Tantalus Rare Earths: The Tantalum & Niobium Project

Tantalus Rare Earths AG Berliner Allee 12 40212 Düsseldorf Germany Telephone: +49 (0)211-52391 - 430 Fax: +49 (0)211-52391 - 200 E-mail: contact@tre-ag.com Internet: http://www.tre-ag.com/ Tantalus Rare Earths: The Tantalum & Niobium Project Presentation of Project and Operating Company

Contents Introductory Overview...03 Rare Earths What Are Rare Earths?...04 Tantalum and Niobium...06 Rare and Expensive...08 A Wide Range of Uses...12 Industrial Demand and Industrial Products...13 Tantalus Project Reasons for Keen Interest by Institutional and Private Investors...15 Special Features: Estate, Reserve Estimate, and Local Factors...18 Special Features: Composition of Deposit Reserves...20 Licenses...21 Project Roadmap: Work Program 2009 2011...22 Net Present Value (NPV)...24 Tantalus Rare Earths AG The Operating Company for the Tantalus Project...25 Management...26 Corporate Structure...27 Financial Information...28 Contact Details...29

Introductory Overview Today s modern technologies, and especially those of tomorrow, urgently require rare earths and metals. Without them, there can be no high tech, and without high tech, there can be no economic future or international economic power. Consequently, strategic planners within economies and companies are increasingly focusing their attention on this area. The rare earths and metals sector has only recently attracted a great deal of public interest. This is primarily due to increased, powerful geostrategic and economic interests resulting from the extremely wide range of uses for rare earths. The Tantalum project, a key project in the area of rare earths, is captivating institutional and private investors alike, both at home and abroad. Subsequent acquisition by a major player is a real possibility. The project site is located in northwest Madagascar and comprises an estate that is over 300 km² in size (originally explored by the former Soviet Union). Domiciled in Düsseldorf, Tantalus Rare Earths AG is the operating company for the Tantalus project. Introductory Overview Page 3

Rare Earths What Are Rare Earths? The term rare earths is somewhat confusing because it actually concerns rare metals in certain earth formations. The fi rst rare earths were isolated as oxides in the 18 th and 19 th centuries. At that time, they were known as earths, a term that continues to be used today. Rare earths actually comprise 17 chemical elements, primarily from the third group in the periodic table of elements. Traces of these elements are found in over 250 rare minerals, primarily in oxides, phosphates, and silicates. 1 2 III IV V VI VII VIII I II 18 H Li Be B C N O F Ne Na Mg Al Si P S Cl Ar 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 K Ca Sc Ti V Cr Mn Fe Co Ni Cu Zn Ga Ge As Se Br Kr Rb Sr Y Zr Nb Mo Tc Ru Rh Pd Ag Cd In Sn Sb Te I Xe Cs Ba La Hf Ta W Re Os Ir Pt Au Hg Tl Pb Bi Po At Rn Fr Ra Ac Db Jl Rf Bh Hn Mt He Ce Pr Nd Pm Sm Eu Gd Tb Dy Ho Er Tm Yb Lu Rare Earth Elements Th Pa U Np Pu Am Cm Bk Cf Es Fm Md No Lr Rare Earths What Are Rare Earths? Page 4

The fi rst element, yttrium, was fi rst found in Sweden in 1794. Lutetium was isolated as the last element in this group in 1905. 15 of these elements belong to the lanthanide group and have related properties. The other two elements, yttrium and scandium, are from the same period in the periodic table of elements, and have similar physical and chemical characteristics. The 15 lanthanides are: Lanthanum (La), cerium (Ce), praseodymium (Pr), neodymium (Nd), promethium (Pr, a highly unstable element, rarely found in nature), samarium (Sm), europium (Eu), gadolinium (Gd), terbium (Tb), dysprosium (Dy), holmium (Ho), erbium (Er), thulium (Tm), ytterbium (Yb), and lutetium (Lu). The most important minerals with rare earth metals are: Bastnasite, gadolinite, monazite, loparite, and laterite clay, which are rapidly becoming more and more scarce worldwide. Rare Earths What Are Rare Earths? Page 5

Tantalum and Niobium Tantalum The metal tantalum (atomic number 73) is found in various forms in over 90 different minerals. Despite being geologically and physically incorrect, all tantalum ores are grouped together, for practical reasons, under the collective name tantalite because their main objective is the recovery of tantalum. Almost two thirds of the world s requirement for tantalum is consumed by the electronics industry. Tantalum-based components are in demand in the armament industry, the aerospace industry, in the construction of artifi cial limbs, joints, and bones, and for equipment and control units in medicine. They are also needed for highly corrosion-resistant parts. Over the past few decades, the demand for tantalum has risen annually by 8 to 12 %. Further steady rises in demand are anticipated. Tantalum and Niobium Page 6

Niobium The metal niobium (atomic number 41, originally known as columbium and, in many cases, still confusingly referred to as columbium ) is used in the manufacture of high performance alloys. Such alloys are used in the production of turbines, thrust bearings, high-speed bearings, combustion chambers, superconductors, pressure-resistant and heat-resistant parts as well as all types of wear-resistant components. To date, deposits have been found in Russia, Brazil, Canada, and The Democratic Republic of the Congo. However, resources yielded to date are now in decline. The Tantalus project could therefore counteract any supply shortages. Tantalum and Niobium Page 7

Rare Earths Rare and Expensive Up to now, very few investors have comprehended the strategic signifi cance of rare earths because, up until a few years ago, their signifi cance was not fully known to the public. Global Demand for Rare Earth Metals: 1950: approximately zero 1984: 20,000 t 2009: approx. 140,000 t 2010 (estimated): approx. 160,000 t 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 1950 1984 2009/10 Global Demand for Rare Earth Metals: Growth Since 1950 (in Tons). Rare Earths Rare and Expensive Page 8

Factors for Consistently High Prices for Rare Earth Metals: The detection, excavation, and extraction of metals from rare earths is a laborious and expensive process. The high-end technologies of today, tomorrow, and the distant future urgently require rare earth metals. Both the nature and scope of industrial uses for rare earth metals are rapidly growing. Many sunrise industries are emerging. China Has a Quasi-Monopoly (known as the China Factor ): The West associates the dangerous, strategic advantages of Beijing with this quasi-monopoly. 12 years ago, China had 88 % of the world s reserves for rare earths, of which approximately one third has already been consumed. At that time, China supplied 98% of the world s requirement for rare earths. However, China s supply has since been restricted. The Tantalus project will contribute towards breaking the China monopoly. Rare Earths Rare and Expensive Page 9

Industries worldwide fear the China monopoly Rare Earths Rare and Expensive Page 10

Summary: In terms of the availability of rare earth metals, there is a strategic gap worldwide, which will continue to widen in the future, and will carry potential risks for Western economies. The Tantalus project could help to close this gap as of approx. 2011/2012. Given these facts, Tantalus Rare Earths AG is in a very strong position. 140 120 100 80 60 40 Monazite period Mountain Pass deposit (USA) Bastnasite-carbonatite period Bayan-Obo deposit etc. (China) China 20 USA 0 Other 1950 1960 1970 1980 1990 2000 2006 The World s Production of Rare Earth Metal Oxides (in 1,000 t). Source: USGS Rare Earths Rare and Expensive Page 11

Rare Earths A Wide Range of Uses Rare earth primary products are used as raw materials in the following areas, for example: Production of high-purity chemicals developed for specifi c customers Catalysts within the entire chemical and petroleum industry Construction of environmental protection plants Manufacture of polishing agents Manufacture of special artifi cial fertilizers Technical spark ignition systems Manufacture of toys and electronic devices Production of screens Space-related applications as well as the entire aerospace spectrum Defense industry The once futuristic qualities and exotic characteristics of rare earths are slowly becoming everyday terms with everyday uses in the ever-expanding high-tech sector and communications industry. For example, Toshiba has expressed a keen interest in rare earths. Rare Earths A Wide Range of Uses Page 12

Rare Earths Industrial Demand and Industrial Products A well-known use of rare earths is misch metal, which is a widely-used alloy that comprises 50 % cerium (Ce), 25 % lanthanum (La), 15 % neodymium (Nd) plus iron, calcium, and other trace elements. Misch metal is commercially available in bar, rod, or powder form. Rare earths are urgently required for the manufacture of entire groups of borides, iodites, carbides, chlorides, fl uorides, and hydrides. Key Industrial Consumers and Products: Glass industry, optics, high-quality lenses, crystal production, luminous fi ber optics High-performance electronics, high-tech weapons, satellite technology and telecommunications Metallurgy, ceramics industry, and laser industry Water treatment, alternative energies, marine biology Paint and lacquer production, laboratories, drying technology, fl uxing agents Manufacture of magnets, batteries, spare parts industries Shieldings against radioactivity Rare Earths Industrial Demand and Industrial Products Page 13

Tantalus Rare Earths: The Tantalum & Niobium Project Main Project of Tantalus Rare Earths AG And a Key Project in the Area of Rare Earths M a d a g a s c a r Tantalus-Project Page 14

Tantalus-Project Reasons for Keen Interest by Institutional and Private Investors Fiscal Reasons Flooding of fi nancial systems with liquidity Sustained worldwide boom in raw materials Brisk demand from China, India, Japan, South Korea, and Western Europe Extremely high foreign currency reserves and dollar mountains, especially in Asia First exodus of dollar-shy and banknote-shy investors in tangible assets Tantalus-Project Reasons for Keen Interest by Institutional and Private Investors Page 15

Project-Specific Reasons Project classifi cation: Project with high potential Madagascar as a project site and mining location: A safe and secure environment (project policy) Local factor labor: Very cheap, extremely high levels of unemployment (therefore strong local support for this project) Exploration: Geologists recently provided evidence of the true signifi cance of this deposit Deposits: In addition to rare earths, there are also gold, silver, zinc, and lead deposits of yet unknown magnitudes in the southern part of the region Infrastructure: Adequate in the project environment Red: Project area, Yellow: Boundary of potential gold mineralizations Tantalus-Project Reasons for Keen Interest by Institutional and Private Investors Page 16

Strategic and Economic Reasons Rare earths are rapidly gaining in strategic importance Extremely limited reserves worldwide: Excavatable rare earth deposits that make economic sense are literally rare! General scarcity of resources in the medium to long term, especially in the area of minerals Growing global population and increasing demand Cost-effective, large, and easy-to-excavate deposits are rapidly disappearing Result: Ever-increasing mining costs (excavation in increasingly lower concentrations at increasingly greater depths, and new deposits in areas with no infrastructure and increasingly expensive logistics costs) Steady rise in the technical uses of rare earths Prospective billion-dollar industries with a very bright future (keyword: sunrise industries ) Enormous economic and technical pent-up demand in Asia Undesirable dependencies on China, currently the world s main supplier of rare earths Tantalus-Project Reasons for Keen Interest by Institutional and Private Investors Page 17

Tantalus-Project Special Features: Estate, Reserve Estimate, and Local Factors Quantitative advantage: Sheer size of the estate (over 300 km²) Original reserve estimate: Rare earth ore body with 15 million tons at approx. 150 USD per ton Actual reserves: High probability of much greater reserves Local factors: Approximately 66 % of the Madagascan people live in poverty; the Tantalus project will create much-needed jobs; local support for the project Schematic geologic cross section as seen from the north when approaching the main prospect from the sea. 3D-view of main mineralization and overlain airborne thorium anomaly. Tantalus-Project Special Features: Estate, Reserve Estimate, and Local Factors Page 18

Flat dipping Isalo sandstones near Ampasibitika Beach. Outcrop of strongly mineralized, saprolitic alkaline granite. Strongly mineralized riebeckite granite. If geological assumptions (further strengthened by visible mineral discharge) prove true, there could actually be much greater deposits. The visible mineralizations alone far exceed the results of past explorations. However: Even though geologists have expressed great enthusiasm for this project, drill cores, test trenches, and ground level samples will have to undergo detailed analysis processes and evaluations before it will be possible to make binding statements that contain accurate information about the size of the reserves. This project will contribute to closing the worldwide gap in the supply of rare earths. Tantalus-Project Special Features: Estate, Reserve Estimate, and Local Factors Page 19

Tantalus-Project Special Features: Composition of Deposit Reserves Unlike other deposits, the Madagascar deposit contains the heavy (and expensive) rare earths of ytterbium, holmium, yttrium, lutetium, thulium, europium, terbium, gadolinium, and dysprosium. The remaining rare earth metals belong to the light group. They are cheaper and occur more frequently (comparable with expensive sweet crude and cheap sour and heavy oils for crude oils). Results of alluvial samples taken along the east cost of the concession; expressed as the sum in ppm of REE+U+Nb+Ta+Zr+Sn In addition to the aforementioned rare earths, the Tantalus deposits are rich in zirkonium (Zr), uranium (U), hafnium (Hf), and, in particular, tantalum (Ta) and niobium (Nb). Notably, the last two metals mentioned above, tantalum and niobium, which are from the fi fth group in the periodic table of elements, are not only rare earths but also considerable mineral assets and main deposit components. Tantalus-Project Special Features: Composition of Deposit Reserves Page 20

Tantalus-Project Licenses License #: PR6698 Project Name: Tantalus License term: 18.04.2003-17.04.2013 Area: 300 km 2 According to the Madagascan Mining laws ( Code Minier 99-022 of August 30th, 1999) exploration licenses are issued for a term of 10 years starting on the day of issuance. The license can be extended twice for fi ve years each time given suffi cient explorations activity. The Tantalus exploration license expires not until April 2013. Tantalus-Project Licenses Page 21

Tantalus-Project Project Roadmap: Work Program 2009 2011 September December 2009: Creation of GIS data base Procurement of equipment and logistics Construction of access roads to drill sites (some 8 to 10 km in total) Sampling and ground radiometric surveys of new anomalies Reconnaissance stream sediment survey covering previously uncovered areas January March 2010: Integration of new data into GIS Procurement of further equipment and improvement of logistics Writing of interim reports Tantalus-Project Project Roadmap: Work Program 2009 2011 Page 22

April December 2010: Commencement of drilling program covering the following targets: Target n 1, the known Ampasibitika Prospect: 10 diamond drill holes of approximately 250 m each plus some 7500 m of RC infi ll drilling Target n 2 is essentially the southern continuation of the Ampasibitika Prospect: some 1500 m of diamond drilling followed by some 3000 m of RC drilling Target n 3 on the western edge of the circular intrusion: some 1500 m of diamond drilling followed by some 3000 m of RC drilling January March 2011: Data integration into GIS and development of detailed geological model In-house resource estimations and pre-feasibility study Final reporting Tantalus-Project Project Roadmap: Work Program 2009 2011 Page 23

Tantalus-Project Net Present Value (NPV) The Tantalus deposit is estimated to contain in a 2 km long part of two major alkaline ring complexes 14.4 million tonnes at 1.52 % rare earth oxides equivalent. At current prices the in ground value is US$ + 1.5 billion. A high-precision helicopter borne geophysical survey gave very strong indications that the mineralized zone might well be 15 times longer than previously anticipated. For the study a mine life of 6 years is assumed. Given the fact that the project has not yet a JORC-compliant resource estimate, discounting factors of 75 % have been applied. Long term price scenario (average prices of 2004-2008): US$ 57,238,389. Medium term price scenario (average prices of 2006-2008): US$ 90,833,247. Short term price scenario (average prices of 2008-2009): US$ 135,184,606. The coming exploration campaign will further increase Tantalus net present value. Tantalus-Project Net Present Value (NPV) Page 24

Tantalus Rare Earths AG The Operating Company for the Tantalus Project Tantalus Rare Earths AG will soon be listed on the stock exchange. However, an initial public offering (IPO) is not planned because there is no immediate fi nancial need. In order to avoid tension between competitors in China and the United States, we have chosen the neutral location of the Frankfurt Stock Exchange. Tantalus Rare Earths AG has the following mission: To source, select, and develop mineral projects outside of China. We are focusing our efforts on Africa. The administrative center of the operating company is Düsseldorf and the current operational focus is Madagascar. All evidence, including the geological facts confi rmed to date, show that the Madagascar-based Tantalus project has the potential to be world class. New information could provide a major breakthrough: Financial resources are already available for boreholes and accurate resource analyses. Geochemical survey programs and other such programs are currently underway. Tantalus Rare Earths AG The Operating Company for the Tantalus Project Page 25

Tantalus Rare Earths AG Management CEO: Peter Küsters (attorney-at-law specializing in taxation law) Auditing, consulting and compliance services for securities trading banks COO: Wolfgang Hampel (graduate geologist) Two decades of experience in exploration Senior positions in large evaluation firms (BGR and Fugro GmbH) Chairperson of the Supervisory Board (SB): Mathias Stüfe (Stüfe & Partner Asset Management) PS Capital Consulting AG for wealthy private individuals CEO Peter Küsters COO Wolfgang Hampel Member of the SB: Lee Goldsmith (accredited lawyer in England and Wales) Supervisory Board positions and consulting mandates in well-known law fi rms Member of the SB: Prof. Dr. Hans-Jürgen Bocker (journalist, columnist, and author) Worldwide professorships, Corporate consultant Member of the SB Prof. Dr. H.-J. Bocker Tantalus Rare Earths AG Management Page 26

Tantalus Rare Earths AG Corporate Structure Tantalus Rare Earths AG has the following corporate structure: Tantalus Rare Earths AG 100% Tantalum Holding Ltd. (Mauritius) 100% Tantalus Rare Earth SARL (Madagascar) CEO Peter Küsters COO Wolfgang Hampel Supervisory Board Chairperson of the SB Mathias Stüfe Member of the SB Lee Goldsmith Member of the SB Prof. Dr. Hans-J. Bocker Tantalus Rare Earths AG Corporate Structure Page 27

Tantalus Rare Earths AG Financial Information Financial information: Nominal Capital: EUR 2,057,069 Number of shares: 2,057,069 Par Value: EUR 1,00 Listing information: Frankfurt Stock Exchange planned in December 2009 Market Segment: Open Market Bank: VEM Aktienbank, Munich, subsidiary of Computershare ISIN: not yet available Ticker: not yet available Listing price: EUR 68 (expected) Tantalus Rare Earths AG Financial Information Page 28

Tantalus Rare Earths AG Contact Details Please contact us. We would be delighted to hear from you. Tantalus Rare Earths AG Berliner Allee 12 40212 Düsseldorf Germany Telephone: +49 (0)211 52391 430 Fax: +49 (0)211 52391 200 E-mail: contact@tre-ag.com Internet: http://www.tre-ag.com/ Please visit us at Booth B02. Tantalus Rare Earths AG Contact Details Page 29