detailed below.

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RTG announced on 29 August 2013 that it had sold its interest in the Mkushi Copper Project for US$13.1 million to Elephant Copper. Pursuant to the share sale agreement (the “Share Sale Agreement”) between Zambian Mining and Elephant Copper, Zambian Mining agreed to sell 100% of the share capital of RTG’s wholly owned subsidiary SML, which holds the 51% interest in MCJVL. The purchase price of US$13.1 million was satisfied by:

1. the issue of 20 million fully paid ordinary shares at an issue price of US$0.33 per share in Elephant Copper to ZML to the value of US$6.6 million (“Consideration Shares”); and

2. a US$6.5 million unsecured redeemable convertible note (“Convertible Note”).

Elephant Copper also agreed to payment of the Deferred Heap Leach payment totalling US$1,399,064 million, before interest (“DHL Payment”). The DHL Payment represents amounts paid by Zambian Mining on behalf of Elephant Copper to MCJVL.

On 22 October 2013, the conditions precedents to the Share Sale Agreement with Elephant Copper were satisfied and the sale was completed. Elephant Copper has indicated it is in the process of completing a listing on the TSX (“IPO”) through a transaction with International Millennium Mining Corp (“IMMC”), subject to securing funding to allow the planned development activities at the Mkushi Project to proceed. Under the planned transaction, IMMC will complete a consolidation (the “Consolidation”) of all of its outstanding common shares (the “IMMC Securities”) and completion of the Listing Transaction will be subject to the satisfaction of certain conditions prior to closing, including, but not limited to, all requisite regulatory approvals relating to the transaction, including, without limitation, TSXV approval, being obtained.

The Convertible Note will be repayable on or before 1 January 2015, unless converted earlier, and will have an exercise price for conversion equal to the lesser of US$0.45 and 1.36 times the IPO price for shares in Elephant Copper. The Convertible Note is convertible at the sole election of Zambian Mining. Under the Share Sale Agreement, if:

1. the IPO does not proceed, or proceeds at a price less than US$0.33 per share, Zambian Mining will be entitled to additional Consideration Shares so that the total value of the Consideration Shares is US$6.6 million; and

Elephant Copper enters into an alternative transaction, then, the total consideration payable under the Share Sale Agreement is to be satisfied in cash or alternatively, Elephant Copper will be required to buy all of the Consideration Shares and any shares to be issued under the Convertible Note at a price of US$0.33 per share.

Pursuant to the Share Sale Agreement, Elephant Copper undertook to complete its IPO by 31 December 2013 and repay the DHL Payment by 1 January 2014. On 30 December 2013, RTG received a letter from Elephant Copper requesting consideration of an amendment to the Share Sale Agreement to permit Elephant Copper more time to complete the IPO and repay the DHL Payment. SML issued a demand letter on 8 January 2014 demanding payment of the outstanding DHL Payment. SML has advised Elephant Copper that it fully reserves all of its rights and remedies under the Share Sale Agreement and has not agreed to any amendment.

Segilola Gold Project

In May 2007, Segilola Gold Limited (“SGL”), a wholly owned subsidiary of RTG, entered into a joint venture with Tropical Mines Limited (“TML”), a private company based in Nigeria, to earn a 51% interest in the Segilola Gold Project in Nigeria (“the Joint Venture Agreement”). An initial maiden indicated resource estimate was declared for the Segilola Gold Project comprising 3,620,386 tonnes at a grade of 4.50g/t for 521,814 ounces of gold plus an inferred resource of 747,590 tonnes at a grade of 4.00g/t for 96,445 ounces of gold. The maiden resource was generated from a drilling campaign of 12,166 metres in 119 holes ranging in depth from 40 metres to 220 metres. The deposit lends itself to initial exploitation by open pit mining methods. The metallurgical characteristics of the ore are amenable to conventional CIL processing techniques.

On 30 March 2012, SGL exercised the third and final option lifting its percentage interest in the mineral tenements from 38% to 51%. TML had refused to accept that SGL validly exercised this option. On 18 May 2012, SGL gave TML a notice of dispute advising of its intention to refer the dispute to arbitration under the Joint Venture Agreement and to seek a declaration that SGL is the holder of a 51% interest in the mineral tenements the subject of the Segilola Gold Project (“Notice of Arbitration”).

On 18 June 2012, TML was granted interim orders in the Federal High Court of Nigeria (the “Court”) restraining SGL from proceeding further with the arbitration or commencing a new arbitration until the hearing and determination of TML’s motion. On 27 June 2012, SGL consented to the Court’s orders that SGL not proceed further with the arbitration that was the subject of the Notice of Arbitration. The remaining issue in dispute relates to orders sought by TML that requires SGL to pay TML’s legal fees to defend its interest in response to the Notice of Arbitration before SGL may re-commence the arbitration process under the Joint Venture Agreement.

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A hearing was due to be held on 4 October 2012 to hear arguments on the point of costs but was adjourned to 14 November 2012 and further adjourned to 22 April 2013 for report of the settlement or hearing of the pending applications. At the hearing on 22 April 2013, counsel informed the Court that settlement discussions were underway and that parties needed time to conclude the same. As a result the matter was adjourned to 17 June 2013, 16 October 2013, 9 June 2014, and has subsequently been further adjourned to 24 November 2014 for report of settlement.

RTG has now entered into an unconditional Share Sale and Purchase Agreement for the sale of RTG’s 51% interest in the Segilola Gold Project in Nigeria (the “Segilola Sale”) for approximately US$14 million to RTG’s joint venture partner, Segilola Resources Operating Limited (“SROL”). The Segilola Sale also provides for the settlement of the related disputes in relation to the Segilola Gold Project between Ratel Group, SGL, TML, SROL, Bakrie Delano Africa Limited, NGM Resources Limited and Mr Oladipo Delano under the terms of an agreed settlement Deed (the “Settlement Deed”). The disputes concern a purported termination of the Joint Venture Agreement. This includes the settlement of the injunctive proceedings brought by SGL before the Court and the interim injunction issued against SGL by the Court dated 18 June 2012. On the completion date of the Segilola Sale, signed counterparts of the Settlement Deed will be released from escrow and come into effect. As a result each of the injunctive proceedings is expected to be discontinued with no order as to costs and each party will bear their own costs.

Obuasi Joint Venture

In 2010 Ratel entered into an acquisition agreement to purchase all the shares in CAML Ghana Limited (“CAML Ghana”). CAML Ghana is an unrelated entity to Ratel. CAML Ghana and Westchester Resources Limited (“Westchester”) are participants in a gold exploration project in Ghana pursuant to the Obuasi Prospecting Farm in and Joint Venture Agreement.

The acquisition agreement was conditional upon the approval of the transaction by the relevant Ghanaian Minister. Ministerial approval was not obtained, and on 3 November 2011 Ratel announced that the Obuasi Prospecting Farm in and Joint Venture Agreement had been terminated. Westchester issued proceedings in Ghana against a number of parties, including Ratel in February 2012, which are considered both unsubstantiated and without foundation (“Ghana Proceedings”).

CAML Ghana was successful in having the Ghana Proceedings stayed following an order from the London Court of Arbitration in April 2012 in the context of arbitration proceedings launched against Westchester by CAML Ghana. On its application, Ratel was joined as a party to the arbitration. On 27 November 2012, on the application of Westchester, the High Court of Ghana set aside that stay order. CAML Ghana has appealed that decision. This appeal has not been determined.

In July 2013 a hearing took place in the arbitration before the Arbitral Tribunal in London. The Arbitral Tribunal delivered its award on all matters of liability in September 2013, finding in favour of CAML Ghana on all points and ordering Westchester to pay to CAML Ghana approximately US$1 million in damages and costs (“Arbitration Award”).

On 14 November 2013, CAML Ghana filed a petition in the United States District Court for the Southern District of New York seeking to confirm the Arbitration Award and to obtain an anti-suit injunction in relation to the Proceedings (“US Proceedings”). Ratel was a co-petitioner. Westchester opposed the petition. On May 21, 2014, the United States District Court issued a stipulated order (“Order”). Pursuant to the Order: Westchester is to commence proceedings in England, the seat of the arbitration, to challenge the Arbitration Award (“English Proceedings”); both the Ghana Proceedings (including the appeal) and the US Proceedings have been stayed pending the resolution of the English Proceedings; there will be no further litigation other than in accordance with the Order; and the parties have agreed to abide by the final judgment delivered in the English Proceedings.

One of Westchester's obligations under the Order was to provide to CAML Ghana a signed stipulation of discontinuance that is to be held on escrow pending the resolution of the English Proceedings. The stipulation of discontinuance is to have the effect of permanently terminating the Ghana Proceedings in the event the Arbitration Award is upheld in the English Proceedings. Westchester has not provided CAML Ghana with a signed stipulation of discontinuance. CAML Ghana has filed a motion to enforce the Order, in respect of which the parties are currently exchanging submissions.

Loan Facility

During September 2012, Ratel Group entered into a loan facility agreement (the “Ratel Group Loan Facility Agreement”) with CGA Mining Limited for the sum of $2.5M. In April 2013, the outstanding principal and interest on the loan facility was fully repaid.

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Change of Financial Year End

During the 2013 calendar year, RTG changed its financial year end from 30 June to 31 December, hence the September 2014 quarter is the third financial quarter for RTG’s 2014 financial year.

Risk Factors

The business of RTG should be considered speculative given the volatility in world stock markets (particularly with respect to mining and exploration companies) and the uncertain nature of mining and exploration activities generally. Amongst other things, the following are some of the key risk factors faced by RTG, its subsidiaries and associates:

• foreign exchange movements;

• movements in commodity prices (in particular gold, copper and iron ore prices and costs of production);

• securing offtake agreements for non-gold products;

• access to new capital (both debt and equity) and meeting liquidity requirements;

• the uncertain nature of exploration and development activities;

• increases in capital expenditures necessary to advance the Company’s projects;

• the ability to profitably exploit new development projects;

• political, security and sovereign risks of Nigeria and the Philippines;

• joint venture partner relationships and disputes;

• permitting and local government and community support; and

• environmental obligations.

For further information on these and other risks inherent in the Company’s business, we direct readers to the Annual Information Form for the 31 December 2013 financial year and the Scheme Booklet dated 10 April 2014 lodged on SEDAR at sedar.com.

Overall Performance

The Company recorded a net loss of $1.761M for the current quarter, as compared to a net loss of $1.438M in the September 2013 quarter. The Group’s activities during the current period focussed on the integration of Sierra and a review of all previous drilling activity and an infill drilling program of the Mabilo ore body. The Company and its joint venture partner at Mabilo have made significant progress towards the preparation of a maiden resource (which we expect to release shortly) and has commenced permitting for the initial planned Direct Ship Ore (“DSO”) development of this project. During the quarter, the Company also successfully obtained the exploration permit for the prospective Bunawan Project in the Philippines.

As at 30 September, the Company had cash and liquid assets of on hand and at bank of $8.588M including a receivable of $0.940M relating to costs awarded to CAML Ghana under the Arbitration Award, $1M due from SROL under the Segilola Sale and the $1.396M DHL Payment due from Elephant Copper.

Consolidated Results (US$000’s, except per share information) Profit and Loss

Profit and Loss
	Three month period ended
	September 30, 2014	June 30, 2014	Variance
Income	10	8	(2)
Groupnet profit/(loss)	(1,761)	(1,220)	(541)
Explorationand evaluationexpenses	-	-	-
Business development expenses^	(456)	(344)	(112)
Share of loss ofassociate	(312)	(127)	(185)
Basic profit/(loss) pershare	(0.27)	(7.46)	7.19

^During the September 2014 quarterly there has been a reclassification of expenditure between business development payments and administration relative to the treatment in the profit and loss.

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Consolidated Cash Flows from Operating Activities

(US$000’s, except per share information)

	**Three month **	period ended
	September 30, 2014	June 30, 2014
Reconciliation of net loss after tax to net cash flows from operations
Net profit/(loss) after relatedincome tax	(1,761)	(1,271)
Adjustments for non-cash income and expense items
Depreciation	9	22
Net exchange differences	43	(170)
Assetwrite off	-	113
Share of loss ofassociate	312	127
Changes in Assets & Liabilities
Changein working capital	300	(460)
Net cash inflow/(outflow)fromoperating activities	(1,097)	(1,639)

Consolidated Balance Sheet

(US$000’s, except per share information)

Consolidated Balance Sheet (US$000’s, except per share information)
		For the period ended
	September 30, 2014	June 30, 2014	Variance
Cash and cash equivalents^	5,252	7,234	(1,982)
Current Assets	5,873	8,156	(2,283)
Property, plant & equipment	239	248	(9)
Investment in associate	83,617	83,857	(240)
Available for sale financial assets	1,842	1,842	-
Loans to associate	1,409	644	765
Derivative financial asset	1,330	1,330	-
Total Assets	94,310	96,077	(1,767)
Total Liabilities	**361 **	**362 **	1
Shareholders’ Equity	93,949	95,715	(1,766)

^As at September 30, 2014 the Company had cash and liquid assets of $8.588M (30 June 2014: $10.688M) which includes cash and cash equivalents, $0.940M relating to costs awarded to CAML Ghana under the Arbitration Award, $1M due from SROL under the Segilola Sale and the $1.396M DHL Payment due from Elephant Copper.

Selected Quarterly Data

(US$000’s, except per share information)

	YTD 9 months to 30 Sept 2014	Q3 Sept 2014	Q2 Jun 2014	Q1 Mar 2014	31 Dec Year end total (6 months)	Q2 Dec 2013	Q1 Sep 2013	30 Jun 2013 Year end total (12 months)	Q4 Jun 2013	Q3 Mar 2013
Total income	28	10	8	10	25	13	12	11	11	-
Net profit/(loss)	(4,853)	(1,761)	(1,220)	(1,872)	(881)	557	(1,438)	(8,323)	(5,405)	(1,103)
Per share (undiluted US$ cents per share)	(8.31)	(0.27)	(7.46)*	(0.57)	(0.27)	0.17	(0.44)	(4.98)	(3.27)	(0.74)
Per share (diluted US$ cents per share)	(8.31)	(0.27)	(7.46)*	(0.57)	(0.27)	0.17	(0.44)	(4.98)	(3.27)	(0.74)

*RTG undertook a 10 for 1 share consolidation during the June 2014 quarter.

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As discussed in the Background and review of operations section, the surviving corporation formed by the Merger is a wholly-owned subsidiary of RTG. Therefore the comparative figures from the March 2013 quarter and prior are those of Ratel Group Limited.

Quarterly Results

Three Months Ended 30 September 2014 as Compared to the Three Months Ended 30 June 2014 and the Three Months Ended 30 September 2013

The Company’s result for the three months to 30 September 2014 was a net loss of $1.761M as compared to a net loss of $1.220M for the previous quarter and a net loss of $1.438M in the September 2013 prior year quarter. Commentary regarding the September 2014 quarter result is outlined below.

Income and foreign exchange gains/losses

The Company earns interest income which fluctuates depending on total and currency composition of cash balances held and short term rates. During the current quarter, the Company earned interest income of $0.01M compared to $0.008M for the June 2014 quarter and $0.012M interest in the September 2013 quarter. The Company holds differing quantities and currencies of cash including Australian Dollars, Canadian Dollars and United States Dollars which expose the Company to foreign exchange gains and losses. A foreign exchange loss of $0.14M was recorded in the current quarter, as compared to a gain of $0.17M in the June 2014 quarter and a gain of $0.18M in the September 2013 quarter.

Expenses

Total expenses for the September 2014 quarter were $1.771M as compared to $1.228M for the June 2014 quarter, and $1.451M for the September 2013 quarter.

Administrative expenses

The Company incurred administrative costs of $0.858M for the September 2014 quarter as compared to $0.978M in the June 2014 quarter and $1.056M in the September 2013 quarter. The reduction from the previous quarter can in part be attributed to finalisation of the merger with Sierra which concluded in June. Administrative costs associated with the merger in the current period amounted to $0.010M as compared to $0.263M in the June quarter. Higher administrative expenses in the form of legal and advisor fees incurred during September 2013 period related predominately to the sale of the Mkushi Copper Project as well as the CAML Ghana arbitration.

Business development expenditure

The Company incurred business development expenses of $0.456M in the current quarter compared to $0.293M in the previous quarter and $0.356M in the September 2013 quarter. Additional business development and investor relations costs were incurred during the current period as the Company focused on and implemented an integration with Sierra and briefing institutional shareholders on the new developments.

Share of associate loss

In the September 2014 quarter, the Company has recognised a loss of $0.312M from its share of its associate’s losses, an increase of $0.185M from the previous quarter loss of $0.127M. These losses are generated from the Philippine entities acquired from the merger with Sierra and are a function of increased exploration and development activity during the September quarter including progress towards an initial resource at Mabilo, a feasibility study related to the planned DSO operation at Mabilo and granting of the Bunawan permit.

Nine Months Ended 30 September 2014 as Compared to the Nine Months Ended 30 September 2013

The Company’s result for the nine months ended 30 September 2014 was a net loss of $4.853M as compared to a net loss of $7.946M in the nine months to 30 September 2013. The prior period loss was influenced by two one off elements, being the $1.915M share based payment expense for shares issued under the Loan Funded Share Plan and a $1.317M provision raised on the receivable due from the Mkushi Copper Joint venture partner.

Income and Foreign Exchange Gains/Losses

The Company earned interest income of $0.028M for the current period as compared to $0.023M in the prior year nine month period. A foreign exchange loss of $0.326M was recorded in the current period as compared to a loss of $0.111M for the nine months ended September 30, 2013. Similarly discussed above at the quarter commentary, foreign exchange gains or losses are influenced by quantities and currencies of cash held including Australian Dollars, Canadian Dollars and United States Dollars.

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Expenses

Total expenses for the nine months ended 30 September 2014 were $4.880M as compared to $7.969M in the nine months in the preceding period. The main factors resulting in reduction of overall expenditure were the two one off items incurred in 2013 outlined above.

Exploration and evaluation expenditure

The Company incurred exploration and evaluation costs of $0.192M during the prior year period as compared to nil in the current period which is consistent with the sale of previous projects in the prior year period and the associate assets acquired with the Sierra merger. The Company sold its interest in the Mkushi Copper Project in the December 2013 quarter and has ceased activity at the Segilola Gold Project, pending completion of the sale. The expenditure and activity relating to the Company’s recently acquired interests in the Philippines are recognized through its associate’s accounts.

Operating expenditure

Operating costs of $1.641M were expensed in the nine months to 30 September 2013 in relation to the heap leach operation at the Mkushi Copper Project, which includes the provision of $1.317M for the heap leach receivable due from the Company’s joint venture partner for their 49% share of the development, plus operating costs. As the Company sold its interest in the project in the December 2013 quarter this has been agreed to be repaid by the purchaser, Elephant Copper.

Share of associate loss

In the nine months to September 30, 2014 the Company has recognised a loss of $0.439M from its share of associate’s losses, which relates to the four month period post-merger with Sierra.

Liquidity and Capital Resources

As at September 30, 2014, the Company had cash and cash equivalents of $5.252M compared to $7.234M at June 30, 2014, and $12.822M at September 30, 2013 the same period the previous year. As at September 30, 2014 the Company had cash and liquid assets of $8.588M (June 30, 2014: $10.688M) which includes cash and cash equivalents, $0.940M relating to costs awarded to CAML Ghana under the Arbitration Award, $1M due from SROL under the Segilola Sale and the $1.396M DHL Payment due from Elephant Copper.

The implementation of the Schemes was completed during the June 2014 quarter, and as part of the merger with Sierra, RTG acquired $1.328M of cash on hand in Sierra.

The Company manages liquidity risk through maintaining sufficient cash, loan facilities or credit terms with its suppliers to meet the operating requirements of the business and investing excess funds in highly liquid short term cash deposits. The Company expects to meet its liquidity needs through existing cash on hand and those receivables expected to be realised, subject to current operating parameters and budgets being met.

The Company did not declare any dividends during the current quarter.

The Company currently has in place an active program of financial forecasting and budgeting both at a corporate and project level to manage both the application of funds and planning for future financial needs to ensure that any shortfall in revenue funds is adequately covered by cash reserves or planned new sources being either debt or equity based on the then most cost effective weighted average cost of capital. Expenditure to date for the Company has been largely in line with the overall initial budget forecasts, save for any costs related to legal disputes.

Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The Group’s maximum exposures to credit risk at the reporting date in relation to each class of financial asset is the carrying amounts of those assets as indicated in the Company’s balance sheet.

Contractual obligations

		Payments due by period	Payments due by period
Contractual obligations	Total	Less than 1 year	1-3 years	4-5 years	More than 5 years
Operatingleases~~1~~	361,462	206,550	154,912	-	-
Total contractual obligations	361,462	206,550	154,912	-	-
~~1~~Corporate office lease payments

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Transactions between the Group and its related entities

During the quarter ended 30 September 2014, the Company entered into transactions with related parties in the wholly-owned group:

• Loans totalling $0.563M were advanced to Mt Labo Exploration and Development Corporation, an associate of the group to fund day to day exploration and administrative costs; and

• Loans totalling $0.200M were advanced to Bunawan Mining Corporation, an associate of the Group to fund day to day exploration and administrative costs.

These transactions were undertaken on the following terms and conditions:

• loans are repayable at call; and

• no interest is payable on the loans at present.

Transactions between the Group and other related parties

During the quarter, no other significant transactions with related parties were entered into.

Outstanding Share Data

As at 30 September 2014, the Company had 111,973,237 common shares outstanding and 8,784,687 listed options with an exercise price of C$1.50 and expiry date of 4 June 2017. During the quarter, 167 listed options were exercised and 256,167 shares issued.

Subsequent Events

There have been no significant events subsequent to balance date.

Critical Accounting Estimates

The significant accounting policies used by RTG Mining are disclosed in Note 2 to the annual financial statements for the year ended 31 December 2013. Certain accounting policies require that management make appropriate decisions with respect to the formulation of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Management reviews its estimates on a regular basis. The emergence of new information and changed circumstances may result in actual results or changes to estimated amounts that differ materially from current estimates. Refer to Note 13 of the 30 June 2014 Interim Financial Statements of the Company for further details on fair value measurements and financial instruments of the Company.

Accounting Policies

The Group’s interim consolidated financial report as at 30 September 2014 complies with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The accounting policies of the Group are set out in Note 2 to the 31 December 2013 Annual Financial Statements, available on www.sedar.com.

Income Taxes

The determination of income and other tax liabilities requires interpretation of complex laws and regulations. All tax filings are subject to audit and potential reassessment after the lapse of considerable time. Accordingly, the actual income tax liability may differ from that estimated and recorded by management.

Internal Controls and Disclosure Controls

The Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) are responsible for the design and effectiveness of internal controls over financial reporting (as such term is defined in National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings (“NI 52-109”)), to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements in accordance with International Financial Reporting Standards. The Company maintains an effective control environment and has used the Internal Control –- Integrated Framework (COSO Framework) published by the Committee of Sponsoring Organizations of the Treadway Commission to design the Company’s internal controls over financial reporting. The Company’s CEO and CFO believe that the Company’s internal controls and procedures are effective in providing reasonable assurance that financial information is recorded, processed, summarized and reported in a timely manner.

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During the quarter ended 30 September 2014, there have been no changes in the Company’s policies and procedures and other processes that comprise its internal control over financial reporting, that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

The Company’s CEO and CFO are also responsible for the design and effectiveness of disclosure controls and procedures (as such term is defined in NI 52-109) to provide reasonable assurance that material information related to the Company, including its consolidated subsidiaries, is made known to the Company’s certifying officers. The Company’s CEO and CFO believe that the Company’s disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed under applicable securities legislation is recorded, processed, summarized and reported in a timely manner.

The Company’s CEO and CFO have each evaluated the effectiveness of the Company’s internal controls over financial reporting and disclosure controls and procedures as of 30 June 2014. The Company’s CEO and CFO have concluded that these controls and procedures are effective in reasonably assuring the reliability of financial reporting and that material information relating to the Company is made known to them by others within the Company and that such controls and procedures have no material weaknesses and no limits on the scope of their design.

Future Outlook

During the next quarter, the Company’s focus will be on the development of the Mabilo project including progressing the feasibility study and permitting process, including the preparation and release of a maiden resource. Given the successful approval of the Bunawan permit, the Company also intends to begin a drilling program during the December quarter.

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