Competitive Strengths of Projects


The Company believes that its competitive strengths are the following factors:


Approved Mineral Production Sharing Agreement.

There are several procedures that a mining company has to undertake before it can commence mining
operations, which includes securing an MPSA and an ECC. An MPSA is an agreement under which the
Philippine government grants to the contractor the exclusive right to conduct large scale mining operations
within a contract area; whereas an ECC is a clearance granted by the Secretary of the DENR, certifying
that the exploration and development works as well as the production methods to be employed by the
contractor are considered to be environmentally compliant.

On December 20, 2006, the Secretary of the DENR approved the MPSA application of Citinickel, and
subsequently, on January 3, 2007, granted to Citinickel MPSA No. 229-2007-IVB to develop areas
covered by this MPSA.

Citinickel has a valid and existing ECC on its SSMPs which will allow Citinickel to conduct mining
operations over the 40-hectare area that is within the MPSA Contract Area. At the same time, Citinickel
has a pending application for an ECC for its large scale operation. On November 6, 2007, Citinickel's EIS,
which is a pre-condition for the issuance of the said ECC, was approved by the RevCom of the EMB.

Validity of MPSA.

An MPSA is valid for 25 years and is renewable for another term not exceeding 25 years. Since the
MPSA of Citinickel had only been approved on January 3, 2007, the Company is well poised to prepare
9 and implement a full-scale long term mining plan in achieving the sustainable development of its Mineral
Property.

Mineral Property Composed of Two Nickel Mines.

The Contract Area covered by MPSA No. 229-2007-IV-B involves two nickel mines with an aggregate area
of 2,176 hectares. Having two Nickel Mining Projects operating in parallel will expand the Company's
production. Similarly, it will serve as a buffer in the unlikely event that the operation of either of the two
mines is impeded for whatever reasons.

Measured Mineral Resources Classified in Due Course as Proved Ore Reserves.

A portion of the Mineral Property, totaling 277 hectares or approximately 13% of the Contract Area, has
been explored and measured in compliance with the standards and requirements of the PMRC. Previous
geological and exploration works have exhibited Measured and Indicated Mineral Resources to be found
in the Mineral Property. Additional confirmatory drillings and tests conducted through Citinickel's resources
have established that the mineralized material is classified as Measured Mineral Resources and is
demonstrated to be economically mineable under reasonable assumptions, and as such, warrant the
conversion to Ore Reserves. After due consideration of the uncertainties in realistically assumed Modifying
Factors, C.O.R. & Associates has established classification of the Ore Reserves as Proved Ore Reserves.
Based on the Independent Qualified Person?s Report, the Proved Ore Reserves estimate established from
the 13% explored area of the Mineral Property is approximately 23.8 MMT.

Marketable Ore Reserves.

The Ore Reserves underlying Citinickel's Mineral Property exhibit high grade nickel laterite ore bodies
relative to the average nickel ore content of most explored mineral deposits in the Philippines. Having a
Mineral Property with relatively high grade nickel laterite ores will provide a certain level of insulation from
any uncertainties in the Modifying Factors of the Projects. As exhibited in the most recent evaluations and
exploration works conducted on the Mineral Property, Citinickel's Ore Reserves contain an average of
1.83% to 1.85% nickel at a Cut-off Grade (?COG?) of 1.2%; even when no COG is assumed, the Ore
Reserves can still be estimated at a marketable grade of 1.2% to 1.52% nickel. Further, the field validation
conducted by the MGB on the Mineral Property demonstrates nickel mineralization at an average grade of
1.54%.

Potential of the Unexplored Areas of the Mineral Property

Upon the commencement of an extensive mine development program covering the remaining 1,899
hectares of the Mineral Property that are still subject to exploration, the Company is in a position to
increase its Indicated and/or Measured Mineral Resource from the current volume of 24 MMT.

Capability to Capitalize on the Global Demand for Nickel Ore.

Upon the commencement by Citinickel of its first large scale commercial production, the Company shall be
one of probably eight large-scale producers of nickel ore in the country. With the proceeds of the Offer, the
Company can further intensify its marketing and production efforts with the end view of shipping nickel ore
within a foreseeable period in the future.