1. INVESTMENT OPPORTUNITIES IN THE NIGERIAN MINING SECTOR
ERIN MINERAL RESOURCES LTD
EXPLORING NIGERIA
Abuja 30 to 31 January 2012

2. INTRODUCTION PRESENTATION OUTLINE
Erin Mineral Resources Ltd - a company profile.
Nigerian mineral sector.
History
Government framework and controls supporting the sector’s development
Investing in Nigeria’s Mineral Sector.
Erin’s experience
Positive developments
Issues affecting investment

3. ERIN MINERAL RESOURCES LTD THE COMPANY
Erin Resources Pty Ltd (Erin), an unlisted Australian incorporated company, is the parent company of Erin Mineral Resources Ltd (EMR).
To date Erin has relied on contributions by its shareholders to fund its exploration activities in West Africa
In Nigeria Erin has a first mover advantage in areas under-explored that have extensive artisanal Au zones opened up under the new Mining Act.
The company currently has its headquarters in Abuja and a regional office in Gusau, Zamfara State.

4. ERIN MINERAL RESOURCES LTD THE COMPANY
EMR is duly incorporated in Nigeria and engages solely in exploration of solid minerals in Nigeria and Senegal.

5. ERIN MINERAL RESOURCES LTD IN NIGERIA
One of the world’s least explored Gold Provinces
Potentially represents 25% of West Africa’s Gold Province Area
Major shear zones and schist belts with extensive gold workings
New Mining Law enacted to world standard to attract investment
Erin actively seeks joint ventures with local Nigerian partners; with Erin providing funds and the technical skills to undertake exploration
Developed a skill base of trained Nigerian geologists in 4 years

6. ERIN MINERAL RESOURCES LTD IN NIGERIA
Erin holds interests in Tenements covering approximately 4,200 square kilometres in Nigeria.

7. ERIN MINERAL RESOURCES LTD IN NIGERIA
1,700 sq kms in joint venture
2,500 sq kms as Erin held exploration licenses
The Tenements are held principally for their gold potential
Project generation in Nigeria is focussing on other areas for their base metal, iron ore, tin/tantalum or rare earth potential
Erin’s has committed in the order of USD9M on exploration in Nigeria since 2008

8. ERIN MINERAL RESOURCES LTD IN NIGERIA
Erin has established 3 main JV project areas
Favourable geotectonic settings; major shear zones with fault corridors
Volcanic and sediment schist belts as favourable hosts
Extensive artisanal and historic workings
Soil sampling identified gold anomalies with strike lengths of more than 30km
No previous modern exploration

9. NIGERIAN MINERAL SECTOR BRIEF HISTORY
Exploration for several solid minerals (Sn, Nb, Pb, Zn, Au) goes back more than 100 years.
Apart from coal, mining of minerals and metals was entirely in the hands of private enterprise, with British mining companies dominating.
Commercial oil was discovered in 1956 and production commenced in 1958.
During the 60s and 70s the predominantly foreign investors in the mining industry left Nigeria, allowing the industry to declined from large and medium scale mining to what is now only small-scale and artisanal mining.
Early 70s the Nigerian Government decided to act as catalyst in the mining sector through the establishment of mining corporations which would use public funds for mining

10. NIGERIAN MINERAL SECTOR BRIEF HISTORY
The expected economic advantages that informed the 1971 review of mining policy were never realised.
In the late 90s the Government then initiated reforms aimed primarily at allowing the private sector to take a pivotal role in the growth of the sector, reorientation of government from ‘Owner-Operator’ to ‘Administrator-Regulator’, ensuring liberal and transparent access to mining titles, strengthening institutional and human capacity and strengthening geological data generation.
The 2007 Act was based on international best practices and thus modelled after a number of successful mining jurisdictions. The aim of the new Act was to increase investment in the sector, both locally and internationally.

11. NIGERIAN MINERAL SECTOR GOVERNMENT FRAMEWORK
The aim of the new 2007 Act and 2008 Policy were to increase investment in the sector, both locally and internationally.
The 2007 Act was to be based on international best practices and thus modelled after a number of successful mining jurisdictions.
All mineral resources are vested in the Government of the Federation for, and on behalf of, the people of Nigeria.
Important features to be included were:
Enactment of transparent laws, regulations and guidelines
Creation of a favourable fiscal regime
Setting up of institutional frameworks for the generation, storage and dissemination of geological and mining information
Transparent access by the public to mining sector information
Provision of clear safeguards for health, safety and the environment
Rules for the succession and transferability of mining titles

12. NIGERIAN MINERAL SECTOR GOVERNMENT FRAMEWORK
Specific provisions were included to attract investment.
Security of tenure
Competition for mineral titles based on “first come first served” basis
Application of the principle of “use it or lose it”
Time limits for granting titles
Implementation of a Mining Cadastre administration system
Introduction of Community Development Agreements and Environmental protection and mitigation measures
Transferability of mining rights
Exemption of customs and import duty on a list of equipment imported exclusively for mining operations
Expatriate quota and resident permits for approved personnel
Permission to retain a portion of foreign earnings in a domicile account
Free transferability of funds

13. NIGERIAN MINERAL SECTOR GOVERNMENT FRAMEWORK
Public release of the Regulations occurred in May 2011.
Prepared in conjunction with private enterprise and industry bodies.
Focus was to comply with the intent of the 2007 Act. This had been a problem previous attempts to issue the Regulations.
A number of industry concerns still exist:
The timing of seeking consent from landowners during the application for a Mineral Title
The MCO to be involved in landowner compensation negotiations rather than acting as an arbitrator
Preparation of Environmental Impact Assessments during exploration; this stems from the definition in the Act of “Mining Activities” that includes exploration
An inappropriate level of investigation (Scoping Study detail) for holders of an Exploration Licence to make application for a Mining Lease
Lack of recourse by the investor in relation to delays in application/approval processes caused by the Government

14. INVESTING IN NIGERIA’S MINERAL SECTOR ERIN’S EXPERIENCE
Partial transfer of mineral titles
Low level Government appreciation for modern exploration and mining requirements, and logistics
Expensive to explore in Nigeria; no support logistics in-country
Delays
Issuance of ELs suspension and revalidation process; mid 2008 to end 2009
Import exemption for drill rig; Aug 2009 to Nov 2009 MMSD, Nov 2009 to Min. Finance
Rig arrived Feb Exemption Mar 2010
Approvals Assignment of mineral titles; Feb 2010 to Nov 2010
Mineral title renewal; Mar 2010 to Oct 2010
Cancellation of applications; Jan 2010

15. INVESTING IN NIGERIA’S MINERAL SECTOR ERIN’S EXPERIENCE
Landowner consents
Environmental constraints on exploration companies
Apparent ad-hoc cancellation of mineral titles
Mineral title rental fees
Payment of with-holding tax

16. INVESTING IN NIGERIA’S MINERAL SECTOR POSITIVE DEVELOPMENTS
Current Government regime very approachable and supportive
Re-instatement of a Director General for the MCO
Availability of high quality airborne data
Issuance of the Mining Regulations in 2011
Landowner consent changes
Ideology within the endeavours of the plan

17. INVESTING IN NIGERIA’S MINERAL SECTOR ISSUES AFFECTING INVESTMENT
Capacity for regulatory bodies
Availability of tenement information
Ability to achieve the benefits in the Act to attract investment
Conversion of ELs to MLs
Environmental compliance review
Control of artisanal mining and activities by non-tenement holders

18. INVESTING IN NIGERIA’S MINERAL SECTOR ISSUES AFFECTING INVESTMENT
Lack of recourse when delays occur
Nigeria’s reputation
Erin’s experience to raise capital in present market for gold exploration in Nigeria very difficult
No major discoveries to reduce the high geological risk profile
No established gold mining industry
At times a negative political/security risk

19. INVESTING IN NIGERIA’S MINERAL SECTOR ATTRACTING INVESTMENT
To develop a large mining sector Nigeria has to encourage (incentives) exploration, particularly in the current market where investors are likely to go to more established/lower risk countries
Keep the cost of exploration low in terms of fees
Improve the delivery of services/support as impacts directly on costs
Overcome the difficulty of companies sourcing capital by having the Government creating a fund that investors can access, potentially see the Government have a return on the investment for projects that develop and encourages local ownership

20. INVESTING IN NIGERIA’S MINERAL SECTOR ATTRACTING INVESTMENT
Key Nigerian stakeholders in the sector need to be aware that it is not easy to be an early exploration player (local or international). The level of real exploration/investment $’s relative to the opportunity is still very low. The real challenge for the Government, who have stated that they are serious to grow the sector, is how do they bring more exploration activity/ investment $’s into the country.
Erin’s view is that a serious incentive scheme is necessary, until the sector matures, to encourage both local and international explorers to choose Nigeria over other investment destinations