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TriAusMin’s Woodlawn Tailings Project On Track To Deliver Near Term Cash Flows

TriAusMin (ASX: TRO, TSX: TOR) is an Australian and Toronto listed explorer that is focused on developing a number of base and precious metals projects within the highly prolific Lachlan Fold Belt of New South Wales.

The Company is seeking near term production from the Woodlawn Tailings Retreatment Project that will process 11.2 million tonnes of high grade tailings to produce Total NSR Revenues of $586 million over 7.5 years.

Based on the Project Economic Valuation forecast Pre-Tax Net Cash Flows of $199 million versus TriAusMin's current market valuation of just $25 million, indicates TriAusMin is clearly significantly undervalued relative to project cash flows and returns.

High value longer term growth will flow from funding and development of the Woodlawn Underground Project and nearby ore sources.

Exploration upside is bolstered by solid prospects at Lewis Ponds, Overflow, and Calarie.

Share price: $0.12
Issued shares: 201.1m
Market cap: $24.1m
Cash: $2.9M

ANALYSIS

TriAusMin has a long history of acquisition and development efforts that are centred on the highly mineralised Lachlan fold Belt, and has accumulated an extremely prospective 770 square kilometre land position. This includes a number of high value projects that can provide both near term and long term development opportunities.

The Woodlawn Retreatment Project hosts a JORC compliant Reserve of 11.2 million tonnes of high grade tailings that can be processed at a rate of 1.5 million tonnes per year, for 7.5 years, to generate approximately $750 million based on current spot metal prices.

The Project is the first step in reactivating the Woodlawn property commencing with a project that provides a short lead time to production and good cash flows.

The re-treatment project has now been given the green light for development and will process 11.2 million tonnes of tailings material to produce separate zinc, lead and copper concentrates with by-product gold and silver.

Development of the Project over the next 18 to 24 months will allow TriAusMin to join the ranks of the producing mining companies and position itself for growth of its mining business in the years ahead.

The Woodlawn Underground Mining Project hosts JORC confirmed in-situ resources of 1.03 million tonnes of zinc, 0.41 million tonnes of lead, 0.18 million tonnes of copper, and 27,000,000 ounces of silver and 167,000 ounces of gold.

Measured, Indicated and Inferred resources are known to be present at a depth of 630 metres below the surface, and definition of additional mineralised resources is currently underway.

Historical drilling across the Woodlawn tenements demonstrated the presence of gold and base metals and will be evaluated as part of the Woodlawn Exploration Project.

Lewis Pond hosts a JORC compliant Indicated Resource of 6.35 million tonnes at 2.4% zinc, 0.2% copper, 1.4% lead, 1.5 g/t gold and 68 g/t silver, along with numerous occurrences of gold and base metals identified across the project area. A VTEM study in 2010 identified a number of high priority targets that were partially drilled in late 2011 along with shallow mineralisation over the Main lode. This drilling delivered significant mineralised intercepts.

A number of other projects are also under development and include Cullarin, Overflow and Calarie.

MANAGEMENT AND SHAREHOLDINGS

William F Killinger serves as Non-Executive Chairman, with more than 40 years global experience in civil engineering construction associated with mineral and industrial projects. He has served as a director of a number of companies in the mining and construction business that includes a six year term as Managing Director of Minproc Engineers Limited, one of the world's leading engineering and construction companies in the mining and
mineral treatment industry.

Wayne R Taylor serves as Chief Executive Officer and Managing Director. He is a mining engineer with over 20 years experience in mining operations, project evaluation and acquisition, and exploration in the base and precious metals fields. He previously held senior operational management roles with Western Mining Corporation and Glencore International's Australian operations.

Dr. Robert I Valiant serves as Non-Executive Director and is a qualified geologist. He co-founded Tri Origin Exploration (TSX-V: TOE) and TriAusMin, and was responsible for listing the Company on the ASX and TSX. He was employed by LAC Minerals as VP of Exploration and made a number of significant discoveries at Bousquet, Doyon, and the Page Williams Mine at Hemlo, one of Canada's largest gold deposits.

Alan J.E. Snowden is a Non-Executive Director, and is a professional Corporate Director with over 30 years experience in global financial markets,

and has 20 years experience as an independent Board Director. He is a former Senior VP of Corporate Planning Associates, VP & Director for Western Canada of BMO Nesbitt Burns Inc., and Executive Director of Odlum Brown Limited.

James W Gill serves as Non-Executive Director and is a geologist with over 40 years of experience in exploration, mine development and operations, acquisitions and project financing. He founded Aur Resources which developed into a significant copper company that was taken over by Teck Resources.

The Directors of the Company hold 15.2 million shares or 7.56% of the issued shares.

FUNDING

The Company holds cash of A$2.9million, and has issued 8.7 million options at exercise prices of $0.10 - $1.54 from 01/12/2012 - 27/06/2016 that may provide additional funds.

WOODLAWN TAILINGS RETREATMENT PROJECT

Lachlan Fold

TriAusMin owns a 100% interest in the Woodlawn Tailings Retreatment Project which includes former mining and tailings areas that are located 30 kilometres south of Goulburn. The Woodlawn tailings form part of a much larger project area that cover 530 square kilometres.

The former Woodlawn mine produced a total of 13.8 million tonnes of ore from the Woodlawn open pit, underground mine, and satellite deposits, at grades of 9.1% zinc, 1.6% copper, 3.6% lead, 74 g/t Ag and 0.5 g/t Au. The Retreatment Project will re-process the tailings material that is remnant

from this production. The mine shut down operations in 1998 due to low metals prices and corporate issues faced by the mine owner at the time.

Veolia Environmental Services currently hold the surface rights to the Woodlawn mine site and operate a waste management facility and bioreactor at the site. TriAusMin holds the mineral rights to the area and agreements between Veolia and TriAusMin enable the reprocessing of tailings and underground mining to proceed over the longer term.

The Woodlawn Retreatment Project will recover base and precious metals from tailings using high pressure water jets (hydraulic mining) to drive the ground ore to a pulping circuit, and delivery to a conventional base metals concentrator to undergo further grinding, flotation and filtering to produce copper, zinc and lead concentrates carrying silver and gold credits.

Tailings are held in three tailings dams which have a combined JORC reserve of 11.2 million tonnes at 2.2% zinc, 1.3% lead, 0.5% copper, 31 g/t silver and 0.3 g/t gold, sufficient for production rate of 1.5 million tonnes per year for 7.5 years.

TriAusMin has confirmed that recovery of metals from tailings includes 170,000 tonnes of zinc, 40,000 tonnes of lead, 30,000 tonnes of copper, 14,000 ounces of gold, and 3.5 million ounces of silver .

Following the recent completion of a Front End Engineering Design study and the decision to proceed, the Company is currently assessing a range of financing options.

Project Economics Evaluation

An economic evaluation forecasts the Project to generate A$199 million in net cash pre-tax and provide an Internal Rate of Return (NYSE:IRR) of 33% over its 7.5 year mine life based upon development capital costs of approximately A$92.8 million (US$96.5 million).

PROJECT HIGHLIGHTS

The Base Case Scenario indicates an above average return and on invested capital and is based upon forward curve metal prices and foreign exchange rates as at February 27 2012.

Mineral Reserves: 11.2 million tonnes at 2.2% Zn, 1.3% Pb, 0.5% Cu, 31 g/t Ag, 0.3 g/t Au
Mining: 4,300 tonnes per day (1.5 Mtpa) utilising hydraulic mining
Mine Life: 7.5 years
Processing: Conventional milling and flotation to produce Cu, Zn, and Pb concentrates containing Ag
and Au
Development Capital: $92.8 million including a $5.6 million contingency
Site Operating Costs: $22 per tonne processed
Total NSR Revenue: $586 million
Pre- Tax Net Cash Flow: $199 million
Pre-Tax NPV10: $81 million
C1 Unit Cost: $0.12/lb payable zinc (post by-product credits)
Pre-Tax Project IRR: 33%

Capital Costs

The construction capital cost estimate is provided below.

Woodlawn Retreatment Project Construction Capital Cost Estimate

Working capital of A$5 million is required to cover pre-revenue operating costs in addition to the construction capital. Minimal sustaining capital will be required during the 7.5 year mine life.

Closure costs have been estimated at A$4.5 million.

Operating Costs

PROCESS PLANT AREA CAPITAL COST A$M

Process Plant $53.5
Infrastructure $11.3
Engineering, P&G, Commissioning, First Fills $18.1
Contingency $5.6
TSF 4 Construction (non GRES) $2.6
Mining Capital + Mobilisation (non GRES) $1.7

TOTAL CONSTRUCTION CAPITAL ESTIMATE $92.8 (US$96.5)

Project Enhancements

Interestingly, the Company has identified a number of opportunities to further enhance the financial performance of the WRP through improved metallurgical recoveries and mining costs could be reduced through the application of owner operated mining.

The project has established water, power, and road access, and enjoys local community and state government support.

The Tailings Retreatment Project presents a low risk reserve, mining and processing project with attractive economics at metal prices significantly below current and forecast future levels. An additional key feature of the Project is the short lead time from construction to production.

WOODLAWN UNDERGROUND MINING PROJECT

The Woodlawn Underground Mining Project is 100% owned and hosts an independently calculated JORC compliant Measured and Indicated Mineral resource of 8.6 million tonnes at 10.3% zinc, 4.0% lead, 1.8% copper, 84 g/t silver, and 0.5 g/t gold; plus an additional Inferred Resource of 1.5 million tonnes at 9.6% zinc, 4.1% lead, 1.7% copper, 87 g/t silver, and 0.6 g/t gold.

This resource contains in-situ metal of 1.03 million tonnes of zinc, 0.41 million tonnes of lead, 0.18 million tonnes of copper, along with 27 million ounces of silver and 167,000 ounces of gold.

TriAusMin has completed a detailed technical analysis of the historic mining lodes within the underground mine and has targeted a conceptual 200 to 300 metre extension to the most prolific mineralised lodes for additional resource definition. Diamond drilling commenced in February 2012.

Re-development of the Woodlawn Underground Mining Project has a number of key development advantages that include access to previous underground mining areas with extensive infrastructure still in place. The mined ore also has known processing characteristics that reduce the potential risks in assessing metallurgical performance and the potential for ore extensions at depth is very high. Importantly, this will allow the mine to be fast tracked back into production at lower capital expense.

WOODLAWN DISTRICT EXPLORATION

Drill Rig

The tenements around the historic mining area contain untested base and precious metal targets along with known deposits with expansion potential that are within trucking distance of the proposed process plant at the Woodlawn mine-site.

Previously defined resources were mined at the Currawang Mine with 539,000 tonnes at 1.8% copper, 2.3% lead, 13.8% zinc, and 38 g/t silver, which is

10 kilometres from the Woodlawn mine; and the Cowley Hills Mine with 35,000 tonnes at 2.0% copper, 2.6% lead, 4.2% zinc, 95 g/t silver, and 1.8 g/t gold, which is 1 kilometre from the Woodlawn Mine.

TriAusMin also holds tenements extending 50km to the north and 50km to the south of the Woodlawn site that cover the prospective felsic volcanic belt.

RECENT DRILLING RESULTS

Tube

The first drill hole, WLTD011, intersected a number of high grade base and precious metal mineralised zones including:

- I Lens: 9.9m @ 1.64% Cu, 1.22% Pb, 6.09% Zn, 14.13g/t Ag, 0.72g/t Au (from 542.65m) D Lens: 15.0m @ 0.17% Cu, 1.94% Pb, 5.04% Zn, 22.13g/t Ag, 0.19g/t Au (from 676m).

- B Lens: 4.0m @ 3.31% Cu, 12.84g/t Ag (from 849m)
- B Lens: 12.1m @ 4.84% Cu, 14.87g/t Ag (from 870m)

These results confirm the existence of significant mineralisation down plunge from where previous operations stopped and it gives rise to the potential to define further resource extensions.

The high grade copper intersections below the base of B lens are significant and supported by other drill results further along strike and both up and down dip of this intersection.

LEWIS PONDS PROJECT

The Lewis Ponds tenement is approximately 164 square kilometres in area and is located 15 kilometres east of Orange.

The region is well known for being prospective for a variety of deposit types including volcanic hosted massive sulphide deposits and orogenic gold deposits found within a belt of Silurian felsic volcanics and associated sedimentary rocks. These volcanics host the McPhillamys deposit that is located 25 kilometres south of Lewis Pond, and contains 3 million ounces of gold along with the much larger resources at the Cadia and Ridgeway
Mines.

At Lewis Ponds ,TriAusMin identified a Measured and Indicated Resource of 6.4 million tonnes grading 2.4% zinc, 0.2% copper, 1.4% lead, 68g/t silver and 1.5 g/t gold, and an additional Inferred Mineral Resource of 0.3 million tonnes of 3% zinc, 0.1% copper, 1.9% lead, 96g/t silver, and 0.6g/t gold.

Recent drilling (2,186 metres) in late 2011 evaluated the open pit potential above the identified JORC resources and reported a number of very significant intersections:

- 39 metres at 1.65% Zn, 0.91% Pb, 0.19% Cu, 0.53 g/t Au and 53 g/t Ag from a depth of 35 metres (LPRC039); and included 4 metres at 9.07% Zn, 3.95% Pb, 0.81% Cu, 3.63 g/t Au, and 253 g/t Ag from a depth of 66 metres.

The shallow drilling confirmed the presence of broad zones of mineralisation at interpreted up plunge extensions of Toms and Main lodes.

A 2010 VTEM survey revealed a number of new targets that may represent buried sulphide mineralisation. Drilling of four of these electromagnetic anomalies struck significant levels of mineralisation at White Rock and Browns Creek and confirmed regional prospectivity.

OVERFLOW PROJECT

Overflow covers 46 square kilometres and is located 90 kilometres south of Cobar.

The Project area contains the Overflow Mine that produced 4,500 ounces of gold, 15,000 ounces of silver, and 775 tonnes of lead with minor copper and zinc, and is adjacent to the Cobar Basin, which is one of Australia's most significant mining districts.

A VTEM Survey was completed and identified a number of high priority targets for systematic follow up.

CALARIE GOLD PROJECT

TriAusMin's Calarie Project is located 3 kilometres from Forbes.

In July 2011, TriAusMin entered into a Farm-In agreement with Goodrich Resources, where they can earn a 75% interest by spending $2.5 million on exploration over 3 years. The tenements are being explored for both porphyry copper gold and epithermal style deposits.

Goodrich has completed an initial drilling program at the Lachlan deposit and has confirmed a JORC compliant Inferred Resource of 0.5 million tonnes at 2.2 g/t Au at a 1 g/t Au cut-off. The resource is near surface, open at depth and along strike, and a drill intercept at 120 metres below the surface suggests excellent potential for further resource increases.

Drilling at the Wattlegrove gold prospect at GC005 intersected 21 metres at 1.13 g/t Au at a depth of 105 metres and indicates potential for a near surface small tonnage deposit similar to Lachlan, within an untested strike line that extends for 8 kilometres. Goodrich has also commissioned an IP survey over the central area of the project area centred on Bald Hill.

ANALYSIS

TriAusMin is developing three key projects that include retreatment of the Woodlawn tailings, re-opening of the underground mine and a regional exploration effort that has identified numerous base metal prospects.

The Company has unveiled production parameters for the Woodlawn Tailings Retreatment Project with a strong Project return of A$199 million in net pre-tax cash flows and provide an Internal Rate of Return (IRR) of 33% over its 7.5 year mine life based upon development capital costs of approximately A$92.8 million (US$96.5 million).

Project Development costs are a very reasonable $92.8 million including a $5.6 million contingency relative to projected revenues.

The Project is the first step in reactivating the Woodlawn property commencing with a project that provides a short lead time to production in 18-24 months.

In addition, the Company is moving toward re-establishing the Woodlawn underground mine with the current drilling program aiming to outline additional high-grade mineralisation below the previously mined ore lenses.

We understand the Company has commenced discussions regarding the financing of the Project. Construction is expected to commence in the third quarter of this year.

This project will see TriAusMin advance from an exploration company into a cash flowing mining enterprise over the next two years.

Based on the Project Economic Valuation forecast Pre-Tax Net Cash Flows of $199 million versus TriAusMin's current market valuation of just $25 million, indicates TriAusMin is significantly undervalued relative to project cash flows. In fact, for an ASX and Toronto listed explorer, the under-valuation is even more pronounced given production could be only 18-24 months away.

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