The Mt Muro Gold mine is located in the northern part of the Province of Central Kalimantan, Indonesia. Owned by PT Indo Muro Kencana, a 100% subsidiary of Straits Metals Limited, the mine lies 300km due west of Balikpapan and 40’ south of the Equator.

The mine is operated under a third generation Contract of Work (“CoW”) which covers some 47,940ha of the central Kalimantan magmatic arc which hosts the Kelian, Mt Muro and Mirah gold deposits among others.

During 2011 Mt Muro commenced a significant recapitalisation plan around the redevelopment of the Serujan open pit.  This included placing the plant on care
and maintenance for approximately three months whilst pre-stripping occurred at Serujan.  The processing plant was restarted in late February and has ramped up in line with early ore mining from the pit.  Mt Muro produced a total of 31,108oz AuEq for the year.

Mining operations outside of Serujan were scaled back to focus on the redevelopment.  As a result mining at the Tasat-Rabu pits was completed, and the underground operation at Soan suspended.  The mining fleet was reduced in size and then ramped up to meet the redevelopment of Serujan.  An ongoing programme of systematic drilling below the old pits has resulted in major resource and reserve upgrades in 2011.  Resources now stand at 2 million oz AuEq and
reserves at over 600,000oz AuEq.  Definition drilling continues and the resource base is expected to grow further in 2012.

Straits remains committed to the production and recapitalisation plan for Mt Muro. Production is steadily increasing and the mine is planning to produce
approximately 70,000oz AuEq in FY 2012.

Significant increases in resources and reserves were announced earlier in 2011, with exploration continuing.  Mt Muro is well established on a trajectory to deliver a stable, capitalised operating platform capable of delivering in excess of 100,000oz AuEq per annum at a targeted total cost of less than US$850 per AuEq oz.

Straits complies with its obligations under the Mt Muro Contract of Work.  The Contract of Work is a long term contract and contains an obligation to offer 51% of the Mt Muro holding company for purchase for fair market value by the Indonesian Government or Indonesian nationals.  Straits complies with this requirement each year, but has not received any proposal to date.

Production for the 2011 reporting period was: