Trading Update & Interim Results - Silver Swan Group

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SILVER SWAN GROUP LIMITED – A Rapidly Maturing Investment

At the beginning of the period, Mercator held 10 million shares and 4 million performance shares in Silver Swan Group Limited, an exploration company listed on the Australian Stock Exchange and focused on gold and base metal projects in Australia, the most significant of which were sold to it by Mercator in April 2008.

During September 2009 the Company received an approach from a group of Silver Swan shareholders and as a result decided to sell approximately nine million of its shares for cash proceeds of approximately A$3 million. This sale, which realised book profits of more than A$1 million, allowed the Company to lock in a considerable profit on its investment whilst still leaving it with a substantial stake in any further success of Silver Swan.

Silver Swan as an Example of Mercator’s Ability to Add Value

Silver Swan represents an excellent example of the process by which Mercator is able to add value to a project and then realise this value at an opportune time. The Company staked the original claim over the Austin prospect near Meekatharra in Western Australia, where Silver Swan has made a significant Cu-Zn-Au-Ag discovery of the volcanogenic massive sulphide type. Mercator was instrumental in the appointment of key management to Silver Swan when the Company sold the package of claims that included the Austin prospect to Silver Swan in April 2008.

Mercator’s initiative has already delivered a cash return following the sale of approximately nine million of its shares in Silver Swan, and the Company retains exposure to the continued success of Silver Swan through its remaining ordinary shares and its 4 million performance shares.

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