Located in the Pacific Ring of Fire

Diverse resource exploration in the Philippines.

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Dear Shareholder,

As we head into the New Year, I would like to sincerely thank our shareholders who supported the company during the 2008 financial crises. I want to assure you that Mindoro is in a strong position to add significant value in the coming year and emerge a stronger company.

By raising sufficient funds in 2007 to see us through the financial crises and by putting in place joint venture arrangements with Avocet Mining and Gold Fields, your company is in the enviable position of seeing near-term drilling on two exciting gold and copper-gold projects (Kay Tanda and Lobo) and strategies are being evaluated to fund drilling on a third gold project (American Tunnels). Although we recognize that the market's interest will be firmly fixed on the gold and copper-gold projects in the near term, we remain bullish on the long-term outlook for our nickel and pyrite (sulphur) projects.

Without diminishing our enthusiasm for the company's near-term prospects, we have also responded to the economic crises by adopting prudent financial strategies to conserve the company's treasury and ensure that we maximize the value of every dollar. Effective January 1, 2009, Mindoro's President, Penny Gould, and I reduced our cash compensation by approximately 60 and 65 percent, respectively. Across the board cuts in overhead and administration costs have been implemented and systematic reductions in staffing levels had already commenced in the fall of 2008. We have retained a core group of dedicated professionals and Mindoro's directors and management are grateful to our hard working staff whose commitment to advancing our projects and achieving success for your company is unsurpassed.

Avocet Joint Venture

Avocet Mining PLC, a London-based, AIM listed gold producer may earn up to a 75 percent interest in Mindoro's Archangel Project, also in the Batangas Province, by funding all exploration until reaching a decision to mine. Archangel includes the Kay Tanda epithermal gold-silver resource as well as several porphyry copper-gold prospects. Avocet has commenced a minimum 1,500 meter diamond drill program at Kay Tanda with the objective of completing a fast-tracked, but comprehensive evaluation. Avocet intends to initially target the high-grade gold zones previously identified by Mindoro and the drill rig is expected to shortly arrive on site.

Gold Fields Joint Venture

The basic commercial framework has been agreed upon whereby Gold Fields may earn up to a 75 percent interest in each of the El Paso, Lobo and Talahib porphyry copper-gold projects located in the Batangas Province, by funding exploration and a feasibility study on each project, subject to certain expenditure limits. Preparation of a formal agreement is well-advanced and planning of the first drill program has commenced.

American Tunnels

One of our most exciting gold and copper-gold prospects anywhere in the Philippines is American Tunnels on our Agata Project. Significant copper, gold, silver, and molybdenum values were reported on November 17, 2008, from channel and rock chip samples taken along the walls of mined out areas of small-scale mine workings. Both epithermal gold and porphyry copper-gold mineralization is encountered along a six kilometer target trend at Agata. Strategies are being evaluated to fund the first round of drilling at American Tunnels ourselves although discussions have also been initiated with potential joint venture partners.

Agata North Resource

In December, 2008, we announced the final estimate for the Agata North nickel laterite project; the combined Measured and Indicated Resources is 13.17 million wet metric tonnes (WMT) grading 1.13 percent nickel, 0.078 percent cobalt and 30.93 percent iron, at a cut-off grade of 0.5 percent nickel for the limonite and 0.8 percent nickel for the saprolite horizon; containing 230.11 million pounds of nickel. In addition, the Inferred Resource estimate is an 18.1 million WMT grading 1.13 percent nickel, 0.083 percent cobalt and 31.44 percent iron, also at a cut-off grade of 0.5 percent nickel for the limonite and 0.8 percent nickel for the saprolite; containing 317.47 million pounds of nickel. The resource estimate includes 13.95 million pounds cobalt in the measured and indicated categories, and additional 20.58 million pounds cobalt in the inferred category. Approximately 80% of the laterite was drilled; so there is upside potential at Agata North, as well as on other targets not yet drill-tested.

We believe sufficient resources have now been delineated to advance discussions aimed at identifying an appropriate partner to fund further development via an off-take agreement, joint venture or alliance with an end-user. Likely this will be with a resource-hungry Asian company; China, in particular, is taking advantage of the current oversold conditions to secure cheap resources for its future growth. Our objective is to advance Agata North to a potential decision point where a rapid transition could be made to production as the nickel price inevitably improves.

Pan de Azucar Pyrite Project

The Valderama massive pyritic sulphide prospect, on the Pan de Azucar Project, Iloilo Province, is emerging as an increasingly important component of our long-term strategy. Future investigations will include evaluation of the potential for direct shipping pyrite to fertilizer producers and nickel laterite processing operations in the Philippines, as well as the potential for Valderama to support a stand-alone sulphuric acid producing plant. Sulphuric acid is produced by the processing of either sulphur or pyrite and is also used to produce ammonium sulphate-and phosphate fertilizers. Sulphuric acid is the major cost-component (greater than 50 per cent) in the hydrometallurgical processing of nickel laterite. A cheap source of sulphuric acid has the potential to considerably enhance the economics and competitiveness of Mindoro's Agata North nickel laterite project.

Notwithstanding the current volatility of sulphur and sulphuric acid prices, we believe these will recover to price levels supportive of this concept, as oil and other commodity prices rise with the inevitable resumption of Asian growth. In addition, demands of the fertilizer industry in a region of looming agricultural under-supply will likely contribute to sulphur and sulphuric acid price increases.

Other Surigao Projects

We will seek joint venture partners on our extensive Surigao copper-gold holdings. With the announcement of the go-ahead by Philex Mining of the Philippines on the Boyongan copper gold deposit, the Surigao District is on its way to becoming a world-class copper-gold camp which will continue to attract joint venture interest and new financing opportunities.


With several exciting gold and copper-gold projects and with joint venture arrangements to fund exploration and drilling, Mindoro is well placed to meet the growing market demand for exciting, near-term gold plays. In the longer term, we believe that, as developing Asian nations gradually pull the global economy from recession, base metals demand and prices will recover, albeit to more sustainable levels. Companies such as Mindoro, with established metal resources in the Asian region and with tremendous upside potential, have a bright future.

I encourage you to contact Mindoro's President, Penny Gould, at our Edmonton office at 1-877-413-8187 for a further discussion of the company's objectives and strategies.

J.A. (Tony) Climie, CEO

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