Letter to the shareholders

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Dear Friends, family, and stakeholders,

In the future, when we look back at 2013, I strongly believe that we will recognize that it contained a nadir for Egypt, for the global mineral resource sector, and for Alexander Nubia. From a macro perspective, USA, China, and parts of Europe are showing signs of sustained recovery. This greater resiliency to the economic and financial shocks of the past has precipitated a decrease in the demand for gold and gold-related equities. Concern remains about the trend and general health of the mineral- resource sector; however, this should be examined in the context of the events of the year. Early in 2013, we witnessed: 1) no new IPO's for mining, 2) positive news from issuers that was greeted by a lower share price, and 3) a dearth of exploration and development capital for mining issuers. In contrast, in the latter half of the year, supported by continued broad positive economic trends, a number of financings were completed and share prices in mining stocks rebounded moderately (not considering gold stocks), combined with an increase in the appetite of private and institutional investors for commodities and risk.

In the same token, in the first half of 2013, Egypt witnessed a significant deterioration in key economic drivers. However, since the events of July 2013, an impressive $12 billion of aid has been designated for Egypt from regional heavyweights, Kuwait, Saudi Arabia, and UAE; this has stabilized the Egyptian currency, abated the economic deterioration, and normalized gas, diesel, and electricity supplies. As a result, tourism is starting to return, private investment is increasing, and in December the Cairo Alexandria Stock Exchange (CASE) hit its highest point since the 2011 uprising. Of particular interest, Sinopec acquired Apache's Egyptian oil assets for $3.1 billion and General Electric (GE) and Carbon Holdings is proceeding with a $4.8 billion naphtha cracker facility located near the Red Sea.

Mark Mobius, executive chairman of Franklin Templeton Emerging Markets Group, told CNBC's "Access: Middle East" last month (December 11, 2013) that he remained bullish about Egypt.

The reason why I've taken some length to reflect on these external factors is to address a principal concern by investors in Alexander Nubia over the past three years, namely, the impact of jurisdictional risk. If the performance of the CASE and foreign direct investment is a measure of sovereign risk, then our stakeholders should take significant relief.

A projected global recovery comes with expectations of a greater demand for copper and zinc, and in H2-2013 we are witnessing growing investor interest for high quality base-metal projects and high-grade gold deposits that are resilient to a volatile gold price.

I see that one of the most compelling value propositions for Alexander Nubia is its exposure to a diverse basket of metal commodities through the advancement of its potentially world-class VMS polymetallic deposit at Hamama. What we have discovered at Hamama: a gold-silver oxidized cap, a zinc-gold-silver-rich exhalite zone, a 3,000-metre mineralized strike length (larger than those of all the other major VMS deposits in the Arabian-Nubian Shield), and broad copper and alteration anomalies at surface, are consistent with our view that Hamama is a major VMS system.

A question often asked of me is, “What is our ability to secure exploration funding to advance our concessions?” Investor interest in Alexander Nubia is based on its future, and I am a firm believer that our quality assets and a credible professional team will secure capital. My confidence in securing substantial and sustainable source of capital is in part based on the broad developments in Egypt, in the mining sector, but more importantly on the exceptional quality of projects Alexander Nubia offers to investors.

In 2014 the exploration program at Hamama VMS should entail geophysics to identify massive sulphide pods, mapping to outline the full strike potential of the Main VMS Horizon and drilling to establish a resource, initially focused on the gold-silver cap, a target mineable by the low-cost open-pit method.

For our stakeholders, in addition to participation in the development of a major VMS deposit, we control a large land package with accessible infrastructure and a diversified portfolio of projects rich in precious- and base-metals and a respectable copper-gold rich initial resource at Abu Marawat.

I'm excited about the near-term and longer-term prospects of the company. We have passed through three years of headwinds, which have made us a leaner and smarter organization; perhaps now the change in currents will help propel our company forward to new heights.

I look forward to sharing our news with you in the coming year as we ramp up our program.

Wishing you a prosperous, healthy, and happy 2014!

Sincerely,

A. Alexander Massoud

CEO and President

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