MINCOR RESOURCES NL

ACN 072 745 692

CHAIRMAN'S ADDRESS TO THE FIFTEENTH ANNUAL GENERAL MEETING OF MINCOR RESOURCES NL TO BE HELD ON WEDNESDAY, 9 NOVEMBER 2011 AT 11.30AM AT THE CELTIC CLUB, 48 ORD STREET, WEST PERTH

I am pleased to report that your Company has operated to a high standard of safety in the year under review, and to date in the current financial year.
The 2011 annual report gives details of our safety procedures and the continuing action being undertaken to maintain our excellent safety record.
Our financial results for the 2011 financial year were not satisfactory and were adversely affected by a costly seismic event at Mariners Mine in July 2010 and ground stability problems which occurred at Otter Juan in March 2011; as well as the under-performance of our Miitel Mine.
These factors, combined with a lower nickel price and high Australian dollar led to the Company incurring a non-cash impairment charge of $24,994,000 relating to our mining properties, plant and equipment.
As a consequence of this non-cash charge, a consolidated loss attributable to our shareholders reserves of $23,391,000 was recognised
Our earnings before interest, tax and depreciation and amortisation (EBITDA) were $16,290,000.
Net positive cash inflow from operating activities was $26,201,000 compared to $99,491,000 in the previous year. After the investment of $49,023,000 in property, plant, equipment and exploration, evaluation and development, and the payment of $16,049,000 (2010: $14,012,000) in dividends to shareholders, our cash balance reduced from $126,797,000 at 30 June 2010 to $87,342,000 at 30 June
2011.
Our working capital position at 30 June 2011 was sound at $92,973,000 and we carry no debt. This is an important prudent attribute in the uncertain and volatile circumstances currently evident in the global financial markets and in the economic conditions applying in most developed economies.
In light of our strong liquidity position the directors declared a 2 cent per share fully franked interim dividend in March 2011 and a 2 cent per share final dividend for the year ended 30 June 2011.
We took strong strategic and executive action throughout 2011, and the benefits of these decisions are seen in the highlights of our quarterly report for the period ended 30 September 2011:

Nickel production is up 28% to 2,797 tonnes (June quarter 2,181 tonnes)

Nickel grade up 39% to 3.4% nickel (June quarter 2.44% nickel)

Cash costs down 35% to A$5.71 per pound of nickel (June quarter A$8.86 per pound)

Operating surplus up 378% to A$18.9 million (June quarter A$3.9 million)

We are confident our new management structure and streamlined operational plans, will enable us to produce at satisfactory rates at Kambalda for the foreseeable future.
Our September 2011 report to the market also showed exciting new strikes of high-grade nickel sulphides at our South Miitel mine, which included:

6.10 metres @ 7.85% nickel (estimated true width);

6.80 metres @ 5.95% nickel (estimated true width);

4.93 metres @ 7.59% nickel (estimated true width)

At September 2011 quarter end, working capital was A$85,630,000 with cash at bank of A$79,340,000 which is after providing for investments in capital works and exploration of A$9,100,000, dividends to shareholders A$4,000,000, share buy-back payments A$3,500,000 and a A$5,000,000 investment in Niuminco Ltd, our partner in our new PNG project.
Our community participation, particularly in the Kambalda and Kalgoorlie Boulder communities continues to be strong. We do all we can to train our staff in all aspects of their work and in particular, safety training and the prevention of harm to our people.
We continue to invest in substantial and necessary exploration work, using the most sophisticated electronic and mechanical systems available. This is to ensure we maintain our nickel resources and reserves. In addition we are searching for new discoveries in a wide range of minerals in many Australian and overseas locations. Investment funds included in the 2011/2012 budget amount to A$13,000,000 and excellent progress is being made in the projects described in the exploration segment of the Annual Report.
Your CEO and Managing Director, David Moore will refer to these ongoing projects in his address, and will refer in some detail to our exciting new copper, gold and silver venture in Papua New Guinea.
We believe we manage a well run business which is of great benefit to the Australia wide economy. These benefits are produced by way of nickel production and by way of careers and salaries paid to our people, and to our contractors. Our operations, and exploration and development projects, include the procurement of operating supplies and equipment from largely, Australian suppliers. We pay out a range of royalties, state and federal taxes, and 30% of all profits is paid out as income taxes to the federal government. Last but not least; our shareholders benefit from regular payment of significant cash dividends.
We will be subject to the effects of the 'clean energy tax' (the carbon tax) and this tax will result in increased costs being passed on to us via the inflationary aspects of the tax, and, an additional and onerous administrative cost burden. These costs will cascade into an ever increasing tax burden.
No benefit to the environment or the Australian people will arise, in our view, from the new tax.
By the government's own figures the vast majority of tax raised will be passed on as subsidies to selected companies and to the wider population. Very little will go directly to any CO2 gas abatement or any emissions limitations by regulation, or direct action innovation programs or incentives. This, and other proposed taxes on the mining industry, will make it more difficult for Australian mines to compete internationally in world markets. We will tend to lose our wealth to those overseas businesses and governments which operate under a less costly and more efficient regime.

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Shareholders can be assured that your Board and management will continue to grow your company through careful and innovative investment in a wide range of excellent mining projects, as well as continuing to develop the great potential of our main area of operations; in the Kambalda nickel fields.
I thank our staff and the Board for their energy and ongoing commitment to the success of Mincor
Resources.
Thank you

David J Humann Chairman, Mincor Resources NL

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