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News > Annual Report 2009

Dear Shareholder

The 2009 financial year has been a successful year with the Company acquiring a significant interest in a portfolio of South American mineral exploration assets.

In late 2008 the Board formed the view that better outcomes would likely be achieved for shareholders in the medium to longer term through pursuing potentially larger and more advanced projects, located in world class geological terrains, compared to staying with our Australian project portfolio.

This new strategy culminated in Metminco acquiring a 36.5% interest in Hampton Mining Limited (“Hampton”). Hampton is an unlisted Australian company with a significant portfolio of exploration projects located in Chile and Peru. The projects are focussed mainly on copper but include significant exposure to gold. In terms of stage of development they range from mine pre-feasibility, through advanced exploration to grassroots exploration.

Hampton’s premier project is the Los Calatos copper-molybdenum porphyry deposit located in southern Peru, near and in a similar geological setting to three large existing copper-molybdenum porphyry mines. Hence the project is located close to established service infrastructure in an existing important mining region.

An initial resource of 262 million tonnes @ 0.43% Cu & 0.042% Mo (0.74% copper equivalent) at a 0.2% copper cut-off grade has already been announced. The mineralised porphyry system is currently open in several directions and at depth. A further substantial drilling program is expected to commence in late 2009.

Hampton’s other advanced projects are the Mollacas copper leach project and the Vallecillo gold-zinc-silver-lead project, both located in north central Chile. The Mollacas Project comprises 92,000 tonnes of in-situ copper metal. SRK Consulting, Chile completed a Scoping Study in 2008 indicating a NPV for the project of US$103 million, using a copper price of US$2.50 per pound. Metallurgical test work has commenced on ores from the Mollacas Project to provide information for a feasibility study as a precursor to mining.

Similar to Mollacas, Vallecillo is a porphyry related mineralised system, with identified gold-zinc-silver-lead resources of over 10 million tonnes grading approximately 2.2g/t Au equivalent. Metallurgical testwork on the Vallecillo ore is being undertaken to determine ultimate metal recoveries and whether saleable concentrates can be achieved as a forerunner to a scoping study.

Hampton’s other projects in Chile are in geological settings similar to other porphyry related deposits, albeit at an early exploration stage. They also show good potential for the discovery of economic mineralisation.

Reflecting Metminco’s focus on Chile and Peru, the Company’s Australian exploration projects will undergo progressive review and the Company is seeking joint ventures or outright sale of these projects.

In late September 2009, Metminco put in place a strategy to acquire a controlling interest in Hampton by entering into an option agreement with Junior Investment Company (holder of a 31.9% interest in Hampton). If the option is exercised, Metminco would increase its interest in Hampton from 36.5% to a minimum of 53.6% and up to a maximum of 68.4%, depending on the extent to which other Hampton shareholders exercise their pre-emptive rights.

In keeping with this new strategy and following the acquisition of a significant interest in Hampton, the composition of the Board has changed with the appointment of new experienced directors to reflect the changed shareholding and to progress the Company’s South America interests.

In closing, I would like to thank our shareholders, fellow Board members and consultants for their support throughout this year of change. I am looking forward to the Company moving through into further advanced exploration and potential development, particularly through the progression of the Los Calatos project.

John Fillmore
Chairman

Date: Wednesday 30 Sep 2009