Saracen Mineral Holdings Limited holds a large tenement position in the South Laverton region covering substantial strike lengths of two major structural zones, the Laverton Techtonic Zone and the Keith-Kilkenny Techtonic Zone, which host most of the gold deposits in the region. Over 20Moz of gold has been discovered in the last 15 years in the Laverton and Keith-Kilkenny Techtonic Zones. The substantially under-explored covered areas, potential for blind flat-lying mineralised structures, growing understanding of the geological controls on gold deposits, and the large tenement holding, are factors that support the potential for further gold discoveries in the region.

Saracen is embarking on a well funded, agressive exploration campaign. The aim of this program is to increase resources and reserves so as to realise Saracen's strategic target of becoming a 250,000ozpa gold producer (see graph below).

In June 2011 the Saracen board approved an exploration budget of $25 million. Following a review of our targets and future production profile, this amount was increased to a total of $35 million in September 2011.

This amount includes:

• underground development at Red October and Porphyry to establish dedicated exploration drill drives
• tenement rates and rent
• in-ground drilling and assaying costs at Saracen's four project areas; Carosue Dam, Porphyry, Safari Bore and Red October
• personnel salaries and wages
• proportion of Perth office costs

• Inaugural years production of 111koz entirely from open pit sources
• Red October underground feed to commence in FY12
• Deep South, Porphyry, Whirling Dervish, and Twin Peaks, set to add to underground production profile
• Targeting ~50% underground mill feed contribution by FY15
• Carosue Dam target production of 250,000ozpa by FY15
• Target assumes either upgrade of existing CDO 2.4Mtpa facility or a northern ~1.0Mtpa facility
• Target production based on current SAR resources, and potential resource extensions/acquisitions