wayne.hewgill@researchcapital.com

Price: $1.35 Basic Sh. O/S (mm): 56.6

Target Price (1 yr.):$ 3 .10 FD Shares (mm): 63.9

Projected Return: 130% Float (shares mm): 56.6

52-Wk High: $4.20 Market Cap (mm): $76

52-Wk Low: $0.51 NAV per Share $6.20

Cash(mm) $8.50

EPS -$0.02 -$0.02 -$0.02 -$0.02

CFPS -$0.02 -$0.02 -$0.02 -$0.02

Target valuation parameter - 0.5x NAV (11%)

Far West announced the highest grade i ron ore resul ts to date from the

area between the companies Chi lean Santo Domingo Sur Deposi t the

Iris Deposi t - including 216 metres grading 37.5 % i ron, as wel l as 62

metres grading 0.73% Cu and 32.5% Fe in a different hole.

Since Far West made the discovery of the Santo Domingo Sur deposi t in

2005, the company recognized the value of the i ron ore component but

dril ling was primari ly focused on outlining a a copper deposi t. With the

April 2008 Preliminary Economic Assessment by Amex Engineering, the

company demonstrated the economic potential of i ron that hosts copper

mineralization in i ron-copper mantos.

Using our long term copper prices of $2.25 per pound and a $60 per

tonne i ron price, the value of the contained metals leans somewhat

towards Cu, wi th Cu contributing approximately 55% to the total

revenue, i ron 40% and, gold adding less than 5%. With the recent long

intersections in the i ron zone between Santo Domingo Sur and Iris,

there is potential to expand the additional iron mineralization between

the two deposits into the ul timate pi t shell . The company may indeed

have an i ron deposit wi th a solid copper credi t rather than visa versa, as

we had original ly thought.

In December 2008, we raised our long term copper price from $1.75 to

$2.25 a pound based on out belief that the current delays in new copper

capacity wi l l give strength to the long term copper price when the

economy recovers.

Our risk adjusted valuation is based a 0.5x NAV using our of NAV of

$6.20 per share (11% discount rate) We have based our risk mul tiple on

the uncertainty surrounding a recovery in the Asian economy which we

see as the principle market for ore from Santo Domingo as wel l as the

most l ikely source of a potential sui tor.

We are maintaining

We are stil l waiting for the detailed metal lurgical work that wi l l clari fy

the processing method for the i ron ore and facil itate the completion of

the next resource estimate which should add a signi ficant amount of i ron

resources.

1.

2.

3.