BEACON EQUITY RESEARCH

Analyst: Victor Sula, Ph.D.

Initial Report
April 28th

NILR daily 4/28/2008

2.4
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Nilam Resources Inc. 1.4

volume
42 Camden Street - Suite 503 200
Toronto, Ontario 150

Thousands
Canada M5V 1V1
100

phone:(416) 823-0915 20
Email: info@nilamresources.com
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Website: www.nilamresources.com Feb Mar April

Market Data Company Introduction

Symbol NILR Nilam Resources Inc. (NILR) is a production stage mining company, focused
Exchange OTC BB on acquiring, exploring and developing gold mineral properties in Peru. The
Current Price $1.60 Company has already acquired two mineral concessions in Peru, is closing on
Price Target $2.61 the purchase of a third property, and is actively pursuing additional acquisi-
Rating Speculative Buy tions in Peru and other South American countries.
Outstanding Shares 57.5 Million
Market Cap. $92 Million The Company has formed a wholly-owned subsidiary, Nilam Resources Peru
Average 3M Volume 27,117.2 SAC, to acquire, explore, develop and manage its Peruvian mineral proper-
Source: Yahoo Finance, Analyst estimates ties. In addition, NILR has recruited highly experienced mining executives
and managers to oversee its operations in Peru and further develop its assets
in that country.

NILR has three mineral properties. The Company’s flagship property is the
Pativilca property, a 2,100-hectare property with a fully operating gold pro-
cessing plant. The Pativilca processing plant currently processes 50 tons of
ore per day, with an average grade of over 1/2 ounce of gold per ton. Annual
revenues from current gold production are expected to exceed $10 million
annually. NILR plans to expand plant production capacity to 500 tons of ore
per day. At that production rate, revenues would range between $90 and $100
million annually.

The Llipa property covers approximately 1133 hectares and has several de-
veloped mining shafts. Mining operations on the Llipa property ceased 20
years ago. The El Varon property has never been developed. The Company
has completed preliminary analysis of the Llipa and El Varon properties and
is evaluating the results, which will be used to develop full exploration and
drilling programs for these concessions.
 Analyst: Victor Sula, Ph.D.
Initial Report
April 28th

Investment Highlights

Exploration in one of the world’s best mining regions

NILR plans to explore for and develop gold, copper and silver resources at three major mineral properties in
Peru. The Company has already acquired the Llipa and El Varon claims and will soon close on the acquisition of
the Pativilca property, which includes a producing gold mine. These properties are located near major mineral
trends and mines operated by Barrick Gold, Teck Cominco and other leading gold producers.

Peru ranks fifth in the world in gold and copper production. It is the world’s largest producer of silver and ranks
among the top five producers of zinc, lead and tin. Over the last five years, the value of Peru’s mineral produc-
tion has grown nearly 25 percent.

Pativilca acquisition boosts reserves and near-term revenues

The Pativilca project consists of 2,100 hectares of mining properties along the North-Central coast of Peru, an
area known to contain major gold veins. The mine follows the North Mineralization Trend in the district of Hua-
rez and is adjacent to major gold producing projects owned by Barrick Gold, Lagunas Norte and Pierina.

In addition to gold reserves, the Pativilca property provides NILR with a modern gold processing plant and pro-
duction capacity estimated at 50 tons of ore/day. At this production rate, NILR could produce annual revenues
from processing approaching $9 million.

Financing commitment funds Pativilca production expansion

NILR has secured a $3 million financing commitment which will be used to complete the purchase of the Pativ-
ilca property and expand mine production to 500 tons of ore per day. At this higher production rate, revenues
from the Pativilca operation could exceed $90 million per year. The Company is currently expanding the mine’s
labor force and is planning an aggressive surface and underground exploration program to prove the property
reserves potential.

Pativilca mine already producing

The Pativilca mine is already producing. Going forward, we expect the Company to increase mine production
to 200 tons per day in 2009. As a result, NILR could report 2009 revenue in a $40 million range. The cash flows
generated from Pativilca mining operations will provide NILR with the needed capital to expand its production
and further develop its Llipa and El Varon properties in 2009.

Acquisition plans expand property portfolio

During the first quarter of 2008, NILR began negotiating to acquire an additional property in Peru. This property
contains mineral assets estimated to exceed $1 billion in gross value. This gold and silver project, located in the
south part of Peru, has a geological resource totaling one million ounces of gold and great infrastructure. Ap-
proximately 60 percent of the project has yet to be explored.

Nilam Resources Inc. (NILR) 2

 Analyst: Victor Sula, Ph.D.
Initial Report
April 28th

Another prospect contains copper resources and has returned impressive surface, underground and drilling
values. Of four holes drilled on this prospect, two have proved the target and one returned an impressive value
of 8 percent copper over 18 meters which undercut sampling in a short tunnel which yielded 6 percent copper.

Additional revenues from tailing reprocessing

The reprocessing of additional minerals and tailings, once too costly to justify, has become economically vi-
able as processing techniques have become more efficient and market prices for precious metals have soared.
In March 2008, NILR announced plans to reprocess tailings at the Llipa mine. The Company estimates that the
tailings at the Llipa mine could contain approximately one million tons at a grade of 0.77 percent Cu and 8.7 g/t
Ag and 2g/ton AU. At current metals prices, this translates into a $72 per ton gross value and potential gross
revenues totaling $72 million.

Proven management team

NILR’s management team has a proven track record for developing geological operations and building success-
ful organizations. The Company’s CEO, Alain Vachon, is an accomplished geologist and corporate director with
more than 30 years of experience in the mining industry and successful careers with Paramount Gold and Silver
Corp, Barrick Gold, Noranda Exploration and Shell Canada Mineral.

Len De Melt, NILR’s chairman, is an engineering technologist with nearly 30 years of executive level mining
experience earned with well-respected mining companies such as Yanacocha Mine in Peru, Norsemont Mining
Inc. and BHP.

Larry Sostad, the Company’s Director of Mining, has been involved in the mining industry since 1965, working
on lucrative mining projects across North and South America, and has held positions with Cominco Ltd., Koo-
tenay King Resources Inc., Rio Tinto and Noranda.

Rising gold prices

The Pativilca mine is already producing. Going forward, we expect the Company to increase mine production
to 200 tons per day in 2009. As a result, NILR could report 2009 revenue in a $40 million range. The cash flows
generated from Pativilca mining operations will provide NILR with the needed capital to expand its production
and further develop its Llipa and El Varon properties in 2009.

Acquisition plans expand property portfolio

Worldwide demand for gold is rising faster than supply. Supplies fell 3 percent in 2007 to 3,469 tons while iden-
tifiable demand rose 4 percent to 3,547 tons. Gold prices, which averaged around $600 per ounce in 2006, rose to
nearly $700 per ounce in 2007 and hit a record $1,000 an ounce in March 2008. Recent price gains reflect investors
seeking refuge from a weak U.S. dollar, higher oil prices, inflation concerns, disruptions at South African mining
operations and U.S. interest rate cuts which make gold attractive. Merrill Lynch recently increased its 2008-2012
forecast for gold prices and now expects gold prices to average $925/oz in 2008 and $1,000/oz in 2009.

Prices of other precious minerals are also climbing because of the weak dollar, rising energy prices and inflation

Nilam Resources Inc. (NILR) 3

 Analyst: Victor Sula, Ph.D.
Initial Report
April 28th

fears. In 2008, copper prices are expected to average between $3 and $3.20 per pound. Global copper consump-
tion increased 4.7 percent in 2007 and is expected to increase 3.6 percent in 2008. Silver prices climbed 15 percent
in 2007 and hit a 27-year high of $17.00 per ounce in January of 2008.

Mineral Properties

Pativilica project

NILR’s wholly-owned Nilam Resources Peru SAC subsidiary has

signed a letter of intent with MRC1 Exploration EIRL to purchase
the Pativilca property and a gold processing plant on the property
for $1.5 million, to be paid as follows: $250,000 upon the signing
of the deed transfer; $500,000 four months from the deed transfer
date; and $750,000 10 months after the deed transfer date. Addition-
ally, MRC1 Exploration will receive a 3 percent royalty on mineral
production. The Company has made a deposit toward the purchase
price and plans to finalize the acquisition during the first half of
2008.

The Pativilca project consists of 2,100 hectares of mining properties

with gold veins present on the North-Central coast of Peru. The
project consists of six mining concessions approximately 200 kilo-
-meters northwest of Lima. The project area is 300 to 1,000 meters above sea level.

The mine follows the North Mineralization Trend in the district of Huarez, adjacent to major gold producing
projects such as Lagunas Norte and Pierina (both owned by Barrick Gold). Barrick Gold is a world leader in gold
production and Lagunas Norte and Pierina are considered among the largest gold deposits in Peru.

Lagunas Norte expected to produce 850,000 ounces of gold in 2007; estimated gold reserves are 8.8 million
ounces. Pierina produced 509,000 ounces of gold in 2006 and anticipated production of 500,000 ounces in
2007; mineral reserves are estimated at 1.2 million ounces of gold.

The Pativilca processing plant currently processes 50 tons of ore per day, with an average grade of over 1/2
ounce of gold per ton. Annual revenues from current gold production are expected to exceed $10 million annu-
ally. The Pativilca project has good access to utilities (water and electricity) and a highway transportation sys-
tem. These resources are essential to increasing production. NILR plans to expand plant production capacity to
500 tons of ore per day. At that production rate, revenues would range between $90 and $100 million annually.

Llipa project

On November 28, 2007, the Company acquired the Llipa mineral concessions for $100,000. NILR has already

Nilam Resources Inc. (NILR) 4

 Analyst: Victor Sula, Ph.D.
Initial Report
April 28th

paid $50,000 and owes $50,000 on a promissory note. The Llipa

project is located in the center of Peru, in the Llipa district and con-
sists of two mining concessions, the Prospera and La Prospera XXI
mines.

The mines produced one million tons of tailings containing gold,

which are still on the property. Llipa is located between the prolific-
producing Antamina and Cerro de Pasco mines and shows strong
potential as a major poly-metallic open pit mine.

The Antamina mine is a joint venture between Noranda, Teck

Cominco, BHP Billiton and Mitsubishi Corp. Antamina is rich in
gold, silver, copper and zinc, with mineral reserves estimated at
501 million ounces. Antamina has a production capacity of 70,000
tons/day and is the world’s largest single-circuit milling operation.
Cerro de Pasco is an open pit mine owned by Volcan, covering over
61,000 hectares of poly-metallic mineral deposits. The topographic
levels of the Llipa mine are 3,600 to 4,200 meters above sea level with close proximity to water and electrical
utilities.

In March 2008, NILR announced plans to reprocess tailings at the Llipa property. The Llipa mine, when oper-
ated by former owner Millotingo, produced gold, silver and approximately 1.2 million tons at 5.30 percent Cu.
The Company estimates the tailings at the Llipa mine contain approximately one million tons at a grade of 0.77
percent Cu and 8.7 g/t Ag and 2g/ton AU. At current metal prices, this translates into a $72 gross value per ton
and potential gross revenues totaling $72 million.

El Varon project

In December 2007, the Company acquired the El Varon property

(aka “El Baron”). This claim was staked by Len DeMelt, NILR’s
chairman, who transferred the claim to the Company for no con-
sideration. The El Varon property is located in the San Mateo Dis-
trict, Huarochiri Province, Lima Department, approximately 250-
kilometers east-northeast of Lima. The property is located in the
historical central mining district along the main access road leading
to Cerro de Pasco, a proven gold, silver and copper deposit, and the
Doe Run smelter located in the town of La Oroya.

The mine follows the East-West Mineralization trend adjacent to

two other major poly-metallic projects: Morococha (Pan American
Silver) and Toromocho (Peru Copper). The Morococha mine has
produced more than two million ounces of silver, together with sig-
nificant amounts of zinc, copper and lead. The Pan American
project hosts a very prolific network of mineral veins covering 11,620 hectares of historically productive conces-
sions. The Toromocho mine was purchased for approximately $1 billion. This mine focuses on copper production

Nilam Resources Inc. (NILR) 5

 Analyst: Victor Sula, Ph.D.
Initial Report
April 28th

but also contains other poly-metallic reserves.

Planned monthly output for the El Varon mine is budgeted at 4,000 tons of ore/month. Production is expected to
rise to 6,000 tons/month by year-end 2009. The El Varon mine already has the necessary infrastructure for mining
operations, including electricity, proximity to water and accessible transportation.

Other Development Projects

In March 2008, NILR announced negotiations to acquire additional promising mineral properties. The Company
is currently evaluating a mineral property with resources estimated to exceed $1 billion in gross value. This gold
and silver project, located in the southern part of Peru, has a geological resource totaling one million ounces of
gold and great infrastructures. Some 60 percent of the project is unexplored.

Another prospect involving copper exploration has returned impressive surface, underground and drilling val-
ues. Of four holes drilled, two have proved the target and one returned an impressive value of 8 percent Cu over
18 meters which undercut sampling in a short tunnel which yielded at 6 percent Cu. At current copper prices,
this represents a value of approximately $520 per ton. The zone is 900 meters long and 20 to 30 meters wide.

Industry Outlook

Gold is considered the most desirable precious metal and has important applications in modern industry. Gold
is the most malleable metal and is not affected by dust, water and chemicals. It is also an excellent conductor
of heat and electricity. As an alloy with other metals such as copper, it acquires new characteristics suitable for
highly specialized applications. The commercial uses of gold include jewelry production, dentistry and electron-
ics. Due to its durable nature and marketability, gold is also purchased as an investment.

Gold supply

Population growth, as well as industrial, technological and economic factors, is causing worldwide demand for
gold to rise faster than supply. Supply fell 3 percent in 2007 to 3,469 tons while mine output was little changed
for the year. An increase in de-hedging last year, which rose to 400 tons from 373 tons, and a 15 percent fall in
scrap supplies were largely, but not entirely, offset by a higher level of Central Bank sales.

Gold sales increased in 2007 under the Central Bank Gold Agreement as Switzerland began a new sales program,
disposing of 145 tons during the year. Spain, which had been an occasional seller in earlier years, undertook a
more vigorous sales program between March and July.

Nilam Resources Inc. (NILR) 6

 Analyst: Victor Sula, Ph.D.
Initial Report
April 28th

Gold supply, metric tons

2005 2006 2007

Mine supply 2,464 2,108 2,047

Mine production 2,550 2,481 2,447
Net producer hedging -86 -373 -400
Official sector sales 662 367 485
Old gold scrap 886 1,107 937
Total Supply 4,012 3,582 3,469
Source: World Gold Council, http://www.marketintelligence.gold.org/

Gold demand

Gold demand was 4 percent higher in 2007 at 3,547 tons. The value of demand at $79.2 billion represented a
fourth consecutive annual record. Following three quarters of strong growth in 2007, identifiable demand fell by
17 percent in tonnage terms in the fourth quarter from year-earlier levels. The investment market continues to
account for a growing share of gold demand and industrial demand produces slow but generally steady growth.
However, jewelry demand is dropping due to soaring gold prices.

Gold supply and demand 1997-2007, tons except where specified

4500
4000
3500
3000
2500
2000
1500
1000
500
0
1997 2000 2003 2006
Jewelry Industrial demand Indentifiable demand

Total $bn (rhs) Total Supply, tonnes

Source: World Gold Council, http://www.marketintelligence.gold.org/

At 2,426 tons, jewelry demand was 6 percent higher in 2007 in tonnage terms and 22 percent higher in dollar
terms, setting a new dollar record at $54 billion. Industrial demand rose 2 percent in 2007 in tonnage terms set-
ting a new annual record at 465 tons. This was equivalent to a 17 percent increase in dollar terms. Demand from
the electronics sector amounted to 314.6 tons and was 3 percent higher than 2006.

Overall, net retail investment in gold has been rising due to increasing demand from India, Turkey and Vietnam.
Investment in gold Exchange Traded Funds (ETFs) and similar products rose 16 percent or $773 million last
year.

Nilam Resources Inc. (NILR) 7

 Analyst: Victor Sula, Ph.D.
Initial Report
April 28th

Gold demand, metric tons

2005 2006 2007

Jewelry 2,707 2,283 2,426

Industrial & dental 431 458 465
Bar & coin retail investment 412 421 441
Other retail investment -26 -22 -36
ETFs & similar 208 260 251
Total Demand 3,731 3,400 3,547
Source: World Gold Council, http://www.marketintelligence.gold.org/

Gold prices

Gold prices, which averaged around $600 per ounce in 2006, rose to nearly $700 per ounce in 2007 and hit a re-
cord $1,000 an ounce in March 2008. Recent price gains reflect investors seeking refuge from a weak U.S. dollar,
higher world oil prices, inflation concerns, disruptions at South African mining operations and U.S. interest rate
cuts which make gold more attractive.

1 Year Gold High 1002.80 Low 641.80

1050 1050
1000 1000
950 950
900 900
USD per ounce

850 850
800 800
750 750
700 700
650 650
600 600
550 550
24Apr 01Jun 01Jul 16Aug 24Sep 31Oct 07Dec 15Jan 21Feb 31Mar 22Apr

Based on New York Close

Source: http://goldprices.com/

Merrill Lynch recently raised its outlook for gold prices, citing broadening investor demand, a weak U.S. dollar,
record oil prices and ongoing geopolitical tensions as growth drivers. Merrill Lynch analysts Michael Jalonen
and Jeffrey Schok now expect gold prices to average $925/oz in 2008 and $1,000/oz in 2009, up from earlier esti-
mates of $750/oz and $800/oz respectively.

Peru’s mining industry

Peru has a lucrative mining industry. Gold, iron ore, coal, and phosphate rock are extracted and exported in sub-
stantial quantities. Overall, the Peruvian economy is robust and growing. Peru produced 7.5 percent GDP growth
in 2006. The value of Peru’s exports increased 23 percent to $23.8 billion, of which $ 14.7 billion (62 percent) was

Nilam Resources Inc. (NILR) 8

 Analyst: Victor Sula, Ph.D.
Initial Report
April 28th

contributed by the mining sector. Peru’s principal exports are copper, gold, zinc, petroleum, coffee, potatoes,
asparagus and textiles.

Peru ranks fifth in the world in gold and copper production. It is the world’s largest producer of silver, and ranks
among the top five producers of zinc, lead and tin. Over the last five years, the value of Peru’s mineral production
has grown 25 percent. The newly-released Peru Mining Report for 2007 prepared by Business Monitor Interna-
tional (BMI) notes expectations that Peru’s mining industry will continue to expand over the next five years.

Yanacocha, a gold mine in northern Peru, is one of the world’s largest, most profitable gold mines. It has pro-
duced over $7 billion worth of gold since 1993. The Yanacocha project was the first large foreign investment in
Peruvian mining since 1976, and is symbolic of Peru’s entry into the world of modern mining. The mine has
significant reserves and will be a major gold producer for many years. Nevertheless, new developments, particu-
larly in sulfurized and gold- and copper-bearing minerals, could give the operations a new dimension.

Another major development in Peru is Barrick Gold’s Pierina mine. Pierina was developed in record time, taking
only 31 months from discovery to first gold production. In 2003, Pierina produced 28,358 ounces of gold. Barrick
Gold is continuing development of its latest discovery at Alto Chicama in North-Central Peru, where an inferred
resource of 3.5 million ounces of gold has been identified. Another important mine, Santa Rosa, is estimated
to contain 10 million ounces of gold. Other major gold producers in Peru include Cia Minera Sipan, Minera
Aurifera Retamas, and Cia Minera Ares. Cia Minera Ares is one of Peru’s latest “small” producers, producing
172,000 ounces of gold and 1.7 million ounces of silver each year.

Nilam Resources Inc. (NILR) 9

 Analyst: Victor Sula, Ph.D.
Initial Report
April 28th

Financial Analysis

Income statement

The Company has yet to generate revenues but anticipates recording its first revenues in the second half of 2008.
The Pativilca mine is already producing and the Company expects to close this purchase in 2008. In 2009, NILR
plans to commence production at its El Varon and Llipa properties, further enhancing its revenue-generating
potential.
Income statement, $

9 months FY 9 months
FY 2006 FY 2007
2007 FY 2008
Revenue - - - -
Operating expenses, including 11,101 68,479 517% 27,637 177,301 542%
Accounting and auditing fees 765 13,716 1693% 12,019 13,184 10%
Exploration costs and expenses 9,500 700 -93% 700 17,055 2336%
General and administrative 136 36,677 26868% 6,555 9,690 48%
Impairment of mineral properties - - n/m - 105,000 n/m
Other operating expenses 700 17,386 2384% 8,363 32,372 287%

Operating profit -11,101 -68,479 n/m -27,637 -177,301 n/m

Total Other Income 908 - n/m - 7 n/m
Net profit -10,193 -68,479 n/m -27,637 -177,294 n/m

Source: SEC Filings, Fiscal year ending April 30.

The Company reported a net loss of $177,294 during the first nine month of FY 2008 compared to a net loss of
$27,637 for the comparable period of FY 2007. Because NILR is in an early production stage, historic operating
expenses are not indicative of future performance.

Liquidity and capital resources

During the first nine months FY 2008, NILR raised $329,775 through private placement sales of its common stock
and warrants and issuance of notes payable to related parties. The Company plans to use these funds to support
its mining operations over the next 12 months.
Balance sheet $

30-Apr-07 31-Jan-08

Cash and equivalents 13,027 176,376

Total Assets 15,252 178,272

Liabilities, including 2,924 67,920

Notes payable 0 60,338
Shareholders’ Equity 12,328 110,352
Source: SEC Filings, Fiscal year ending April 30.

Nilam Resources Inc. (NILR) 10

 Analyst: Victor Sula, Ph.D.
Initial Report
April 28th

The Company has sufficient funds to cover the anticipated professional fees and general administrative expens-
es for the next 12 months. However, NILR needed additional financing to complete the purchases of the Pativilca
and Llipa properties. In addition, the Company lacks adequate capital for funding geological studies and work
programs on its mineral properties.

In March 2008, NILR announced a private placement of 789,473 restricted units at $1.90 per unit, which gener-
ated total gross proceeds of $1.5 million. The units consist of one common share and one full share purchase war-
rant, with each warrant exercisable for $2 for 18 months after the private placement closing date. The warrants
are redeemable by the Company without consideration upon 30 days notice to the subscriber. The Company
plans to use the private placement proceeds to expand production at the Pativilca mine from 50 to 500 tons per
day, purchase equipment and hire more workers.

The private placement was followed in April 2008 by a new $3 million financing commitment. NILR plans to use
these funds to complete the purchase of the Pativilca mine and increase mine production.

Outlook

NIRL has acquired the Llipa and El Varon claims and is in the process of closing the purchase of the Pativilca
mine. The Pativilca property will provide the Company with a near-term revenue stream and a platform for ex-
panding its mining operations. The Pativilca mine includes a modern gold processing plant currently processing
50 tons of ore/day. At this production rate, NILR could generate $9 million in annualized revenues.

In addition, the Company has secured a $3 million funding commitment that will allow it to complete the pur-
chase of the Pativilca mine and increase mine production to 500 tons of ore per day. As a result, the Pativilca
project could quickly ramp up to $90 million in annualized revenues. The Company is in the process of expand-
ing its labor force to boost gold production and is planning an aggressive surface and underground exploration
program.

The Pativilca mine is already producing. During 2009, we expect the Company to operate the mine at an average
production rate of 200 tons of ore per day. As a result, we expect NILR to produce 2009 revenues in a $40 million
range. In addition, we expect the Company to begin commercial production from the El Varon and Llipa proper-
ties in 2009, adding further to revenues.

Another source of revenues will come from reprocessing tailings at the Llipa mine. At current precious metal
prices and with modern techniques, reprocessing these tailings becomes economically viable. NILR estimates
tailings at the Llipa mine could contain approximately one million tons at a grade of 0.77 percent Cu and 8.7 g/t
Ag and 2g/ton AU. At current metal prices, this equates to a $72 per ton gross value and anticipated gross rev-
enues totaling $72 million after complete exploitation.

Nilam Resources Inc. (NILR) 11

 Analyst: Victor Sula, Ph.D.
Initial Report
April 28th

Valuation

We based our peer comparison on mining companies with sizable gold, copper, and silver production in Latin
America and Peru. The peer companies trade at a median 4.3 times forward Price/Sales ratio and a 16.1 times
forward P/E ratio.

Comparative analysis

Ticker Price/ Market Cap. P/E P/S

Company Name 4/23/2008
Symbol share($) $ million
2008 2009 2008 2009

AngloGold Ashanti Ltd. AU 36.49 10,280 28.96 14.14 2.99 2.54

Barrick Gold Corp. ABX 41.45 36,080 16.99 16.07 4.30 4.23
Goldcorp Inc. GG 38.82 27,570 39.21 31.06 9.74 8.59
Kinross Gold Corp. KGC 21.24 13,050 26.22 17.70 7.54 5.77
Newmont Mining Corp. NEM 44.11 19,990 18.77 15.87 3.09 2.89
Gold Fields Ltd. GFI 14.08 9,190 26.07 11.26 2.85 2.36
Randgold Resources Ltd. GOLD 51.82 3,950 39.26 41.46 10.39 10.91

Median 26.22 16.07 4.30 4.23

Source: Yahoo Finance

We think NILR will warrant a valuation comparable to peer group median levels once it begins generating rev-
enues in the second half of 2008. We expect revenues from mining and processing operations to approach $40
million in 2009. Multiplying our 2009 revenues estimate by a 4.3 times forward Price/Sales multiple, we derive
a $180 million market capitalization target. Assuming 20 percent dilution and 69 million shares outstanding at
year-end 2009, we derive a $2.61 price target for NILR shares.

We are initiating coverage of NILR with a Speculative Buy rating and a $2.61 price target. Given the Company’s
early production stage, however, we caution investors to carefully consider the risk factors mentioned below
before investing in these shares.

Nilam Resources Inc. (NILR) 12

 Analyst: Victor Sula, Ph.D.
Initial Report
April 28th

Risk Factors

Limited operating history

The Company is an early-production stage mining company. Activities to-date have focused on acquiring and
evaluating properties. A general truth for the mining industry is that few properties develop into commercially
viable mines. NILR has a limited operating history, making it difficult to assess the quality of its business plan.
No assurance can be given that the Company’s mining operations will become profitable.

Uncertain reserve estimates and reserve life

Reserve estimates are based on assumptions and may be inaccurate. NILR’s actual mineral production may fall
far short of reserve estimates. In that event, exploration spending would likely exceed mineral sales.

Need for additional financing

The Company must raise additional capital to fund its 2008 and 2009 exploration and production plans. If NILR
is unable to raise these funds, revenue-generating activities could be delayed or even suspended.

Commodity price volatility

NILR’s profits are determined by mineral prices, which fluctuate widely and are impacted by factors outside of
the Company’s control. If gold prices decline significantly, the Company’s mining operations could prove un-
profitable.

Management

NILR’s management team has a proven track record for developing geological operations and building success-
ful organizations. The Company has assembled a team of seasoned experts to direct its South American mining
operations.

Alain Vachon Mr. Vachon is an accomplished geologist and corporate director with more
President and CEO than 30 years experience in the mining industry. His career spans mineral re-
sources operations covering explorations, geology, mine operations, consult-
ing and corporate business development. Mr. Vachon was a major contributor
to the growth and success of Paramount Gold and Silver Corp., a company
that graduated from OTC to TSX and then AMEX listings. Mr. Vachon is con-
sidered one of the industry’s leading experts on mining operations. He has
held executive positions with Barrick Gold, Noranda Exploration and Shell
Canada Mineral.

Nilam Resources Inc. (NILR) 13

 Analyst: Victor Sula, Ph.D.
Initial Report
April 28th

Len De Melt Mr. De Melt is an engineering technologist with nearly 30 years of experience
Chairman & Director in the mining industry. He has managed a number of well-regarded mining
companies, including Yanacocha Mine in Peru, Norsemont Mining Inc. and
BHP. As NILR’s chairman and director, Mr. De Melt brings a wealth of man-
agement and leadership experience. He is a graduate of the Haileybury School
of Mines and holds a Bachelor of Arts degree in Business and Economics and
a Diploma in Mechanical Studies from the British Columbia Institute of Tech-
nology.

Varan Grewal Mr. Grewal is a business development director with broad experience in corpo-
Director of Finance rate finance. He began his career as an investment broker at Cannacord Capi-
tal, Canada’s largest independent investment firm. Mr. Grewal later founded
Pacific Imperial Inc., a stock investment firm that specializes in professional
investing, venture capital and investor relations. During his career, he has
raised significant amounts of investment capital for small to mid-cap interna-
tional companies and served as a private consultant in the investment banking
sector. Mr. Grewal serves as treasurer, secretary and director for NIRL.

Larry Sostad Mr. Sostad has been involved in the mining industry since 1965, and brings
Director of Mining a wealth of experience in geological exploration and corporate management.
He has served as a consultant on a number of high-profile mining projects
spanning North and South America and held positions with Cominco Ltd.,
Kootenay King Resources Inc., Rio Tinto and Noranda. He is a specialist in
precious and base metals and an expert in exploratory geological operations
and mineral assessment. Mr. Sostad’s role in NIRL is to increase production
through effectively targeting precious metal resources.

Juan Manuel Elescano
Director of Explorations
Mr. Elescano has more than 20 years experience in mining operations. He
graduated as a geological engineer from San Marcos National University and
soon after became involved in metal exploration projects in South America.
Mr. Elescano has worked with a number of reputable gold producers, most
notably Barrick Gold, where he served as a private contractor and consulting
engineer for over a decade. He holds a position as senior professor of Geologic
Engineering at San Marcos University in Lima, Peru and is an expert on South
American mining operations.

Carlos Ortiz Mr. Ortiz has been involved in South American mining operations for more
Director of Operations than 35 years. He is a recognized expert in the areas of planning, project devel-
opment, financial administration and executive management of mining opera-
tions. Mr. Ortiz holds a masters degree in business administration and a min-
ing engineering degree from the University of Ingenieria. He has worked for
several reputable South American mining companies, most notably Mauricio
Hochschild & Cía, Compañía Minera Ares, and Compañía Minera Arcata.

David Garcia Mr. Garcia has many years of experience in Peru’s mining industry and has
Professional Geologist been employed by Paramount Gold, Teck Cominco and other major mining
companies. He is an expert at implementing modern, integrated mineral ex-
ploration programs which include data compilation, ASTER imagery inter-
pretation, geochemical and geological surveys, PIMA interpretation and su-
pervision of drilling campaign in varying geological environments such as
disseminated gold deposits and low sulphidation.

Nilam Resources Inc. (NILR) 14

 Analyst: Victor Sula, Ph.D.
Initial Report
April 28th

Disclaimer
Beacon Equity Research (otherwise known as BER) is an independent research firm specializing in small and micro capitalization companies.
BER has no investment banking or consultation conflicts thereby minimizing the inherent conflicts of interest between the research analysts and
the companies they cover. BER is not a registered investment advisor or broker dealer. No information in this report should be construed as an
endorsement to either buy or sell any securities mentioned in this report. The analyst(s) who prepared this report rely on publicly avail¬able
information which neither the analyst, nor BER, can guarantee to be error-free or factually accurate. All conclusions in this report are deemed
reasonable and appropriate by the author. The Private Securities Litigation Reform Act of 1995 provides investors a “safe harbor” in regard to
forward-looking statements. To fully comply with the requirements of this law, BER cautions all investors that such forward-looking statements
in this report are not guarantees of future performance. Unknown risk, uncertainties, as well as other uncontrollable or unknown factors may
cause actual results to materially differ from the results, performance or expectations expressed or implied by such forward-look¬ing state-
ments. Investors should exercise good judgment and perform adequate due-diligence prior to making any investment. BER and its affiliates
have been compensated a total of eight thousand dollars directly from the company for enrollment of NILR in its research program and other
services. Ratings and price targets in this report should not be construed as recommendations or stock price predictors. Readers of this report
are urged to use due-diligence in any purchase of security listed herein. Readers should consult the Company’s SEC filings as well as our initial
report on the firm to better understand the inherent risks associated with this security. There may be many uncontrollable or unknown factors
which may cause actual results to materially differ from the results, performance or expectations expressed or implied by such forward-looking
statements. Investors should exercise good judgment and perform adequate due-diligence prior to making any investment.

All decisions are made solely by the analyst and independent of outside parties or influence.

I, Victor Sula, Ph.D, the author of this report, certify that the material and views presented herein represent my personal opinion regarding the
content and securities included in this report. In no way has my opinion been influenced by outside parties, nor has my compensation been
either directly or indirectly tied to the performance of any security listed. I certify that I do not currently own, nor will own and shares or se-
curities in any of the companies featured in this report.

Victor Sula, Ph.D. - Senior Analyst

Victor Sula, Ph.D. has held the position of Senior Analyst with several independent investment research firms since 2004. Prior to 2004, Mr. Sula
held Senior Financial Consultant positions within the World Bank sponsored Agency for Restructuring and Enterprise Assistance and TACIS
sponsored Center for Productivity and Competitiveness of Moldova, where he was involved in corporate reorganization and liquidation. He is
also employed as Associate Professor at the Academy of Economic Studies of Moldova. Mr. Sula earned his Ph.D. degree in 2001 and bachelor’s
degree in Finance in 1997 from the Academy of Economic Studies of Moldova. Mr. Sula is currently a level III candidate in the CFA program.

Nilam Resources Inc. (NILR) 15