Howard Group Introduction to Argex Mining, April 2012

Painting A Picture Of Argex Mining FAR BEYOND a “mining story” The Howard Group’s Perspective By: Dave Burwell Contributions from Grant Howard & Harvey Brovald April 19, 2012With a single business deal, announced on October 18, Market Performance2011, Argex Mining (RGX – TSX.V) instantly changed itsbusiness and value proposition. It was no longer lumped • Recent Price $1.01into the stagnating pool of Canadian junior miners. It was • 52 week High $1.25transformed into a chemical technology company with its • 52 week Low $0.33own Titanium Dioxide (Ti02) properties. • Market Cap ~$108 MillionOn that day the company announced that it had finalizedthe purchase of 50.1% interest in a patented industry As of April 1, 2012leading ore processing technologycalled - CTL Process. According Share Structure – April 19, 2012to management, the CTL Process Shares 107,794,496 Outstandinghas the ability to produce Options 9,125,000 1,850,000 Jan 28, 2015Titanium Dioxide (TiO2) in an 300,000 Feb 11, 2015environmentally friendly manner, 662,500 Jun 21, 2015 475,000 Jan 26, 2016while being significantly cheaper 350,000 May 19, 2016with superior purity compared to 3,100,000 Jun 20, 2016any other process available 1,650,000 Dec 9, 2016 1,000,000 Feb 24, 2017today. Warrants 34,661,675 17,1000,000 @ $.52 Sep 29, 2014 16,000,000 Oct 30, 2014Titanium Dioxide is currently 4,175 @ $.30 Sep 29, 2012 1,750,000 @ $.52 Sep 29, 2014selling for approximately $5,000 Shares Fully 151,581,171per metric ton. It is in high Diluteddemand as it is non-toxic and is Insider Holdings 11.34%used in a wide variety of products, including paint. It replaced lead pigment severaldecades ago. Now it is critical for the production of high quality paint, as a whiteningand brightening agent.The second major development in the company’s evolution occurred in early April2012 with the announcement of a technology collaboration agreement between Argexand NYSE listed PPG Industries, the number two paint company in the world, whichincludes brands such as PPG Pittsburgh Paints, Olympic Paints and Stains and more.While this will be discussed further in this commentary, the logical question to ask is -Why would a multi-billion dollar company sign such an agreement with a smallCanadian company if it hadn’t already completed extensive due diligence?And while RGX may be approximately 18 to 24 months away from having its first fullyoperational titanium dioxide processing plant up and running, the company couldclaim a unique global position.

On the presumption it will prove the scalability, efficiency and economic advantages ofits technology, what rewards potentially lay ahead for investors?On that subject we must declare that members of The Howard Group and theassociated Insight Limited Partnership II are shareholders in Argex. Also, The HowardGroup receives investor relations fees from Argex. However, those fees are significantlyless than what has already been invested in RGX stock as of this writing.We also must stress that The Howard Group is not a registered investment advisorand, as such, this commentary solely deals with HG’s perspectives on why it andclosely associated parties with HG invested in RGX. Readers should carefully considerall opinions and seek registered investment advice.Investment Points Stable and improving industrial demand for TiO2 (paint demand is very predictable and is considered a leading economic indicator). A majority stake in an industry leading patented TiO2 extraction process. Not only does Argex have its own supply of TiO2, it is building access to additional raw materials. With the CTL process, high purity Ti02 can be extracted from low concentration, previously considered waste rock. NI43-101 Preliminary Economic Assessment - $2.2 billion asset, on just one of Argex’s properties. A mature, experienced and polished management team.1970’s - Titanium Dioxide Replaces Lead in PaintIt is widely known that lead causes health problems in both children and adults.According to the U.S. Environmental Protection Agency, children with exposure tohigh levels of lead can suffer from damage to the brain and nervous system, behaviorand learning problems, slowed growth, hearing problems and headaches. Adultsexposed to high levels of lead are at risk of reproductive problems, high bloodpressure, nerve disorders, memory and concentration problems, and muscle and jointpain.Many homes built before 1978 contain lead-based paint. As a result of the healtheffects of exposure to lead in paint, paint manufacturers began replacing white leadpigments with the less toxic substitute, Titanium Dioxide. This occurred even beforelead was functionally banned in paint for residential use in 1978 by the U.S.Consumer Product Safety Commission.The Demand for Titanium DioxideIn 2010 global demand for TiO2 was ~4.9 million metric tons having a value ofapproximately U.S. $12 billion. The principal TiO 2 consuming industries in 2010 werethe paint and coatings industry with ~62% of world demand, the plastics industrywith ~26% of demand and the paper industry with 7% of world demand.

The balance of 5% of world demand was consumed in a variety of end-use applicationsincluding rubber, ceramics, inks, food, cosmetics, pharmaceuticals, toothpaste,fibers/textiles and many other miscellaneous applications. Paint as an Economic Indicator 2010 Global TiO2 Market End Use Markets Most people don’t know that economists track the price of Titanium Dioxide. Other, 5% Paper, 7% White paint is used by a huge slew of industries — including the automotive sector, in the construction of skyscrapers and of course, by adolescent boys painting fences. One Plastics, 26% Coatings, 62% economist calls it the "durable-goods pigment" because its used in the creation of so many products. Source: www.npr.org Coatings Plastics Paper OtherTiO2 Price HistoryToday the average Ti02 price sits around $5,000/tonne. The chart below demonstratesthe Global Average Price History of TiO2 (per tonne) up to 2010. The average for 2011was approximately $3,700/tonne. Global Average TiO2 Price History (at Fx of the day, in US$ pmt) $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0

Argex Inks a Deal with Pittsburgh PaintsOn April 3, 2012 Argex Mining announced the signing of a technology collaborationdeal with PPG Industries, the second largest paint company in the world.PPG Pittsburgh® Paints is an internationally recognized brand, with history exceeding100 years. PPG Pittsburgh® Paints are sold through an independent dealer networkconsisting of 2,500 locations across the United States and in over 250 PPG company-owned_stores.According to the release, the two parties will work together in the development andoptimization of pigment grade Titanium Dioxide (TiO 2) for paints and coatings,combining PPG’s paint technology with Argex TiO2 proprietary processing technology.An important point for investors is that much was going on behind the scenesleading up to this milestone announcement. PPG had been conducting duediligence on Argex’s metallurgical process for approximately nine months inadvance of the announcement.In our discussions with Argex management, we have learned that Pittsburgh teamsspent the nine months prior to the early April announcement in multiple stages of duediligence. This involved a detailed review AND testing of Argex’s chemical processingtechnology as well as testing the quality of the Argex TiO2.In short, PPG produced a product!This announcement is the first move PPG Industries has made as part of its ―GlobalInitiative to leverage Titanium Dioxide expertise,‖ which was announced on December6th.In the news release issued on that day, ―PPG Chief Technology Officer Charles F. KahleII announced that the company has undertaken a strategic initiative with multipleglobal suppliers to secure and enhance PPG’s supply of titanium dioxide, as well asadd to the global supply of the raw material from PPG.‖To view the news release, please click here.Mr. Kahle was also quoted in the RGX – PPG news release of April 3, 2012.While the terms of the agreement were not disclosed, investors should note thefollowing sentence for what is yet to come, ―The Agreement provides for the negotiationof a purchase and supply agreement between Argex and PPG based on thesuccessful development of the treatment technologies.‖About PPG Industries – PPG Pittsburgh® PaintsPPG Pittsburgh® Paints is a division of PPG Industries Inc.

NYSE: PPGMarket Cap – $14+ BillionFounded in 1883, the company is a global supplier of paints, coatings, opticalproducts, specialty materials, chemicals, glass and fibreglass. PPG has over 38,000employees and operates in more than 60 countries around the globe.2011 Financial ResultsNet Sales - $14.9 billionEarnings per Share - $6.79Argex Pilot-Plant Production OverviewThe company has been operating a small scale pilot plant in Mississauga sinceFebruary 2011, using patented and proprietary technology for the recovery of TiO 2,V2O5 (vanadium pentoxide) and Fe (iron) from its 100% owned ore body in Quebec.Based on the success of the pilot, Argex acquired a 50.1% ownership position inCanadian Titanium Ltd. (CTL), for a lump sum payment plus ongoing royalties on TiO 2revenue.Argex plans to complete an expansion of its pilot-plant in Mississauga to 30 times itsoriginal production capacity from 0.5 kg/day up to 15kg/day during Q2/2012."The scale-up permits us to not only increase production," noted Chief OperatingOfficer Enrico Di Cesare, "it will also allow us to conduct larger scale testing andcontinue to optimize the key performance indicators.‖“De-Risking” Scale-Up of ProductionBased on recent news, it is no secret that Argex’s objective is to build in conjunctionwith a partner, a full scale TiO2 production facility. The size and scale is not yetpublically known. However, Argex management is convinced scalability ―will not be anissue.‖ Below is a summary, based on information provided by Chief Operating Officer,Enrico Di Cesare on what Argex has done to ensure a seamless scale up of the CTLproduction process.Significantly, in our discussions with RGX management, we have been told that theactual processing facility is similar in nature to that being used in the uraniumindustry. Thus, the key to scalability is the chemical technology, not reliance on newand untested equipment.This “secret sauce” is the heart of Argex!The process (CTL Process) for recovering titanium dioxide (TiO 2), iron and vanadium co-products is based upon an atmospheric leach of the ore, crushed and ground to a finepowder (approx. 75 micrometers in diameter). Equipment for crushing and grinding toprepare for leaching is a well known and widely available commodity.

Leaching takes place at 70ºC using a mixed chloride brine solution comprised ofhydrochloric acid (HCl) and magnesium chloride (MgCl2). This acid/brine mixturedissolves the titaniferous magnetite; leaching practically all of the iron, titanium, andvanadium into a solution form, leaving little in terms of residue for disposal (~15%).Materials and equipment required that resist acid for this process are “off the shelf” andwell known.Each of the end product components are then recovered as the leach solution is passedthrough successive chemical extraction stages. Again, this is standard.The final stage of the CTL process is acid regeneration. Argex has chosenPyrohydrolysis which is a commercially-proven technology, used primarily in the steelindustry, which has been tested and used for over 40 years.For the TiO2 coating, Argex is working closely with PPG. Together, the two will leveragePPG’s proprietary coating technology, thereby eliminating risk on this item.Argex’s Corporate HistoryThe company originated as a CPC on the TSX Venture Exchange known as "ArgexSilver Capital Inc." and completed its qualifying transaction by acquiring the assets of7013833 Canada Corp in October 2010. The assets included 100% ownership of: 1. The La Blache Property – a NI43-101 compliant titanium, iron and vanadium deposit. The property is located 120 km north of the St. Lawrence River, contains over 30 million tonnes (measured + indicated) of ore suitable for surface mining. A Preliminary Economic Assessment released October 26, 2011 demonstrates low-cost production using conventional open-pit mining techniques. Argex has the option to rapidly advance production from this deposit to feed its planned Titanium Dioxide extraction plant. 2. The Lac Brûlé Titanium-Iron-Vanadium deposit, located 130 km west of Baie- Comeau, less than 100 km from the coast of the St. Lawrence River, contains between 2 and 3 million tonnes (based on historical studies – Non-NI43-101 compliant) of high grade titanium ore – higher than La Blache. Significantly, the ore has a lower iron content than the La Blache property, contributing to a much higher refining throughput.

3. The Mouchalagane Iron ore project, located north-west of the Manicouagan Reservoir on the North Shore of Quebec. Historical drilling in five areas on the property confirmed the presence of several economic grade iron deposits up to a hundred meters in thickness. The overall conceptual tonnage estimated for Mouchalagane ranges between 940 million tonnes and 2.31 billion tonnes of magnetite and hematite-rich (types of rocks from which metallic iron can be extracted) mineralization.Existing infrastructure for all three properties include rail lines, power lines, mainaccess & forestry roads, affordable housing for employees, deep sea ports, and skilledlabour.La Blache - Preliminary Economic AssessmentIn December 2011, Argex published a Preliminary Economic Assessment on its LaBlache property in Quebec, Canada, indicating a 32% IRR for the end-to-end project -mine development through full scale refining.A summary of the PEA on its 100% owned La Blache Property is below. This project isestimated to have a pre-tax internal rate of return of 32% and a net present value of$2.2 billion, using an 8% discount rate.The La Blache PEA study assumed ore production from La Blache and multiple plantmodules includes the following highlights:  IRR (Pre‐Tax): 32%  NPV: $2.2 billion (using an 8% discount rate)  Payback period of 7* years assuming a staged, modular plant construction.  Total Operating cost (net of by‐products) of $586 per tonne of TiO2 (averaged over the life of the mine)  Price per tonne of TiO2: $2,846 - trailing 3 year average (current price is $5,000)While the PEA included revenue from all commodities to be produced, Titaniumdioxide constitutes approximately 85% of the economic value and as such is thedominant factor.

Argex Trading and Stock SummaryStock Chart For those who understand and follow technical analysis, Argex has a very bullish chart. The rising RSI (Relative Strength Index) reflects the recent strength in the stock price, and also highlights a modest but healthy pullback from recent over bought levels. The 50 day moving average has crossed the 200 day moving average which is another bullish signal. The previous $0.90 resistance should become the new support level moving forward.It is not unreasonable to expect a period of price consolidation at current levels, butany new news about further business developments should push the stock to higherlevels.The bottom of the image shows Argex’s MACD (Moving Average ConvergenceDivergence), another momentum indicator. It punched through 0 in January (apositive move) and just like the RSI it too has been rising steadily since November.Average Daily VolumeThe average daily volume jumped Average Daily Volumein April. This is a result of the 1,400,000announcement of the deal with 1,200,000PPG Industries, additional 1,000,000exposure generated from research 800,000reports and an intensified investor 600,000relations program. Liquidity is 400,000critical to attracting not only retailbuyers but institutional support 200,000in particular. 0 January February March April (To Date)

House Summary January 1, 2012 – April 19, 2012.The diversity of the market participation in Argex is among the best that we have seenin the almost 24 years that The Howard Group has been assisting micro and small capcompanies. Argex has strong retail, broker & institutional support in a large crosssection of houses.Broker Buy SellID Broker Name VWAP Buy Vol VWAP Sell Vol 7 TD Securities Inc. 0.814 5,945,506 0.845 5,984,700 1 Anonymous 0.804 5,025,900 0.754 6,132,800 99 JitneyTrade Inc. 0.878 4,091,360 0.889 3,351,800 9 BMO Nesbitt Burns Inc. 0.697 2,548,821 0.699 2,084,426 79 CIBC World Markets Inc. 0.759 2,226,360 0.754 2,099,552 2 RBC Capital Markets 0.767 2,192,930 0.746 3,456,007 80 National Bank Financial Inc. 0.75 1,759,700 0.799 1,902,169 85 Scotia Capital Inc. 0.783 1,627,278 0.791 2,187,348 27 Dundee Securities Ltd. 0.673 1,624,500 1.111 337,750 15 UBS Securities Canada Inc. 0.828 1,509,247 0.941 381,285 33 Canaccord Genuity Corp. 0.83 1,052,357 0.778 1,058,390 19 Desjardins Securities Inc. 0.816 856,207 0.787 907,914 75 MGI Securities Inc. 0.753 810,100 0.798 251,694 37 MacDougall, MacDougall & MacTier Inc. 0.79 777,630 0.655 723,509 53 Morgan Stanley Canada Limited 0.545 498,500 0 124 Questrade Inc. 0.82 460,900 0.765 548,339 22 Fidelity Clearing Canada ULC 0.642 445,200 0.615 348,500 123 Citigroup Global Markets Canada Inc. 0.5 385,600 0 39 Merrill Lynch Canada Inc. 0.702 361,465 0.632 604,015 14 ITG Canada Corp. 0.915 224,600 0.485 341,573 100 TSX Buy-Ins (CDS) 1.229 161,800 0 81 HSBC Securities (Canada) Inc. 0.575 160,000 0.527 68,750 57 Interactive Brokers Canada Inc. 0.522 147,762 0.535 153,608 36 W.D. Latimer Co. Limited 0.824 144,992 0.841 298,056 13 Instinet Canada Limited 0.903 115,400 0.977 80,700 44 Jones, Gable & Company Limited 0.818 113,400 1.195 113,000 46 Macquarie Private Wealth Inc. 0.845 110,700 0.862 168,000 18 Euro Pacific Canada Inc. 0.605 99,000 0.848 65,500 89 Raymond James Ltd. 0.599 91,500 0.922 38,800 101 Newedge Canada Inc. 1.005 91,100 0.987 72,200 74 GMP Securities L.P. 0.638 88,500 0.99 92,100 62 Haywood Securities Inc. 1.078 86,500 0.958 25,000 69 Jordan Capital Markets Inc. 0.544 68,000 0.889 117,500

28 BBS Securities Inc. 0.823 62,500 0.803 59,500 6 Union Securities Ltd. 1.13 48,000 0.769 380,000 67 Northern Securities Inc. 0.815 40,000 0.548 692,980 48 Laurentian Bank Securities Inc. 0.586 35,300 0.789 38,700 95 Wolverton Securities Ltd. 0.911 34,200 0.995 65,000 31 D&D Securities Inc 0.911 33,500 0.767 52,600 70 Manulife Securities Incorporated 0.817 25,350 0.692 22,750 58 Qtrade Securities Inc. 0.653 22,800 0.692 58,450 86 Pictet Canada L.P. 0.656 19,500 0 25 Odlum Brown Limited 1.19 16,200 0 68 Leede Financial Markets Inc. 0.51 10,000 0.602 24,000 83 Mackie Research Capital Corporation 0.9 10,000 0.917 26,000 54 Global Securities Corporation 1.098 5,600 1.106 71,400 56 Edward Jones 1.078 5,000 0.491 31,500 5 Penson Financial Services Canada Inc. 0.74 2,500 1.04 384,000 16 Paradigm Capital Inc. 0 1.006 49,700 43 Caldwell Securities Ltd. 0 1.08 9,200 92 Pollitt & Co. Inc. 0 1.06 1,000 96 Blackwatch Capital Corp. 0 0.5 291,500 121 Jennings Capital Inc. 0 0.45 20,000Totals 0.784 36,273,265 0.784 36,273,265What the Analysts are SayingEuroPacific Canada - March 8, 2012Strong Buy - 12 month target price: $1.80In our view, Argex has all the necessary attributes to be a successful Ti02 pigmentproducer. Current operating costs for the project, we estimate, will be the lowest in theindustry. Capex is in line with other Greenfield projects. The company is led by askilled and experienced management team with a strong and supportive Board ofDirectors. Long-term trends in the Ti02 pigment market, we believe, will remainfavourable to support strong long-term pricing and a very economical project. The keyhurdle at this stage is the successful scaling of the underlying CTL process toindustrial size.Ubika Research – March 5, 2012Rating: ―Undervalued‖ – Target price: $3.30Significantly undervalued – Trading at steep discount to NAV: Argex currently tradesat a significant discount (~490%) to its NAV of $3.30/sh, providing strong investmentopportunity for early stage investors who are not risk averse. We have used aconservative discount rate of 12% in arriving at the NAV to account for the risk inscalability of its CTL extraction process.

Additionally, we have considered only Lac Brûlé’s available historical resourceestimate (3.87 million tonnes and ~27% TiO2 grade) as ore feedstock for the CTLplant, and any higher-grade ore from outside suppliers and increase in Lac Brûléresource estimates would result in substantial increase in NAV. We therefore initiatecoverage on Argex with an undervalued rating, with a Ubika Model Price (UMP) of$3.30 per share.Summary  The Argex story is unique, which in itself has attracted the attention of those who are avid participants in the junior market.  The majority of junior resource stories are orphaned, especially those that are in the precious metals area, but Argex has something special with its industrial reincarnation.  This isn’t a question of supply to Ti02; it’s now a question of technology.  The story is evolving, but took a major step forward with the announcement of the collaboration agreement with PPG industries.  The next key pieces of news will be the details of supply and purchase agreements that will further define the nature of the Argex-PPG relationship and provide the market with the ability to further quantify RGX’s future value.  The Argex story is well followed and enjoys broad stock participation amongst many investment firms; a position that would be viewed with great envy by the majority of junior companies.  A question that we believe will become more frequently asked will be whether or not Argex will carry forward with plans to develop a series of processing facilities or will a large conglomerate move to buy out the company sooner rather than later?  Logic would dictate that anyone who has an interest in securing the ―secret sauce‖ chemical technology would likely wait until the first plant is up and running. On the premise that the facility runs bug free and the economics and through-put meet expectations, the question of scalability will be answered beyond a shadow of a doubt.The links below will allow you to reach The Howard Group when you require investorinformation:Email: info@howardgroupinc.comWebsite: http://www.howardgroupinc.com/clients/Clients/Argexmining.aspxNewsletter Direct: http://howardgroupinsightnewsletter.blogspot.com/

To receive future news and commentary on Argex Mining pleaseemail: info@howardgroupinc.comSubject Line – Receive Argex informationPlease provide us with relevant contact information and whether or not you are anindividual investor, investment advisor, analyst or fund manager. Also, please indicate ifyou would like someone to call you to discuss Argex Mining. We also appreciate yourcomments & feedback.Contact Information:Dave Burwell/Grant HowardThe Howard Group Inc.Toll Free: 1-888-221-0915Phone: (403) 221-0915dave@howardgroupinc.comDisclaimerThe Howard Group is not a registered investment advisor and as such, individuals shouldconsult a registered investment advisor prior to making investment decisions in relation to thecompany discussed in this commentary. The information presented in these website pages wasobtained from sources believed to be reliable but is not guaranteed, is not all conclusive andshould not be relied upon as the sole source of information/opinion for making an investmentdecision. The Howard Group or its employees may own securities in the company discussed inthis commentary. The Howard Group receives remuneration for Investor Relations activitiesfrom the company discussed in this commentary.Except for the statements of historical fact contained herein, certain statements contained inthis presentation constitute ―forward-looking statements‖ as such term is used in applicableCanadian and US laws. These statements relate to analyses and other information that arebased on forecasts of future results and assumptions of management. Any statements thatexpress or involve discussions with respect to predictions, expectations, beliefs, plans or futureevents or performance (often, but not always, using words or phrases such as ―expects‖ or―does not expect‖, ―is expected‖, ―anticipates‖ or ―does not anticipate‖, ―plans‖, ―estimates‖ or―intends‖, or stating that certain actions, events or results ―may‖, ―could‖, ―would‖, ―might‖ or―will‖ be taken, occur or be achieved) are not statements of historical fact and should be viewedas ―forward-looking statements‖.Forward-looking statements are made based on management’s beliefs, estimates and opinionson the date the statements are made and the Corporation undertakes no obligation to updateforward-looking statements if these beliefs, estimates and opinions or other circumstancesshould change, except as required by applicable law. THIS IS NOT A RECOMMENDATION TO BUY OR SELL ANY SECURITY

Howard Group Introduction to Argex Mining, April 2012

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Howard Group Introduction to Argex Mining, April 2012 Document Transcript