COPY OF FINAL PROSPECTUS - Mirabela Nickel

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multinational mining companies active in Brazil include Anglo American PLC, Rio Tinto PLC and BHP Billiton Ltd. CVRD, a Brazilian company, has become the second largest nickel producer in the world following its acquisition of Inco. Under the Brazilian Constitution, mineral deposits represent a class of property separate from surface rights, and belong to the Republic of Brazil. Exploration and mining activities can only be undertaken by Brazilian individuals or legal entities incorporated in Brazil which hold an authorization or concession granted by the federal government of Brazil. The Mining Code of 1967 (the ‘‘Mining Act’’) and the Brazilian Mining Code Regulation 1968 (the ‘‘Regulation’’ and together, the ‘‘Mining Code’’) govern the exploration and commercial exploitation of mineral resources in Brazil. Under the Mining Code, mining activity requires the grant of a concession from the DNPM, an agency of the Brazilian federal government responsible for controlling and applying the Mining Code, and requires an agreement with the relevant landowner regarding surface rights. Accordingly, mining tenements in Brazil generally consist of one or more prospecting permits, exploration licences and mining concessions. The Mining Code does not require that the holder of a granted exploration licence or mining concession spend a prescribed amount on exploration or mining activities. The Company holds, directly or indirectly, exploration licences and applications for exploration licences and is preparing to submit one or more applications for mining concessions. Exploration Licences An exploration licence entitles a holder, to the exclusion of all others, to explore for minerals in the area of the licence but not to conduct commercial mining. The maximum exploration area for nickel is 2,000 hectares in the States of Bahia and Piaui and 10,000 hectares in the State of Tocantins. An exploration licence is valid for a maximum period of three years and can be extended by no longer than one additional three year period. The holder of an exploration licence must (i) inform the DNPM of the discovery of any other mineral substance not included in the exploration licence; (ii) perform work in accordance with applicable environmental legislation; (iii) report annually to the DNPM on exploration expenditures; (iv) compensate the surface owner for occupation of land and for losses caused by the work; and (v) submit a final report of the results of the work to the DNPM before termination of the exploration licence. In addition, the holder of an exploration licence must pay an annual exploration fee to the DNPM. The fee is established at progressive values based on the size of the area and the extension period of the licence. If the final report demonstrates the existence of a resource which can be both technically and financially developed, the DNPM will generally approve the report. Once the exploration report is approved, the holder of an exploration licence has one year to apply for a mining concession. If the holder of an exploration licence fails to apply for a mining concession within this one year period, the mineral rights over the property will lapse. Mining Concessions An application for a mining concession must be addressed to the DNPM and be supported by a development plan and a mining plan. A mining concession will not be issued until an installation licence has been granted by the applicable environmental authority. See ‘‘Environmental Licensing’’ below. A mining concession is granted under ordinance of the Ministry of Mines and Energy. The area of the mining concession will be limited to (and can be smaller than) the area of the exploration licence from which it is derived. Subject to complying with its conditions, a mining concession entitles the holder thereof, to the exclusion of others, to mine the mining lease area indefinitely, until full depletion of the deposit. The holder of a mining concession is entitled to servitudes over the land covered by the concession for mining, processing and infrastructure or over adjacent land for processing and infrastructure. In very occasional circumstances mining rights can be denied where the government mining authority considers that a subsequent public interest exceeds that of the utility of mineral exploration, in which case the Federal Government must compensate the mining concession holder. 22
A mining concession may only be granted to a company incorporated under Brazilian law such as <strong>Mirabela</strong> Brazil. Mining concessions can be transferred between parties qualified to hold them, however transfers must be authorized by the applicable governmental authority. The holder of a mining concession must (i) commence development within 60 days from the granting of the concession; (ii) not suspend development and mining operations for more than six months without the prior approval of the DNPM; (iii) mine in accordance with an approved development and mining plan; (iv) compensate the landowner for occupation of the property; (v) pay a royalty to the landowner; (vi) pay a royalty to the local, state and federal governments; (vii) obtain all required environmental licences and authorizations; (viii) restore the areas degraded by mining and processing operations and infrastructure; and (ix) report annually to the DNPM on activities, production and sales. Environmental Licensing All phases of the Company’s operations are subject to environmental regulations. In general, environmental licensing is handled by the environmental agency of the relevant state in Brazil and exceptionally by federal authorities. The licensing system is divided into preliminary licences, installation licences and operation licences. A preliminary licence (the Licença de Localizaçâo) is obtained at the planning stage of the project. An EIA and a plan for the restoration of degraded areas are prepared and submitted and public hearings are called to present the EIA to the communities and authorities. The Company was issued a preliminary licence on January 2, 2007. An installation licence (the Licença de Instalação) is required prior to the commencement of construction and may only be obtained after an EMP has been presented to and approved by the relevant environmental agency. The issuance of a mining concession is conditional upon the issuance of an installation licence. At this stage, the environmental authority will set the Environmental Compensation Amount, which is a minimum of 0.5% of the projected capital investment. Mining and processing can only occur following the issuance of the operation licence by the relevant environmental agency. An operation licence will only be issued once the environmental authorities are satisfied that development and construction were completed in accordance with the conditions of the installation licence and the EMP has been correctly implemented. Native Title According to the Brazilian Constitution, native title areas (reserves) inhabited by indigenous peoples in Brazil are available to mining activities with Congress approval. Several proposals have been submitted to Congress but since 1988, none have been approved as yet. Management believes that none of the Company’s properties currently encroach native title areas. Taxes Mining activities are subject to taxation in the same manner as other activities in Brazil. Mining activities are subject to a range of corporate taxes, charges and duties which are administered at the federal, state and municipal level. These include income tax, social contributions taxes, sales taxes, service taxes and taxes on financial transactions. Companies under Brazilian or foreign control are subject to the same income tax, and are liable for tax on their worldwide income. A variety of fiscal incentives, concessions and exemptions are also available and are aimed at the selective fostering of industries and advancement or development of certain economic regions. Generally, corporations in Brazil are currently subject to a federal income tax at a rate of 25%, plus a social contribution tax on net profits of 9%, for a theoretical combined tax rate of 34%. The Company’s tenements are located in the states of Bahia and Tocantins, which are subject to the Authorities for the Development of the North-east and Northern regions. Tax benefits from participation in exemptions and incentives available in this region can result in an effective corporate tax rate as low as 15.25%. Dividends, whether paid to resident or non-resident shareholders, are not subject to withholding tax. 23
Page 1 and 2: ABN 23 108 161 593 Ground⋅Floor,
Page 3 and 4: (continued from cover) Unless other
Page 5 and 6: FORWARD-LOOKING STATEMENTS This pro
Page 7 and 8: PROSPECTUS SUMMARY The following is
Page 9 and 10: Recent Developments: Drilling and E
Page 11 and 12: Summary of Financial Information: M
Page 13 and 14: CORPORATE STRUCTURE Mirabela Nickel
Page 15 and 16: The Santa Rita Project The Santa Ri
Page 17 and 18: which a final exploration report ha
Page 19 and 20: and R$4.2 million, payable in insta
Page 21 and 22: esources by holders of mining conce
Page 23 and 24: Management believes this mineraliza
Page 25 and 26: THE NICKEL MARKET The following sum
Page 27: 27MAR200712114903 Source: World Bur
Page 31 and 32: Property Description The Santa Rita
Page 33 and 34: Accessibility, Climate, Local Resou
Page 35 and 36: 25MAR200710211038 The ultramafic zo
Page 37 and 38: completed in October 2006. The RC d
Page 39 and 40: sample of approximately two kilogra
Page 41 and 42: Metallurgy The Santa Rita deposit c
Page 43 and 44: Operating Costs GRD Minproc estimat
Page 45 and 46: Fazenda Palestina Intrusion The Faz
Page 47 and 48: The Ponto Novo project area consist
Page 49 and 50: elating to the Shares computed in a
Page 51 and 52: wish to change registers and trade
Page 53 and 54: Selected Annual Financial Informati
Page 55 and 56: The carrying value of mineral prope
Page 57 and 58: Finance Activities, Liquidity and C
Page 59 and 60: Disclosure of Shareholding Informat
Page 61 and 62: PRICE RANGE AND TRADING VOLUME OF S
Page 63 and 64: Management The following is a brief
Page 65 and 66: faith with a view to the best inter
Page 67 and 68: Aggregated Options Exercised During
Page 69 and 70: markets and may also be terminated
Page 71 and 72: Mirabela currently depends heavily
Page 73 and 74: disposal of solid and hazardous was
Page 75 and 76: Stock Exchange Prices The market pr
Page 77 and 78: MATERIAL CONTRACTS Except for contr
Page 79 and 80:
GLOSSARY OF TECHNICAL TERMS The fol
Page 81 and 82:
mackinawite ............. magmatic
Page 83 and 84:
Mirabela Nickel Limited Consolidate
Page 85 and 86:
AUDITOR’S REPORT IN RESPECT OF CO
Page 87 and 88:
MIRABELA NICKEL LIMITED STATEMENTS
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MIRABELA NICKEL LIMITED STATEMENTS
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MIRABELA NICKEL LIMITED NOTES TO FI
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MIRABELA NICKEL LIMITED INCOME STAT
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MIRABELA NICKEL LIMITED BALANCE SHE
Page 125 and 126:
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CERTIFICATE OF THE COMPANY Dated: A
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COPY OF FINAL PROSPECTUS - Mirabela Nickel

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