Minco : 2015 Annual report

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2015

ANNUAL REPORT AND ACCOUNTS

Chairman's Letter to Shareholders

In 2015 Minco completed exploration drilling programs on its lead/zinc properties at Buchans. Newfoundland and at the Pennines in northern England with positive results. Minco also acquired three new prospecting licences near Moate in County Westmeath, Ireland, centered on a specific geological target identified by Minco, with potential for zinc-lead mineralization of Tynagh Mine type.

In Newfoundland Minco also entered into a collaboration agreement with Canadian Zinc to undertake a research programme to complete metallurgical studies on seven volcanogenic massive sulphide deposits located in central Newfoundland and to share research data on their respective deposits. The objective of the program is to evaluate the technical and economic viability of developing some combination of these deposits by utilizing a central milling facility. Results to date from this research program are encouraging.

Minco also holds a 20% interest in an Irish prospecting licence in joint venture with Tara Boliden, adjacent to Boliden's large Tara zinc lead mine at Navan, Ireland, a 26% interest in Xtierra Inc., which holds zinc, lead, silver properties in Mexico, and a 2% net smelter royalty on the Curraghinalt gold deposit in County Tyrone, Northern Ireland, currently being explored by Dalradian Gold.

BUCHANS LEAD-ZINC EXPLORATION

During 2015 Minco completed a drilling programme testing the Lucky Strike South target at the old Buchans mine site in central Newfoundland. Minco's 2015 programme was undertaken to follow up of favourable results from drilling in 2014 and tested several mineralized stratigraphic horizons to explore for new high-grade massive sulphide deposits. All eight 2015 Minco holes intersected mineralized felsic volcanic breccia ranging from 1 to 23 metres in thickness , and containing massive sulphide and sulphide-rich clasts measuring up to 15 centimetres in diameter.

During 2015 Minco re-logged 156 historic surface and underground drill holes (13,418 m) southwest of the former Lucky Strike mine. This re-logging work focused in on a small high-grade massive sulphide deposit known as the West Orebody deposit, with reported base metal grades similar to Lucky Strike.

Minco has planned a five hole 2,000 metres drilling program to explore the West Orebody deposit.

The Company's ongoing re-logging program at Buchans is currently assessing potential targets in the vicinity of the West Orebody and Lucky Strike deposits for discovery of additional high-grade ore near the Company's Lundberg deposit. This program is expected to dominate field activities in Buchans for the remainder of 2016.

METALLURGICAL STUDIES - CENTRAL NEWFOUNDLAND BASE METAL PROJECTS

In December 2015 Minco entered into a collaboration agreement with Canadian Zinc Corporation to undertake a research programme to complete physical and metallurgical bench scale studies on seven volcanogenic massive sulphide ("VMS") deposits located in central Newfoundland and to share research data on their respective central Newfoundland Cu-Pb-Zn-Ag-Ag deposits.

The total cost of the research project is estimated at $735,000, with the Company and Canadian Zinc each contributing up to $100,000 . The Research & Development Corporation of Newfoundland and Labrador is providing funding of $535,000 for the research project through the GeoEXPLORE Industry-led R & D Technology Development and Demonstration Program.

In December of 2015 Minco completed a seven hole, 781 metre, drilling programme at its Daniels Pond and Bobbys Pond deposits to collect fresh rock samples for metallurgical testing. To date the program has completed dense media separation (OMS) tests on all the deposits and is now in the process of completing flotation tests to determine the estimated metal recoveries. Preconcentration of the ore by OMS (prior to flotation) was determined to be technically viable for semi-massive and stringer sulphide samples from Minco's Bobbys Pond and Daniels Pond deposits and Initial flotation tests indicate the deposits are amenable to a common process flowsheet.

The bench scale testing programs are now being followed-up by the development of a process simulation and order of magnitude cost assessment model to evaluate and identify the key factors impacting the operating economics of a centralized milling concept for processing the deposits.

WOODSTOCK MANGANESE PROJECT

In July 2014 Minco completed a Preliminary Economic Assessment ("PEA") of its wholly owned Woodstock electrolytic manganese metal ("EMM") project, located 5 km west of the town of Woodstock and the junct ion of the Trans Canada and 1-95 Highways in west-central New Brunswick, Canada.

Given the large capital investment required to build an EMM plant at Woodstock, Minco has focused its efforts on attracting a development partner from one of the existing EMM producers in China. Minco has been able to attract the attention of one of China's largest EMM producers which recognizes the advantages offered by the Woodstock project but has decided to postpone evaluating the project further until EMM market conditions improve.

MINERAL EXPLORATION AT NORTHERN PENNINES, ENGLAND

Two holes drilled on the Whitewood-Barneycra ig-Williams fault/vein structure in Northumberland in early 2015 intersected reasonable widths of lead and zinc mineralization at three different levels and indicate the mineral potential of this large fault/vein structure which was previously demonstrated by historic mining to be mineralized over a strike length of 3.5 kilometres. Minco's 2012-2015 drill programme in the Pennines has established a significant stratiform component to the mineralisation within the Great Limestone which had not been previously recognised. The extent of the stratiform mineralisation discovered by Minco in the Great Limestone to date is encouraging.

A second phase of drilling is planned for 2016, subject to conclusion of land access agreements , to further explore the potential within both the Great Limestone and basal succession with the primary target for both being the Barneycraig-Whitewood fault complex.

LEAD-ZINC EXPLORATION, MOATE, COUNTY WESTMEATH, IRELAND

In November 2015 Minco was granted three new Prospecting Licences by the Minister of Communications, Energy and Natural Resources. The new licences, Pls 1228, 1229 and 3981, at Moate in County Westmeath , are centered on a specific geological target identified by Minco, with potential for zinc-lead mineralization of Tynagh Mine type.

Minco's studies of previous drilling have outlined a geological setting that Minco believes mirrors that at the former Tynagh Mine, where zinc-lead mineralization was hosted by breccias developed at the margin between the reef and off-reef limestone facies.

Minco has planned an initial exploration programme consisting of six inclined drill holes for a total of 1400 metres of drilling.

XTIERRA INC.

Minco holds an approximate 26% interest in Xtierra Inc. ("Xtierra"), a company listed on the TSX Venture Exchange, which holds mineral properties in the State of Zacatecas in the Central Mineral Belt of Mexico.

In December 2013 the Company agreed to provide working capital financing to Xtierra, secured pari-passu with Pacific Road Group of Funds. In August 2015,the Company and Pacific Road both agreed to further extend the due dates of the Notes from 31 August 2015 to 31 January 2016, which were again extended to April 30, 2016, and to provide further advances to fund Xtierra's property maintenance costs and working capital. Xtierra is considering various financing options and is in discussions with its major shareho lders regarding strategic or financing alternatives.

FINANCIAL RESULTS 2015

For the year ended December 31, 2015, Minco recorded a loss of $118,000 compared to a loss of $2,667,000 for the year ended December 31, 2014. The loss for 2015 included a foreign exchange gain of $648,000. The loss for 2014 included $2,283,000 share of loss of associate Xtierra and a foreign exchange gain of $873,000.

During the year ended December 31, 2015 Minco invested $1,056,000 on exploration of its mineral properties, of which the largest amounts were expended on the Buchans zinc lead project in central Newfoundland.

At December 31, 2015, Minco held $3,974,000 in cash and cash equivalents and had a working capital surplus of $3,618,000, compared to a working capital surplus of $5,497,000 at December 31, 2014. At December 31, 2015, Minco held mineral properties with a book value of $12,341,000. The balance sheet values for these assets may not represent that which could be obtained if the assets were to be offered for sale.

METAL PRICES

Metal prices play an important part in the Company's ability to finance, explore and develop its various lead-zinc projects. The prices of zinc, lead and silver, expressed in US dollars, were generally lower in 2015 than in 2014. Metal prices rose during the first half of the year, but declined later in the year as economic indicators signaled lower growth rates in China. The US dollar strengthened significantly against most of the world's currencies in 2015, largely due to the relatively stronger performance by the US economy and expectations of US interest rate rises which resulted in declining local costs in producing countries measured in US dollars.

The International Lead and Zinc Study Group ("ILZSG") noted that world usage of refined zinc metal is expected to increase by 3.5% to 14.33 million tonnes in 2016, primarily driven by a further 4.5% increase in China where demand is expected to benefit from continued infrastructure investment. Meanwhile the ILZSG is expecting a sharp fall in zinc mine production outside China of 9.4% due to a combination of mine closures and announced production cutbacks. The ILZSG anticipates that global demand for refined lead metal in 2016 will rise by 2% to 10.83 million tonnes. With the Century mine in Australia and the Lisheen mine in Ireland now closed, almost

1.5 billion lbs. of annual zinc production, representing almost 5% of global mine production, has been removed from supply. The long term outlook for both zinc and lead is positive.

We would like to thank all Minco shareholders for their continued support.

John F. Kearney

Chairman & Chief Executive April 29, 2016

Approval by Directors

The Annual Report for the year to 31 December 2015 was approved by the Directors on 29 April,2016.

A copy of this Annual Report is posted on the Comp's website at www mmcoplc.comand copies will be available for inspection at the Company's registered office at 27 Hatch Street Lower, Dublin 2,Ireland.

Qualified Person and Competent Person

The te_chnical information in this report has been reviewed and verified by Benjamin Batson, B.Sc.,P. Geo, Minco's Qualified Person within the meaning of Natlonal Instrument 43-101 of the Canadian Securities Administrators. Terence McKillen, B.A. (MOD), M.A., M.Sc., P.Geo. is Minco's Competent Person for the purposes of the AIM Guidance Note on Mining, Oiland Gas Companies.