A N N U A L R E P O R T

Transcription

1 S T R E N G T H T H R O U G H D I V E R S I T Y A N N U A L R E P O R T

2

3 2007 Annual Report table of contents MILESTONES 2 LETTER TO OUR SHAREHOLDERS 4 SURIGAO PROJECTS 6 Surigao: A Major Copper-Gold and Nickel District 6 Mindoro Nickel Laterite Projects in the Surigao District 10 Agata Gold and Copper-Gold Prospects 13 Tapian San Francisco Copper-Gold Prospects 16 Tapian Main Copper-Gold Prospects 16 Mat-I Gold Prospect 16 Bolobolo Copper Prospect 17 BATANGAS PROJECTS 18 Resources and Multiple Targets in a Well-Mineralized Copper-Gold Belt 18 Archangel Project and Kay Tanda 19 Archangel Project: Multiple Porphyry Copper-Gold Targets 25 Talahib Prospect: a Promising Porphyry Prospect 27 SW Breccia Mineral Resource 27 The Calo Porphyry Copper-Gold Prospect 28 El Paso Prospect: Abundant Copper Showings and Two Large IP Anomalies 30 PAN DE AZUCAR PROJECT 32 SOCIAL RESPONSIBILITY 34 ENVIRONMENTAL RESPONSIBILITY 38 p. 1

4 Mindoro Resources Inc MILESTONES May August Shareholder Rights Plan adopted to ensure fair and equal treatment of all shareholders in the event of an unsolicited take-over bid. Kay Tanda drill hole KTRC-101 intersects 5.96 grams per tonne gold, 4.13 g/t silver, 3.31 percent zinc and 1.56 percent lead over 26 meters. Technotrix Consultancy Services Inc. and Mediatrix Business Consultancy are retained to assist with processing the company s application for an Environmental Compliance Certificate covering the Agata nickel laterite project. Exploration Permit received covering the El Paso Prospect. Agreement reached on the Agata South nickel laterite prospect whereby Delta Earthmoving Inc. will fund exploration and advancement to production, if warranted. Exploration Permit received covering 1,538 hectares within the company s Batangas Project area. September June Gross proceeds of $3,953,700 received from first tranche of private placement. Gross proceeds of $2,852,585 received pursuant to a private placement. Initial Exploration Target announced for the Kay Tanda goldsilver prospect: at a cut-off at 0.5 g/t gold, from 15 to 20 million tonnes of open-pitable material at a grade of 1.1 to 1.4 g/t gold and 3.0 to 3.4 g/t silver, containing from 530,000 to 900,000 ounces of gold and from 1.45 to 2.2 million ounces of silver. October Gross proceeds of $4,137,802 received from final tranche of private placement. Transported clasts (rock fragments) of porphyry copper mineralization are intersected in drill hole 7 on the Calo porphyry copper-gold prospect. July Key mining engineers, Dallas Cox, BE (Min) and Romeo Rebadomia, Jr., are hired to advance the Agata nickel laterite project towards development. Exploration on Mindoro s properties is carried out under the supervision of Tony Climie, P. Geol., who is a qualified person, as defined by National Instrument , and who has also reviewed the technical disclosures in this document. Excellent results received from extensive metallurgical testing of drill core composites from the Kay Tanda gold-silver prospect with independent metallurgical consultant noting that the heap leach results are remarkably good in all cases, with recoveries (of the coarse crush) only approximately 10% below the maximum gold recovery achievable by grinding to a fine size. Photo, above: Calo Project Skarn Mineralization. Photo, opposite page: High grade copper mineralization being mined by artisanal miners at American Tunnels, Agata. Believed to be linked to porphyry copper-gold system nearby. p. 2

5 2007 Annual Report 2008 MILESTONES January Mr. A. Robson (Rob) Garden, Q.C., appointed Chairman of the company and Mr. Oscar S. Reyes, B.A., appointed Chairman of MRL Gold Phils. Inc., the company s Philippine subsidiary. February National Instrument compliant mineral resource estimate received for part of the Kay Tanda gold-silver prospect from Phase I drilling, converting from 40% to 67% of Exploration Target into Resource category. Geological mapping expands nickel laterite resource potential in Surigao Projects. March Philippine subsidiary appoints Alan Buenavista to the position of Exploration Manager and Dr. F.S. Mon Monteros to the position of Vice President, Social and Environmental Management. April A Memorandum of Agreement (MOA) is signed with the Mamanwa and Manobo Tribes within the Agata MPSA area and the National Commission on Indigenous Peoples, granting a one percent royalty. Purchase of 40% interest in the Surigao Projects from Panoro Minerals Ltd. is completed with payment to Panoro of $500,000 and 500,000 Mindoro common shares. National Instrument mineral resource estimate received for a portion of Agata North nickel project, doubling original Exploration Target. p. 3

6 Mindoro Resources Inc. letter to our shareholders Tony Climie, CEO & COO Strength through Diversity It is the diversity of our commodities, with porphyry / skarn copper-gold, epithermal gold-silver and iron-nickel-cobalt laterite projects, as well as the depth of our target-rich land packages, painstakingly built up over a period of twelve years, that give us the ability to respond quickly to changing commodity demand, to any prospect set-backs we may encounter, and to capitalize on new market opportunities. During the past year, we strengthened the foundation of Mindoro s value with early-stage National Instrument compliant mineral resource estimates for both the Kay Tanda gold-silver and Agata North nickel laterite projects. These are early stage estimates, prepared under a rigorously conservative reporting regime and, in both cases, the resources are open to considerable upgrading and expansion. Agata North has been brought to a stage where direct shipping ore (DSO) production could quickly start if market conditions justify. However, the key to unlocking the real value of our nickel laterite projects is the creation of a higher-value product through local processing of the ore. This requires defining our total global resource and selecting the optimal technology. In addition to Mindoro s portfolio of gold and nickel projects, we have over twenty promising porphyry copper-gold prospects. On two of our Surigao Projects, artisanal miners are now exploiting near-surface, high-grade copper mineralization, interpreted as leakage from proximal porphyry copper-gold deposits, underlining the high potential of these copper-gold projects. Metal prices and markets remain strong, albeit with a softening in nickel price which is currently affecting DSO demand. Based on a projected resumed expansion of the Chinese stainless steel industry, which is the end user of most nickel production, a recovery to higher levels seems likely by late There is no sign of any let-up in overall metals demand as China, India and other Asian countries continue their frenetic pace of development. The resource-rich Philippines is ideally placed to meet this metals demand. When the full significance and implications of the scale of current and projected future metal consumption in Asia become better-understood by the West, the value of companies such as Mindoro, with established metal resources, excellent resource expansion potential, and blue-sky exploration opportunities, will become apparent. Nickel Laterite - The Future Source of Nickel While sulphide nickel deposits have dominated historical nickel production, the future belongs to nickel laterite deposits. Once regarded as too difficult metallurgically, break-throughs and technological refinements, still in their relative infancy, are leading rapidly to a new generation of much larger nickel production centers from laterite deposits. This new reality, combined with our infrastructure advantages, close to tide water and to the markets that really count, augers well for our nickel laterite resources. While we are keeping our options open for DSO production in the short term, on-site processing offers much more exciting and high value opportunities Our primary objective remains defining our total global resource potential and identifying the optimal technology for enhanced value, local processing of our laterite ore. Agata North Nickel Laterite Project In April of this year we announced an early-stage compliant mineral resource estimate for the Agata Nickel Laterite Project. The estimate for combined Measured and Indicated Resources, for both limonite and saprolite, is 4.40 million wet metric tonnes (WMT) grading 1.25 percent nickel, percent cobalt and 23 percent iron, at a cut-off grade of 0.80 percent nickel. In addition, the Inferred Resource estimate is 2.45 million WMT grading 1.23 percent nickel, percent cobalt and 22 percent iron, also at a cut-off grade of 0.80 percent nickel. The resource area is a small part of Agata North as mapped to date and resource expansion drilling is continuing. Additional areas of potential laterite mineralization have been mapped on other projects and are being evaluated. We note that there has been a recent softening in prices quoted for DSO nickel laterite ore. This appears to be the result of many nickel pig iron blast furnaces in China shutting down for a variety of economic and environmental reasons. Nevertheless, it is apparent that the Chinese stainless steel industry, which is projected to continue its dramatic expansion later this year, will require increasingly large quantities of nickel feedstock, for which nickel pig iron, and higher quality ferronickel products, have formed an important source. It is uncertain where and how this demand for nickel feedstock will be met; and therein lie our opportunities. It is likely that this shutdown will lead to an acceleration in the construction of processing plants offshore. p. 4

7 2007 Annual Report Mindoro believes there is high potential for the development of an integrated nickel laterite mining and processing industry in the Philippines and for our resources to be part of this future. Kay Tanda An initial NI compliant mineral resource estimate was released early this year for that part of the Kay Tanda epithermal gold-silver prospect drilled to date. For the Kay Tanda Zone, the Inferred Resource is 10,592,000 tonnes at a grade of 0.70 g/t Au, 1.9 g/t Ag (238,000 contained ounces Au), and for the nearby Pulang Lupa Zone, the Inferred Resource is 1,007,000 tonnes at a grade of 0.73 g/t Au, 15.1 g/t Ag (24,000 contained ounces Au). Total combined inferred resource for Kay Tanda and Pulang Lupa is 11,599,000 tonnes at 0.70 g/t Au, 3.0 g/t Ag (262,000 contained ounces Au). In addition, Pulang Lupa has a total indicated resource of 3,365,000 tonnes at 0.88 g/t Au, 8.0 g/t Ag (95,000 contained ounces Au). Many gold mineralized intercepts, including much of the bonanza grade material (to 246 g/t gold and over 1,000 g/t silver), were not included in the resource estimate due to wide drill spacing, averaging 50 meter centers, and lack of information on geological controls. Exclusion at this time of many high-grade intercepts, and top-cutting of grade to 9 and 10 g/t gold, also applied significant constraints to the estimated grade. Additional drilling is required to understand these geological controls and further upgrade the resource estimate. Kay Tanda is being evaluated for its open-pit, heap leach potential. Initial metallurgical test work has produced excellent results. Mindoro has received an expression of interest from a company with considerable gold mining expertise in the region, to advance and potentially co-develop Kay Tanda, and negotiations are at an advanced stage. Porphyry Copper-Gold Projects It has been a relatively quiet year for us on our copper-gold porphyry targets, but this is expected to change dramatically later this year as we re-focus on these, both in-house and via joint ventures. At the time of writing, we were at an advanced stage in acquiring the residual 25 percent interest in the Batangas Projects held by our partner, enabling us to control the entire 100 percent and thence finalize several pending joint ventures. This will result in a high level of activity and drilling on our Batangas gold and copper-gold projects. We have identified over 20 promising porphyry copper-gold, several copper-gold skarn, and many epithermal gold-silver prospects on our Batangas, Pan de Azucar and Surigao projects. its peers in the industry. Since commencing work in 1997, we implemented social programs to a standard unheard of at the time. We did this out of a sense of empathy with the local people living in generally poor communities, as well as to establish a solid long-term partnership in developing the mineral resources in their area. These programs are paying dividends, not only from the satisfaction of making a positive difference in their lives, but also in developing a harmonious relationship which will benefit us all as we move our projects forward. Management and Board Changes During the year we were pleased to announce the appointment of Penny Gould to the position of President. For the past decade Penny has played a major role in managing our corporate functions and in helping build the Company; a role she has handled superbly. Penny has effectively been the face of Mindoro in Canada, allowing me to concentrate on our Philippine operations. Her promotion to President will allow me to have an even greater focus on advancing and expanding our Agata North nickel, and Kay Tanda and SW Breccia gold resources, as well as unlocking the value of our over 20 promising porphyry coppergold and epithermal gold prospects. These changes are a natural evolution of management responsibilities as we continue to grow the company. Also during the year, Gerhard Kirchner retired as Chairman of the Board. We are very grateful to Gerhard for his dedication to the company as Chairman for over three years and look forward to his continued contributions as a director. In his place, Rob Garden Q.C. was appointed Chairman. Rob has 32 years of experience in his primary areas of practice: natural resources, labour, and administrative law, with considerable experience working with the mining industry. We are pleased to welcome Rob to his new role. We also welcome the appointment of Eugene Zarowny to the position of Chief Financial Officer. Eugene is a Chartered Accountant and Certified Financial Planner who has 15 years of financial accounting, corporate finance, strategic planning and management experience. Thanks With sincere gratitude I acknowledge the hard work and dedication of our loyal employees in both Canada and the Philippines. My thanks also to the board of directors for their guidance, and to our shareholders for their continued support of Mindoro. A Strong Social and Environmental Conscience Mindoro takes pride in having one of the strongest and most comprehensive social and environmental programs amongst Tony Climie, CEO & COO p. 5

8 Mindoro Resources Inc. Surigao projects SURIGAO: A MAJOR COPPER-GOLD AND NICKEL DISTRICT Photo, above: Manual auger drilling on Agata North nickel laterite. Epithermal gold and porphyry copper-gold in the Surigao District Nickel Laterite in the Surigao District The Surigao Gold District is an historic gold mining camp, where there are literally thousands of epithermal gold showings, prospects and small scale artisanal mines. Based on the recognized Philippine copper-gold model, porphyry copper-gold systems would be anticipated as well, and this was confirmed with the discovery in 2000 of the Philex Gold/Anglo American Boyongan porphyry copper-gold deposit, and more recent discoveries. Subsequent drilling at Boyongan outlined a major porphyry copper-gold deposit with a disclosed resource estimate of 219 million tonnes at a grade of 0.51 percent copper and 0.74 g/t gold. The Anglo-Philex joint venture more recently announced that a second porphyry system has been discovered a few hundred meters to the north of Boyongan, known as the Bayugo (or Kalayaan) porphyry prospect, as well as indications of several other porphyry systems nearby. Intensive drilling is in progress in the area. The Surigao Gold District is attracting considerable international attention and is in the early stages of exploration for new porphyry copper-gold discoveries. Mindoro believes the Surigao Gold District will become a major copper-gold camp within a decade. The Surigao Region is now emerging as a major nickel producing district, and there are at least eight nickel laterite deposits either in production or being developed, providing direct shipping ore (DSO) to markets and processing plants in China, Japan, Korea and Australia. Nickel laterite mines are in production at Cagdianao, Century Peak Mine, Nonoc, Hinatuan, Taganito, CNC Mine, CTP Mine, PGMC Mine, Oriental Synergy Mine, and the SR Metals (SRMI) Mine, with the last six mines commencing production just in the last one and a half years. SRMI is located immediately adjacent to Agata, and on the same nickel laterite trend. Just to the north of Surigao City, on Nonoc Island, there are plans to construct a new processing plant at the Nonoc deposit, and Sumitomo has recently announced plans to construct a high-pressure acid-leach nickel processing plant in the Surigao District. At its Agata Project, significant drill results have previously been reported by Mindoro from its nickel laterite prospect, and an initial National Instrument (NI) resource defined recently. Potential areas of nickel laterite mineralization have been located on other Mindoro projects. p. 6

9 Mindoro Resources Inc Annual Report SURIGAO 2007 MILESTONES projects A Major Copper-Gold and Nickel District 2008 MILESTONES p. 8 p. 9

10 2007 Annual Report Mindoro Tenement Status Mindoro commenced exploration in the Surigao District in 1997 under an agreement with Minimax Mineral Exploration Corporation, a private Philippine company. A subsequent agreement covering the additional tenement acquisition was finalized with Minimax affiliate, Apical Mining Corporation. Under the agreement with Minimax, Mindoro may earn a 75 percent interest in the Agata, Tapian San Francisco, Tapian Main and Mat-I Projects through phased exploration expenditures and issues of shares. To date, Mindoro has earned a 75 percent interest in the Agata, Tapian San Francisco, Tapian Main Projects, and the various extension projects, and a ten percent interest in the Mat-I Project. Mindoro s total project area in Surigao is over 26,000 hectares. The granted tenements consist of a Mineral Production Sharing Agreement (MPSA) and an Exploration Permit on Agata, Exploration Permits on Tapian San Francisco and Tapian Main, as well as MPSA and Exploration Permit applications that are undergoing normal processing on the remaining ground. This is believed to be the second largest land holding after the Philex-Anglo American joint venture. Between 2004 and 2006, Panoro Minerals Ltd. earned a 40 percent interest in the Surigao Projects. For strategic reasons, Mindoro re-acquired that interest in Upon closing, as consideration for the purchase of the interest, Mindoro paid Panoro $750,000 cash plus 500,000 Mindoro Common shares and made a second payment of $500,000 cash plus 500,000 Common shares on the first anniversary of the closing. Furthermore, in the event that the nickel laterite prospect located on the Agata project should proceed to production and upon shipment of an aggregate one million tonnes of nickel laterite, Mindoro will pay Panoro $500,000 cash plus an additional $500,000 cash payment on the first anniversary of the shipment. Mindoro thus has a 75 percent interest in the Surigao Projects, and has the option to acquire a further 25 percent from its Philippine partner at feasibility stage, bringing its total interest to 100 percent if all options are exercised. Mindoro has a significant nickel laterite prospect on the Agata Project, an initial NI compliant resource with substantial upside potential, and has defined multiple porphyry copper-gold and epithermal gold prospects on the Surigao Projects. Photo, above: Sampling test pit in Agata North nickel laterite. p. 7

11 Mindoro Resources Inc. MINDORO NICKEL LATERITE PROJECTS IN THE SURIGAO DISTRICT Agata Nickel Laterite Project Agata North - Mineral Resource Estimate Geology of the Agata Project consists of greenschists, ultramafics, volcanics and multi-phase intrusives. Widespread serpentinized harzburgite and localized lenses of dunite and pyroxenite form an area of conspicuous peneplain (erosional surface) on the Agata hills. The nickel laterite developed on the ultramafics, and trend generally northeast, parallel to geological strike. The soil profile is intensely ferruginous in this region. The nickel laterite profile consists of the ferruginous cover, limonite zone, saprolite zone, and saprolitic rock. Relic cobbles of highly fractured and serpentinized ultramafic rock are scattered throughout the profiles. The nickel mineral garnierite is common within the lower horizons of the profile. The map Agata Project Nickel Laterite Resource on page 11 shows the distribution of nickel laterite mineralization mapped to date on the Agata Project, as well as the SRMI Mine immediately to the south of Agata. The Agata nickel laterite project is on the Agata MPSA and has been subdivided into two areas: Agata North, which is being advanced by Mindoro, and Agata South, which is a joint venture with Delta Earthmoving, Inc., a private Philippine company. Agata North - Initial DSO Exploration Target In April 2008, Mindoro reported results of a NI compliant mineral resource estimate for Agata North. The estimate covers just a small part of the Agata North nickel laterite prospect as mapped to date. The map Agata Project Nickel Laterite Resource on page 11 shows the resource area in relation to the delineated extent of nickel laterite mapped to date at Agata. The Mineral Resource model was generated by Dallas Cox, BE (Min), an independent qualified person as defined by NI A total of 134 drill holes, comprising 2,921 meters of diamond drill core and 2,874 assay samples, have been used for the estimate. An Inverse Distance Squared grade estimation method was utilized within tightly constrained lithological and grade domains. Mr. Cox has indicated that the density of drilling and continuity of mineralization is sufficient to classify the estimated resource and has verified and authorized the technical information detailed in the NI report. Both dry metric tonnes (DMT) and wet metric tonnes (WMT) are quoted since the saleable unit for DSO production is actually WMT. Mineralized intercepts within approximately 30 hectares of the drilled area were not included in this initial estimate due to the wider drill spacing used, and are expected to expand the resource as infill drilling is carried out. Mineralization is open in most directions. As reported in March 2007, the initial objective on the Agata North project was to define a NI compliant resource adequate, initially, for three to five years of production at a rate of 500,000 to 700,000 wet metric tonnes (WMT) per annum of DSO for the production of nickel pig iron and other ferronickel products in China, India and Korea (i.e., target tonnage from 1,500,000 to 4,900,000 WMT). During the course of this drilling, Mindoro recognized that the nickel laterite resource on the Agata, and other projects, has the potential to support a much larger scale integrated mining and processing operation, and plans were made to advance the DSO alternative on a short turn basis only, as the opportunity arose, while Mindoro focused on defining the global nickel laterite resource potential, and carried out an evaluation of enhanced value, local processing alternatives. At the time of writing, Mindoro has completed a total of 181 drill holes for a total of 3,637 meters at Agata North. Photo, above: Drill rig on Agata North nickel laterite. p. 10

12 2007 Annual Report AGATA PROJECT - NICKEL LATERITE RESOURCE Summary of the Mineral Resource Estimate: Category Mil. WMT Mil. DMT Ni% Co% Fe% Measured Indicated Total Meas. + Ind Inferred Resource: Combined limonite and 0.8% Ni cutoff grade. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The tonnage and nickel grades above have been rounded to the nearest 2nd decimal, and iron grades to the nearest whole number, which may have resulted in minor discrepancies. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. It is uncertain if further exploration will result in upgrading the Inferred mineral resource to an Indicated or Measured mineral resource or the Indicated mineral resource to a Measured Resource category. The NI resource (measured plus indicated and inferred) is therefore more than double that of the original Exploration Target within the drill area. It is emphasized that the resource estimate is a small part of the overall resource potential at Agata North i.e., resource delineation is a work in progress, and updated resource estimates will be released as they come to hand. Since emphasis switched from the DSO scenario to an overall integrated mining and processing operation, the initial resource drilling plans were expanded with the objective of defining the total global resource at Agata North. p. 11

13 Mindoro Resources Inc. Agata North - Global Exploration Target The Global Exploration Target for Agata North for the combined ferruginous overburden, limonite and saprolite horizons is as follows: 30 to 40 million wet metric tonnes (WMT) at a grade of 0.9 to 1.5 percent nickel and 18 to 28 percent iron. The reader is cautioned that the potential quantity and grade of the Exploration Target described is conceptual in nature, that there has been insufficient exploration to define a mineral resource and that it is uncertain if further exploration will result in the target being delineated as a mineral resource. Until a feasibility study has been completed there is no certainty that the Company s projections will be economically viable. The Agata North nickel laterite mineralization, as interpreted to date, covers approximately 379 hectares. A total of 181 drill holes have been completed to date within this area. The Exploration Target does not include additional areas of nickel laterite mineralization on the Agata South project, where Mindoro is in a joint venture with a Philippine mining contractor (Delta Earthmoving). Nor does it include potential areas of nickel laterite on the adjacent Tapian Main, Tapian SF and Mat-I tenements. Agata South: Delta Joint Venture In August of 2007, Mindoro announced that it had reached agreement with Delta Earthmoving, Inc., an experienced Philippine nickel laterite mining contractor, to explore, and advance to production if warranted, the Agata South nickel laterite project. The agreement does not cover Agata North. A total of 176 drill holes with a total of 2,281 meters have been drilled, covering 54 hectares, near the southern boundary. Only partial assay results have been reported by Delta to date. Enhanced Value, On-Site Processing Alternatives While much of the Surigao District nickel laterite production has been as DSO to processing plants in Japan, Australia and China, several attractive alternatives are emerging for local processing, which include, at the low technology end of the spectrum, constructing an on-site electric arc furnace for nickel pig iron (a low grade ferronickel product) production, ferronickel smelting, heap-leaching for which pilot testing on another Philippine laterite deposit has produced promising results, atmospheric (tank) leaching, and an improved generation of High Pressure Acid Leach (HPAL) plants. HPAL technology is currently being used with great success by Sumitomo on its Philippine Coral Bay operation, and shows considerable promise for the local processing of Surigao ores. In fact, Sumitomo recently announced plans to proceed with permitting to construct an HPAL plant in the Surigao District. This HPAL technology has a proven track record. An HPAL plant would likely require a resource in excess of 50 million tonnes, whereas for smaller resources the most appropriate technologies may include atmospheric (tank) leaching, ferro-nickel smelting to produce high iron / high nickel content product, or low grade ferro-nickel (nickel-pig iron) product from an electric arc furnace. A ferronickel smelting plant was recently built and is in operation near Cagayon de Oro, northern Mindanao. New laterite processing technologies are being aggressively developed globally since nickel laterite ores will constitute the bulk of future nickel production. There is abundant evidence of the beginning of a trend for local/ on-site processing of Philippine laterite ores, and the growth of a large high-value industry in the Philippines. We expect that the prolifically nickel laterite-mineralized Surigao District will be an important part of this evolution. Construction of a local processing plant, rather than simply shipping out raw product, would greatly increase the returns to all stakeholders; including Mindoro, its Philippine partner, the local people, local government units, and to the Philippines itself. Global Nickel Laterite Resource Potential of Mindoro s Surigao Tenements Reconnaissance geological mapping was recently carried out over Mindoro s Surigao tenements with the objective of defining areas of potential nickel laterite mineralization. These tenements are on the continuation of the geological trend north from the nickel laterite mineralization in the SRMI tenement, and from the Agata project where resource delineation drilling programs are in progress. Nickel laterite in the Surigao District is manifested by the development of thick, purple-coloured clayey soils over favorable ultra-mafic rocks. Geological mapping by Mindoro has outlined lateritic soils on ultra-mafic rocks over extensive areas on these projects, as shown on the map Surigao A Major Copper-Gold and Nickel District on pages 8-9. Significant areas of lateritic soils were defined on the Tapian Main, Tapian SF and Mat-I projects. Based on the mapping alone, there is no guarantee that nickel grades and thickness will be of commercial interest. Accordingly, a program of reconnaissance auger drilling is in progress to give a preliminary indication of nickel content and laterite thickness. This will be followed by detailed NI compliant resource delineation drilling programs. p. 12

14 2007 Annual Report Agata Gold and Copper-Gold Prospects In addition to the nickel laterite mineralization, remarkably, Agata has a cluster of porphyry copper-gold prospects and two epithermal gold prospects which are also being advanced by Mindoro. The two unrelated mineralization types are in totally different geological settings. The gold and copper-gold prospects are summarized below. American Tunnels Artisanal miners have been mining epithermal gold in the American Tunnels area for several decades (see the map Agata Project Copper-Gold Prospects on page 15). Artisanal miners are now mining high-grade copper ore from six shafts and tunnels at Agata. This phenomenon is the result of both the discovery of the high-grade copper mineralization and high copper prices, which can support this small scale mining and transportation of raw ore to China for processing. Mindoro, working with the Philippine Mines and Geosciences Bureau, encourages local miners to profit from legitimate smallscale mining of shallow ores, providing that this is done in an environmentally and socially acceptable manner. Mindoro is working in several areas to assist in the formation of small-scale mining cooperatives to assist this process. Mindoro sees this as a mutually beneficial operation; with the artisanal miners earning a living and at the same time providing useful information on the potential for large-scale associated deposits at depth. The relatively small loss of ore at these shallow levels is not considered a detriment to potential large scale mining operations by Mindoro. Photo, above: Artisanal miner recovering gold from small scale operation, American Tunnels, Agata. The six shafts and tunnels extend over an area of 150 meters by 50 meters. A further eleven workings are being actively mined for epithermal gold (an overprinting shallower event). The copper ore is being mined by manual methods; ore grading 5 percent to 15 percent copper is loaded into 40-kg sacks and sold to local buyers to be sent to China for processing. Mindoro sampled one of the more easily accessible shafts, obtaining the following results from channel samples: 1.1 m vertical channel sample across exposed part of dyke at 7.91% copper, 0.23 g/t gold and g/t silver; 1.0 m horizontal channel sample across floor of shaft at 4.89% copper, 0.15 g/t gold and g/t silver; 1.9 m vertical channel sample across exposed part of dyke at 7.37% copper, 0.13 g/t gold and g/t silver; 1.05 m vertical channel sample across exposed part of dyke at 2.02% copper, 0.07 g/t gold and 7.70 g/t silver. Photo, above: Close-up of gold recovered. Small ball mills are used to crush the ore, which is then panned. Recovery is very low from this kind of operation. p. 13

15 Mindoro Resources Inc. Assmicor Prospect Photo, above: High-grade copper mineralization (chalcopyrite and bornite) from artisanal mining, American Tunnels, Agata. Mapping by Mindoro and petrology work by an independent petrologist, indicate mineralization is associated with multiphase syenite, quartz monzonite, monzodiorite and diorite intrusives. These occur as dykes, sills, and small stocks intruding ultramafic rocks. Petrographic studies indicate early potassic alteration (secondary biotite, actinolite), plus the copper minerals chalcopyrite, covellite and bornite. This is overprinted by later phyllic (sericite±calcite±actinolite±epidote) and skarn alteration/ mineralization. These features are indicative of a porphyry copper setting. A younger epithermal gold mineralization event cuts the earlier porphyry-related alteration. The American Tunnels prospect is characterized by a strong IP chargeability anomaly, extending over 800 meters by 300 meters, is capped by a resistivity anomaly and coincident with a magnetic anomaly. Extensive copper, gold and zinc soil anomalies are associated. The IP chargeability anomaly is part of a string of strong chargeability anomalies extending over at least six kilometers of strike through the Agata Project, which are associated with intersections of splays of the Philippine Fault and cross-cutting faults. In a remarkable geological coincidence, extensive nickel laterite mineralization is juxtaposed in close proximity to the porphyry copper-gold prospects, and is itself the subject of intensive economic evaluation and pre-development work by Mindoro. The American Tunnels prospect is an untested high-priority drill target for both epithermal gold and, especially, for porphyry copper-gold mineralization. The extent of alteration, abundance and strength of copper-gold showings, and of the associated IP anomalies, indicate a source of considerable potential interest. During the 1980s, thousands of artisanal miners mined a saprolite (soil) horizon at Assmicor to shallow depths. In 1999, seven of eight drill holes completed by Mindoro intersected better than 0.5 g/t gold near surface in oxidized intrusives and dykes. The two best holes were 1.1 g/t gold over 19 meters and 1.4 g/t gold over 24 meters. The mineralization is open to the north and east. Limestone Prospect At the Limestone Prospect, geology consists of silty limestone with strong gold-in-soil anomalies occurring in an area of approximately 600 meters by 500 meters. Artisanal miners previously panned gold from the soils and mined gold from shallow workings in the limestone. Two 1999 holes drilled by Mindoro at the eastern edge of the soil anomalies encountered 2.7 g/t gold and 2.2 g/t gold over seven and eight meters respectively, at shallow depths. Deeper sections of mineralization were also encountered in both holes. Mineralization at the Limestone Prospect resembles important limestone-hosted gold deposits in Nevada, USA. Assmicor Porphyry Copper-Gold Prospect Alteration, accompanied by grey quartz-magnetite veins with copper and gold mineralization, characteristic of the margins of a porphyry copper-gold system, are associated with east-dipping dykes and intrusions intersected in 1999 drill-hole 11. North PorphyryTarget The North Target occurs at the intersection of northeastsouthwest faults with a splay of the north-trending Philippine Fault, which is the structural setting of porphyry copper-gold deposits in the Surigao District. The North Target is a very large p. 14

16 2007 Annual Report South Porphyry Target and strong chargeability anomaly of greater than 28 m/secs covering about 1.2 kilometers by 500 meters. It is coincident with soil copper and gold anomalies, and unusually intense alteration of ultra-mafic rocks (pyrite and magnetite disseminations and silica veining). Recent panning of heavy mineral concentrates taken along creeks draining the North Target yielded significant gold counts of up to 21 grains from 26 kg of raw creek sediment sample draining ultra-mafic rocks. This implies significant mineralization leakage from intrusive rocks below, and very possibly a porphyry mineralization source. Several copper showings and intrusive dykes have also been found in the area. Late in 2005, drilling commenced at the North Target. Considerable operational difficulties were experienced in the intensely fractured broken and gougy ultra-mafic cap rock and three holes were lost at shallow depths. This degree of structural preparation is consistent with that seen associated with a porphyry copper-gold system. At a future date, it is planned to pre-collar drill holes with a reverse circulation rig and then continue with diamond drilling below. South Target is also a large, 1.5 kilometer by 500 meters, and strong chargeability anomaly of greater than 28 m/secs. It has a large, flanking high resistivity anomaly. Geology consists of limestone, greenschist and ultra-mafics. Small dykes or stocks of altered intrusive, likely the top of a much larger intrusive complex, have been mapped. Zones of structurally controlled phyllic alteration have also been defined. There are historical and ongoing artisanal gold mining operations in this area. Soil geochemical surveys carried out by Mindoro in 1997 partially covered the South Target and defined gold, zinc and copper anomalies. The South Target geological, geochemical and geophysical results strongly point to a porphyry copper-gold system at depth. In 2006, a single hole was drilled on the South Target. This also encountered operational difficulties and was terminated before target depth. However, in this case it is believed that the target can be drilled from the western side and the difficult ultra-mafic cap rock circumvented. AGATA PROJECT COPPER-GOLD PROSPECTS p. 15

17 Mindoro Resources Inc. TAPIAN SAN FRANCISCO COPPER-GOLD PROSPECTS Geology of the Tapian San Francisco (TSF) Project consists of ultra-mafics, volcanics and limestones intruded by diorite and monzonite dykes and intrusions. Several major northeasttrending lineaments extend from TSF through the Boyongan district hosting the Boyongan and Bayugo copper-gold porphyry deposits. The northern portion of the TSF property overlaps the southern edge of a large intrusive complex of approximately six kilometers in diameter that hosts the Masgad porphyry system on its western margin and the Mayag porphyry system on its eastern margin. Alteration at TSF is widespread, pervasive, and typical of porphyry systems. This includes widespread propylitic and argillic alteration, minor calc-silicate alteration, structurally-controlled phyllic alteration and occurrences of potassic alteration. These alteration assemblages span an area that exceeds 3.5 kilometers by two kilometers, typical of large magmatic hydrothermal copper-gold ore-forming systems. A group of seven IP chargeability anomalies was defined at TSF. Geological work has identified a cluster of porphyry copper-gold targets, as well as multiple epithermal gold prospects (see map on pages 8-9). Further work has focused on two northeast structural/ chargeability trends: the C6 trend and the C9 trend. The two trends are coincident with porphyry-related rock alteration and copper, gold and zinc in-soil geochemical anomalies and extremely abundant gold and copper showings. During 2006, a reconnaissance drilling program was carried out at C6 and C9 and three drill holes for a total of 1,176 meters were completed. The drilling intersected porphyry-relaetd alteration and mineralization in a series of narrow monzonite, monzonite porphyry, diorite porphyry, porphyritic dacite, and porphyritic andesite intrusive sills/dikes. The mineralization and alteration is typical of mineralization in the distal to intermediate parts of a porphyry copper-gold system and suggest that the core of the porphyry system is further to the east within the project. Additional drilling is proposed to vector into the center of the system at a later date. Recently, high-grade copper mineralization has been discovered by artisanal miners in the northern part of TSF, in an area known as the Masgad Prospect. Massive chalcopyrite-pyrite-magnetite ores are being won in a high-grading area hosted in serpentinized ultramafic rocks. The prospect is thought to be related to a porphyry copper-gold system in the area which Mindoro is targeting. A small scale mining cooperative has been formed to carry out the mining in a regulated manner. TAPIAN MAIN COPPER-GOLD PROSPECTS Geology consists of greenschist overthrust by ultramafics, unconformably overlain by limestone and intruded by multiple intermediate porphyry intrusions. High-level epithermal gold mineralization occurs as veins, stockworks and breccias at contacts between green-schist, ultramafic, limestone and intrusives. The Rosario Zone is about 500 meters by 200 meters and open to the north. It includes extensive pre-world War Two underground development of a vein system, which reportedly had a 100 ton per day mill. The workings are inaccessible and production is unknown. Very incomplete records suggest the average grade was 8.3 g/t gold. The adjacent Samson Zone is about 600 meters by 200 meters. Encouraging gold values from rock sampling were obtained over widespread areas in this zone. Copper soil anomalies greater than 150 ppm and up to 1,192 ppm are associated with both the Rosario and Samson zones. A strong chargeability anomaly, coincident with intrusives, soil geochemical anomalies and alteration, extending over an area of 1.4 kilometers by 600 meters, covers the Rosario and Sampson Zones, and is open to the south. Planned work includes further evaluation of the epithermal gold potential by trenching, extension of the geophysical survey to fully define the anomalies, and drilling, if warranted. MAT-I GOLD PROSPECT Geology consists of ultramafics, sediments and volcanic tuffs intruded by intermediate porphyry intrusives. The Mat-I area was an important artisanal gold mining area and thousands of miners won gold from alluvials as well as shallow, hardrock workings. There are spectacular examples of high-grade epithermal veins. However, most of the highest potential ground was lost in land disputes to other parties. Systematic geochemical surveys by Mindoro defined four moderate-order copper in soil anomalies of greater than 100 ppm and up to 268 ppm. Maximum dimension is approximately 2,000 meters by 200 to 300 meters. Minor associated gold anomalies are present, as well as very strong arsenic anomalies of up to 1,520 ppm. The copper anomalies may reflect intrusiverelated mineralization of potential interest. Further geological investigations are planned. p. 16

18 2007 Annual Report BOLOBOLO COPPER PROSPECT 2008 MILESTONES Porphyry deposits in the Surigao District are controlled by the intersection of northeast to southwest-trending faults with north-northwest trending splays of the major Philippine Fault system. Due diligence work by Mindoro defined, amongst many other structural targets, one such structural intersection set in the Bolobolo area. A small ground reconnaissance program was carried out in 2005 to determine its potential significance. Altered and mineralized float boulders and outcrop were located over a wide area at Bolobolo. Widespread propylitic alteration, characteristically the outer halo of a porphyry system, was defined in volcanics. Within this propylitic halo, outcrops and boulders of intense argillic, phyllic and calc-silicate alteration were located. Phyllic alteration (quartz-sericite-pyrite), which is characteristically proximal to the main mineralized core of porphyry systems, is intense, structurally controlled, and can be traced over three kilometers and observed up to 200 meters wide. A mineralized float boulder of calc-silicate located in a stream, contains abundant disseminations of chalcopyrite and bornite, as well as high-density quartz-bornite-magnetite veinlets. A representative grab sample assayed 1.34 percent copper, 17.1 g/t silver. A float boulder of similar alteration and mineralization found in a stream, approximately 1.6 kilometers to the south, assayed 0.96 percent copper and 4.9 g/t silver. In a third stream, approximately three kilometers to the northeast, a boulder of silicified limestone assaying 1.92 percent copper was also found. Calc-silicate mineralization characteristically occurs in limestone near Philippine porphyry copper-gold deposits. Photo, right: Chief Geologist Bail Lab-oyan examining drill core. p. 17

19 Mindoro Resources Inc. Batangas projects Photo, above: Coastal scenery at Archangel Project. RESOURCES AND MULTIPLE TARGETS IN A WELL-MINERALIZED COPPER-GOLD BELT Mindoro acquired the Lobo and Archangel Projects in the Batangas District of Luzon Island in December 2000, under an agreement with Egerton Gold Philippines Inc., a private Philippines company. Mindoro may earn a 75 percent interest in the Batangas Projects through phased exploration expenditures, issues of shares, and by taking one of the projects (either Lobo or Archangel) to the feasibility stage. Lobo and Archangel are each held under a Mineral Production Sharing Agreement (MPSA), which is a legally binding contract with the Philippine Government allowing for mineral exploration and development. Early work in the Batangas District was so encouraging that Mindoro has since increased its tenements and tenement applications (under Exploration Permits) to over 29,000 hectares. These cover favorable geology and abundant epithermal goldcopper-silver showings, and several clusters of porphyry coppergold prospects. The Batangas Projects, which include the original Lobo and Archangel Projects, are located within a well mineralized coppergold belt. This belt includes the Taysan porphyry copper-gold deposit of Freeport McMoRan, adjacent to the Mindoro projects, as well as the Dizon, Tapian, San Antonio and Mogpog porphyry copper-gold deposits, several of which have been mined. The Batangas Projects summary map, on pages 20-21, shows the tenement situation and main prospects defined to date. Of particular note are the areas of high chargeability (reflecting metal sulphides) defined to date, which are shown in yellow. These cover a remarkable area within Mindoro s tenements, indicating the widespread and strong alteration and mineralizing processes which have operated in the Batangas District. Many mineral showings are as yet un-surveyed by geophysical surveys (induced polarization, or IP) and it is expected that even more chargeability anomalies will be defined as work progresses. At the time of writing, discussions were in progress to acquire the remaining 25 percent interest in the Batangas Projects, with the objective of freeing up equity to accommodate joint ventures with incoming partners. p. 18

20 Mindoro Resources Inc Annual Report 2007 BATANGAS MILESTONES projects 2008 MILESTONES p. 20 p. 21

21 2007 Annual Report ARCHANGEL PROJECT AND KAY TANDA The Kay Tanda epithermal gold-silver prospect occurs on the Archangel Project, a granted Mineral Production Sharing Agreement (MPSA). Geology of Archangel consists of pervasively altered volcanics intruded by andesitic, dioritic and dacitic intrusives, and overlain by younger cover volcanics to the northwest. A cluster of gold-silver and porphyry copper-gold prospects has been outlined along a strong northeast structural trend of at least six kilometers, which is open to the northeast. Extensive phyllic, SCC (sericite-clay-chlorite) alteration, characteristic of porphyry copper-gold-related mineralization, along with abundant copper showings, occur along the six kilometer trend. Superimposed on this at higher elevations are areas of advanced argillic and argillic alteration which are interpreted as being upflow zones and which may indicate proximity to porphyry centers below. Near-surface zones of lowsulphidation epithermal gold-silver mineralization, including Kay Tanda, have been telescoped into the advanced argillic alteration and are interpreted to reflect especially fertile and metalliferrous porphyry systems below. The main features are shown on the map Archangel Project Gold Resources and Prospects on page 22. This illustrates the location of the resource area, the extent of the chargeability anomaly (indicating metal sulphides), plus epithermal gold silver zones as mapped at surface, and zones of advanced argillic alteration. The latter can be especially important guides to porphyry copper-gold systems nearby. Kay Tanda: Geology and Mineralization Structural studies are in progress to determine the nature and controls of the high-grade zones. The high-grade mineralization appears to occur preferentially at elevations below 250 meters (ASL) interpreted to be a paleo-boiling zone. Few holes have penetrated to this depth to date. Such upflow zones may be associated with bonanza mineralization that constitute some of the world s best epithermal gold-silver deposits. Kay Tanda is being evaluated for its open-pit, heap leach potential. Initial metallurgical test work has produced excellent results. Kay Tanda is interpreted as intermediate to low sulphidation epithermal quartz-carbonate-gold-silver-base-metal mineralization telescoped into the top of an underlying porphyry copper-gold system. Kay Tanda: Exploration Target At a 0.5 g/t gold cut-off, the immediate Exploration Target is from 15 to 20 million tonnes of open-pitable material at a grade of 1.1 to 1.4 g/t gold and 3.0 to 3.4 g/t silver, containing from 530,000 to 900,000 ounces of gold and from 1.45 to 2.2 million ounces of silver. *The reader is cautioned that the potential quantity and grade of the Exploration Target described is conceptual in nature, that there has been insufficient exploration to define a mineral resource and that it is uncertain if further exploration will result in the target being delineated as a mineral resource. Until a feasibility study has been completed there is no certainty that the Company s projections will be economically viable. Epithermal gold-silver mineralization at Kay Tanda is associated with extensive and intense quartz stockworks, veins and hydrothermal breccias, with accompanying base metal sulphides. Kay Tanda is reflected by an induced polarization chargeability anomaly that is about 1.5 kilometers by 1.4 kilometers in extent, which is part of a much larger chargeability anomaly which extends over six kilometers along strike to the northeast. To date, drilling has been conducted only on the Kay Tanda part of the trend. Mindoro has completed 147 reverse circulation (RC) and twenty six core drill holes at Kay Tanda for a total of 23,042 meters of drilling. Almost all holes have encountered near-surface, generally flat-lying to gently-dipping blanket-like low-grade stockwork mineralization. This is strongly to partially oxidized to depths of 40 to 160 meters and non-oxide below this. Drilling, especially at deeper levels, has encountered at least five steeply-dipping, much higher-grade zones with bonanza grades to 246 g/t gold and over 1,000 g/t silver, which are interpreted as structurally controlled upflow, or feeder zones. p. 19

22 Mindoro Resources Inc. Kay Tanda: NI Mineral Resource Estimate In February of 2008, Mindoro reported results for a National Instrument compliant mineral resource estimate for that part of its Kay Tanda epithermal gold-silver prospect drilled to date. The Mineral Resource Report was completed jointly by Dean Fredericksen, Principal Consultant, of Ravensgate Mineral Industry Consultants of Australia, who carried out the Mineral Resource estimate, and Dr. Bruce Rohrlach, geological consultant, also of Australia, who completed the geological and quality control / quality assurance components of the report. The Mineral Resource estimate has been estimated by Ordinary Kriging inside as series of primary mineralization domains interpreted at >0.15 and >0.25 g/t gold for Pulang Lupa and Kay Tanda respectively. A later mineralization event is evident in the drilling results and is characterized by a strong gold-base metal signature with locally bonanza relatively high gold grades. This mineralization has not been included in the Mineral Resource estimate at this stage, given that the geological controls on distribution and continuity of the mineralization are not yet certain. The Mineral Resources have been reported above a cutoff of 0.4 g/t gold for oxide and transitional material and above a cut-off of 0.6 g/t gold for fresh material. Top cuts were applied for Pulang Lupa at 9 g/t gold and for Kay Tanda at 10 g/t gold, and these result in a significant reduction in the mean grade of the composites of approximately 15% and 17% in the Pulang Lupa and Kay Tanda domains respectively. ARCHANGEL PROJECT GOLD RESOURCES AND PROSPECTS p. 22

23 2007 Annual Report WIREFRAME MODEL OF KAY TANDA MINERALIZATION To date, from 40 to 67 percent of the previously defined Exploration Target, at a cut-off of 0.5 grams per tonne (g/t) gold, has been converted to resources. Summary results are: Resource at 0.4 g/t Au cutoff for oxide and transitional material and 0.6 g/t Au for fresh material: Category Deposit Contained Au ounces Tonnes Au (g/t) Ag (g/t) Indicated Pulang Lupa 95,000 3,365, Kay Tanda Total Indicated 95,000 3,365, Inferred Pulang Lupa 24,000 1,007, Kay Tanda 238,000 10,592, Total Inferred 262,000 11,599, Mineral resources which are not mineral reserves do not have demonstrated economic viability. The tonnage and contained ounces figures above have been rounded to the nearest thousand and gold grades to the nearest 2nd decimal, which may have resulted in minor discrepancies. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. Many gold mineralized intercepts, including much of the bonanza grade material, were not included in the resource estimate due to wide drill spacing, averaging 50 meter centers, and lack of information on geological controls. Additional drilling is required to understand these geological controls and further upgrade the resource estimate. Mindoro has received an expression of interest from a company with considerable gold mining expertise in the region, to advance and potentially codevelop Kay Tanda, and negotiations were at an advanced stage at the time of writing. The figure entitled Wireframe Model of Kay Tanda Mineralization above, shows graphically the mineralization included in the resource estimate, and mineralized intercepts not included in the resource estimate due to uncertainties on continuity due to wide drill spacing or lack of geological domain information. With more drilling and geological work, there is considerable potential to expand the resource. Mindoro considers that the original Exploration Target remains valid. While we would like to have achieved our defined Exploration Target ounces at this early stage of evaluation, we are confident that with additional drilling and geological work we will significantly increase the resource at Kay Tanda. In particular, as we gain a better understanding of the high grade zones and bring these into the resource, we have the potential to significantly increase grade. We agree with our consultants that there is p. 23

24 Mindoro Resources Inc. excellent potential to unlock at Kay Tanda and on our adjacent ground, both for epithermal gold-silver and porphyry coppergold deposits. Dr. Rohrlach concluded: The Kay Tanda and Pulang Lupa prospects are interpreted to form part of a substantially larger mineralizing system which to date remains to be fully explored. Mindoro s Resource delineation drilling at Kay Tanda and Pulang Lupa has focused within a relatively small area that is contained within the shallow portions of the southwest quadrant of an otherwise extensive IP chargeability anomaly at Kay Tanda-Pulang Lupa that is approximately 1.6 kilometers wide. This is one of four recognised mineralization centres along the Archangel corridor, and there are several potential avenues for adding substantial ounces of gold-silver to the preliminary resource base at Kay Tanda-Pulang Lupa. The present indicated component of the resource is contained entirely within the Pulang Lupa prospect. Additional tonnages of material that are presently classified as an inferred resource at Pulang Lupa as well as the significantly larger Kay Tanda inferred resource could be largely converted to the indicated resource category with relatively modest amounts of additional drilling that would better define grade continuity. The majority of the high-grade and locally bonanza grade intersections at depth, which relate to the younger base-metal-rich mineralizing event, are not accounted for in the present resource calculation due to insufficient understanding of their orientation, thus preventing reliable estimation domains to be defined. These deeper, high-grade and locally bonanza-grade quartzcarbonate-base metal vein arrays are an important exploration target in the deeper parts of the Kay Tanda system that have potential to markedly improve any economic outlook of Kay Tanda. There is geological reason to believe that the deeper base-metal vein systems trend NNW, near orthogonal to the older and shallower Au-Ag quartz stockworks which have a prominent northeast control. Using carefully targeted diamond drillholes oriented orthogonal to the current drilling, Mindoro is well placed to rapidly test the orientation of these bonanza veins. Once their orientation is confirmed, Mindoro would then be able to more rapidly delineate the zones of bonanza grade and trace them along strike, thus incorporating them into the resource estimate at Kay Tanda and Pulang Lupa. This would have potential to substantially improve the result of any future economic analysis. Photo, below: Copper oxides bearing SCC altered medium grained horblende quartz diorite from Takaran creek, El Paso Project. Extensive areas of excellent potential for both porphyry Cu-Au mineralization and additional epithermal mineralization occur within the broader Archangel property and particularly in and around the Kay Tanda mineralizing centre. There is good potential for delineation of contiguous extensions of the shallow Kay Tanda quartz-au-ag stockwork mineralization to the ENE of Kay Tanda along the zone of argillic alteration (defined by Pima surveys and which coincides with Au anomalism in soils) that trend toward the Marita prospect. This zone passes through the prospective north and south Lumbangan areas where IP anomalies are strong and where Pima data indicates the presence of Fe-oxides at surface and high-temperature illite alteration. The area contiguous with and directly North and NNE of Kay Tanda has potential for underlying porphyry mineralization. The presence of intense chloritesericite (SCC) alteration and anhydrite veining at depth in diamond holes that lie near the northeast margin of the Kay Tanda prospect, and the location of the center of the 1.6-km-wide IP chargeability anomaly that lies near the northeast margin of the Kay Tanda drill grid suggest that a porphyry target may lie at depth proximal to the northeast margin of the Kay Tanda deposit. Kay Tanda: Metallurgy The metallurgical characteristics of the ore are critical to the success of a mining operation. A comprehensive program of metallurgical testing has been embarked on at Kay Tanda. Detailed testing of large diameter drill core with the objective of evaluating heap leach characteristics of both near-surface oxide, and deeper mixed oxide / sulphide containing material was carried out. Samples were collected by large diameter (PQ) core drilling and submitted to Metcon Laboratories in Australia. The program was designed and supervised by an independent metallurgical consultant, Peter J. Lewis and Associates of Australia. Excellent results were obtained from extensive metallurgical testwork of drill core composites for two different crush sizes from both oxide and mixed (transitional) oxide and sulphide mineralized material. The independent metallurgical consultant noted that the heap leach results are remarkably good in all cases, with recoveries (of the coarse crush) only approximately 10% below the maximum gold recovery achievable by grinding to a fine size. The results to date indicate that both composites are highly amenable to heap leaching. It appears that most of the gold occurs in the cracks and fissures in the rocks and is readily accessible to the cyanide solution. Gold dissolution is rapid and high gold recoveries have been obtained from both composites, and with low cyanide consumption. Kay Tanda: Plans Mindoro has been approached by a gold mining company active in the region, with particular expertise in developing the Kay Tanda deposit type, which has expressed interest in potentially co-developing Kay Tanda. At the time of writing, advanced negotiations were taking place. p. 24

25 2007 Annual Report Photo, above: Rugged volcanic terrain on Archangel Project. ARCHANGEL PROJECT: MULTIPLE PORPHYRY COPPER-GOLD TARGETS Strong chargeability and resistivity anomalies have been defined semi-continuously along a northeast trend for over six kilometers. The anomalies are over one kilometer wide in places and are consistent with the reflection of multiple porphyry copper-gold cells at depth. The IP appears to define four separate porphyry centers at Kay Tanda, Ahit / Balibago, Marita and Bootin (see map Archangel Project Gold Resources and Prospects on page 22). Detailed geological mapping along the Archangel copper-gold trend, as well as detailed independent petrological studies and PIMA clay analyses, confirm alteration types. Geological, geophysical and geochemical data have been integrated to define the following principal porphyry copper-gold drill targets along the six kilometer trend. Kay Tanda The extent and intensity of alteration and mineralization noted at Kay Tanda itself, strongly suggest porphyry copper-gold mineralization below, or nearby. Deep drilling suggests at least two superimposing porphyry systems related to the emplacement of the San Juan Diorite probably in the Early Miocene and a younger Pliocene magmatism related to the emplacement of Dacite Porphyry. Widespread phyllic, SCC alteration is overprinted by advanced argillic and argillic alteration with high temperature clays. In hole KTDH-10, for example, porphyry signatures are obvious and include: increase in chalcopyrite: sphalerite/galena ratio; occurrence of chalcopyrite-bornitemolybdenite plus hydrothermal magnetite near end of hole; and pervasive anhydrite as gangue mineral. In other holes, grey quartz veinlets with chalcopyrite and some bornite mineralization have also been encountered in places at depth. Deeper drilling may intersect potassic zones of the porphyry system. Information from the current shallow resource delineation drilling of Kay Tanda is being compiled and interpreted and will lead to deeper drill testing of porphyry copper-gold targets at a later date. p. 25

26 Mindoro Resources Inc. Ahit-Balibago At the southwestern end of Archangel, Ahit-Balibago is an 800 meter by 600 meter, high-chargeability anomaly with a coincident resistivity anomaly. Ahit Hill exhibits intense argillic and advanced argillic alteration, probably telescoped into the top of a porphyry system. PIMA clay analyses revealed prominent high-temperature potassic white mica (high-temperature illite). Extensive and strong copper-in-soil anomalies are associated with the alteration. Further southwest of Ahit, a magnetic low anomaly is located in an area associated with young, highly magnetic agglomerates and basaltic andesite. The magneticlow anomaly is a possible porphyry target due to the positive correlation between magnetic-lows and mineralization in the Lobo-Taysan district; e. g., in the Taysan and Old Lobo Mine areas. Bootin Bootin is located about 1.5 kilometers north of Marita and is associated with high-chargeability and high-resistivity anomalies. The area is largely covered by young, volcanics with windows of phyllic-altered andesite, andesite porphyry and diorite. A hydrothermal breccia pipe with a matrix of fine pyrite and clay occurs on the northwest side of the prospect. Zones of argillic to advanced argillic alteration have been mapped and localized copper showings found. A grab sample from a north-northeast trending gougy fault assayed g/t gold. Photo, below: Project Geologist Egay Fetiza, sampling at Archangel. In 2006, two reconnaissance diamond drill holes, 500 meters apart, were drilled to test the strong chargeability anomaly coincident with copper-oxide showings and quartz veining. They intersected dacite porphyry, diorite, and quartz diorite stocks intruding andesite and dacite volcanics with porphyryrelated alteration. Weak to moderate sulphides were intersected, including pyrite and minor chalcopyrite, covellite and bornite associated with galena and sphalerite. The holes bottomed at 500 meters depth in the anhydrite-gypsum zone of the porphyry system, which is normally adjacent to the potassic mineralized core. The information will be used to target later drilling with a larger drill rig to vector into the mineralized porphyry center. Marita The Marita prospect is located northeast of Kay Tanda, and is a one kilometer by 700 meter, high-chargeability zone with a coincident high-resistivity anomaly. The area is underlain by volcanics intruded by dioritic to dacitic intrusives, capped and masked by young volcanic cover to the northwest. Alteration is phyllic, overprinted by intense argillic alteration. Detailed mapping, including analysis of fracture pattern, and trenching activities revealed strongly oxidized quartz-sulphide stockworks, in places with associated copper mineralization. A highly silicified and stockworked boulder contains disseminated chalcopyrite and assayed 9.92 g/t gold (surface-enriched). Independent consultant, Dr. Bruce Rohrlach, using PIMA data, summarized his findings, The Marita area is associated with a very distinctive circular zone of sericite alteration that is approximately one kilometer in diameter. Within this illite alteration lies an arcuate zone where illite occurs in association with jarosite. Jarosite is a common weathering product of pyrite and is seen in a number of porphyry systems that have extensive jarosite development in their leached caps. The arcuate jarosite zone defined by PIMA is broadly similar in shape and position to the arcuate core of the IP anomaly (>40 msec at n=3). Hence it is reasonable to suspect that the sulfides that define the core of the IP anomaly are also responsible for the jarosite development where they are oxidized at surface. p. 26

27 2007 Annual Report TALAHIB PROSPECT: A PROMISING PORPHYRY PROSPECT The Talahib prospect is located about eight kilometers west of Lobo Project and eleven kilometers southwest of Freeport McMoRan s Taysan porphyry deposit. Reconnaissance work has located significant copper and gold mineralization at Talahib. The prospect area is underlain by andesitic volcanics intruded by a series of phyllic and SCC-altered diorite and microdiorite intrusions, and capped in places with younger Quaternary tuff. Stream sediment sampling yielded strong anomalies to 650 ppm copper, 468 parts per billion (ppb) gold, 100 ppm lead and 327 ppm zinc. Reconnaissance rock channel sampling of heavily mineralized hydrothermal breccia assayed 3.33 percent copper and 0.10 g/t gold over 20 meters, which included 6.55 percent copper and 0.16 g/t gold over ten meters. About 200 meters south of this, an outcrop of SCC-phyllic altered diorite gave 0.74 percent copper and 0.15 g/t gold over 30 meters. Another channel sample from phyllic-altered diorite outcrop 500 meters north of the hydrothermal breccia, assayed 1.04 percent copper and 0.09 g/t gold over 20 meters. Detailed work including soil geochemical and induced polarization surveys are planned for 2008, followed by drilling, subject to receipt of an exploration permit. SW BRECCIA MINERAL RESOURCE Past work by Mindoro outlined from five to seven kilometers of northeast-trending epithermal vein/breccia trends on the Lobo Project. Mineralization along these epithermal trends occurs as both low-sulphidation gold and high-sulphidation copper-silver, with lesser gold, mineralization shoots. Two such mineralization shoots are SW Breccia, where Mindoro has drill-defined a nearsurface gold resource, and the old Lobo Mine, where copper was mined during the 1960 s. High gold-copper-silver values occur at surface in a number of areas along these trends. There are likely other mineralization-shoots not exposed at surface that will require drilling to discover. At SW Breccia on the Camo Trend, a National Instrument compliant resource estimate was prepared during 2004, based on 25 shallow drill holes completed by Mindoro using a man-portable diamond drill rig. Photo, above: Geologist Maya Arguelles examining outcrop on Archangel Project. Indicated resources, to a depth of 130 meters are as follows: SW Breccia Zone 0.5 g/t Au cutoff Category Contained Au ounces Tonnes Au (g/t) Indicated 56, , Inferred 10,540 61, Mineral resources which are not mineral reserves do not have demonstrated economic viability. The tonnage and contained ounces figures above have been rounded to the nearest thousand and gold grades to the nearest 2nd decimal, which may have resulted in minor discrepancies. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. The mineralization is believed to be open to depth and to the south-west along strike. There is high potential to expand the SW Breccia resource, and to locate new resources on the adjacent the five to seven kilometers of vein-breccia trends at Lobo. p. 27

28 Mindoro Resources Inc. CALO-PICA COMPILATION THE CALO PORPHYRY COPPER-GOLD PROSPECT A cluster of unusually large Induced Polarization (IP) anomalies has been defined at Calo, with extremely high chargeability readings of up to 100 msecs against a background of 6-8 msecs. The chargeability anomalies, which occur at the intersection of strong regional northwest to southeast, and northeast to southwest structural features, suggest large concentrations of metal sulphides below the younger cover volcanics. Evidence that the sulphides defined by the IP survey relate to porphyry coppergold mineralization include: the Pica porphyry copper-gold mineralization already drill-intersected by Mindoro on the far southeastern margin; the erosional windows of advanced argillic, phyllic and SCC (sericite-clay-chlorite) alteration; copper-stained, massive silica boulders, interpreted as porphyry system lithocap located in the southern part of Calo; abundant epithermal copper and gold showings occur along the western and eastern margins of Calo, and include high-sulphidation epithermal copper-gold-silver veins and skarn mineralization; and the occurrence of a diatreme breccia. All are features characteristic of Philippine porphyry copper-gold systems. Much of the anomaly cluster, which is at least four kilometers by six kilometers in extent, is covered by younger rocks; with the source, therefore, being obscured. The anomalies are interpreted as related to porphyry-copper-gold mineralization, possibly with multiple mineralization centers. High-sulphidation epithermal copper-gold showings, along with advanced argillic alteration - which are usually indicative of proximity to porphyry mineralization in the Philippines - as well as diatreme breccias and porphyry-type alteration, occur around the margins of the chargeability anomalies, and in erosional windows. Porphyry copper-gold mineralization has already been drillintersected by Mindoro on the far-eastern margin of Calo, where Pica drill hole two intersected 213 meters of 0.18 percent copper and 0.30 grams per tonne gold below a cap of advanced argillic alteration. In the southwest part, young volcanic cover above the chargeability anomaly contains exotic copper mineralization, which is typically associated with porphyry copper deposits. The volcanic breccia contains clasts cemented by supergene copper minerals and have been mapped over an area of 100 meters p. 28

29 2007 Annual Report by 300 meters. Two trench channel samples gave 2.62 percent copper over 30 meters, and 2.17 percent copper over 20 meters. This exotic copper occurrence, typical of those associated with South American porphyry copper deposits, also implies a significant copper source in the underlying rocks. Main features are shown on the Calo-Pica Compilation map on page 29. Reconnaissance drill-testing with a large diamond drill rig commenced in late Seven wide-spaced holes, up to two kilometers apart, were completed for a total of 3,323 meters. Objective was to intersect indications of porphyry copper-gold alteration/mineralization and then to vector into mineralization centers with closer spaced drilling. Location of the drill holes is shown on the Calo-Pica Compilation map: Hole 1 encountered young cover rocks down to 162 meters, then interbedded tuffs, volcanic breccias and andesitic lavas hole bottom of 502 meters. Opaline silica and illitic clay alteration were confirmed by petrography near hole bottom. Fracture controlled and disseminated fine pyrite increase to 15 percent with depth. The increased pyrite is associated with moderately anomalous moderate copper and zinc, and weakly anomalous gold and arsenic. The significant pyrite content may suggest a porphyry source. The hole was prematurely terminated due to continuous ground collapse. Hole 2 intersected intercalated volcanic breccias, porphyritic andesite, basaltic andesite and tuffs, was drilled to 620 meters. Significant hydrothermal opaline, chalcedonic silica and barite occur, possibly indicating pulses of epithermal alteration. Structurally controlled sericite alteration is also present. This alteration is weak and probably distal to a porphyry system. Hole 3 intersected intercalated sediments and andesitic volcanics. Zones of moderate argillic alteration were encountered near surface, with propylitic alteration to end of hole at 226 meters. Within the altered andesitic unit, galena, chalcopyrite and sphalerite occur in veinlets and fracture fills. Photo, below: Exotic copper mineralization, Calo project. A 10.5 meter wide fault breccia occurs at 94 meter depth with stringers of chalcopyrite-pyrite. Throughout the propylitized unit, pyrite disseminations and trace chalcopyrite occur. Only weak porphyry-related alteration/mineralization zoning is evident in this hole. Hole 4 to 60 meters intersected argillic to intermediate argillicaltered andesitic flows and lapilli tuffs, with gypsum veins plus minor pyrite (to 10 percent) and chalcopyrite. To hole bottom at 360 meters, weakly propylitized porphyritic andesite with localized sericite and epidote alteration was encountered. Only weak porphyry-related alteration/ mineralization was encountered in this hole. Hole 5 intersected weakly argillic-altered andesitic tuff down to 46 meters, followed by argillic to intermediate argillic-altered, gypsum-anhydrite veined lithic and andesitic lapilli tuff down to 250 meters, with a 4 meter massive vuggy silica intercepted from 61 to 65 meters from which a sample assayed 1.18 g/t gold. To end of hole at 456 meters, propylitized porphyritic andesite occurs, intruded by narrow propylitic and phyllicaltered diorite dykes, which are likely distal to a porphyry system. Hole 6 intersected cover volcanics to 296 meters, and below these, the Talahib Volcanics to end of holes at 358 meters; generally with weak alteration, but containing structurallycontrolled zones of argillic alteration and pyritization (to 5 percent pyrite). No significant mineralization was encountered in this hole. Hole 7 intersected 580 meters of cover volcanics, volcaniclastics and tuff above the Talahib Volcanics. Clasts of diorite intruding volcanics were found in the tuff (which is a lahar, or locally transported flow debris). Petrology by Mindoro s independent petrology consultant describes strong potassic (secondary biotite to 20 percent), clay (to 10 percent) and chlorite (to 10 percent) alteration and silicification (to 25 percent), with from trace to one percent chalcopyrite (copper-iron sulphide) and up to three percent hydrothermal magnetite in clasts of the diorite and volcanics. These clasts are interpreted to be derived from the core of a porphyry copper-gold system some hundreds of meters to the west, where there is a diatreme about 700 meters distant. This diatreme contains argillic-altered clasts set in fine pyritic (up to 15 percent) matrix. Diatremes are commonly associated with porphyry copper-gold deposits in SE Asian island arcs. Anomalous soil values of up to 150 parts per million copper are noted in proximity to the diatreme. Cover thickness near the diatreme is thin. Hole 7 passed from the lithic tuff into propyliticaltered andesitic volcanics at 710 meters. All results to date are being carefully evaluated to assist in vectoring in to the mineralization center in a second, more focused, round of drilling. Clearly the diatreme area will be one of the priority areas for that more detailed drilling. p. 29

30 Mindoro Resources Inc. EL PASO PROSPECT: ABUNDANT COPPER SHOWINGS AND TWO LARGE IP ANOMALIES Main features of El Paso are shown on the El Paso Compilation on page 31. The El Paso EP, covering 6,315 hectares, was granted in It is located 11 kilometers southeast of Freeport McMoRan s Taysan porphyry copper-gold deposit and seven kilometers northeast of Mindoro s Pica porphyry copper-gold prospect. El Paso is immediately north of the major west-northwesttrending structural boundary that separates older northeastern batholithic terrain (San Juan Diorite), and the younger southern volcanic terrain. This major boundary is an especially favorable structural setting, which served to localize mineralizing intrusions, including Taysan. The area is underlain largely by San Juan Diorite with islands of metavolcanics, intruded by younger hornblende quartz diorite to hornblende diorite and andesite porphyry intrusions, and overlain in places by younger Quaternary volcanic tuff. Extensive porphyry-related phyllic and intermediate argillic alteration has been mapped, as well as potassic alteration in places. Widespread copper-gold mineralization occurs associated with the younger andesite porphyry and hornblende quartz diorite to hornblende diorite intrusions, as well as the older, more-eroded San Juan Diorite. The mineralization associated with the former is the principal target. In the southwest part of the El Paso prospect, copper ± gold mineralization had been known historically and was tested with shallow drill holes by a previous operator in the mid-nineties. Results are unknown. However, the area tested by drilling is not associated with significant IP anomalies and is considered to represent copper ± gold mineralization on the periphery of the porphyry copper-gold system. A thin cover of volcanic ash obscures much of the area, but scattered outcrops indicate geology consists of stocks of younger fine-medium grained hornblende quartz diorite, hornblende diorite and andesite porphyry intruding metavolcanics. Independent petrology confirms that alteration consists of quartz-sericite-chlorite±epidote and sericite-clay-chlorite. These alteration assemblages are common to Philippine porphyry systems and are usually transitional to the core potassic zone at depth. The petrology also confirms the presence of quartz veining with magnetite and the copper minerals chalcopyrite and bornite. A channel sample from the metavolcanics yielded 0.24 percent copper over 15 meters. Recent trenching within the medium grained hornblende quartz diorite to hornblende diorite at the central part of the area, northwest edge of Mulawin, gave 0.88 percent copper, 0.14 g/t gold and up to 57 parts per million molybdenum over 15 meters. These suggest the strong chargeability anomaly below is of considerable potential. High molybdenum values of 806 parts per million over a 10 meter trench are associated with a younger quartz diorite stock at Calantas, and also suggest a porphyry source. The results of a trenching and channel sampling program at El Paso appear in the compilation map and table on page 31. High copper values in the one percent plus range were outlined in most trenches excavated southwest of the prospect, over lengths from three meters to 30 meters. Negotiations are in place to form a joint venture on El Paso with the objective of advancing the project to the drill stage in late 2008 early Subsequent IP surveys by Mindoro defined two large and strong chargeability anomalies, known as Calantas and Mulawin, approximately two kilometers east of the drill-tested copper ± gold showings. Each is about two kilometers by one kilometer in extent with chargeability values ranging from 20 to over 50 msec, against a background of 4 to 8 msec. Photo, right: Molybdenite mineralization in SCC-altered, medium-grained diorite, Calantas Target, El Paso Project. p. 30

31 2007 Annual Report EL PASO COMPILATION EL PASO TRENCH / CHANNEL RESULTS Trench No. Length (m) Cu (%) Au (g/t) Ag (g/t) Mo (ppm) TRN < TRN TRN TRS TRS TRS TRS TRS TRS TRS <0.50 TRS TRS TRS TRS < TRS TAL CAL TR TR TR TR TK TK TK TK p. 31

32 Mindoro Resources Inc. pan de azucar project Photo, above: The dramatic volcanic caldera of Pan de Azucar Island. PAN DE AZUCAR PROJECT: PORPHYRY MINERALIZATION YET TO BE DRILL- EVALUATED The Pan de Azucar MPSA covers 535 ha on Pan de Azucar Island and adjacent Panay Island. Under a 1997 agreement with a private Philippines company, Minimax Mineral Exploration Corporation, Mindoro may earn a 75 percent interest in the Pan de Azucar Project through phased exploration expenditures and issues of shares. Mindoro has earned a 40 percent interest to date. Geology and Mineralization The Pan de Azucar Prospect is located within a collapsed caldera structure, where the dacitic-andesitic caldera-fill package hosts pervasive replacement and structurally-controlled alteration and mineralization. Dacitic units are preferred hosts to mineralization. An epithermal, massive pyritic-sulphide deposit, the Valderama Zone, with low to moderate grade copper-goldzinc-silver values was drill-intersected by Mindoro in 2001 and a porphyry copper-gold target located at Asparin Hill in Photo, above: Geologist working on Pan de Azucar. p. 32

33 2007 Annual Report Valderama Zone: Massive Sulphide Mineralization A 2001 scout drill program, consisting of 1,041 meters, encountered promising copper, gold, silver and zinc values at shallow depths, for example: 37.1 meters of 0.8 percent copper, 1.87 g/t gold meters of 0.69 percent copper, 1.21 g/t gold, 4.34 g/t silver, and 0.63 percent zinc (true thicknesses). A second drill program in 2002, consisting of 431 meters, encountered lower, more irregular grades. The zone is open to the north for a further meters, to the property boundary, where gossanous outcrops are present. The Valderama epithermal replacement mineralization is believed to be related to an adjacent porphyry copper-gold system. Based on drilling to date, the Valderama Zone averages between 36 percent and 40 percent sulphur. Mineralization is near-surface, and a few hundred meters from tide water. It may, therefore, have potential for a low-cost sulphur source for sulphuric acid production for treatment of the numerous lateritic nickel deposits going into production in the Philippines and elsewhere in the region and for fertilizer production. Mindoro s main priorities, however, are the remaining Pan de Azucar copper-gold targets and Mindoro s projects elsewhere. Asperin Hill: Porphyry Copper-Gold Prospect A short, 45 meter drill hole was completed on the Asparin Hill target, approximately 700 meters west of the Valderama Zone, to test an area of gossanous quartz-alunite boulders, also site of the strongest geochemical anomalies on the project, a coincident circular topographic depression some 300 meters in diameter, and a broad magnetic anomaly. This intersected dacitic rocks with intense porphyry-related alteration, including biotite alteration, plus disseminated and veinlet chalcopyrite mineralization. Both are characteristic of porphyry copper systems. Future work at Pan de Azucar will focus on the Asparin Hill porphyry copper-gold target. p. 33

34 Mindoro Resources Inc. social Responsibility Photo, above: Public forum hosted by Mindoro to present its Community Development Program, Archangel Project. TOWARDS RESPONSIBLE PARTNERSHIP Mindoro recognizes that any successful exploration venture must have the support of those local inhabitants whose daily lives are most affected by our activities. Mindoro s community engagement and social development policies are directed at establishing a solid, long-term relationship and encouraging communities to become active partners in the development of the mineral resources found in their areas. Social preparation and engagement are a vital prerequisite for our exploration activities. From the start of its exploration programs in the Philippines in 1997, before being mandated by the government, Mindoro introduced and utilized Information, Communication and Education (ICE) campaigns as one of the basic tools in linking with local communities and various stakeholders. ICE campaigns are the venue to explain our exploration activities and any accompanying environmental impacts and mitigating measures. Open and frank discussions have become part of the ICE process, and these are increasingly necessary, not just in the Philippines, but in most parts of the world, to counter the active and cynical misinformation campaigns spread by various anti-mining groups; none of whom, it is observed, seem quite ready to give up the benefits of mining products. Mindoro instituted the Community Technical Working Group (CTWG), in collaboration with local government units and non-government organizations, including representatives from business and the church. This multi-sector group is an avenue by which issues and concerns of the community are raised, discussed, and resolved. The group plays an active role in monitoring the social and environmental impact of the company s exploration activities and any mitigating measures. The CTWG has provided valuable input and acted as Mindoro s partner in planning and implementing the company s extensive community development programs. There are currently sixteen CTWGs organized within Mindoro s permit areas. The CTWGs technical capabilities are enhanced through continuous training programs and seminars sponsored by the company and concerned government agencies. Mindoro particularly favours social development programs that focus on improving health, education, and employment. Mindoro recently instituted a micro-lending program, providing shortterm loans to establish various community livelihood projects. Programs supported to date by the micro-lending program include agricultural ventures (goat raising, vegetable production), sewing, baking native cakes and establishment of a small variety store. p. 34

35 2007 Annual Report 2008 MILESTONES In addition to the micro-lending program, some of the Company s major social development milestones included: facilitation of a major medical mission benefiting over 1,700 patients in the municipalities of Jabonga, Santiago and Tubay, a Memorandum of Agreement (MOA) with the Department of Education for the Adopt-A-School Program, a Memorandum of Agreement with the Indigenous People of Sitio Coro and the National Commission on Indigenous People for the implementation of a one percent royalty from the gross output of any future mine, as well as various livelihood, infrastructure and social services projects, and developing a program to create small-scale mining co-ops to assist and regulate small-scale mining activities. Photos, above from left to right: The CLDH 7 hole converted to water pump; Mindoro staff discusses plans with Catholic Archbishop Ramon C. Arguelles in line with the company s policy to involve the host communities in its projects. Photo, above: Thousands of Lobo residents celebrated Lobo Foundation Day at the Battle of the Bands organized and hosted by Mindoro. Photo, above: Ribbon cutting grand opening of farm to market road funded by Mindoro. Photo, above: Cultural show at launch of Adopt-a-School program, cosponsored by Mindoro. p. 35

36 Mindoro Resources Inc. Outreach 2007 Mindanao, Philippines After months of preparation, on July 2 to 6, 2007, a medical/ surgical/dental/optometry Outreach mission was carried out in the municipality of Santiago. The Outreach served nine barangays (E. Morgado, La Paz, Colorado, Lawigan, Tinigbasan, Tagpangahoy, Curva, Jagupit, and Binuangan). Approximately 1,700 people were helped during this five-day Outreach. Much needed medications were given out to patients. Of those people seen, 64 received minor surgical treatment, 237 received dental care, and 484 were given eye examinations and eye glasses. Mindoro provided logistical support for the Outreach, including arrangements for accommodation, cooking and serving meals, transportation for the medical team and for patients to and from their communities, purchasing medical supplies and arranging local medical and governmental support. Photo, above: Basic assessments were performed on all patients, who were then directed to physicians, dentists, and optometrist for further follow up. Shown: Pauline Supan, R.N., examines an infant to determine required medical services. Special thanks and acknowledgement are due to the following health care providers and supporters of the Outreach: Seton Health Services Foundation The Enriquez Family The Farris Family The Miller Family Department of Health Caraga Region Santiago Municipal Health Office Municipality of Santiago Philippine National Police Provincial Health Office, Agusan del Norte National Commission on Indigenous Peoples Dr. Hermie Payen Dr. Herman Valle Dr. Ron Enriquez Willie Caliente, RN Pauline Supan, RN Agnelica Farris, RN Angelica Escatron, RN Mechelle Cassion, RN Maria Clarissa Jovita, RN Cheezca Rachel Uy, RN A special thank you to Jean Gonzales and the entire staff of MRL Gold Philippines Inc., as well as the many other volunteers who donated their time and worked tirelessly to support the medical team and make the Outreach an overwhelming success. p. 36

37 2007 Annual Report Photo, above: Patients experienced the rare opportunity to receive professional dental care. Shown: Dr. Ramon Loja treats a young patient. Photo, above: 1,249 medical patients were seen during the Outreach. Shown: Dr. Hermie Payen examines a local resident. Photo, above: 64 patients received minor surgery during the Outreach. Shown: Dr. Hermie Payen performing minor surgery. Photo, above: 484 patients were seen in the optometry department and hundreds of donated eye glasses were distributed. Shown: one happy patient sees clearly for the first time. Photo, above: Some of the over 1,700 people who received care during the Outreach. The building, which previously held Mindoro s drill core, was renovated and donated to the community. p. 37

38 Mindoro Resources Inc. ENVIRONMENTAL Responsibility Photo, above: Jatropha seedlings at Mindoro tree nursery, Agata Project. PRO-ACTIVE PROGRAMS Mindoro is committed to developing and upholding the highest standards of environmentally responsible exploration and to the pursuit of sustainable development designed to directly improve the well being of our affected communities. Even though the impact of Mindoro s current exploration activities is relatively small, responsible environmental management is strictly implemented at all levels. Good housekeeping and proper waste disposal and segregation are practiced with non-biodegradable wastes given to the locals to reuse or recycle and the remaining wastes disposed of through Environmental Management Bureau-accredited buyers. Accurate pre-assessment of drill sites is conducted to minimize ground disturbance and post-drilling mitigation measures are strictly implemented. The environment management team employs slope stabilization measures in those areas that are prone to landslides and erosion. These measures include establishment of riprap and contour planting using local nitrogen fixing plants to prevent soil erosion and river siltation. Protection of water systems and prevention of soil contamination are major objectives of the company s environmental management programs. Oils, fuels and drilling additives are securely contained and fluid and water waste discharge from drilling are contained in catchment sumps to prevent ground water contamination. Excavated lands, such as sumps, compost pits, test pits and trenches, are fenced and stabilized. Disturbed areas are rehabilitated and planted, The company maintains its own nurseries and grows thousands of various trees and fruit species for its reforestation/rehabilitation programs. Continuous maintenance and protection of the rehabilitated site is carried out to ensure successful rehabilitation. Safety, Health and Environment (SHE) protocols for high-impact activities, such as drilling, are implemented and strictly observed. All personnel, including locally-hired workers, undergo SHE induction and orientation. Close coordination is undertaken with contractors to ensure across the board implementation of Mindoro s environmental and safety policies and standards. A particularly sensitive challenge to the environmental care of Mindoro s Tapian San Francisco Project exists in the form of artisanal (small-scale) mining activities. These artisanal miners typically lack the financial means and regulatory knowledge p. 38

39 2007 Annual Report 2008 MILESTONES to apply for small-scale mining permits on their own. As a result, many small-scale mining activities are unauthorized and unregulated, often employing both socially and environmentally questionable practices. Mindoro recognizes the importance of balancing the needs of the miners to earn a living and at the same time ensure that the mining activities are conducted in a socially and environmentally responsible manner. To achieve this objective, Mindoro, the Philippine Mines and Geosciences Bureau and other local government units have devised a strategy to create cooperatives to assist and regulate small-scale mining activities. Putting Mindoro s environmental policy into action is the mandate of Dr. F.S. Mon Monteros, who was recently appointed Vice President, Social and Environmental Management, of the company s Philippine subsidiary, MRL Gold. Dr. Monteros formerly held a senior position with the DENR-Mines and Geosciences Bureau where he was involved with information, communication, education and community development programs in partnership with mining companies. He was part of the DENR-World Bank project developing multi-sector partnerships in mining communities. His appointment reflects Mindoro s strong commitment to conducting its exploration and development programs in a socially and environmentally responsible manner. Photos, from top to bottom: Environmental officers participate in coastal resource management training; Periodic monitoring on the rehabilitated drill sites conducted by the environmental team in the project areas; Environmental officer Siegrid Macas and Annabel Cabiao during tree planting project. p. 39

40 Mindoro Resources Inc MILESTONES Photo above: MRL Gold Philippines Inc., Manila and Batangas Staff. (Back row from left to right: Joe Muhi GIS Specialist, Edsel Abrasaldo- VP Exploration, Chris Dieza VP Finance, Edgar Reyes General Manager, Romy Rebadomia Mine Manager, Mon Monteros VP Socio-Envt l, Clarence de Guia VP Legal, Albert Sumpo GIS Specialist. Front row from left to right: Mariefe de Guzman Tenements Officer, Jean Ravelo Data Manager, Karen Gonzales Accountant, Hazzell Aquino Admin Officer, Erlinda San Pedro Accounting Manager, Maya Arguelles Geologist, Passie de Vera GIS Specialist.) Photo above: MRL Gold Philippines Inc., Surigao Staff. (Back row from left to right: Elsa Diaz ComRel Officer, Melita Diez ComRel Officer, Melvin Sebua Geologist, Arnold Joyno GIS Specialist, Alan Buenavista Exploration Manager, Esteban Padugdog Asst. Environmental Mgt Officer, Rainerio Sabellano - ComRel Officer, Siegrid Macas Environmental Mgt Officer, Joanne Rejuso Accountant. Front row from left to right: Arlene Tibe Accountant, Venice Mosa ComRel Officer, Mary Jean Gonzales Socio- Environmental Manager, Gracy Cassion Admin Officer, Jesalyn Guinguing Environmental Management Officer) p. 40

41 CORPORATE INFORMATION INVESTOR RELATIONS Canada Mindoro Resources Ltd. Penny Gould Tel: (780) or Toll Free: (North America only) Fax: (780) Website: Europe Argentuminvest GmbH Richard Mayr Tel: Fax: Website: Oscar S. Reyes, Director. MANAGEMENT J. A. (Tony) Climie, P.Geol CEO, COO Penny Gould President Eugene D. Zarowny, CA, CFP CFO DIRECTORS A. Robson Garden, Q.C., B.A., LL.B. Chairman, Director J. A. (Tony) Climie, BSc, (Hons), P.Geol CEO, COO, Director Dr. Gerhard F. Kirchner, PhD, P.Eng Director Oscar S. Reyes, BA Director Robert Sarcher Director Doug Frondall, CA, CMA, CMC, CVA Director ADVISORY BOARD Terry A. Lyons, B.Sc. (Civil Eng.), MBA R. Michael Jones, B.A, BSc., P.Eng. OFFICES Canada Head Office Suite 104, Avenue Edmonton, Alberta, Canada T5S 1T1 Tel: (780) or Toll Free: (North America only) Fax: (780) Website: Philippines Subsidiary Office MRL Gold Phils., Inc. Unit 2, 7th Floor BDO Plaza, Paseo de Roxas Street Makati City Philippines Tel: or Fax: Website: Penny Gould, President SOLICITORS MacPherson, Leslie & Tyerman 2507 TD Tower, Avenue Edmonton, Alberta, Canada T5J 2Z1 TRANSFER AGENT Valiant Trust Company 2300, Jasper Avenue Edmonton, Alberta, Canada T5J 3X6 AUDITORS KPMG LLP Commerce Place Street Edmonton, Alberta, Canada T5J 3V8 BANKER ATB Financial Stony Plain Road Edmonton, Alberta, Canada T5S 2M9 ANNUAL MEETING The annual meeting of the shareholders will be held: DATE / TIME: August 12, 2008, at 10:00 am PLACE: Jasmine A Room, Hilton Garden Inn West Edmonton Stony Plain Road, Edmonton, Alberta, Canada SHARES LISTED TRADING SYMBOL TSX Venture Exchange MIO Frankfurt WKN For additional corporate and project information, visit the Mindoro website: