XREF LIMITED — AGM Information 2012

Jul 30, 2012

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King Solomon Mines Limited

CHAIRMAN'S ADDRESS 1 August 2012

Ladies and Gentlemen

When we assembled for the Company ’ s Annual General Meeting last year, I outlined the various factors which were impacting both the Euro Zone and the US economy and in the process undermining confidence in global equity markets. These were factors resulting from years of economic mismanagement. At the time I spoke with some optimism that world leaders had grasped the nettle and were putting in place steps to address the problems. Perhaps naively I hoped that decisive action would return confidence to the markets.

Now, one year on, my optimism has been shown to be misplaced. Europe seems to be lurching from crisis to crisis. The obvious reluctance of the Greek, Spanish and Italian people to take the harsh medicine required to remedy their economic malaise is being reflected in political polarisation on the left or right. How long Germany will underwrite the insolvent members of the Euro Zone must now be questionable. In the United States, incipient signs of economic recovery late last year seem to have evaporated and the uncertainties around the forthcoming Presidential election will not encourage business confidence.

The impact of this scenario on equity markets is all too apparent. I don ’ t recall a worst market environment, particularly in the more speculative space in which King Solomon Mines trades, in my 45 year career.

But what is the relevance of this macroeconomic background to your Company. Candidly the parlous state of the equity markets represents a serious threat to your investment in King Solomon Mines Limited. The reason for this assessment is that mineral exploration companies ’ life blood is continuing access to markets prepared to fund speculative activity. This is not a new phenomenon. The 1800 ’ s gold rushes in this country and mine were underwritten by the City of London ’ s stock exchange. My career in this ’ industry was financed by continuing equity injections into Newmont s Australian subsidiary over more than a decade. The current strike by equity investors is very alarming.

It is with such a backdrop that your Company now faces some formidable challenges.

I mentioned in my Review in the current Annual Report that the 2012 field season would be of critical importance to the Company. As it happens, weather conditions permitted a start to our drilling program pretty much on schedule in April. The season commenced with mobilisation of a drill rig to the Bu Dun Hua Project, about which I have had a strong feeling for some time. Our first priority was to test the recently identified magnetic anomaly called Nomad. Unfortunately that test proved negative. A second hole at Ghenghis anomaly

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King Solomon Mines Limited

also failed to intersect meaningful copper values. We then turned to the Northern Deeps anomaly and drilled a 563 metre hole to test a postulated trend to the technically encouraging indications in the last hole drilled in 2011. Whilst assays are pending, we have not observed the type of mineralisation needed for ore body formation.

We have now drilled 31 diamond holes at Bu Dun Hua without intersecting significant copper or gold mineralisation. We have had consistent encouragement with rock types and alteration styles, but unfortunately those don ’ t pay the bills. Our technical team now need time to reassess the substantial amount of data which we have assembled and to determine if we can justify any further work by your Company or potentially by a partner.

With our concentration on Bu Dun Hua we have only recently turned our attention to the Mud-house Gold Project in Sonid Zuoqi County. We have a rig on that site currently.

I mentioned in my 2012 Review that based on drilling to date, it was not unreasonable to see potential for a resource of more than 100,000 ozs of gold with the central part of this prospect. There is also unfinished business along strike. Further work on this property could achieve two different but nonetheless very valuable outcomes for your Company. If we can add substantial ozs to the resources, this property may become an asset worth developing into a mining operation for this company. Alternatively if we simply upgrade the mineralisation indicated to date into a resource classification we believe that such a resource could be readily divested to Chinese miners who have shown a strong appetite for such deposits.

More recently we have identified some interesting veining at Naogaoshandu which warrants follow up.

Stephen and Bruce will outline our plans for this area in their presentation.

Your Board is conscious that the results of our exploration to date have not identified a large discovery. Whilst we remain convinced that the geological potential of the South Gobi Desert is outstanding we have been frustrated in our attempts to expand our exploration portfolio in Inner Mongolia by the combination of a prolonged moratorium on processing of new exploration licence applications by the local administration and absurd price expectations by holders of existing licences. As a consequence the Company ’ s management are evaluating opportunities in other geographic areas. These initiatives may result in a redirection of some of our efforts in future.