Dachang 2011 Technical Report Final - Inter- · PDF file16.0 MINERAL PROCESSING AND...

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SUITE 10, KESWICK HALL, NORWICH, UNITED KINGDOM NR4 6TJ Telephone (44) (1603) 501 501 Fax (44) (1603) 507 007 INTER-CITIC MINERALS INC. A TECHNICAL REPORT ON AN UPDATED MINERAL RESOURCE ESTIMATE FOR THE DACHANG GOLD PROJECT, QINGHAI PROVINCE, PEOPLE’S REPUBLIC OF CHINA Stanley C. Bartlett, M.Sc., P.Geo., Micon International Co Limited Dibya Kanti Mukhopadhyay, M.Sc., MAusIMM (CP), Micon International Co Limited B. Terrence Hennessey, P.Geo., Micon International Limited June 28 th , 2011

Transcript of Dachang 2011 Technical Report Final - Inter- · PDF file16.0 MINERAL PROCESSING AND...

SUITE 10, KESWICK HALL, NORWICH, UNITED KINGDOM NR4 6TJ Telephone (44) (1603) 501 501 Fax (44) (1603) 507 007

INTER-CITIC MINERALS INC.

A TECHNICAL REPORT ON

AN UPDATED MINERAL RESOURCE

ESTIMATE FOR THE DACHANG GOLD PROJECT,

QINGHAI PROVINCE,

PEOPLE’S REPUBLIC OF CHINA

Stanley C. Bartlett, M.Sc., P.Geo., Micon International Co Limited Dibya Kanti Mukhopadhyay, M.Sc., MAusIMM (CP), Micon International Co Limited

B. Terrence Hennessey, P.Geo., Micon International Limited

June 28th, 2011

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TABLE OF CONTENTS

Page

1.0  SUMMARY .................................................................................................................... 1 1.1  UPDATED MINERAL RESOURCE ESTIMATES ................................................... 3 

1.1.1  Resource Estimate for the Main and Placer Valley Zones ................................. 4 1.1.2  Mineral Resources (Polygonal Methods) ........................................................... 5 1.1.3  Total Mineral Resources .................................................................................... 6 

2.0  INTRODUCTION AND TERMS OF REFERENCE ................................................ 8 

3.0  RELIANCE ON OTHER EXPERTS ........................................................................ 14 

4.0  PROPERTY DESCRIPTION AND LOCATION .................................................... 15 

5.0  ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ................................................... 18 

6.0  HISTORY ..................................................................................................................... 20 6.1  BACKGROUND ....................................................................................................... 20 6.2  2004 TECHNICAL REPORT.................................................................................... 21 6.3  2005 MINERAL RESOURCE INVENTORY ESTIMATE ON NR-2 ..................... 21 6.4  2007 MINERAL RESOURCE INVENTORY ESTIMATE ON DMZ ..................... 22 6.5  2008 MINERAL RESOURCE ESTIMATE FOR THE DMZ .................................. 23 6.6  2009 TECHNICAL REPORT AND MINERAL RESOURCE ESTIMATE ............ 23 

7.0  GEOLOGICAL SETTING ......................................................................................... 25 7.1  REGIONAL GEOLOGY ........................................................................................... 25 7.2  LOCAL GEOLOGY .................................................................................................. 26 7.3  PROPERTY GEOLOGY ........................................................................................... 29 

8.0  DEPOSIT TYPES ........................................................................................................ 31 

9.0  MINERALISATION ................................................................................................... 32 

10.0  EXPLORATION ......................................................................................................... 34 10.1  INTRODUCTION ..................................................................................................... 34 10.2  GEOLOGICAL MAPPING ....................................................................................... 35 10.3  TOTAL FIELD MAGNETOMETER SURVEY ....................................................... 37 10.4  TIME DOMAIN ELECTROMAGNETIC SURVEY ............................................... 37 10.5  2008 INDUCED POLARIZATION GEOPHYSICAL SURVEY ............................ 38 10.6  SOIL GEOCHEMICAL SURVEY ............................................................................ 38 

10.6.1  2004 Soil Geochemistry ................................................................................... 39 10.6.2  2005 Soil Geochemistry ................................................................................... 41 10.6.3  2006 Soil Geochemistry ................................................................................... 43 

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10.6.4  2007 Soil Geochemistry ................................................................................... 43 10.7  TRENCHING ............................................................................................................ 43 

10.7.1  2004 Trenching Program .................................................................................. 44 10.7.2  2005 Trenching Program .................................................................................. 44 10.7.3  2006 Trenching Program .................................................................................. 47 10.7.4  2007 Trenching Program .................................................................................. 52 10.7.5  2008 Trenching Program .................................................................................. 60 10.7.6  2009 Trenching Program .................................................................................. 66 10.7.7  2010 Trenching Program .................................................................................. 74 

11.0  DRILLING ................................................................................................................... 79 11.1  2004 DRILL PROGRAM .......................................................................................... 79 11.2  2005 DRILL PROGRAM .......................................................................................... 80 11.3  2006 DRILL PROGRAM .......................................................................................... 82 11.4  2007 DRILL PROGRAM .......................................................................................... 83 11.5  2008 DRILL PROGRAM .......................................................................................... 84 

11.5.1  Infill Drilling .................................................................................................... 86 11.5.2  Engineering Targets ......................................................................................... 86 11.5.3  Exploration Drilling ......................................................................................... 86 11.5.4  Compilation of Results ..................................................................................... 89 

11.6  2009 DRILL PROGRAM .......................................................................................... 90 11.7  2010 DRILL PROGRAM .......................................................................................... 91 

12.0  SAMPLING METHOD AND APPROACH ............................................................. 94 12.1  SOIL SAMPLING ..................................................................................................... 94 12.2  TRENCH SAMPLING .............................................................................................. 94 12.3  DRILL CORE SAMPLING ....................................................................................... 95 

13.0  SAMPLE PREPARATION, ANALYSES AND SECURITY ................................. 96 13.1  SAMPLE PREPARATION AND ANALYSIS ......................................................... 96 

13.1.1  Soil Samples ..................................................................................................... 96 13.1.2  Trench Samples ................................................................................................ 96 13.1.3  Drill Core Samples ........................................................................................... 96 

13.2  QUALITY CONTROL AND QUALITY ASSURANCE ......................................... 97 13.2.1  SGS Quality Control ........................................................................................ 97 13.2.2  Inter-Citic Quality Control ............................................................................... 97 

14.0  DATA VERIFICATION ........................................................................................... 111 14.1  MICON VERIFICATION SAMPLING .................................................................. 111 14.2  POPULATION STATISTICS ................................................................................. 111 14.3  CONCLUSIONS...................................................................................................... 114 

15.0  ADJACENT PROPERTIES ..................................................................................... 115 

16.0  MINERAL PROCESSING AND METALLURGICAL TESTING ..................... 116 

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17.0  MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES ................ 117 17.1  DATA PROVIDED FOR RESOURCE ESTIMATION ......................................... 117 17.2  STATISTICAL ANALYSIS ................................................................................... 118 17.3  VARIOGRAPHY .................................................................................................... 120 17.4  BLOCK MODEL GRADE INTERPOLATION ..................................................... 121 17.5  LOCAL ESTIMATE OF RECOVERABLE RESOURCES ................................... 124 17.6  MINERAL RESOURCE CLASSIFICATION ........................................................ 128 17.7  MINERAL RESOURCE ESTIMATE ..................................................................... 129 17.8  MINERAL RESOURCES (POLYGONAL METHODS) ....................................... 130 17.9  MINERAL RESOURCES ....................................................................................... 133 17.10  RESPONSIBILITY FOR ESTIMATION ........................................................... 133 

18.0  OTHER RELEVANT DATA AND INFORMATION ........................................... 135 18.1  PRELIMINARY ASSESSMENT ............................................................................ 135 

18.1.1  Design Concept .............................................................................................. 135 18.1.2  Mining ............................................................................................................ 136 18.1.3  Processing ....................................................................................................... 138 18.1.4  Infrastructure and Services ............................................................................. 139 18.1.5  Cost Structure ................................................................................................. 140 18.1.6  Economic Analysis ......................................................................................... 141 

18.2  CONCLUSIONS AND RECOMMENDATIONS .................................................. 143 

19.0  CONCLUSIONS ........................................................................................................ 144 

20.0  RECOMMENDATIONS .......................................................................................... 144 

REFERENCES ...................................................................................................................... 146 

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List of Tables Page

Table 1.1  : Mineral Resource Estimate for the DMZ and PVZ as at June 28th, 2011 ............. 4 

Table 1.2  : Exploration Area Inferred Mineral Resources as at June 28th 2011 ...................... 6 

Table 1.3  : Current Total Mineral Resources for the Dachang gold project as at June 28th, 2011........................................................................................................ 6 

Table 2.1  : List of Abbreviations ............................................................................................. 9 

Table 4.1  : Dachang Exploration Licenses ............................................................................ 15 

Table 10.1  : Major Gold-in-Soil Anomalies - 2004 and 2005 Exploration Programs ............ 42 

Table 10.2  : Significant Trench Assay Results - 2005 Exploration Program .......................... 45 

Table 10.3  : Significant Trench Assay Results - 2006 Exploration Program .......................... 49 

Table 10.4  : Resampling of Historic Trenches - 2006 Exploration Program .......................... 52 

Table 10.5  : Significant Trench Assay Results - 2007 Exploration Program .......................... 53 

Table 10.6  : 2008 Trenching Targets ....................................................................................... 62 

Table 10.7  : Significant Trench Assay Results – 2008 Exploration Program ......................... 65 

Table 10.8: 2009 Trenching Summary .......................................................................................... 67 

Table 10.9: 2009 Significant Trench Assays ................................................................................. 67 

Table 10.10: 2010 Significant Trench Assays ............................................................................... 75 

Table 11.1  : Significant Drill Intersections on the NR2FZ ..................................................... 80 

Table 11.2  : Significant Drill Results From Central Dachang ................................................ 81 

Table 11.3  : 2008 Drilling Programs ....................................................................................... 86 

Table 11.4: 2009 Drilling .............................................................................................................. 91 

Table 11.5: 2010 Drilling by Zone ................................................................................................ 92 

Table 13.1: Inter-Citic Quality Control Samples – 2007 to 2009 ................................................. 98 

Table 13.2  : Certified Values of the Gold Standards Used by SGS ........................................ 98 

Table 13.3  : SGS Samples Used for Comparison with Gold Standards .................................. 99 

Table 13.4: Internal Duplicates - Summary Statistics ................................................................. 102 

Table 13.5: Blank Samples Statistics .......................................................................................... 104 

Table 13.6 : 2010 Quality Control Samples ................................................................................ 106 

Table 13.7: Certified Values for the 2010 Standards .................................................................. 106 

Table 13.8: SGS Samples Used for Comparison with Gold Standards ....................................... 106 

Table 13.9: Internal Duplicates - Summary Statistics ................................................................. 108 

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Table 14.1  : Micon Check Samples ....................................................................................... 111 

Table 14.2: Dachang East Univariate Statistics for Gold ............................................................ 112 

Table 17.1: Basic Statistics of the Composite Data .................................................................... 119 

Table 17.2: Parameters of the Semi-Variogram Models ............................................................. 121 

Table 17.3: Dimensions of the Dachang Block model ................................................................ 122 

Table 17.4: Variogram Parameters used in Recoverable Resource Estimation ......................... 125 

Table 17.5: Dispersion Variance due to Change in Block Size .................................................. 126 

Table 17.6: Mineral Resource at Different Gold (g/t) Cut-off .................................................... 128 

Table 17.7: Mineral Resource Estimate for the Dachang Property as at June 28th, 2011 .......... 129 

Table 17.8  : Exploration Area Inferred Mineral Resources as at June 28th, 2011 ................ 132 

Table 17.9  : Current Total Mineral Resources for the Dachang gold project as at June28th, 2011 ................................................................................................... 133 

Table 18.1  Economic Parameters used in Open Pit Optimization ....................................... 136 

Table 18.2  : Table of Life-of-Mine Production by Year ....................................................... 137 

Table 18.3  : Capital Cost Summary ....................................................................................... 140 

Table 18.4  : Summary of Total Operating Costs by Cost Centre .......................................... 141 

Table 18.5  : Economics Base Case Assumptions .................................................................. 141 

Table 18.6  : Base Case Project Economics for the 2 Mtpa Flotation/UFG/Biox®/CIL at a Gold Price of US$750/oz, August 2009 ........... 142 

Table 18.7  : Sensitivity Studies on the Base Case After-Tax Results ................................... 142 

Table 19.1: Mineral Resources of the Dachang gold project as at June 28th, 2011.................... 144 

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List of Figures Page

Figure 1.1: Dachang Map with Exploration Zones ......................................................................... 5 

Figure 4.1: Dachang Property Location Map ................................................................................ 15 

Figure 4.2  : Dachang Exploration License Areas ................................................................... 16 

Figure 5.1  : Landsat Image Showing Dachang Property ........................................................ 18 

Figure 5.2  : Photo of the Dachang Property Illustrating General Topography ....................... 19 

Figure 7.1: Regional Geology ....................................................................................................... 25 

Figure 7.2  : Local Area Geology Map .................................................................................... 28 

Figure 7.3  : Property Geology Map ........................................................................................ 30 

Figure 9.1  : Microscopic Views of Mineralisation in Core Samples ...................................... 33 

Figure 10.1  : Surface Geology and Major Soil Geochemical Anomalies at Dachang.............. 36 

Figure 10.2  : Trench Assay Results - 2006 Exploration Program ............................................ 48 

Figure 10.3  : Trench Assay Locations - 2007 Exploration Program ........................................ 61 

Figure 10.4  : Trench Locations - 2008 Exploration Program ................................................... 63 

Figure 10.5: 2010 Trenching Summary ......................................................................................... 74 

Figure 11.1  : 2006 - 2007 Diamond Drill Hole Locations - DMZ Area ................................... 85 

Figure 11.2  : 2008 Diamond Drill Hole Locations ................................................................... 88 

Figure 13.1: Repeatability by SGS on Reference Material, Gold Grade of 0.307 g/t ................... 99 

Figure 13.2: Repeatability by SGS on Reference Material, Gold Grade of 2.77 g/t (OREAS 7Pb) ..................................................................................................... 100 

Figure 13.3: Repeatability by SGS on Reference Material, Gold Grade of 4.75 g/t (OREAS 61Pb) ................................................................................................... 100 

Figure 13.4  : Distribution of the Original Samples ................................................................. 101 

Figure 13.5  : Correlation Plot between Original and Duplicate Samples (374 Samples) ............................................................................................................. 102 

Figure 13.6: Correlation Plot between Original and Duplicate Samples .................................... 103 

Figure 13.7: Results of the Blank Samples Analysis .................................................................. 104 

Figure 13.8: Results of OREAS 4Pb Analyses ........................................................................... 105 

Figure 13.9: Results of Standard OREAS-17c Analyses ............................................................ 107 

Figure 13.10: Results of Standard OREAS-60b Analyses .......................................................... 107 

Figure 13.11: Duplicate Sample Bivariate Plot ........................................................................... 108 

Figure 13.12: Blank Sample Return Values ................................................................................ 109 

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Figure 14.1: Dachang East Gold Histogram ................................................................................ 112 

Figure 14.2: Dachang East Gold Log Histogram ........................................................................ 113 

Figure 14.3: Dachang East Gold Probability Plot ....................................................................... 113 

Figure 17.1: Distribution of Dachang Mineralised Zones .......................................................... 118 

Figure 17.2: Log Probability Plot ................................................................................................ 119 

Figure 17.3: Block Model Grade Distribution ............................................................................ 122 

Figure 17.4: Zone Average Estimated Block Grade versus Composite Grade .......................... 123 

Figure 17.5: Declustered Composite Grade versus Estimated Block Grade .............................. 124 

Figure 17.6: Grade-Tonnage Curve for Measured and Indicated Resource for Dachang. .......... 127 

Figure 17.7: Dachang Block Model from the Southeast Underneath showing the Measured (Red), Indicated (Green) and Inferred (Blue) Resources .................. 129 

Figure 17.8  : Example of Polygon Interpretation .................................................................. 131 

Figure 17.9: Example Polygonal Resource Section ................................................................... 132 

Figure 18.1  Dachang Site Layout .......................................................................................... 137 

Figure 18.2:  Schematic Overall Process Flow Diagram ......................................................... 139 

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1.0 SUMMARY Micon International Co Limited (Micon), has been retained by Inter-Citic Minerals Inc., (Inter-Citic) to prepare an updated estimate of the mineral resources for the Dachang gold property in western China. The Dachang gold project is located in Qinghai Province, People’s Republic of China, in the western portion of the country. The lode gold mineralisation there was discovered by the Qinghai Geological Survey Institute (QGSI) after following up on reports of significant scale unauthorised local placer gold mining in the nearby river beds. Collectively, the Dachang gold project currently consists of five contiguous exploration licenses, for an aggregate total area of approximately 279 km2. Inter-Citic entered into an earn-in agreement for the Dachang gold project with the QGSI on November 14, 2003. The original agreement has been amended several times to allow for increases to Inter-Citic’s funding of the project as required, with the last amendment dated June 17, 2010. Among these amendments, on November 24, 2009 the Chinese party to the agreement was changed to the No. 5 Geology and Mineral Exploration Institute (No. 5 Institute, or, together with QGSI, the Partner), a company that shares the same parent company as that of QGSI. The parties now operate the project through a co-operative joint venture company the purpose of which is to conduct exploration, development and mining of the Dachang gold project. The co-operative joint venture company was formed with limited liability for a term of 30 years. It received approval from the Chinese Commission for Foreign Trade and Economic Co-operation on December 25, 2003 and was issued a Business License from the State Administration of Industry and Commerce the next day, December 26, 2003. The existing exploration licenses, as well as exploration licenses for new areas, were formally transferred/granted to the joint venture company on November 25, 2004, and have been renewed, as and when required, since that time. Subject to the terms of the agreement, Inter-Citic shall have an 83% interest in the joint venture company and the Partner shall have a 17% interest. The Dachang property is readily accessible by truck and four-wheel drive vehicle from the regional infrastructure city of Golmud (also known as Ge’ermu). Paved, gravel and dirt roads are followed from Golmud to Dachang, a distance of approximately 300 km. Situated on the Qinghai-Tibetan plateau at an elevation of 4,300 to 4,600 m above sea level, Dachang exhibits an alpine climate and vegetation. The average annual temperature is approximately 0º C, with monthly averages between -15º and 13º C. Annual precipitation ranges from 180 mm to 440 mm, mostly as rain, and primarily occurs from June to August. Winter lasts from October to April and is characterised by cold, wind and dust with little snow. QGSI reports that for over 200 years this region has been a traditional area for local placer miners to recover gold. The first regional geological maps were completed in 1966. Over the next three decades various governmental agencies completed regional stream sediment and soil geochemical surveys, trenching and diamond drilling in the area of the current Dachang Main

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Zone (DMZ) at the Dachang East district. All of the historic exploration activity by the QGSI focused on the initial Dachang East discovery area in the southern portion of the property. The Dachang project is located in the Sichuan-Yunnan-Qinghai-Xizang Domain of the Songpan-Ganze continental margin mobile belt, a part of the South China Plate. This block is underlain by Mesozoic back-arc sediments on a Palaeozoic to Precambrian basement and has been intruded by various Cretaceous intermediate to acid intrusions. Regionally, faults trend west-northwesterly and northeasterly. The west-northwesterly faults are the earliest and best developed. The exposed faults are mapped as reverse (thrust) faults. At Dachang, a sequence of Permian and Triassic sediments consisting of slate, calcareous shale, siltstone and sandstone strikes northwesterly and locally dips steeply both to the north and south. Alluvial material in the recent river beds is the host for the placer gold mined on and downstream from the Dachang property. Several thrust faults have been mapped at Dachang, including the Gaude Maduo Fault. Exploration at Dachang indicates that the mineralised zones of interest are structurally-controlled, low-temperature, low-sulphide associated gold deposits hosted within faults and tectonic breccias within the sediments. Although some similarities exist, these deposits do not appear to be part of the Carlin-type class. The results and observations made to date suggest a shear-hosted deposit model. Inter-Citic has been actively exploring at Dachang since the spring of 2004 with the assistance of geologists from the Partner. The exploration activities have included geological mapping and geophysics. However, the primary methods employed are B-horizon soil geochemical surveys, followed by trenching and diamond drilling. Soil geochemistry followed by trenching has proven to be a valuable exploration tool at Dachang due to the shallow soil development, typically less than 2 m, and the at- or near-surface gold mineralisation. Soil surveys are used to locate backhoe-dug trenches. Trenching exposed the bedrock source of the gold-in-soil anomaly over the Dachang East mineral resource and has been equally successful in exposing bedrock gold zones associated with soil anomalies in other districts on the property. A consistent spatial relationship has been observed between the soil anomalies, trench values and underlying altered and mineralised fault zones. In every case trenching was able to expose the source of the soil geochemical anomaly. The trench information has been used to plan drill holes with great success. Both Inter-Citic and the Partner have completed several phases of exploration, mostly on the DMZ. The Dachang project has dominated Inter-Citic’s exploration activities since 2004. A significant strike length of the DMZ has been drilled off at variable spacing from 120 m to 40 m and three previous NI 43-101-compliant inferred mineral resource estimates have been prepared for it.

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Inter-Citic used the original QGSI results to estimate a mineral resource for the DMZ in 2004 (Cargill, 2004). Later, significant gold mineralisation was discovered at the North River District and, after the 2005 field season, a second mineral resource estimate on the mineralisation under the NR-2 soil anomaly was published (Wahl, 2006). Micon was retained by Inter-Citic in 2006 as an independent Qualified Person, and was responsible for preparing an updated resource estimate for the DMZ, which was published in the report described below. A Technical Report on the Dachang property was prepared by Micon in May, 2008, and is entitled “A Technical Report on a Mineral Resource Estimate for the Main Zone Deposit, Dachang Project, Qinghai Province, People’s Republic of China” (Hennessey, 2008). The information contained in Sections 4.0 through 13.0 and 15.0 of this present report has been reproduced from Hennessey, 2008, with such modification that is required to render the information current. The most recent technical report on the Dachang property was prepared in August 2009 by Puma Resources with the help of Micon, Metallurg Pty and The Mines Group, and included a preliminary assessment of the property in addition to an updated mineral resource estimate. This report was entitled “A Technical Report on an Updated Mineral Resource Estimate, and a Preliminary Assessment and Economic Analysis for the Dachang Gold Project, Qinghai Province, People’s Republic of China” (Gorman, 2009). Much of the information and wording included in this current report has been reproduced with such modification that is required to render the information current. In 2009 and 2010, Inter-Citic embarked on drill and trench programs primarily aimed at expanding resource outside of the DMZ and PVZ. Updating this resource is the primary purpose of this report. 1.1 UPDATED MINERAL RESOURCE ESTIMATES The mineral resources for the DMZ and the Placer Valley Zone (PVZ) have been determined by Micon using computerised block modelling methods. These resources supersede those reported for the zones in 2009. The mineral resources reported herein for the NR-2 zone at the North River area are unchanged from those determined by Wahl in 2005 (reported in a press release on December 12, 2005). The NR-2 resources were determined using a polygonal method and categorised as inferred resources. In 2009 Inter-Citic staff estimated a small amount of additional new mineral resources in certain exploration areas drilled in 2008. These were also determined using sectional polygonal methods and were reported in the 2009 technical report and were again updated in 2010. In 2010, Inter-Citic ran a 25,070 m drill program and a 9,800m trenching program focused on expanding the resources outside of the DMZ and PVZ. The new exploration area resources are entirely in the inferred category. The methodology used by Inter-Citic to estimate resources in the exploration areas has been reviewed by Micon and is considered appropriate for the current state of knowledge on the exploration properties to which it has been applied.

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1.1.1 Resource Estimate for the Main and Placer Valley Zones Micon has carried out a resource estimate for the DMZ and PVZ using geology and assay information from 880 drill holes and 430 surface trenches. Primary assay data were composited for gold and were analyzed to determine the basic statistical and geostatistical parameters. This information has been used in several modelling algorithms, which have been compared and checked for validity. A total of 116 specific gravity measurements were collected. The final resource has been categorised into indicated and inferred components in accordance with the JORC and CIM guidelines. Based on an analysis of grade distribution, individual assays were capped at a maximum of 40 g/t Au. The capped assays were composited to a standard length of 1 m. Three-dimensional wireframe solids were prepared for 22 mineralised zones, 14 in the DMZ and 8 in the PVZ, using a cut-off grade of 0.5 g/t Au. A block model was created with blocks measuring (X) 10 m by (Y) 5 m by (Z) 5 m. Grades were interpolated into individual blocks by ordinary kriging, using separate search ellipsoid dimensions for each vein group based on variography. The average of the specific gravity measurements made by Inter-Citic was 2.7, and a bulk density of 2.7 t/m3 was used to convert volumes to tonnages. The block model was validated by visual inspection, and by three analytical techniques. All validation methods demonstrated that the ordinary kriging estimation had not introduced any bias or over-estimation into the block model. Both the CIM and JORC definitions require that reported mineral resources must have reasonable prospects for eventual economic extraction. In Micon’s opinion, the appropriate cut-off grade for reporting mineral resources for the DMZ and PVZ is 0.6 g/t Au. A summary of the mineral resources at this cut-off grade is provided in Table 1.1. The effective date of this estimate is June 28th, 2011.

Table 1.1 : Mineral Resource Estimate for the DMZ and PVZ as at June 28th, 2011 (0.6 g/t Au Cut-Off Grade)

Measured Resource Indicated Resource Measured + Indicated

Resource Inferred Resource

Million Tonnes

Grade (g/t Au)

Million Ounces of Gold

Million Tonnes

Grade (g/t Au)

Million Ounces of Gold

Million Tonnes

Grade (g/t Au)

Million Ounces of Gold

Million Tonnes

Grade (g/t Au)

Million Ounces of Gold

5.0 3.55 0.57 12.2 3.34 1.31 17.2 3.41 1.88 9.7 2.97 0.93

Mineral resources that are not mineral reserves do not have demonstrated economic viability. There are no mineral reserves presently identified on the Dachang property. The stated mineral resources are not materially affected by any known environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other relevant issues, to the best knowledge of the authors. There are no known mining, metallurgical, infrastructure, or other factors that materially affect this mineral resource estimate, at this time.

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6

The updated exploration area mineral resources presented in this report were based on interpretation of continuous mineralisation as determined from drill and trench logs and assays, interpreted on section, and were sometimes influenced by plan interpretation of soil sample results. Full zone width composites were calculated for each drill hole and trench using a 0.5 g/t Au cut-off and a minimum required value of 2.0 gram-metres (g-m), with individual composites carrying up to 2.0 m (drilled width) of internal waste. Exceptions to these rules occur, when necessary, to allow for consistent geological interpretation and to avoid a misleading interpretation regarding the deposit grade. The mineral resources determined for the exploration areas are set out in Table 1.2.

Table 1.2 : Exploration Area Inferred Mineral Resources as at June 28th 2011

Zone Tonnes (Mt)

Au Grade (g/t)

Acadia 2.55 1.81 861/XP 1.70 2.78 North River 1 1.44 2.10 DMZ - Extension 2.54 2.02 DMZ - North 0.33 2.76 PVZ - Extension 1.40 3.15 Ruby Zone 0.31 2.85 Total 10.27 2.31

1.1.3 Total Mineral Resources The total updated mineral resources for the Dachang gold property are set out in Table 1.3. The great majority of this resource estimate comes from mineralisation at surface to depths of less than 150 m and it has been assumed that open pit mining techniques would be the most likely method of recovering it.

Table 1.3 : Current Total Mineral Resources for the Dachang gold project as at June 28th, 2011

Location Resource Category

Tonnes (Mt)

Grade (g/t Au)

Contained Gold

(million oz) Dachang Main Zone and Placer Valley Measured 5.00 3.55 0.57 Indicated 12.20 3.34 1.31

Total Measured and Indicated 17.20 3.41 1.88 Dachang Main Zone and Placer Valley Inferred 9.70 2.97 0.93 NR-2 Anomaly Inferred 1.30 5.81 0.24 Exploration Areas Inferred 10.27 2.31 0.76

Total Inferred 21.27 2.83 1.93 The estimates of mineral resources are not affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues.

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The inferred mineral resources presented have not been sufficiently drilled to demonstrate economic viability. Additional drilling will be required to upgrade these inferred mineral resources to an indicated or measured resource. There can be no certainty that further drilling will enable this inferred mineral resource to be upgraded. In addition, the future economic viability of the mineral resources may be adversely affected by their location, as the Dachang project is situated at an elevation of approximately 4,300 m above sea level, in a high-cold plateau area exhibiting alpine climate and vegetation with limited infrastructure. The nearest major city centre is approximately 250 km away, with the nearest primary road and power line approximately 120 km from the property.

8

2.0 INTRODUCTION AND TERMS OF REFERENCE Micon International Limited (Micon) has been retained by Inter-Citic Minerals Inc., (Inter-Citic) to prepare an updated estimate of the mineral resources for the Dachang gold project in Qinghai province, western China. The mineral deposits at Dachang are structurally-controlled, pyritic, refractory gold deposits hosted within folded and brittle deformed clastic sediments. The Dachang Main Zone (DMZ) and the other deposits are hosted in faults and fractures within a sequence of shales, sandstones and wackes. The lode mineralisation was originally discovered by the Qinghai Geological Survey Institute (QGSI) investigating reports of large-scale unauthorised placer mining taking place in the area prior to Inter-Citic’s involvement. The Dachang project is located at high elevation (4,300 to 4,600 m) on the Qinghai-Tibetan plateau in Qinghai province, in western China. Dachang lies 160 km southeast of the city of Golmud (also called Ge’ermu), a major regional supply and transportation centre in western Qinghai province. Access to the project from Golmud is by a mix of paved, gravel and dirt roads. Golmud is connected to Xining, the capital of Qinghai, by paved road, rail and air links. The Dachang project is held by way of a Chinese co-operative joint venture company controlled by Inter-Citic through its 83% interest, with the remainder held by its current partner the No. 5 Institute. It consists of five mineral leases with an approximate total area of 279 km2. Both Inter-Citic and the Partner have completed several phases of exploration, mostly on the DMZ. The Dachang project has dominated Inter-Citic’s exploration activities since 2004. A significant strike length of the DMZ has been drilled off at variable spacing from 120 m to 40 m and three previous NI 43-101-compliant inferred mineral resource estimates have been made for it. The most recent Technical Report on the Dachang property was prepared by Micon in July, 2009, and is entitled “A TECHNICAL REPORT ON AN UPDATED MINERAL RESOURCE ESTIMATE, AND A PRELIMINARY ASSESSMENT AND ECONOMIC ANALYSIS FOR THE DACHANG GOLD PROJECT, QINGHAI PROVINCE, PEOPLES’S REPUBLIC OF CHINA” (Gorman, 2009). In 2008 a report was also completed entitled “A TECHNICAL REPORT ON A MINERAL RESOURCE ESTIMATE FOR THE MAIN ZONE DEPOSIT, DACHANG PROJECT, QINGHAI PROVINCE, PEOPLES REPUBLIC OF CHINA” (Hennessey, 2008). The information contained in Sections 4.0 through 13.0 and 15.0 of this present report has been reproduced from Hennessey, 2008, with such modification that is required to render the information current. The principal new data presented in this report are an updated mineral resource estimate incorporating the results from the 2010 exploration.

9

The Qualified Persons responsible for this report, all of whom are independent of Inter-Citic, are: Stanley C. Bartlett., M.Sc., P.Geo., B Terrence Hennessey, B.Sc., P. Geo., and Dibya Kanti Mukhopadhyay, M.Sc., MAusIMM (CP), all employed by Micon. Mr. Bartlett as Managing Director of Norwich Office in United Kingdom Office, Mr. Hennessey as Vice President in Toronto Office and Mr. Mukhopadhyay as a Senior Geologist in Norwich Office in United Kingdom. Mr. Bartlett supervised the overall work; Mr. Mukhopadhyay prepared the updated mineral resource estimate reported herein for the DMZ and the Placer Valley Zone (PVZ) on the Dachang property and Mr. Hennessey have reviewed the exploration areas. While Mr. Hennessey visited Dachang property thrice (April 30 to May 6, 2006, November 24 to November 30, 2007 and September 22 to 28, 2010); Mr. Mukhopadhyay visited the Dachang property from the 21st to the 26th November 2009 to review results of exploration at site. All currency amounts are stated in Canadian or US dollars or Chinese Renminbi (also known as Yuan), as specified, with costs and commodity prices typically expressed in US dollars (US$). Quantities are generally stated in SI units, the Canadian and international practice, including metric tons (tonnes, t), million metric tonnes (Mt), kilograms (kg) and grams (g) for weight, kilometres (km), metres (m), centimetres (cm) or millimetres (mm) for distance, litres (L), millilitres (mL), cubic centimetres (cc, cm3) or cubic metres (m3) for volume, hectares (ha) for area, weight percent (%) for base metal grades, grams per metric tonne (g/t) for gold grades (g/t Au) and tonnes per cubic metre (t/m3) for density. Precious metal grades may also be expressed in parts per billion (ppb) or parts per million (ppm) and their quantities may also be reported in troy ounces (ounces, oz), a common practice in the mining industry. A list of the abbreviations used in this report is provided in Table 2.1.

Table 2.1 : List of Abbreviations

Abbreviation Term

~ approximately ° degrees

°C degrees Celsius $ dollar(s)

$/oz dollars per ounce $/t dollars per tonne = equal to > greater than < less than % percent

% v/v percent by volume µm micron(s)

AARL Anglo-American Research Laboratories AAS atomic absorption spectroscopy AC alternating current Ag silver AI aluminum

10

Abbreviation Term ARD aqua regia digestion

As arsenic Ashanti Ashanti Goldfields Company

Au gold Ba barium

BAT bio-leach amenability testing BDAT best demonstrated available technology

Bi bismuth BRL Burnie Laboratory BWi Bond ball mill work index

C carbon CORG organic carbon

CTOTAL total carbon Ca calcium Cd cadmium

CDI Chinese design institute Cdn$ Canadian dollar(s) CFS Chinese feasibility study CIL carbon-in-leach CIM Canadian Institute of Mining, Metallurgy and Petroleum CJV Chinese Joint Venture cm centimetre (s) cm³ cubic centimetre(s)

CNWAD weak acid dissociable cyanide Co cobalt

CO2 carbon dioxide C03²¯ carbonate ion con concentrate Cr chromium Cu copper d day(s)

DFZ Dachang Fault Zone Discovery Discovery China Geophysical Consulting Ltd.

DMZ Dachang Main Zone DMZ-X Dachang Main Zone Extension

EGL effective grinding length EPA Environmental Protection Agency EPZ Environmental Protection Zone FA fire assay Fe iron

FOB fine ore bin FoS factor of safety

g gram(s); acceleration due to gravity g/cm³ grams per cubic metre g/m gram-metres g/t grams per tonne

g/t Au grams of gold per tonne G&A general and administrative GFIL gravity-float-intensive leach GMD Gaude-Maduo Fault gpm gallons per minute

11

Abbreviation Term GPS global positioning system GRL gravity recoverable gold

h hour(s) h/d hours per day

H2SO4 sulphuric acid ha hectare(s) ID³ inverse distance cubed IFC International Finance Corporation

Inter-Citic Inter-Citic Minerals Inc. IP induced polarization

IRR internal rate of return JORC Joint Ore Reserve Committee

K potassium k thousand

kg Kilogram(s) kg/h kilograms per hour kg/t kilograms per tonne

kg/tcon kilograms per tonne concentrate km kilometres km² square kilometres

kN/m² kilonewtons per square metre koz thousand ounces kPa kilopascals kPag kilopascals gauge

kt thousand tonnes kW kilowatt(s)

kWh kilowatts hours kWh/t kilowatt hours per tonne

kV kilovolt(s) kVA kilovolt ampere(s)

L litre(s) L/s litres per second

L/kWh litres per kilowatt hour LCT locked cycle test Li lithium

LOM life-of-mine M million Ma million years Mt million tonnes

Mtpa million tonnes per year m metre(s) m² square metre(s) m³ cubic metre(s)

m³/d cubic metres per day m³/h cubic metres per hour m³/s cubic metres per second MCC motor control centre

Metallurg Metallurg Pty. Ltd. Mg magnesium mg milligram(s)

mg/L milligrams per litre

12

Abbreviation Term Micon Micon International Co Limited

mL millilitre(s) mm millimetres Mn manganese Mo molybdenum MW megawatt(s)

N north NA not applicable Na sodium

NaCN sodium cyanide NASH sodium hydrogen sulphide

Ni nickel NI 43-101 National Instrument 43-101

Nm³/h normal cubic metres per hour NNE north-northeast No. number

NPV net present value NPV5 net present value at a discount rate of 5% per year NSR net smelter return O/F overflow oz troy ounce(s) P phosphorous

Pb lead PC personal computer PFS pre-feasibility study pH measure of acidity or alkalinity of a solution

PLC programmable logic controller PLS pregnant leach solution POX pressure oxidation ppb parts per billion ppm parts per million

Puma Puma Resources Limited PVZ Placer Valley Zone

PVZ-E Placer Valley Zone East P80 the size at which 80% of particle are finer

QA/QC quality assurance/quality control GGSI Qinghai Geological Survey Institute

QP qualified person RCMS rubber covered stainless steel RMB Chinese renminbi ROM run-of-mine rpm revolutions per minute RZ Ruby Zone S south, sulphur

S²¯, SSULPHIDE sulphide sulphur STOTAL total sulphur SAG semi-autogenous grinding SD standard deviation

SEA South East anomaly SG specific gravity

SGS SGS Group Geochemical Laboratories

13

Abbreviation Term SMU selective mining unit SO2 sulphur dioxide Sr strontium

SSW south-southwest SWOT strengths, weaknesses, opportunities, threats

t tonne(s) t/m³ tonnes per cubic metre

TCM total carbon measurement TEM time domain electromagnetic survey TMG The Mines Group, Inc. TMF tailings management facility tpa tonnes per year tph tonnes per hour

UCS unconfined compressive strength U/F underflow UFG ultra-fine grinding US$ United States dollars

US$/t United States dollars per tonne V vanadium

W/O ratio of waste to ore Wt % percent by weight XRD X-ray diffraction

y yttrium Zn zinc Zr zirconium

14

3.0 RELIANCE ON OTHER EXPERTS The authors of this report have reviewed and analyzed data provided by Inter-Citic, its contract drillers and analytical laboratories, and its consultants, and have drawn their own conclusions therefrom, augmented by direct field examination. The authors have not carried out any independent exploration work, drilled any holes or performed any extensive sampling and assaying programs. Micon has examined examples of gold-bearing mineralisation in outcrop and in core samples from drill holes which intersected the deposit in order to confirm the presence of the mineralisation. Micon also collected two composite chip samples from trench outcrop for check analysis. The gold-bearing sulphide mineralisation is visible in the drill core and iron oxide staining (gossan) can be seen in many of the local trench outcrops where Inter-Citic has explored under gold-in-soil anomalies. Micon has previously reviewed the exploration data and advised on the estimation of mineral resources for the DMZ each year since 2006. While exercising all reasonable diligence in checking, confirming and testing it, the authors have relied upon the data presented by Inter-Citic in conducting the mineral resource estimate and in preparing the preliminary assessment. The assay data used in the resource estimate have been produced by SGS Group Geochemical Laboratories (SGS) subject to an external quality assurance/quality control (QA/QC) procedure conducted by Inter-Citic. Micon has reviewed the results of the QA/QC program and has relied upon the assay results supplied. The geological, mineralisation and exploration descriptions used in this report are taken from Hennessey, 2008, Gorman, 2009 and from reports and press releases prepared by Inter-Citic, its joint venture partners and contracted consultants, or from public scientific literature. The various agreements or licenses under which Inter-Citic holds title to the mineral lands for this project have not been investigated or confirmed by the authors and they offer no opinion as to the validity of the mineral title claimed. A description of the property, and ownership thereof, as set out in this Technical Report, is provided for general information purposes only as required by National Instrument 43-101 (NI 43-101). This report has been prepared as an NI 43-101, F1 Technical Report on behalf of Inter-Citic. It is based on information available at the time of preparation, data supplied by outside sources, and the assumptions, conditions and qualifications set out herein. This report is intended to be used by Inter-Citic, subject to the terms of its agreements with the authors, which permit it to be filed as a Technical Report with Canadian Securities Regulatory Authorities pursuant to provincial securities legislation. The authors acknowledge the helpful cooperation of Inter-Citic’s management and field staff, all of whom made any and all data requested available and responded openly and helpfully to all questions, queries and requests for material.

4

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15

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16

Under Chinese legislation, exploration licenses are granted for an initial period of three years and are renewable thereafter for subsequent two year periods. The legislation also requires a minimum expenditure on exploration by companies holding these licenses prior to renewal. Inter-Citic has always exceeded these minimum requirements by significant amounts. All of Inter-Citic’s current exploration licenses at Dachang have been renewed at least once in the normal course of business. There is a small informal underground gold mine near the property boundary which is now abandoned. There are no known hard rock mine workings on the property except for a small test pit that was operated by the QGSI near the DMZ in Placer Valley, prior to Inter-Citic’s involvement. However, the river valleys crossing and adjacent to the project have, in the recent past, been subject to extensive unauthorised placer gold workings and, prior to that, small scale Tibetan placer mining going back for centuries. The Chinese government has stopped all unauthorised placer mining in the area.

Figure 4.2 : Dachang Exploration License Areas

Inter-Citic first entered into an earn-in agreement for exploration and development of the Dachang gold project with the Qinghai Geological Survey Institute (QGSI) on November 14, 2003 through a Chinese co-operative joint venture contract. The business of the joint venture is conducted through a co-operative joint venture company (the CJV), the purpose of which is to conduct exploration, development and mining of the Dachang gold project. The co-operative joint venture company was formed with limited liability for a term of 30 years. It received approval from the Chinese Commission for Foreign Trade and Economic Co-operation on

o

17

December 25, 2003 and was issued a Business License from the State Administration of Industry and Commerce the next day, December 26, 2003. Existing exploration licenses, as well as exploration licenses for new areas, were formally transferred/granted to the joint venture company on November 25, 2004, and have been renewed in the normal course. In 2006 Inter-Citic chose to abandon application for three licenses that were not contiguous to the property due to their location and lack of geologic interest. Under the terms of the agreement and related amendments, Inter-Citic has agreed to fund 100% of the costs associated with exploration and development of the Dachang gold project in exchange for 83% of any profits earned. The capital contribution on the part of Inter-Citic is defined as monetary contribution equivalent to approximately Cdn$22,517,300 (Renminbi 150,000,000). The entire amount of this contribution had been made as at the date of this report. QGSI contributed its initial capital to the project by transferring the existing exploration licenses held by QGSI. In addition to the foregoing, Inter-Citic is required to complete a pre-feasibility study within one year of the completion of all exploration work at Dachang, and has agreed to pay to the Partner the equivalent of approximately Cdn$1,534,000 (Renminbi 10,000,000) upon the granting of all necessary permits, including related mining licenses, that are required to bring the project into production. The Partner has agreed to provide Inter-Citic with an option to increase its interest in the joint venture company from 83% to 90% in exchange for payment equal to the pro rata value of the increased interest in the joint venture based on the valuation of any potential mining project contained in the pre-feasibility study. As part of the agreement, Inter-Citic has a right of first refusal on any mineral exploration project for which the Partner seeks foreign investment. Inter-Citic controls the joint venture company by virtue of its ability to appoint three of the five members of the board of directors of that company. However, certain matters require unanimous approval of the board of directors of the joint venture company, including transfer of all or a portion of either party’s interest in the joint venture, changes to registered capital and/or profit distribution or matters relating to financing, dissolution, liquidation or extension of the term of the joint venture.

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19

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20

6.0 HISTORY 6.1 BACKGROUND The QGSI reports that for over 200 years the Dachang region has been a traditional area for local placer miners to recover gold. The first regional geological maps were completed in 1966. Over the next three decades various governmental agencies completed regional stream sediment and soil geochemical surveys, trenching and diamond drilling. According to QGSI a limited open pit test mining operation was carried out during 1999, however, the results of this work are not known. All of the historic exploration activity in the region focused on the initial discovery area in what is currently referred to as the DMZ in the Dachang East area of the property. Inter-Citic and the QGSI entered into a co-operative joint venture agreement for Dachang on November 14, 2003. Details of this agreement can be found above, in Section 4.0. Prior to entering into the joint venture, the QGSI focused its exploration efforts on an approximately 25 km2 area, situated in the southeastern portion of the property, immediately adjacent to historic gold placer workings. This work commenced in 2000, and over the ensuing three years the QGSI completed a 1:50,000 scale regional geochemical survey, a 1:10,000 scale soil-sampling program (which discovered 28 gold anomalies), 27,104 m3 of trenching, excavated a number of shallow exploration “shafts” (1.0 m x 1.2 m) for a total depth of 113.9 m, limited induced polarization (IP) and electromagnetic test surveys, drilled 3,249 m of NQ-sized core and sampled 28 sections across the area now referred to as the DMZ. The QGSI continued to focus on delineating the DMZ and other selected gold zones in the area during 2003. This work consisted of excavating 39 trenches (2,522 m), sinking 11 shallow exploration shafts (159 m) and drilling 25 diamond drill holes (2,911.6 m). The results of this work further defined the mineralised portion of the Dachang Fault Zone (DFZ) the host of mineralisation at the DMZ. In September 2004, Inter-Citic initiated its first exploration at Dachang. This work consisted of establishing a GPS-controlled survey grid on the property, covering approximately 107 km2, which was followed by a conventional B-horizon soil geochemical survey, magnetometer and electromagnetic (TEM) surveys, 467 m of trenching and 15 NQ core holes totalling 3,623 m. The results of this work identified six large regional gold-in-soil anomalies, which define areas referred to as Dachang East, Dachang North, Central Dachang, Western Quarter, North River and Southwest Dachang (see Figure 7.2 for the location of these areas). In 2005, Inter-Citic extended the soil geochemical survey over the property to “fill-in” and cover a total of approximately 160 km2 and completed geological mapping of the North River, Western Quarter, Dachang Central, Dachang North and Dachang East Districts of the property, which cover approximately 200 km2. Follow-up work included 23.7 km of trenching and 2,487 m of NQ diamond drilling in 22 holes.

21

In 2006 Inter-Citic completed a soil geochemical survey over new areas of approximately 53 km2 (12,545 conventional B-horizon soil samples collected and tested for gold, arsenic and antimony), as well as excavation and sampling of 175 trenches totalling 14,332 line-metres. In 2006 Inter-Citic conducted its first soil geochemistry survey in the Dachang East area, one of six districts within the Dachang gold project, and the area in which the DMZ is located. The company established two exploration grids over Dachang East and collected a total of 8,634 B-horizon soil geochemical samples from hand-dug pits, every 20 m on grid lines established at 200-m intervals. The first grid (B8) is approximately 16 km2 and located southeast of the DMZ. The second grid (B3) covers 6 km2 and is approximately 4 km northeast of the DMZ. Analysis of this soil geochemistry resulted in the discovery of 25 new gold-in-soil anomalies, as reported by Inter-Citic in a press release dated March 27, 2007. In addition, Inter-Citic completed 101 NQ-sized diamond drill holes totalling 15,304 m. In 2007 a limited soil geochemical survey was completed between the DMZ, located in the East Dachang area of the property and hosting the primary NI 43-101-compliant mineral resource, and its eastern extension (the DMZ-X). Samples collected were tested for gold, arsenic and antimony. An extensive trenching program utilising three backhoes aimed at testing new geochemical anomalies discovered from the previous year’s work. Within this program a total of 17,022 m of soil geochemical anomalies were trenched, for a total of 146 trenches and, from these, 6,271 samples were extracted for analysis. 6.2 2004 TECHNICAL REPORT In March, 2004, Dr. George Cargill, P.Eng., prepared an independent NI 43-101 Technical Report on the Dachang property. As part of his report Dr. Cargill reviewed the QGSI-defined resource estimate for the Dachang Main parcel and subsequently reported an NI 43-101-compliant inferred resource as described in Inter-Citic’s press releases of December 3, 2003 and March 12, 2004. A copy of Dr. Cargill’s Technical Report is available from Inter-Citic’s website (www.inter-citic.com) or from the company’s filings on SEDAR (www.sedar.com). 6.3 2005 MINERAL RESOURCE INVENTORY ESTIMATE ON NR-2 On December 12, 2005, Inter-Citic published an inferred resource estimate of 1.28 Mt grading 5.81 g/t gold (approximately 238,000 oz) for the NR-2 anomaly, located in the North River area of the property. Shallow drill testing of the NR-2 fault zone (the NR2FZ) defined a structurally-controlled, 800-m long zone of gold mineralisation to depths up to 200 m. This mineralisation remains open at depth and along strike to the west. A mineral resource study was carried out for this zone based on the exploration drilling and trenching programs completed up to September, 2004. The NR-2 drilling was follow-up work on mineralisation discovered by a 2004 reconnaissance drill hole CJV-15 (reported in Inter-Citic’s press release of February 11, 2005, 7.1 m interval grading 7.6 g/t Au). This drill hole intersected a major fault zone (the NR2FZ) and the target

22

was more clearly defined by the 2005 trenching program. A plan and longitudinal section of the NR2FZ mineralisation is available on Inter-Citic’s website. The NR2FZ is an 800-m long, near-vertical fault structure. Drill testing has defined a west-plunging zone of gold mineralisation hosted in highly deformed sediments caught up in the fault. Late in 2004, 13 holes were drilled on 200-m spaced cross-sections along this structure. Hole CJV-15 discovered the NR2FZ and a further 12 holes tested the NR2FZ in 2005. Six of the 12 holes that tested the fault in 2005 (CJV-16, -17, -19, -23 -24, and -29) encountered encouraging gold mineralisation. The best results from recent shallow drill testing of the zone include: 2.67 g/t Au over 17.0 m (including 7.08 g/t Au over 4.5 m) in hole CJV-17; 3.28 g/t Au over 1.5 m in hole CJV-19; 12.64 g/t Au over 2.2 m in hole CJV-24; 4.73 g/t Au over 8.1 m, and a second zone of 6.25 g/t Au over 2.0 m in hole CJV-29. CJV-23 was abandoned at the south edge of the NR-2 fault zone. The southern contact of the fault zone returned 1.63 g/t Au over 1.7 m. Previously reported holes that relate to the NR2FZ resource estimate are CVJ-15, drilled in late 2004 and reported in Inter-Citic’s press release of February 11, 2005 (a 7.1 m interval grading 7.6 g/t Au), and CJV-16 (a 6.5 g/t Au interval over 8 m), reported in Inter-Citic’s press release of November 1, 2005. The resource estimate was completed by David G. Wahl, P.Eng., P.Geo., Inter-Citic’s then Vice President of Resource Development, and the Qualified Person (QP) for the project at the time. This estimate was completed as at December, 2005 and complied with the CIM guidelines and resource definitions referenced in NI 43-101. The inferred resource estimate incorporated results from a surface trenching program and 13 diamond core holes, totalling 1,747 m, drilled on sections established at 200-m intervals along strike of the mineralised zone. Drill sections, incorporating geology and assay results, were drawn across the mineralised zone and a vertical longitudinal section was constructed along the strike incorporating the trenching and drilling data. Resource blocks were drawn on the longitudinal section using an area of influence equal to one half of the distance from the nearest data point. The resource blocks were extended to depth and along strike for a distance equal to one half that from the nearest data point. Block areas were measured and subsequently the resource block volumes calculated using the horizontal thickness of the mineralised intersection, which establishes the pierce point for the drill hole on the longitudinal section. Resource tonnages for the individual blocks were calculated using a density of 2.7 t/m3. The density was based on tests completed during Dr. Cargill’s review of the Dachang East resource estimation. Given the similarity in geology between NR-2 and Dachang East a new density was not calculated for NR-2. 6.4 2007 MINERAL RESOURCE INVENTORY ESTIMATE ON DMZ On March 27, 2007, Inter-Citic announced a new inferred mineral resource estimate for the DMZ following the 2006 drill program. This was the first mineral resource update reported for the DMZ. Inter-Citic’s previous exploration programs tested targets northwest of the original DMZ discovery. In 2006, a total of 101 NQ and HQ diamond drill holes tested a 2.5 km strike length of the DMZ fault (the fault sometimes being called the DFZ) in an area the QGSI had originally tested

23

in 2001. Drill fences were typically spaced at 120 m centres and tested the structure to a maximum depth of 200 m although it was not extensively tested below 160 m. The DMZ remained open to the east and to depth. The updated resource inventory was based on assay intervals established with minimum widths of 2.5 m and a 5 gram-metre (intersection length times average grade) cut-off. Individual intercepts below this cut-off grade may have been included to allow for consistent geological interpretation. To avoid the influence of isolated high-grade assays an upper cut-off of 18.0 g/t Au was also employed on individual sample assays. The mineral resource estimate included all existing trench and drill hole data and was prepared using the polygonal method on cross-sections with a maximum depth of influence from any individual assay intercept of 65 m. Most intercepts have an influence of less than 50 m. A specific gravity (density) of 2.92 t/m3 was used for this inventory based on a set of tests taken by Inter-Citic and its independent consultants. The updated resource estimate in 2007 was prepared for Inter-Citic by Charles Hartley, P.Geo., Inter-Citic’s internal QP, and reviewed by B. Terrence Hennessey, P.Geo., of Micon, Inter-Citic’s independent QP with respect to its mineral properties. 6.5 2008 MINERAL RESOURCE ESTIMATE FOR THE DMZ In May, 2008 the mineral resource estimate for the DMZ, described in Section 6.4, was updated to reflect the drilling completed in 2008 (Hennessey, 2008). The updated mineral resource estimate for the DMZ was prepared by Michael W. Leahey, P.Geo., Inter-Citic’s internal QP, and was reviewed by B. Terrence Hennessey, P.Geo. 6.6 2009 TECHNICAL REPORT AND MINERAL RESOURCE ESTIMATE In July 2009 Micon International Limited (Micon) released a technical report which included an updated mineral resource estimate for the DMZ, a preliminary assessment of the Dachang property for commercial production as well as an analysis of the metallurgical properties of the property. The results of the assessment were positive and a number of recommendations were set forth as outlined below. This information has been copied from the original report and is presented here for information purposes only. The purpose of the preliminary assessment was to outline the overall potential of the property and to provide a technical and economic summary of the preferred development concept that is recommended to be advanced to Chinese feasibility study (CFS) and international pre-feasibility (PFS) standard. The preliminary assessment is based on the resources, including inferred resources, estimated to be contained in the DMZ. An economic sensitivity analysis was also performed to provide a preliminary assessment of scheduling the currently estimated mineable resources derived from the PVZ, pending further drilling.

24

The principal conclusions resulting from the preliminary assessment are summarised as follows:

At a gold price of US$750/troy ounce, the Dachang project is estimated to generate an after-tax, un-leveraged, un-inflated, internal rate of return (IRR) in excess of 40% and an un-leveraged, after-tax project net present value at a 5% discount rate (NPV5) of US$198 million.

At a gold price of US$800/troy ounce, the after-tax IRR increases to 47% and NPV5

exceeds US$241 million.

Total gold production of approximately 1.5 million ounces is forecast to be generated during a mine life of approximately 9 years.

Estimated mine site cash operating costs average US$404/oz and project capital cost is

forecast to beUS$104 million. It should be noted that all economic results derived from the preliminary assessment are for the overall Dachang project in which Inter-Citic currently has an 83% beneficial interest. The preliminary assessment results are preliminary in nature. The study relies on mineral resources that are not mineral reserves and therefore do not have demonstrated economic viability. The preliminary assessment also includes inferred mineral resources that are considered to be too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as mineral reserves. There is no certainty that the preliminary assessment will be realised as presented. Certain engineering parameters related to construction, operating, environment, geotechnical and other technical and cost factors will require further systematic assessment and validation during the pre-feasibility study phase. Given the positive results of the preliminary assessment, the principal recommendation of the authors is for work to commence on preparing a CFS and a PFS for the Dachang gold project.

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26

“The Cretaceous is also composed of continental basin deposits. The total thickness of the Jurassic and Cretaceous is not well established. It may be as much as 4,000 m and the whole Mesozoic may be as thick as 10,000 m.” “Intrusive rocks in the mobile belt have been divided into Indosinian (Triassic), Yanshanian (Cretaceous) and Himalayan (Tertiary) age. The Indosinian rocks (190 Ma - 225 Ma) are intermediate to acid in composition (quartz diorite, granodiorite and monzonitic granite). Intrusions are small and intrude the Permian-Triassic series partially controlled by faults.” “Yanshanian intrusives are biotite granite and granodiorite with isotopic ages of 92 - 72 Ma. The rare earth element distribution pattern suggests they formed under intraplate conditions. Intrusions are small and often associated with Himalayan intrusives.” “Himalayan intrusives (present - 65 Ma) are generally less than 1 km2 in size and are intruded into Mesozoic strata or Yanshanian intrusions. They are controlled by faults and the major rock type is biotite monzonite. Alteration of country rock is very strong and often extends over an area larger than the intrusive. There is often copper and molybdenum mineralisation associated with the alteration zone. The rare earth element distribution pattern suggests these intrusions were formed in an orogenic environment.”

7.2 LOCAL GEOLOGY

“The strata in the area strike northwest [Anon (a, b, c), 2003]. There are small folds with axes following the northwest strike of the formations. Bedding dips can be either north or south. The Southern Kulun Mountain Fault zone transects the area. North of the fault is the Eastern Kulun area and south of the fault is the Bayankara area.” “The Eastern Kulun area includes Proterozoic, Carboniferous, lower Permian, Triassic and upper Pleistocene rocks. The Bayankara area is underlain by Permian, Triassic, Tertiary and Quaternary rocks. The Permian, Triassic, Tertiary and Quaternary rocks have similar lithologies in both areas. The major difference is the older rocks, which form the basement of the northern area.” “The Proterozoic rocks consist of basic volcanic and gray carbonate rocks overlain by a greenish-gray carbonate rock with volcanic interbeds. The upper Carboniferous rocks, which are in fault contact with the Proterozoic rocks, include gray limestone, sandstone, slate with coal and minor interbeds of andesite and rhyolite.” “The Permian assemblage is a massive bioclastic limestone.” “Triassic rocks, which conformably overlie the Permian, are mostly flysch with a few volcanic interbeds. The lower Triassic rocks are lithic and feldspathic sandstones with occasional limestone lenses. The middle Triassic rocks have been divided into two parts on the basis of the proportion of sandstones to slates and the fabrics of the sandstones. The lower middle-Triassic rocks are feldspathic sandstones interbedded with slates. The upper middle-Triassic has been intensely folded and is the host of the Dachang deposit.”

27

“The Tertiary rocks are a succession of fluvial-lacustrine red to mauve shales. These rocks unconformably overlie the Triassic sediments and are folded into gently dipping anticlines and synclines.” “Most fold structures are associated with the Indosinian (Triassic) deformation. They are usually incomplete in shape and small in scale due to the offsets of subsequent faults. The Qiongzou syncline is probably the largest and most complete fold. It trends about 290° and the north limb dips 50° N to 60° N and the south limb dips 35° S to 60° S. On the east end of the structure the axial plane dips northward and on the west end it is vertical.” “Faults in the region are divided into those trending west-northwest and northeast. The west-northwest faults are the earliest and the most intense. They have the most influence on the distribution of lithologies and mineral deposits. The exposed faults are designated as reverse (thrust) faults, but there are many interpreted faults covered by Quaternary sediments in northwest trending valleys. Based on regional geology and aeromagnetic data the thrust faults dip to the north.”

Figure 7.2 shows a local geology map of the Dachang area.

“The South Kulun Fault zone is the largest of the west-northwest trending faults. It has been traced along strike for approximately 1,000 km and about 90 km outcrops in this area.” “The northeast trending faults are shorter than the west-northwest set, with the longest being about 25 km. They show left handed offsets for the rock contacts and the west-northwest faults. They are shown as wrench faults on the map but some offsets suggest considerable dip-slip.” “There are a small number of intrusions cutting the Triassic sediments. Most intrusives are dated Indosinian but some are believed to be Yanshanian (Cretaceous). Indosinian intrusives include biotite-quartz-diorite, monzo-diorite and porphyry-biotite-monzonite. Yanshanian intrusives are granodiorites. Both sets of intrusives have associated tungsten, copper and gold mineralisation.” “There are also diorite, granite and diabase dykes and many quartz veins associated with the intrusions.” “The regional metamorphic grade, measured in the Permian volcanic rocks, is lower greenschist. However, there are wide zones of contact metamorphism associated with the intrusives. Contact metamorphic zones include hornfels, silicification and schistosity.”

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Figure 7.2 : Lo

ocal Area Geologyy Map

29

7.3 PROPERTY GEOLOGY The Dachang project is underlain by a sequence of Permian and Triassic sediments consisting of slate, calcareous shale, siltstone and sandstone. This sequence strikes northwesterly and, locally, dips are generally steeply to the north or south, with flatter fault structures sometimes found nearer surface (which may be associated with greater erosion). Figure 7.3 shows a geological map of the property. Overlying the Permian and Triassic rocks are relatively unconsolidated Quaternary sediments which can be divided into two groups. First are the alluvial materials in the recent river beds. They consist of grit, pebbles and clay. The second type includes aeolian and residual Holocene sediments which occur in the flats and at the toes of mountain slopes. The alluvial material is the host for the placer gold mined on the property. Several thrust faults have been mapped at Dachang. The Gaude Maduo fault is one of several such thrust faults in the area. This fault strikes northwesterly and dips 20 to 50º northeast. It is up to 200 m wide and is characterized by a zone of calcareous rocks, and siltstones, which are typically highly brecciated. Silicification, carbonatisation, sericitisation and hematisation are common and locally intense quartz and carbonate stockwork veining is also common. A series of auriferous fracture zones are related to the Gaude Maduo Fault zone (Anon (a), 2003). The nature of the relationship is not currently well explained. These auriferous fracture zones are found more commonly to the south of the fault zone. They strike 110° to 130° and dip from 40° to 60° to the south. These structures are usually 1 m to 20 m wide and some have been traced for several kilometres along strike. The rocks associated with these structures are sheared or crushed clastic sediments, cataclasites and fault gouge, and stockworks, stringers and lenses of quartz. The common alteration is silica, pyrite, arsenopyrite and sericite. Most of the pyrite is disseminated with contents ranging from 3% to 7%. The arsenopyrite also forms fine-grained disseminations with contents ranging from 5 to 10%. Gold mineralisation is associated with significant silica, pyrite and arsenopyrite. The estimated content of pyrite and arsenopyrite correlates generally with gold grade. These fracture zones contain multiple stages of mineralisation and quartz veining. The many fault/fracture zones which cross the project area host a complex sequence of sulphide gold replacement mineralisation. The main mineralised body of interest in this report, the DMZ, is hosted within a fault zone sometimes referred to as the DFZ. Gold mineralisation is probably related to specific stages of the alteration and quartz veining described above but this has not been established in detail. A second prominent fracture set strikes northeast and dips 60° to the northwest. These are post mineralisation faults, which offset mineralised zones by tens of metres and seem to be able to destroy mineralisation along their traces. There are no known intrusive rocks mapped on the Dachang property. However, there are several Indosinian intrusives immediately east of the property.

30

Figure 7.3 : P

Property Geology Map

31

8.0 DEPOSIT TYPES Exploration at Dachang indicates that the deposits are structurally-controlled, sediment-hosted, low-temperature, low-sulphide associated gold deposits. The results and observations made to date suggest a shear-hosted deposit model. Exploration going forward at Dachang will be designed to test the shear-hosted deposit model. The mineralisation and its relationship to the tectonic setting are discussed in the following section. Earlier work had suggested that Dachang may be a Carlin-type deposit. While there are some similarities with the Carlin-style of mineralisation, such as some of the host rock types and the refractory arsenic- and iron-sulphide gold associations, there are also a number of differences. Among the differences are the relative lack of such minerals as realgar, orpiment and cinnabar, and the lack of such common features as decalcification and jasperoid development. As yet it is not clear precisely what type of deposit Dachang is and further study is required.

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9.0 MINERALISATION Historical reports by the QGSI, from analyses of heavy mineral concentrates and examination of polished thin sections, indicated that the main metallic minerals are free gold, pyrite, arsenopyrite, stibnite, chalcopyrite, galena and sphalerite. Oxide minerals include limonite, malachite, and antimony oxides. Gangue minerals consist of quartz, feldspar, calcite, clay and sericite. Chemical analyses show that this area is characterised by high concentrations of gold, sulphur, arsenic and antimony and low concentrations of silver, copper, lead and zinc. Mineral textures are described as granular, metamorphic, cataclastic and mortar textures. Structures are described as dissemination and breccias. On the basis of macroscopic and microscopic studies, paragenesis, type of occurrence and metallogenic character, the mineralisation at Dachang is divided by the Chinese into two types:

Gold-sulphide-alteration cataclastic rock type. Gold-pyrite vein type.

Visual observation by Inter-Citic staff of mineralisation exposed by trenching and that seen in drill core supports the above observations. Additionally, in 2004, the joint venture completed limited thin section work on selected samples taken from drill holes CJV-6, -7 and -9 to study the lithologies at Dachang. This work confirmed that the host rocks are sedimentary, composed of mainly argillite and carbonate (micrite) and that the rocks are locally silicified and carbonatised with local evidence of chloritisation and sericitisation. Disseminated pyrite, arsenopyrite and stibnite are present. Figure 9.1 shows two photomicrographs of mineralisation styles from drill hole CJV-139. The mineralisation occurs within brecciated faults and fracture systems often with several parallel, and possibly anastomosing, mineralised zones being present over the width of the DMZ.

FFigure 9.1 : MMicroscopic Vi

33

ews of Mineraalisation in Coore Samples

34

10.0 EXPLORATION Maps and more detailed results of all areas discussed herein are available from Inter-Citic’s website at www.inter-citic.com. 10.1 INTRODUCTION Prior to Inter-Citic’s involvement at the Dachang project, exploration work conducted by the QGSI defined several large gold stream sediment anomalies across the limits of the property. This work is summarised in Section 6 of this report. In September, 2004 Inter-Citic conducted its first exploration on the Dachang property. A GPS-controlled survey grid was established covering approximately 107 km2 with grid lines spaced at 200-m intervals, for a total of 462 line-kilometres. The following work was subsequently completed.

1. Soil Geochemical Survey - 23,088 conventional B-horizon soil samples analyzed for gold, arsenic and antimony over approximately 107 km2.

2. Total Field Magnetometer Survey - recording 23,100 readings over the established grid

covering approximately 107 km2.

3. Time Domain Electromagnetic (TEM) Survey - completing test profiles along selected grid lines.

4. Trenching - Seven trenches, totalling 467 line-metres, were excavated (approximately

1,425 m3 of material).

5. Diamond Drilling - 15 NQ-sized core holes totalling 3,623 m. In 2005, Inter-Citic completed geological mapping of the project, extended the 2004 soil geochemical survey, and began an extensive mechanical trenching program throughout the property, followed by diamond drilling of identified targets, as follows:

1. Geological Mapping - 1:25,000 scale over 200 km2. 2. Soil Geochemical Survey - 11,220 B-horizon soil samples were collected and tested for

gold, arsenic and antimony over an area covering approximately 54 km2.

3. Trenching - 115 trenches totalling 23.71 line km (excavation of approximately 43,000 m3).

4. Diamond Drilling - 22 NQ-sized core holes totalling 2,487 m.

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The results of this work identified six large regional gold geochemical anomalies on the property and environs as it was then. These large regional anomalies define areas on the Main Parcel (see Figure 10.1 for approximate boundaries) and are now referred to by Inter-Citic as:

Dachang East. Dachang North. Dachang Central (or Central Dachang). Western Quarter. North River. Southwest Dachang.

All exploration undertaken at Dachang since the establishment of Inter-Citic’s joint venture was completed under the direction of Inter-Citic. Cyr Drilling International Ltd., of Canada, performed much of the diamond drilling. In 2007 the QGSI provided two drill rigs sourced from Shandong Province #8 Geological Survey Institute (Shandong Drilling) of Shandong Province, China. Shandong drilled 6,957 m in 2007 and remained on the project through 2008. In 2008 QGSI brought on their own drills and have had up to 5 drills on the site at any one time since then. In 2009, Inter-Citic retired one of their three drills and used parts from that drill to maintain and upgrade the remaining two and have kept the remaining two in operation. 10.2 GEOLOGICAL MAPPING During the 2005 exploration program, the QGSI completed a geological survey covering the North River, Western Quarter, Dachang Central, Dachang North and Dachang East districts of the property. The mapping was completed at a scale of 1:25,000 and covered an area of approximately 200 km2 (see Figure 10.1). During the geological survey, rock outcroppings were located by GPS and geological observations noted at each outcrop. The geological observations included, but were not restricted to, dimensions of the outcrop, rock type, strike, dip, alteration if any, and nature and type of any mineralisation present. Structural information such as the presence of faults (and type), shears and jointing patterns was also noted. Selected representative rock samples were taken for geochemical analysis and thin section studies. The data were compiled, interpreted and presented on a single map covering a significant portion of the property at a scale of 1:25,000 as noted above. The results of the geological mapping confirmed and further defined the regional geological setting mapped in 1976 by the Qinghai Geological & Mineral Bureau Region #1 Investigating Team and presented at a scale of 1:200,000. The Dachang property is underlain by a sequence of Permian and Triassic sediments consisting of slate, calcareous shale, siltstone and lithic sandstone. This sequence strikes northwesterly and dips steeply to the north or south. Numerous faults have been mapped on the property. The northwesterly trending faults are the earliest and the best developed and consist of reverse (thrust) faults and normal (shear zone) faults.

36

Fiigure 10.1 : Surfacce Geology and M

Major Soil Geochemmical Anomalies aat Dachang

37

The dominant thrust fault, locally termed the CBx Fault (carbonate breccia), is a portion of the regional Gaude Maduo Fault. This thrust trends northwesterly across the central portion of the property and appears to be spatially related to the regional gold geochemistry. Where observed in outcrop and intersected in drilling, the CBx Fault is up to 250 m wide, exhibits a shallow dip (20º to 45º N) and is characterised by calcareous rocks, tectonic breccias and post tectonic quartz-carbonate veins (see Carbonate Thrust Fault on Figure 10.1). Silicification, carbonatisation, sericitisation and hematisation are common and locally intense. Based on limited drill testing in 2004, the CBx Fault was observed to be highly altered and to contain significant secondary concentrations of arsenopyrite, pyrite and stibnite. These sulphides are locally present as disseminations and narrow massive sulphide vein sets and are most abundant in the highly altered sections of the thrust fault. A separate set of near-vertical shear zones and faults have also been mapped across the property and appear to be the main conduits for the gold mineralisation. These vertical shear zones are 3 to 15 m wide and can typically be traced along strike for several kilometres. This major fault system is defined by a 2 to 3 km wide package of calcareous shales and siltstones hosting up to 12 near-parallel shear zones that appear to closely follow the gold soil geochemistry. These faults are oxidised near surface and shallow trenches typically uncover gossanous bedrock within these shear structures. The faults exhibit secondary sulphide replacement (pyrite, arsenopyrite and stibnite), silicification and quartz carbonate veining. Gold mineralisation appears to be related to specific zones of sulphide replacement within these faults. Further work will be required to determine the specific controls on gold deposition. 10.3 TOTAL FIELD MAGNETOMETER SURVEY During the 2004 exploration program, a magnetometer survey was completed over the North River, Western Quarter, Dachang Central, Dachang North and Southwest Dachang areas. The survey was carried out using a GSM-19T proton magnetometer supported by a continuous recording magnetic base station. The total magnetic field data were recorded at 20-m spaced intervals along all lines of the established grids, covering a total of approximately 107 km2. The results of the magnetic survey illustrated very little difference in the magnetic susceptibility across the various lithologies of the Dachang sedimentary sequence likely due to the complexity of the stratigraphy and similarity of magnetic characteristics. 10.4 TIME DOMAIN ELECTROMAGNETIC SURVEY TEM test profiles were completed across the Dachang East ation, and, as expected, this system identified electromagnetic anomalies over the gold-bearing sulphide zone. Following the completion of the baseline work, a second stream sediment target, the Western Quarter anomaly, was selected for TEM testing. The six profiles completed over this target detected multiple strong TEM anomalies. These anomalies were selected for testing by diamond drilling and trenching once the geochemical soil analysis for these areas was completed. The diamond drill results are included in Section 11.

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10.5 2008 INDUCED POLARIZATION GEOPHYSICAL SURVEY Between mid-July and the end of September, 2008, a test survey of Induced Polarization (IP) and apparent resistivity geophysics was completed on the Dachang property. A survey grid was established with lines 200 m apart and stations at 25 m intervals. The lines were run at an azimuth of 198° true and approximated the Chinese grid system. The grid straddles the Dachang Main Zone (DMZ), Placer Valley Zone (PVZ), Dachang Main Zone-Extension (DMZ-X) and the Ruby Zone (RZ). Twenty-five kilometres of 50-m and 32.6 km of 25-m spaced surveying were completed. Discovery China Geophysical Consulting Ltd. (Discovery) provided experienced transmitter and receiver operators while Inter-Citic and the QGSI provided field personnel for the remainder of the crew. Discovery conducted the survey with a GDD 1.2 kW transmitter and an Elrec 6 Irius receiver. Part way through the survey a GDD 16 Channel receiver was utilised in place of the Elrec 6 Irius receiver. A pole-dipole method was employed for the survey and electrode spacing was varied from 25 to 50 m. This approach provided a depth spacing (“z” interval) from 1 - 6 to 1 - 11 “n” spacings to get the best response to the known mineralisation. Twenty-three coloured pseudo-sections were prepared from the field work. These pseudo- sections were incorporated into plans of the near surface representation (-41 m,-83 m depths) of the apparent resistivity and the near surface representation of the apparent chargeability (-41 m, -83 m depths). A plan of the apparent chargeability at -41 m (n = 4) and pseudo-sections of lines L12300W and L16000W of the Dachang Main Zone grid area was presented in a press release dated September 11, 2009 and is available on the Inter-Citic website. Four main trends were interpreted from the 2008 IP survey: the Ruby East Trend, Dachang Main Zone North Trend, the Dachang Main Zone Trend (including the DMZ-X) and the Placer Valley Trend. The resistivity data also show a north-trending cultural anomaly related to the placer workings and the flat lying till sheet on the eastern area of the grid. Some trenching and drilling of a few of the geophysical anomalies delineated in the 2008 IP survey produced new discoveries of gold mineralisation in the Placer Valley Main Zone area and the Placer Valley North area. On IP line L1600W, on the eastern edge of the PVZ, the best drill intercept was 6.5 m of 5.03 g/t Au in hole CJV-487. On IP line L3600W, in between the DMZ and the PVZ, drilling of isolated IP chargeability anomalies returned a best drill intercept of 3.91 g/t Au over 3 m in CJV-560. On IP line L1400E, on the northern edge of the DMZ-X, the best drill intercept was 2.54 g/t Au over 1 m in hole CJV-497. 10.6 SOIL GEOCHEMICAL SURVEY Soil geochemistry has been a valuable exploration tool at Dachang because of the near-surface nature of the mineralisation and generally thin cover in the Dachang project area. This method led to the discovery of the original inferred gold resource at the DMZ.

39

A summary of the results of the soil geochemical programs completed at Dachang since 2004 can be seen in Figure 10.1. The thresholds for selection of anomalous values are discussed below. 10.6.1 2004 Soil Geochemistry During Inter-Citic’s 2004 exploration program, a conventional B-horizon soil-sampling program was completed near the major stream sediment anomalies. This work defined five new mineralised districts specifically the North River, Western Quarter, Dachang Central, Dachang North and Southwest Dachang districts. Within these districts this survey discovered 21 new gold-in-soil anomalies. These anomalies appear to be broadly strata-bound and can be seen to define three discrete geological corridors. Each of these corridors comprises a series of lenticular anomalies between 2 to 2.5 km across and which generally follow the 110º strike of the host sediments. The three geological corridors are:

The explored portion of the northern corridor is approximately 7 km long and includes all the North River anomalies. It is open along strike in both directions.

The central corridor, which includes the Western Quarter, Dachang Central and

Dachang North anomalies, is approximately 7 km long and appears to continue off the property in both directions.

The southern corridor is approximately 5 km in length and hosts the original mineral

resource at Dachang East. The anomalies in the southern corridor proceed to the southeast off the property.

All gold-in-soil anomalies were distinctly linear and can be summarised by district as follows. North River District The results of the 2004 soil geochemical survey identified three large and distinct gold-in-soil anomalies at North River: NR-1, NR-2 and NR-3. Gold values in soils grade from 1 ppb to in excess of 300 ppb Au, which is the upper detection limit for the survey’s analytical method. Background levels for the soils in this district range from 1 to 5 ppb Au with anomalous values typically grading greater than 50 to 100 ppb Au. Additionally, the gold anomalies typically show a highly variable enrichment in arsenic and/or antimony. Separate non-gold bearing arsenic and antimony soil anomalies have also been detected in this district. Western Quarter District Gold values in soils from the Western Quarter grade from 1 ppb to in excess of 300 ppb (the upper limit). Background levels for the soils in this district range from 1 to 5 ppb Au with anomalous values typically grading greater than 50 to 100 ppb Au. Gold anomalies also typically show a highly variable enrichment in arsenic and/or antimony. Separate non-gold bearing arsenic and antimony soil anomalies have been detected. Analyses of the 3,443 soil

40

samples from the Western Quarter lead to the observation that there are two distinct gold-bearing geological domains apparent in this area.

1. Below the CBx Thrust Fault: Below the CBx Fault the soil survey defined six prominent gold soil anomalies, being WQ1 to WQ6. These anomalies form a series of parallel gold-bearing zones, which have been detected across a stratigraphic width of 1,800 m to 2,000 m immediately below the fault.

2. Above the CBx Thrust Fault: A prominent regional fault, the CBx Thrust, crosses the

northwestern corner of the Western Quarter grid. Above the thrust, soil geochemistry detected high concentrations of arsenic in the soils above the altered sedimentary rocks within the fault structure. Gold enrichment was detected on the eastern extension of this unit.

Dachang North District The soil samples collected during the 2004 program at Dachang North were analyzed using a method with a higher maximum gold detection limit than in other previous surveys on the property, because of extremely high isolated gold-in-soil results. This resulted in gold-in-soil values on this grid being detected at levels of up to 4,001 ppb. Analysis of these samples defined four prominent anomalies in Dachang North (DN-1, DN-2, DN-3 and DN-4) that appear to be similar in all aspects to those defined in other districts. Background gold levels for the soils in this district range from 1 to 5 ppb. The survey returned a mean gold value of 17 ppb Au with a threshold of 31 ppb Au defined as highly anomalous, representing results at the 95th percentile. As with other soil geochemistry at Dachang, the Dachang North anomalies are distinctly linear and follow the stratigraphy of the host sediments, and also typically show variable enrichment in arsenic and/or antimony. Within this district, separate non-gold bearing arsenic and antimony soil anomalies have also been detected. Dachang Central District Gold values in soils from Dachang Central grade from 1 ppb to greater than 300 ppb, (upper detection limit). Background gold levels for the soils in this district are less than 5 ppb Au. Threshold values are between 5 and 20 ppb Au. As with other soil geochemistry at Dachang, the Dachang Central anomalies are distinctly linear and follow the stratigraphy of the host sediments, and also typically show variable enrichment in arsenic and/or antimony. Within this district, separate non-gold bearing arsenic and antimony soil anomalies have also been detected. Seven anomalies were identified (CD-1 to CD-7) in this central part of the project. The Dachang Central soil geochemistry illustrates continuity of soil anomalies between Western Quarter and Dachang North. These anomalies generally follow the 110º strike of the host sediments and form a series of densely packed, ribbon-shaped features. Dachang Central

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anomalies range from 20 m to 80 m wide, with along strike lengths from 800 m to 2,000 m. Gold geochemistry in the anomalies attains grades of 20 ppb to greater than 300 ppb (upper limit of detection). Southwest Dachang District Gold values in soils from Southwest Dachang grade from 1 to greater than 300 ppb (upper detection limit). Background gold levels for the soils in this district are less than 5 ppb. Threshold values are between 5 and 20 ppb Au with over 20 ppb defined as anomalous. Values over 50 ppb are defined as highly anomalous. As with other soil geochemistry at Dachang, the Southwest Dachang anomalies are distinctly linear and follow the stratigraphy of the host sediments, and also typically show variable enrichment in arsenic and/or antimony. Within this district, separate non-gold bearing arsenic and antimony soil anomalies have also been detected. Only one significant soil geochemical anomaly was identified in Southwest Dachang (SW-1). This anomaly was detected adjacent to the Dachang Central grid. This anomaly is approximately 40 m wide with a strike length of 800 m. 10.6.2 2005 Soil Geochemistry During the 2005 exploration program, Inter-Citic completed the detailed conventional B-Horizon gold soil geochemical survey discussed above. During this program a total of 11,220 soil samples were collected and analyzed for gold, arsenic and antimony. The results of this recent survey discovered four new gold anomalies and extended the strike length of several previously identified gold anomalies in North River, Dachang North and Dachang Central. The following summarises the four significant new gold soil anomalies. North River District NR-4: A new gold-in-soil anomaly discovered in 2005, NR-4 is located approximately 1 km southeast of and along strike from the previously identified anomaly NR-3. It has a strike length of approximately 1 km. The anomaly consists of three parallel ribbon-like zones exhibiting gold values up to 186 ppb with one sample returning a value of greater than 300 ppb. Dachang North District DN-4 Extension: This gold-in-soil anomaly represents the continuation of anomaly DN-4 discovered in 2004. This work extends DN-4 a further 600 m along strike to the southeast and is characterised by gold values of up to 125 ppb Au, with isolated single station values of greater than 300 ppb Au. As a result of the 2005 survey, DN-4 now has a total strike length of approximately 2 km and is open along strike off the property to the southeast. NR-5: This anomaly represents the northwestern extension of an unnamed anomaly discovered in 2004. It is located in the northwestern portion of North River and is parallel to, and

42

approximately 1 km southwest of, the previously identified anomaly NR-1. NR-5 is approximately 2 km long and is open along strike off the property to the northwest. It may also be open to the southeast; however, thick alluvial sediments of the North River mask any geochemical response. It is possible that this anomaly represents the northwestern extension of NR-2 on which Inter-Citic reported an inferred mineral resource of approximately 1.3 Mt averaging 5.81 g/t Au (238,000 oz Au). Central Dachang District CD-8: This anomaly is located southwest of anomaly CD-7 discovered in 2004. The CD-8 anomaly has gold values of greater than 300 ppb Au, occurs in an area of intense faulting and may represent dislocated sections of one anomaly up to 1.6 km long. This anomaly is open along strike off the property to the northwest and appears to be the possible western extension of the Dachang East gold resource. The significant gold-in-soil anomalies from the 2004 and 2005 exploration work are summarised in Table 10.1.

Table 10.1 : Major Gold-in-Soil Anomalies - 2004 and 2005 Exploration Programs

District Anomaly Length (m)

Width (m)

Anomaly Strength (ppb Au)

North River NR-1 2,300 120 - 220 20 - >300 NR-2 1,000 20 - 180 20 - >100 NR-3 1,300 20 -120 20 - >100 NR-4 1,000 20 - 40 20 - >300 NR-5 2,000 20 - 60 20 - >300 Western Quarter WQ-1 1,000 60 - 450 20 - >100 WQ-2 2,600 40 - 200 20 - >100 WQ-3 1,100 60 - 200 20 - >100 WQ-4 2,400 60 - 200 20 - >100 WQ-5 2,600 20 - 100 20 - >100 WQ-6 2,200 20 - 100 20 - >100 Dachang Central CD-1 1,000 20 - 120 20 - 270 CD-2 1,200 20 - 140 20 - 270 CD-3 1,000 60 - 200 20 - 160 CD-4 4,600 20 - 180 20 - >300 CD-5 4,000 20 - 260 20 - >300 CD-6 1,600 20 - 140 20 - 150 CD-7 1,600 20 - 400 20 - >300 CD-8 400 20 -200 20 - >300 Dachang North DN-1 3,000 40 -180 20 - 4,000 DN-2 2,000 40 to 120 20 - 313 DN-3 1,200 60 to 300 20 - 721 DN-4 400 60 to 160 20 - 1,065

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10.6.3 2006 Soil Geochemistry In 2006 Inter-Citic conducted its first soil geochemistry survey on the Dachang East area. Dachang East is one of six districts within the Dachang gold project, and is the area in which the DMZ is located. Inter-Citic established two exploration grids over Dachang East and collected a total of 8,634 B-horizon soil geochemical samples from hand-dug pits located every 20 m on grid lines established at 200 m intervals across the grids. The first grid (B8) is approximately 16 km2 and located southeast of the DMZ. The second grid (B3) covers 6 km2 and is approximately 4 km northeast of the DMZ. Analysis of the soil geochemistry has resulted in the discovery of 25 new gold-in-soil anomalies. These anomalies tend to be linear, between 40 to 240 m in width with strike lengths varying from 600 to 1,400 m and tend to follow the 110º trend of the dominant structural fabric observed throughout the property. Gold values in soils from the 2006 survey areas grade from 1 ppb to greater than 300 ppb. Background gold levels for the soils range from 1 ppb to 5 ppb. The B8 survey tested 6,433 soil samples to a gold detection limit of 300 ppb. Of these, 174 samples tested greater than 100 ppb and the survey returned a mean gold value of 11 ppb with a threshold of 20 ppb defined as highly anomalous, representing results at the 90th percentile. On grid B3, the 2,201 soil samples collected returned 46 samples greater than 100 ppb, the upper gold detection limit for this grid’s testing. Results show mean gold values of 7 ppb with a threshold of 20 ppb defined as highly anomalous given values at the 90th percentile The 2006 season increased the number of major gold soil anomalies discovered by Inter-Citic at Dachang to 55. All of the newer anomalies lie outside the limit of the drill testing on the DMZ resource area. 10.6.4 2007 Soil Geochemistry In 2007 a limited soil geochemical survey was completed between the DMZ, located in the East Dachang area of the property, and its eastern extension (the DMZ-X). Samples collected were tested for gold, arsenic and antimony. An extensive trenching program utilizing three backhoes was aimed at testing new geochemical anomalies discovered from the previous year’s work. Within this program a total of 17,022 m of soil geochemical anomalies were trenched, for a total of 146 trenches and, from these 6,271 samples were extracted for analysis. 10.7 TRENCHING Trenching has proven to be a valuable exploration tool at Dachang due to the shallow soil development, typically less than 2 m, and the at- or near-surface gold mineralisation. Trenching exposed the bedrock source of the gold soil anomaly over the Dachang East mineral resource and has been equally successful in exposing bedrock gold zones associated with gold-

44

in-soil anomalies in other districts on the property. A consistent spatial relationship has been observed between the gold-in-soil anomalies, trench values and underlying altered and mineralised fault zones. In every case, trenching was able to expose the source of the soil geochemical anomaly. Very little if any gold displacement occurs between the soil anomaly and the bedrock gold zone, indicating very little gold migration from the source. The 2004-2007 trenching programs completed at Dachang are summarised below. 10.7.1 2004 Trenching Program During the 2004 exploration program, Inter-Citic completed reconnaissance trenching at North River and Dachang North. This work was completed to investigate the large regional gold geochemical anomalies identified there and was done without the advantage of having completed the detailed soil geochemical survey discussed above. The trenches typically were sampled at one-metre intervals, the optimum interval used by the QGSI to define the Dachang East Resource, given the physical dimensions of the currently known gold zones. At North River, 4 trenches, totalling 370.9 m were excavated at various locations on the regional anomaly. All of the trenches exposed portions of the Dachang sedimentary sequence. Two of the trenches, NR-TC-2 and NR-TC-4, are located on the southern flank of what is presently known as the NR-2 anomaly and returned 11.8 g/t Au over 3 m and 4.62 g/t Au over 6 m, respectively. Subsequent sampling of NR-TC-2 returned 1.03 g/t Au over 26 m. Trenches NR-TC-1 and NR-TC-2 are located on other parts of the regional anomaly and returned no significant gold values. At Dachang North four trenches, totalling 95.8 m, were excavated on the regional gold anomaly. All of the trenches exposed altered carbonate rocks. Trench ND-TC-1 returned 1.3 g/t Au over 9.3 m, trench ND-TC-2 returned 1.21 g/t Au over 8 m and ND-TC-3 returned 0.53 g/t Au over 5 m. 10.7.2 2005 Trenching Program During the 2005 exploration program, Inter-Citic made extensive use of trenching to evaluate the gold-in-soil anomalies identified during the 2004 soil geochemical survey. Trenches were typically established at 100-m and 200-m spaced intervals on the North River anomalies, and at 200-m and 400-m spaced intervals on the Western Quarter and Dachang Central anomalies. Only limited trenching was carried out at Dachang North and no testing was done at Southwest Dachang. Mechanical excavators were used to establish 101 trenches, totalling 23.7 line-kilometres, and to excavate 63,474 m3 of overburden. As in 2004, channel samples were taken, typically at one-metre intervals along the prospective section of the various trenches. Geochemically anomalous gold values of >250 ppb Au were encountered over numerous intervals in almost all of the trenches.

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At North River, 48 trenches, totalling 9,982 m were excavated on gold-in-soil anomalies NR-1, NR-2 and NR-3. Twenty-eight trenches were excavated on NR-1, 13 trenches on NR-2 and 7 trenches on NR-3. At Central Dachang, 38 trenches, totalling 8,655 m were excavated on various gold-in-soil anomalies. The majority of the trenches were established on soil anomalies CD-4 (9 trenches) and CD-5 (11 trenches) with fewer trenches on CD-1 (3 trenches), CD-2 (2 trenches), CD-3 (1 trench), CD-6 (1 trench) and CD-7 (5 trenches). The remaining six trenches were excavated on satellite anomalies. At Western Quarter, 11 trenches, totalling 3,920 m were excavated at strategic locations on WQ-2, WQ-3, WQ-4, WQ-5 and WQ-6. At Dachang North, 4 trenches, totalling 976 m were excavated at selected locations on DN-1 and DN-3. Table 10.2 summarises the gold assays reported for the significant gold zones exposed by trenching during the 2005 exploration program.

Table 10.2 : Significant Trench Assay Results - 2005 Exploration Program

Trench Number

From (m)

To (m)

Interval (m)

Grade (g/t Au)

Gram- Metres

North River District Anomaly NR-1 A1TC35501 73.4 81.4 8.0 4.47 35.8 183.0 191.0 8.0 4.07 32.6 A1TC3601 113.0 126.8 13.8 2.38 32.8 226.5 228.5 2.0 5.52 11.0 A1TC36501 64.0 67.0 3.0 2.74 8.2 150.0 152.5 2.5 3.04 7.6 A1TC37501 195.0 198.0 3.0 1.90 5.7 A1TC3801 7.0 19.4 12.4 2.00 24.8 A1TC38501 8.0 20.0 12.0 4.49 53.9 A1TC3901 27.3 32.0 4.7 1.14 5.4 A1TC39501 39.5 45.5 6.0 2.84 17.0 A1TC39502 29.0 40.4 11.4 1.57 17.9 A1TC4001 23.0 27.0 4.0 2.70 10.8 A1TC40501 28.5 33.0 4.5 3.35 15.1 A1TC40502 21.5 22.6 1.1 4.62 5.1 88.0 89.8 1.8 4.26 7.7 A1TC4101 78.2 80.7 2.5 3.74 9.4 A1TC41502 15.0 19.0 4.0 3.65 14.6 53.5 56.5 3.0 3.96 11.9 86.0 93.0 7.0 4.43 31.0 108.0 110.5 2.5 2.23 5.6 A1TC4202 97.0 99.0 2.0 3.94 7.9 A1TC4203 35.0 39.0 4.0 1.63 6.5 A1TC42501 32.0 40.0 8.0 0.82 6.6

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Trench Number

From (m)

To (m)

Interval (m)

Grade (g/t Au)

Gram- Metres

61.5 67.0 5.5 1.92 10.6 A1TC43501 190.0 196.0 6.0 1.14 6.8 Anomaly NR-2 A1TC5101 25.0 29.0 4.0 20.65 82.6 195.0 198.0 3.0 2.03 6.1 A1TC51501 89.2 92.0 2.8 5.01 14.0 A1TC5201 118.0 136.0 18.0 2.09 37.6 217.0 220.0 3.0 14.54 43.6 A1TC5301 261.0 266.0 5.0 1.42 7.1 A1TC53501 13.0 18.0 5.0 1.65 8.3 A1TC5401 97.0 101.0 4.0 7.25 29.0 A1TC5501 56.0 58.0 2.0 2.67 5.3 174.4 178.4 4.0 5.14 20.6 Anomaly NR-3 A1TC6601 13.0 16.0 3.0 3.61 10.8 A1TC6701 13.0 14.0 1.0 6.29 6.3 50.0 53.0 3.0 3.57 10.7 Western Quarter District Anomaly WQ-2 A2TC3802 328.0 330.0 2.0 3.37 6.7 Anomaly WQ-5 A2TC4301 252.5 257.5 5.0 3.15 15.8 Anomaly WQ-6 A2TC3801 81.5 88.0 6.5 2.40 15.6 Anomaly WQ-2 & 6 A2TC4001 112.0 113.0 1.0 5.28 5.3 292.5 294.5 2.0 3.64 7.3 712.0 713.0 1.0 9.98 10.0 Dachang Central District Anomaly CD-1 A2TC6302 232.0 236.0 4.0 2.00 8.0 Anomaly CD-4 A2TC5401 26.0 32.0 6.0 1.41 8.5 A2TC6002 135.0 138.0 3.0 2.23 6.7 A2TC6401 31.0 35.0 4.0 3.94 15.8 A2TC6901 89.0 91.0 2.0 2.51 5.0 137.0 139.0 2.0 2.80 5.6 Anomaly CD-5 A2TC5402 55.0 64.0 9.0 6.09 54.8 A2TC5601 40.5 55.5 15.0 0.73 11.0 62.5 73.5 11.0 1.30 14.3 A2TC6501 118.0 122.0 4.0 1.43 5.7 126.0 131.5 5.5 7.26 39.9 A2TC6601 52.0 68.5 16.5 4.89 80.7 A2TC6701 283.6 284.6 1.0 12.10 12.1 A2TC6702 12.5 21.5 9.0 1.88 16.9 A2TC7001 174.0 186.5 12.5 2.25 28.1

(Assay cut-off 0.5 g/t Au and 5 gram-metres)

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10.7.3 2006 Trenching Program Five new areas of gold mineralisation were discovered through trenching during the 2006 exploration season at Dachang. Three of the new areas of discovery (Placer Valley anomaly, DMZ-X and Little Ruby) are near the DMZ resource area in Dachang East. All three of these zones are open along strike and together have an aggregate surface length of approximately 1.3 km. Most of the newly discovered zones near the DMZ have been trenched on 40 m intervals along strike. The areas trenched in the 2006 program can be seen in Figure 10.2. Placer Valley Anomaly (Dachang East) The Placer Valley anomaly is approximately 600 m to the south of the eastern end of the DMZ as known in 2006. Trenching of the Placer Valley anomaly has revealed a mineralised zone approximately 720 m in length which is open in both directions. Reported trench assay values at the Placer Valley anomaly include T-2101 with 8.0 m of 10.28 g/t Au, T-3503 with 6.0 m of 10.57 g/t Au, T-3703 with 7.5 m of 10.59 g/t Au, T-3704 with 8.0 m of 10.24 g/t Au, and T-4301 with 17.0 m of 4.28 g/t Au Dachang Main Zone Extension (Dachang East) The DMZ-X continues along strike off the eastern end of the currently defined DMZ. Trenching has delineated a 360-m length of surface mineralisation, and the zone is open to the east. Reported trench assay values at DMZ-X include T-2502 with 3.0 m of 7.29 g/t Au, T-2702 with 17.0 m of 2.40 g/t Au, and T-2904 with multiple zones including 2.0 m of 13.34 g/t Au and 5.5 m of 7.35 g/t Au. Little Ruby Anomaly (Dachang East) Little Ruby is approximately 2,000 m to the north of DMZ-X. Trenching of Little Ruby has revealed a mineralised zone approximately 200 m in length and open to the east. Reported trench assay values at Little Ruby include T-2903 with 22.0 m of 5.11 g/t Au, T-3101 with 4.3 m of 6.80 g/t Au and T-3302 with 16.6 m of 3.18 g/t Au. CD-9 (Central Dachang) and DN-5 (Dachang North) Anomalies Reported trench assay values at the CD-9 anomaly include trench 537501A2 with 4.0 m of 6.02 g/t Au, trench 652501A2 with 12.5 m of 7.91 g/t Au, and trench 657501A2 with 8.0 m of 6.54 g/t Au. DN-5 was defined by five trenches with continuously mineralised lengths of up to 9.5 m and grades between 0.56 and 3.82 g/t Au.

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Figure 10.2 : Trench Assay

Results - 2006 Exploration Programm

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Compilation of Results Table 10.3 is a summary of gold assays reported for significant gold zones exposed by trenching during the 2006 exploration program.

Table 10.3 : Significant Trench Assay Results - 2006 Exploration Program

Trench Number From (m)

To (m)

Interval (m)

Grade (g/t Au)

A. Dachang East 1. Placer Valley T-11902 20.70 22.40 1.70 1.97 73.40 75.80 2.40 1.88 T-1301 31.50 34.50 3.00 3.06 40.50 46.00 5.50 2.57 64.50 69.00 4.50 2.47 T-1501 39.50 40.50 1.00 0.61 T-1701 21.00 23.50 2.50 1.43 T195001 26.00 28.50 2.50 2.90 72.50 74.50 2.00 1.84 88.00 89.00 1.00 2.37 T-2101 17.00 22.00 5.00 4.24 33.00 41.00 8.00 10.28 T-215001 5.50 7.50 2.00 4.04 35.00 38.00 3.00 4.98 62.00 68.00 6.00 1.36 79.00 82.00 3.00 3.45 T-2311 16.00 26.00 10.00 1.85 T-2312 15.00 16.50 1.50 1.78 27.50 28.50 1.00 0.74 59.00 60.00 1.00 2.57 64.00 69.00 5.00 1.41 84.00 86.00 2.00 2.27 T-235001 14.50 17.50 3.00 1.83 21.00 23.00 2.00 1.65 T-235002 15.00 16.50 1.50 2.22 31.50 35.50 4.00 2.18 44.00 46.00 2.00 1.06 54.00 56.50 2.50 1.45 70.00 73.00 3.00 7.07 T-235003 76.00 81.00 5.00 2.33 T-2503 12.00 17.00 5.00 1.29 T-255001 41.00 47.00 6.00 2.06 77.00 80.00 3.00 1.55 T-275001 37.00 40.00 3.00 1.84 59.00 62.00 3.00 4.59 T-2905 8.00 10.00 2.00 2.08 16.00 21.00 5.00 1.41 24.00 26.00 2.00 8.82 T-3103 105.00 109.00 4.00 3.14 T-3304 60.00 64.00 4.00 5.34

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Trench Number From (m)

To (m)

Interval (m)

Grade (g/t Au)

77.50 80.50 3.00 1.32 T-3306 22.00 23.00 1.00 1.36 28.00 32.00 4.00 1.59 37.50 40.50 3.00 2.26 47.00 52.00 5.00 2.15 55.00 57.00 2.00 1.65 T-3503 6.00 7.00 1.00 1.11 18.00 24.00 6.00 10.57 40.50 41.50 1.00 2.32 T-3703 7.00 8.50 1.50 1.48 27.00 34.50 7.50 10.59 39.50 43.00 3.50 3.01 T-3704 35.00 42.00 7.00 2.29 46.00 47.00 1.00 0.73 52.00 54.00 2.00 1.18 60.00 67.00 7.00 1.99 78.00 80.00 2.00 4.33 91.00 99.00 8.00 10.24 104.00 108.00 4.00 6.20 T-4106 8.50 9.50 1.00 1.08 20.50 22.00 1.50 0.99 33.00 39.00 6.00 2.04 47.70 57.00 9.30 3.47 T-415001 14.00 24.00 11.00 1.77 T-4301 10.50 17.00 6.50 0.64 22.50 28.00 5.50 1.28 31.00 39.00 8.00 1.58 43.50 45.00 1.50 1.58 63.00 80.00 17.00 4.28 83.50 90.50 7.00 1.89 T435002 11.00 14.00 3.00 7.59 40.50 43.00 2.50 1.78 61.80 64.00 2.20 1.63 T-4505 5.00 8.00 3.00 3.05 28.00 30.00 2.00 6.64 35.00 37.00 2.00 7.53 83.00 84.00 1.00 1.30 T-4705 13.00 17.00 4.00 2.57 20.50 22.00 1.50 0.59 46.50 47.50 1.00 4.54 52.00 53.50 1.50 0.70 92.00 97.00 5.00 1.11 T-5521 26.00 27.00 1.00 2.30 81.50 82.50 1.00 2.53 2. DMZ East Offset (DMZ-X) T-2310 35.00 38.50 3.50 1.10 44.00 48.00 4.00 5.20 64.50 67.50 3.00 2.85 130.00 134.50 4.50 2.64 T-2502 5.00 6.50 1.50 3.53

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Trench Number From (m)

To (m)

Interval (m)

Grade (g/t Au)

9.50 12.00 2.50 4.50 78.50 81.50 3.00 7.29 95.50 98.00 2.50 4.63 104.00 113.00 9.00 4.60 T-2702 22.00 39.00 17.00 2.40 65.00 67.00 2.00 4.12 78.50 81.50 3.00 2.37 95.00 97.50 2.50 1.01 124.00 130.50 6.50 1.78 T-2904 6.00 7.50 1.50 0.54 10.50 12.50 2.00 13.34 99.00 104.50 5.50 7.35 3. Little Ruby T-2701 23.90 27.90 4.00 2.05 T-2903 14.30 15.80 1.50 7.50 26.00 48.00 22.00 5.11 T-3101 18.30 22.60 4.30 6.80 25.60 27.60 2.00 2.69 T-3302 6.80 23.40 16.60 4.15 T-3502 7.00 10.00 3.00 2.16 T-3907 10.60 12.20 1.60 1.69 B. Central Dachang 1. DC-8 Anomaly 535001A2 14.00 19.50 5.50 3.39 33.00 34.00 1.00 0.64 537501A2 11.00 15.00 4.00 1.38 17.80 21.80 4.00 6.02 650201A2 14.40 16.40 2.00 2.16 20.90 27.10 6.20 1.49 652501A2 19.50 27.00 7.50 1.01 46.00 58.50 12.50 7.91 657501A2 31.60 39.60 8.00 6.54 662501A2 21.30 22.80 1.50 5.37 665001A2 22.00 25.00 3.00 1.92 667501A2 10.00 11.50 1.50 1.15 20.50 23.50 3.00 1.41 C. Dachang North 1. DN-5 8601A3 99.50 109.00 9.50 0.96 8801A3 92.40 95.40 3.00 1.66 112.00 115.00 3.00 0.56 164.00 167.00 3.00 0.58 802501A3 12.50 13.50 1.00 1.76 845001A3 61.00 67.00 6.00 1.35 70.00 71.40 1.40 1.18 855001A3 55.30 56.40 1.10 3.82

(Assay cut-off: 0.5 g/t Au, intervals were determined by geological interpretation of consistent mineralised zones. Broader intervals may include waste intervals of up to 2 m.)

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In addition to the results listed above, trench T-12301 at Dachang East returned assay values of 8.11 g/t Au over 9.0 m. Inter-Citic also sampled a number of trenches previously excavated on the property by the QGSI. All of the trenches sampled returned good gold values. None of these trenches has been subjected to drill testing below the exposed areas, nor have the trenches been excavated across the full width of the DFZ. All trenches sampled were excavated by backhoe and most reached broken bedrock at depths of 1.5 to 2.0 m. Samples were collected using 1.0 to 1.5 m chip samples each weighing approximately 3 to 5 kg. Table 10.4 summarises the results of trench resampling.

Table 10.4 : Resampling of Historic Trenches - 2006 Exploration Program

Trench Number Section Number

Sample Number

Width (m)

Grade (g/t Au)

TC-9503 860 North C1 to C2* 2.2 3.29 TC-9502 860 North C3 to C5* 3.0 2.67 TC-6301 E 220 North C1 to C3 3.1 7.56 TC-6301 W 220 North C1 to C2 2.3 6.9 TC-10501 1060 North C1 to C4

C5 to C6 9.2 2.2

3.06 2.27

TC-10101 960 North C1 to C4 4.0 12.35 TC-11102 1180 North C1 to C4 4.0 11.58 TC-11302 1210 North C1 to C11

C1 to C9 C10 to C11

16.7 9.0 2.0

6.07 8.90

10.35 * Trenches TC-9503 and TC-9502 are on the same line, approximately 5 m apart.

10.7.4 2007 Trenching Program During the 2007 exploration season, extensive trenching was conducted in and around zones highlighted by the contouring of results from the previous soil geochemical results. Included in these areas were the Placer Valley Zone (PVZ) which had yielded promising results in 2006, a new anomaly approximately 6 km east of the Main Zone, referred to as the South East anomaly (SEA), and other areas to the east of the Main Zone and peripheral to previously outlined anomalous areas. Trenches were established generally at 100-m intervals with smaller intervals of 25 to 50 m used where better definition of a zone was needed, especially in the PVZ and the SEA. Mechanical excavators were used to establish the 146 trenches, totalling 17 km, and to excavate 38,298 m3 of overburden. As with previous years’ work sampling was carried out for the most part at 1 m intervals along prospective sections of the various trenches. Geochemically anomalous gold values of >50 ppb were encountered regularly over significant intervals in almost all of the trenches. In Placer Valley, 67 trenches totalling 7,322 m were excavated along the PVZ already defined by previous trenching in this area. Trenches were also established around the periphery of the

53

PVZ, based on gold-in-soil anomalies. Some holes were drilled to test the trench results. Gold mineralisation was intersected, but core recovery was a problem. In the South East anomaly 35 trenches were established totalling 5,982 m. The targets of these trenches were long linear anomalies indicated by the soil geochemical data. A number of mineralised fault zones were discovered in the trenches. No drilling has been done to date. At Central Dachang, 13 trenches were established totalling 1,087 m. At Eastern Dachang, 31 trenches were established totalling 2,631 m. A well-defined near-surface mineralised zone was indicated by the high gold values from the trenches. This mineralisation has been named the Dachang Main Zone Extension (DMZ-X). Table 10.5 summarises the significant results from the 2007 trenching program.

Table 10.5 : Significant Trench Assay Results - 2007 Exploration Program

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

T-1001 DMZ-X 14.00 16.00 2.00 1.82 33.00 34.00 1.00 1.71 39.00 53.00 14.00 2.77 120.00 121.00 1.00 1.32 T-1002 DMZ-X 2.00 3.00 1.00 2.94 25.50 28.50 3.00 1.30 38.50 39.50 1.00 0.74 47.50 51.50 4.00 0.59 70.50 73.50 3.00 1.68 141.50 143.00 1.50 1.44 147.50 150.00 2.50 10.71 T-1102 DMZ-X 18.50 19.50 1.00 2.13 39.50 42.00 2.50 0.61 53.00 54.00 1.00 0.74 88.00 89.00 1.00 1.05 91.50 93.50 2.00 0.93 96.50 102.50 6.00 2.52 T-1201 DMZ-X 12.00 14.00 2.00 4.65 37.00 39.00 2.00 2.29 T-1401 DMZ-X 14.00 45.00 31.00 8.34 58.00 59.00 1.00 1.47 64.00 65.00 1.00 0.71 70.00 71.00 1.00 1.26 83.00 87.00 4.00 4.18 T-1502 PVZ 3.00 7.50 4.50 0.84 35.50 38.00 2.50 1.62 54.50 67.00 12.50 4.59 80.00 86.00 6.00 0.97 123.50 125.50 2.00 3.64 134.50 137.00 2.50 1.78 T-16501 DMZ-X 11.50 27.50 16.00 4.53

54

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

30.50 35.50 5.00 2.56 T-1702 PVZ 55.50 56.50 1.00 0.66 95.00 96.00 1.00 7.00 101.00 102.00 1.00 0.82 T-1904 PVZ 4.00 5.00 1.00 2.90 8.00 10.00 2.00 0.74 13.00 16.50 3.50 2.17 T-2103 PVZ 42.70 43.00 0.30 3.97 62.00 63.00 1.00 0.73 67.00 70.00 3.00 1.26 80.50 81.00 0.50 1.57 T-21503 PVZ 3.00 4.00 1.00 0.73 8.00 12.00 4.00 2.51 16.00 22.00 6.00 2.10 T-22501 DMZ-X 16.00 17.00 1.00 0.65 38.00 42.50 4.50 3.86 47.50 48.50 1.00 0.80 50.50 51.50 1.00 0.79 56.50 59.50 3.00 2.66 71.00 86.00 15.00 4.78 T-2313 PVZ 46.20 46.80 0.60 1.72 79.20 80.20 1.00 1.35 100.00 105.00 5.00 2.64 108.00 117.00 9.00 2.44 123.00 135.50 12.50 1.84 140.00 141.50 1.50 1.45 T-23504 PVZ 49.50 52.50 3.00 0.73 T-2403 DMZ-X 5.00 7.00 2.00 5.26 37.00 44.00 7.00 2.03 48.00 50.00 2.00 0.91 T-24401 SEA 37.50 40.00 2.50 0.57 T-2504 PVZ 18.00 22.00 4.00 1.63 25.00 26.00 1.00 2.01 44.50 46.50 2.00 1.28 49.50 51.50 2.00 0.72 T-2507 PVZ 9.50 15.50 6.00 1.51 T-25401 SEA 66.00 67.00 1.00 1.39 78.00 79.00 1.00 1.79 101.50 104.00 2.50 4.05 124.00 125.50 1.50 3.26 T-25503 13.00 16.00 3.00 1.33 T-26201 SEA 0.00 1.00 1.00 0.87 118.00 119.00 1.00 0.93 126.00 128.00 2.00 1.24 162.00 162.50 0.50 2.03 190.00 191.00 1.00 2.20 221.00 222.00 1.00 2.70 229.00 230.00 1.00 1.24 255.00 257.00 2.00 1.21 T-26601 SEA 18.00 18.50 0.50 0.80

55

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

63.50 66.50 3.00 0.68 69.50 71.50 2.00 0.83 85.50 89.50 4.00 0.61 T-27001 SEA 31.00 34.00 3.00 3.38 40.00 41.00 1.00 1.54 80.00 93.00 13.00 1.25 96.00 98.00 2.00 1.47 T-27201 SEA 44.00 48.00 4.00 0.53 69.00 72.50 3.50 0.75 117.00 118.00 1.00 1.34 121.00 122.00 1.00 0.87 155.00 156.00 1.00 0.79 256.00 257.50 1.50 0.55 T-27401 SEA 57.00 60.00 3.00 6.68 82.00 83.00 1.00 2.31 T-27402 SEA 46.00 47.00 1.00 0.88 61.00 63.00 2.00 0.73 15.00 16.00 1.00 1.30 T-27801 SEA 13.00 14.50 1.50 1.52 21.50 23.00 1.50 0.70 43.00 44.50 1.50 5.04 47.50 48.50 1.00 0.52 63.00 64.50 1.50 2.10 77.00 78.50 1.50 0.60 T-27802 SEA 57.00 77.00 20.00 1.50 T-27803 SEA 50.00 51.00 1.00 1.44 74.00 78.00 4.00 0.55 80.00 82.00 2.00 0.61 T-28201 SEA 63.00 67.50 4.50 1.78 T-28202 SEA 39.50 40.50 1.00 1.12 53.50 60.00 6.50 1.06 69.50 71.50 2.00 1.69 108.00 110.00 2.00 2.52 120.00 121.00 1.00 1.68 183.00 186.50 3.50 2.00 227.50 233.50 6.00 1.81 252.50 253.50 1.00 1.19 T-28203 SEA 38.00 40.00 2.00 0.61 51.00 63.00 12.00 1.18 67.00 69.00 2.00 0.70 72.00 73.00 1.00 1.12 82.00 83.00 1.00 1.15 106.00 108.00 2.00 1.77 113.00 114.00 1.00 0.61 T-28601 SEA 28.00 29.00 1.00 3.07 47.00 54.00 7.00 1.14 71.00 74.00 3.00 0.77 T-28801 SEA 71.00 72.00 1.00 1.16 77.50 78.50 1.00 0.64 83.50 84.00 0.50 0.92

56

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

T-28802 SEA 19.00 20.00 1.00 1.29 32.00 34.00 2.00 0.52 39.00 40.00 1.00 1.83 100.00 104.00 4.00 0.62 128.50 131.50 3.00 0.77 T-2906 PVZ 44.00 46.00 2.00 1.27 66.00 68.00 2.00 4.76 T-2907 PVZ 4.00 5.00 1.00 0.76 13.00 18.50 5.50 2.10 T-29201 SEA 30.00 31.00 1.00 0.65 44.50 47.00 2.50 2.65 57.00 58.00 1.00 0.91 T-29202 SEA 16.00 20.00 4.00 0.52 33.00 39.00 6.00 1.29 54.00 55.00 1.00 0.71 113.00 114.00 1.00 5.88 T-29401 SEA 62.00 63.00 1.00 0.85 65.50 68.50 3.00 1.58 77.50 80.00 2.50 2.18 106.00 107.00 1.00 0.53 168.00 176.50 8.50 1.37 183.00 188.00 5.00 1.62 205.00 206.00 1.00 2.11 T-29402 SEA 14.00 16.00 2.00 1.42 19.00 20.00 1.00 1.01 25.00 35.00 10.00 1.56 50.00 54.00 4.00 0.97 120.00 127.00 7.00 2.08 134.00 135.00 1.00 1.67 139.40 141.00 1.60 1.92 T-29601 SEA 21.00 30.00 9.00 2.10 53.00 54.00 1.00 1.15 80.00 82.00 2.00 1.49 86.00 91.00 5.00 1.01 T-30201 SEA 48.00 50.00 2.00 0.89 T-30401 SEA 75.00 77.00 2.00 0.71 128.00 129.00 1.00 2.27 134.00 135.00 1.00 0.57 152.00 155.00 3.00 2.47 325.00 326.00 1.00 0.78 365.50 366.50 1.00 2.71 T-3104 DMZ-X 18.50 22.50 4.00 3.74 26.50 41.50 15.00 6.68 T-3105 PVZ 28.50 30.00 1.50 31.00 T-3106 PVZ 52.50 53.50 1.00 1.78 71.00 72.00 1.00 0.51 74.50 75.50 1.00 0.93 T-31202 SEA 31.50 32.50 1.00 3.31 60.50 61.50 1.00 0.72 T-31501 PVZ 60.50 67.50 7.00 0.75

57

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

80.00 81.00 1.00 1.34 T-32201 SEA 82.00 94.00 12.00 0.91 125.00 126.00 1.00 1.31 134.00 137.00 3.00 1.76 265.00 268.00 3.00 2.67 T-3307 PVZ 34.00 42.00 8.00 4.31 65.50 66.50 1.00 3.97 T-3308 PVZ 90.00 91.50 1.50 2.19 97.50 98.00 0.50 3.69 118.00 122.00 4.00 2.58 143.00 146.50 3.50 2.46 T-33401 SEA 37.00 38.00 1.00 3.00 56.50 58.00 1.50 1.45 92.50 95.50 3.00 0.72 117.50 118.50 1.00 30.40 T-33402 SEA 0.00 4.00 4.00 0.78 8.00 9.50 1.50 0.52 15.50 19.50 4.00 1.10 65.00 66.50 1.50 0.74 T-33403 SEA 67.50 69.00 1.50 4.62 T-33501 PVZ 13.50 31.50 18.00 4.50 34.50 37.00 2.50 2.21 T-33502 PVZ 7.00 11.50 4.50 9.03 30.00 32.00 2.00 1.63 T-3507 PVZ 11.00 12.00 1.00 0.97 20.50 21.50 1.00 1.43 32.00 33.00 1.00 0.76 52.50 66.00 13.50 5.46 72.00 73.00 1.00 1.02 T-3706 PVZ 5.00 7.00 2.00 1.56 105.00 106.00 1.00 3.28 114.00 117.00 3.00 0.78 120.00 121.00 1.00 1.10 124.00 126.00 2.00 1.54 T-3910 PVZ 10.50 11.50 1.00 0.93 19.50 21.50 2.00 1.66 T-3911 PVZ 2.00 4.00 2.00 3.52 76.00 82.00 6.00 2.27 T-401 DMZ-X 33.00 35.00 2.00 7.69 T-41502 PVZ 49.00 50.00 1.00 1.44 T-41504 PVZ 12.50 29.50 17.00 2.56 34.50 36.00 1.50 0.64 39.00 47.50 8.50 4.40 T-4302 PVZ 8.50 15.00 6.50 1.69 18.00 19.50 1.50 0.52 25.00 35.50 10.50 2.93 45.50 54.50 9.00 9.38 T-4506 PVZ 61.90 62.50 0.60 0.78 73.00 76.50 3.50 3.62 T-4507 PVZ 3.00 7.00 4.00 0.95

58

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

21.00 28.00 7.00 1.27 41.00 44.00 3.00 6.89 72.00 74.00 2.00 1.92 81.00 82.50 1.50 2.12 93.00 95.00 2.00 4.03 111.00 112.00 1.00 0.83 T-45501 PVZ 193.00 198.00 5.00 1.36 204.00 207.00 3.00 2.07 T-4705 PVZ 14.00 15.00 1.00 2.69 21.20 22.50 1.30 1.21 26.00 31.00 5.00 3.24 60.00 67.00 7.00 1.59 T-5302 PVZ 52.00 53.00 1.00 2.99 T-5303 PVZ 46.00 48.00 2.00 2.01 T-5522 PVZ 18.00 20.00 2.00 0.91 23.00 24.00 1.00 0.94 28.00 32.00 4.00 0.67 110.50 111.50 1.00 5.14 119.00 122.00 3.00 2.27 126.00 127.00 1.00 3.02 158.00 160.00 2.00 3.53 171.00 172.00 1.00 0.70 180.00 181.00 1.00 0.53 186.00 188.00 2.00 3.85 200.00 201.00 1.00 1.15 208.00 209.00 1.00 2.51 251.00 256.00 5.00 1.03 T-601 DMZ-X 5.00 6.00 1.00 1.66 34.50 47.50 13.00 1.64 51.50 59.50 8.00 1.82 T-6303 PVZ 53.50 54.50 1.00 4.34 58.00 59.00 1.00 1.09 62.00 65.00 3.00 1.91 71.00 72.00 1.00 0.52 78.50 79.50 1.00 2.85 T-6501 DMZ-X 4.50 5.40 0.90 0.69 12.50 14.50 2.00 1.44 T-6502 DMZ-X 28.00 29.00 1.00 1.30 T-6502 41.00 45.00 4.00 1.56 T-6503 PVZ 14.00 16.00 2.00 3.57 T-810 DMZ-X 9.00 12.00 3.00 2.07 46.00 50.00 4.00 3.87 53.00 54.00 1.00 3.41 57.00 60.00 3.00 1.22 T-811 DMZ-X 9.50 13.50 4.00 1.28 17.50 19.50 2.00 2.58 T-8301 PVZ 13.00 15.00 2.00 1.68 T-8501 PVZ 25.00 29.00 4.00 0.86 32.00 34.00 2.00 4.18 54.00 55.00 1.00 1.40

59

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

T-8502 DMZ-X 9.20 10.00 0.80 1.72 21.00 23.00 2.00 0.97 47.00 48.00 1.00 1.01 54.00 55.00 1.00 2.46 64.50 67.50 3.00 3.70 75.00 76.00 1.00 2.40 T-87501 PVZ 65.00 68.00 3.00 1.80 73.00 86.00 13.00 2.73 89.00 90.00 1.00 1.07 102.50 107.00 4.50 1.99 125.50 127.00 1.50 0.60 T-89501 PVZ 10.00 12.00 2.00 10.25 24.50 25.00 0.50 1.45 30.00 31.00 1.00 0.59 T155001 PVZ 71.60 77.00 5.40 0.79 81.00 87.50 6.50 3.12 132.20 135.50 3.30 1.96 143.00 144.50 1.50 7.76 158.00 171.50 13.50 2.95 T175002 PVZ 61.00 64.00 3.00 1.45 68.00 72.00 4.00 2.38 97.50 100.50 3.00 1.17 T1902-1 PVZ 6.00 7.40 1.40 2.94 40.70 45.50 4.80 1.24 80.50 82.00 1.50 0.53 86.00 87.00 1.00 2.10 104.90 110.00 5.10 1.80 T195002 PVZ 6.50 9.00 2.50 2.86 53.00 54.00 1.00 5.32 T2313-1 PVZ 37.50 43.00 5.50 1.86 48.00 49.00 1.00 2.28 73.00 74.00 1.00 2.15 82.00 84.00 2.00 1.44 104.00 108.00 4.00 3.86 112.00 138.00 26.00 2.56 143.50 144.50 1.00 1.90 T254501 PVZ 109.50 111.00 1.50 0.83 T295001 PVZ 124.00 133.00 9.00 1.45 T295002 PVZ 45.50 47.00 1.50 1.01 T315003 PVZ 150.00 151.50 1.50 3.40 175.00 183.00 8.00 1.83 T335002 PVZ 10.50 16.50 6.00 4.99 T335002 PVZ 19.50 20.50 1.00 1.58 23.00 24.50 1.50 0.63 34.00 35.00 1.00 1.12 72.50 74.50 2.00 1.08 83.50 85.00 1.50 0.51 87.50 93.50 6.00 1.24 103.50 105.00 1.50 1.06 109.00 114.00 5.00 1.56

60

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

118.50 120.00 1.50 2.29 124.00 135.50 11.50 5.26 139.50 141.00 1.50 5.46 147.00 150.00 3.00 0.65 156.00 163.50 7.50 0.73 T3706-1 PVZ 10.00 11.50 1.50 1.16 15.80 26.00 10.20 2.62 30.50 37.00 6.50 1.66 97.00 101.30 4.30 1.47 151.50 152.50 1.00 1.53 T415002 PVZ 71.50 75.50 4.00 2.74 81.00 85.00 4.00 0.91 T435003 PVZ 21.00 22.00 1.00 1.11 48.00 54.00 6.00 3.18 64.00 65.50 1.50 0.54 71.00 73.00 2.00 1.62 87.00 88.00 1.00 0.65 96.80 99.00 2.20 1.51

The areas trenched in the 2007 program can be seen in Figure 10.3. 10.7.5 2008 Trenching Program Most of the 2008 trenching was again utilised to evaluate the bedrock source of gold-in-soil anomalies identified during the 2004-2006 soil geochemical surveys. Included in these areas were the PVZ which had yielded promising results in 2006 and 2007, between the DMZ and the Placer Valley Zone (PVZN) and southeast of Placer Valley (PVZE). Trenching was also conducted on areas to the north of the Dachang Main Zone and Dachang Main Zone Eastern Extension and on the strike extension of the Gaude-Maduo Fault (GMD) system located approximately 3 km northeast of the mineralised DMZ. In addition some trenching was done to investigate geophysical targets identified during the 2008 Induced Polarization survey. Two mechanical excavators were used to establish 115 trenches, totalling 9.5 km, and removing some 20,250 m3 of overburden. Table 10.6 sets out a breakdown of the 2008 trenching by target area tested. In 2008 one trench was completed on the DMZ where previous trenching and drilling had defined the main mineralisation on the Dachang property.

61

Figure 10.3 : Trench Assay L

Locations - 2007 Exploration Prograam

62

Table 10.6 : 2008 Trenching Targets

Trench Areas Metres Number of

Trenches % of Total

DMZ 160 1 2 DMZ NORTH 1,602 16 17 DMZ - X NORTH 3,058 35 32 PVZ MAIN 599 8 6 PVZN 1,293 16 14 PVZE 2,326 33 24 GMD 509 6 5 TOTAL 9,547 115 100

Trenches were generally excavated 100 to 200 m apart with infill trenches at 40- to 50-m spacing. Trench sampling was usually carried out at 1 m, 1.5 m and 2.0 m intervals along prospective sections of the various trenches. Geochemically anomalous gold values of >50 ppb were encountered regularly over significant intervals in almost all of the trenches. The areas trenched in the 2008 program can be seen in Figure 10.4. Results Forty seven of the trenches returned significant gold values at various grades and variable widths (minimum value greater than or equal to 0.5 g/t Au and 5 gram-metres). The gold bearing zones intersected coincided with areas of secondary sulphide enrichment in Triassic sediments. Six areas of gold mineralisation were exposed through trenching during the 2008 exploration season at Dachang. Five of the areas of trenching (DMZ North, described below, DMZ-X North, described below, PVZ Main, described below, PVZN, and PVZE) are near the DMZ/PVZ mineral resource area. Two of the newly discovered zones (DMZ-X North and PVZE) are peripheral to, or are along strike from, previously outlined mineralised areas. DMZ One trench, T12304, (160 m in length), was completed in the area of the 2008 infill drilling. No gold values of significance were returned in the trench sample assays.

Figure 10.44 : Trench Loc

63

cations - 2008 Exploration PProgram

64

DMZ North Sixteen trenches of varying length from 45 m to 205 m, totalling 1,602.6 m, were excavated between sections 700W and 7500W on gold-in-soil geochemical anomalies located 1 km to 2.5 km north of the DMZ (DMZN). A number of weakly mineralised fault zones were discovered in the trenches. Seven of the 16 trenches returned significant gold values ranging from 1.44 g/t Au over 3.5 m (T-3309) to 3.38 g/t Au over 4.5 m (T-711). DMZ-X North In the area north of the Dachang Main Zone Eastern Extension (DMZ-XN), 35 trenches of varying lengths from 19 m to 310 m, totalling 3,057.9 m, were completed between sections 100W and 4000E to evaluate gold-in-soil geochemical anomalies. The anomalies are located immediately north of, and parallel to, the DMZ-X mineralised structure to 1,300 m north of the DMZ-X. Thirteen of the 35 trenches returned significant gold values ranging from 2.5 g/t Au over 2 m in T-1404 to 5.95 g/t over 11 m in T-0003. Two of these mineralised zones were drilled to test the trench results, while T-3 and T-203 have yet to be drilled. Gold mineralisation returned from samples in T-4007 is also of interest because it may represent the faulted offset of the DMZ-X mineralisation located 150 m to the south and 100 m to the west of the trench. PVZ Main In Placer Valley, 8 trenches, totalling 599 m, were excavated along the PVZ already defined by previous trenching in this area. Three of the 2008 trenches returned significant gold values: 4.19 g/t Au over 4.5 m in T-43501; 5.1 g/t Au over 3 m in T-1905 and 1.58 g/t over 14 m and 1.16 g/t Au over 10 m in T-902. PVZE Trenches based on gold-in-soil anomalies were also established along the southeastern strike extension of the PVZ. Thirty-three trenches, totalling 2,326 m, were excavated from section 1000E to 8600E. Fourteen of the 33 trenches returned significant gold values ranging from 0.65 g/t Au over 9 m in T-4605 to a high of 62.36 g/t Au over 10.5 m in T-6801. No drilling has been done on the 1,400 m of eastern strike extension to the PVZ east of 1400E. PVZN In the area between the PVZ and the DMZ to the north, 16 trenches, totalling 1,293 m, were excavated to evaluate geophysical anomalies delineated by an IP survey completed during the 2008 field season. Two gossan zones were exposed in the first trench (T-3508) and additional trenching was completed to the west and east of T-3508 at 40

65

GMD In the Gaude-Maduo Fault (GMD) system located 3 km northeast of the mineralised DMZ, 6 trenches, totalling 509 m, were excavated. These trenches tested the eastern extension of the DN-2 gold-in-soil geochemistry anomaly. Four of the trenches returned gold values ranging from 1.69 g/t Au over 4 m in T-2003 to 3.23 g/t Au over 8 m in T-1405. To date, no drilling has been completed in this area. Table 10.7 summarises the significant gold assays reported for the trenching completed during the 2008 exploration program.

Table 10.7 : Significant Trench Assay Results – 2008 Exploration Program

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

T-7503 DMZN 64 68 4 3.37 T-7503 DMZN 75 79 4 1.6 T-6304 DMZN 131 138 7 0.88 T-4904 DMZN 18 22 4 1.56 T-3510 DMZN 49.5 51.5 2 3.98 T-3309 DMZN 50 53.5 3.5 1.44 T-1503 DMZN 30 34 4 1.4 T-1503 DMZN 36.5 40 3.5 3.9 T-711 DMZN 82 86.5 4.5 3.38 T-711 DMZN 161 163 2 2.71 T-1004 DMZ-XN 56 60.5 4.5 2.01 T-1006 DMZ-XN 3 13 10 0.76 T-1006 DMZ-XN 17 19 2 2.83 T-1402 DMZ-XN 6 8 2 3.38 T-1403 DMZ-XN 19 23 4 2.24 T-1403 DMZ-XN 25.5 38 12.5 1.21 T-1404 DMZ-XN 59 61 2 2.5 T-203 DMZ-XN 18.5 24 5.5 2.87 T-2201 DMZ-XN 12 21 9 1.53 T-2201 DMZ-XN 24 29.5 5.5 2.48 T-2404 DMZ-XN 201 207 6 5.55 T-2602 DMZ-XN 93 95 2 2.81 T-3 DMZ-XN 28 39 11 5.95 T-3 DMZ-XN 81 83 2 2.53 T-3 DMZ-XN 99 102 3 2.01 T-4007 DMZ-XN 19 21 2 5.41 T-4007 DMZ-XN 96 98 2 2.69 T-402 DMZ-XN 0 2 2 2.88 T-402 DMZ-XN 39 48 9 1.31 T-404 DMZ-XN 18 21 3 3.59 T-43501 PVZ MAIN 19 21.5 2.5 4.19 T-1905 PVZ MAIN 54 57 3 5.1 T-902 PVZ MAIN 36 50 14 1.58 T-902 PVZ MAIN 160 177 10 1.16 T-1007 PVZE 11 18 7 2.38 T-1007 PVZE 21 26 5 6.7

66

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

T-1209 PVZE 57 59 2 3.6 T-1604 PVZE 54.5 56.5 2 2.67 T-1604 PVZE 65.5 79.5 14 1.93 T-1803 PVZE 79 81 2 3.15 T-3003 PVZE 53 56 3 1.71 T-3408 PVZE 58 66 8 1.58 T-3410 PVZE 7 16 9 2.55 T-4008 PVZE 10 12 2 5.03 T-4601 PVZE 24 41 17 1.25 T-4605 PVZE 93 102 9 0.65 T-5201 PVZE 27.5 37.5 10 1.6 T-6201 PVZE 28 29.5 1.5 3.45 T-6801 PVZE 17.5 28 10.5 62.36 T-6801 PVZE 121.5 123.5 2 7.2 T-8601 PVZE 22 27 5 3.74 T-2908 PVZN 10.5 11.5 1 16.7 T-2909 PVZN 47 52 4.5 3 T-3508 PVZN 16 31 15 1.75 T-3508 PVZN 87 90 3 4 T-3707 PVZN 149 153 4 1.58 T-37501 PVZN 70 74 4 2.43 T-43502 PVZN 14.5 17.5 3 2.15 T-1405 GMD 92 100 8 3.23 T-2003 GMD 21 25 4 1.69 T-2003 GMD 139 146 7 1.79 T-2202 GMD 8.5 12.5 4 3.92 T-2603 GMD 35 42 7 1.63

(Assay cut-off 0.5 g/t Au and 5 gram-metres)

10.7.6 2009 Trenching Program Trenching in 2009 focused on PVZ and PVZ-E zones. Of the 14,400m trenched in 2009, 11,200m were in the PVZ and its eastern extension. The main goal of the 2009 trenching program was to find any remaining lenses in the DMZ and Placer Valley areas which could be added to the resource and which may underlay areas which may be used for infrastructure during future mining operations. Several trenches were also dug in areas outside the main zone to develop exploration areas. Trenches in the Placer-Valley area were targeted using the soil geochemistry results from 2004 to 2006 as well as following previous trenching or drilling and the surface workings left by QGSI before Inter-Citic became involved in the property. In exploration areas, targets were selected based solely on soil geochemistry results with positive results. No change was made to the operation of the trenching program from other years. A mechanical excavator was used to open the trenches under the direction of Inter-Citic personnel. QGSI personnel logged and sampled the trenches before they were closed up again. Inter-Citic personnel translated the logs on-site.

67

Table 10.8 outlines areas of trenching in 2009 and the number of trenches and length per zone.

Table 10.8: 2009 Trenching Summary

Zone No. of

Trenches Length

(m) 861 5 666

Acadia 8 898

CD-1 2 285

DMZ 2 170

PVZ 97 11184

SEA 6 1115

Unnamed 1 76

Total 121 14394

Trenching proved successful in all areas. Of the 121 trenches excavated, 90 returned significant gold assays. 73 of 97 trenches in the Placer Valley zone and Placer Valley Eastern Extension returned significant gold assays. 6 of 8 trenches in Acadia and 4 of 6 trenches in the South-Eastern Anomaly returned significant gold assays. All 4 trenches in the DMZ and CD-1 areas returned significant gold assays. Table 10.9 has a complete list of all significant gold intercepts from the 2009 trenching program.

Table 10.9: 2009 Significant Trench Assays

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

T-0102 PVZ-E 40 41 1 1.92

T-0301 PVZ-E 19 20 1 0.51

89 92 3 1.87

96 97 1 2.74

171 173 2 1.59

180 188 8 1.65

T-0302 PVZ-E 10 11 1 1.98

44 45 1 0.57

62 63 1 3.21

70 72 2 0.91

T-0303 PVZ-E 13 15 2 4.76

T-0405 PVZ-E 22 36 14 1.26

66 67 1 1.25

82 83 1 1.12

87 96 9 1.64

100.5 109.5 9 2.33

260 262 2 0.96

68

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

T-0406 PVZ-E 87 88 1 1.41

116 118 2 0.96

176 179 3 1.03

259 263 4 3.26

T-0501 PVZ-E 65 80 15 5.18

112 118 6 3.35

125 126 1 2.27

129 132 3 2.91

162 163 1 4.72

191 194 3 3.53

203 217 14 2.24

225 234 9 2.41

T-0602 PVZ-E 8 9 1 2.43

29 32.99 3.99 1.40

T-0603 PVZ-E 12 19 7 0.86

29 30 1 1.50

33 34.5 1.5 0.67

40 43 3 1.77

46 47 1 1.31

T-0713 PVZ-E 104 105 1 1.23

108 110 2 1.42

119 120 1 0.55

122 126 4 0.66

214 216 2 1.39

T-0812 PVZ-E 34 35 1 2.60

66 67 1 2.16

70 72 2 5.35

T-1008 PVZ-E 108 110 2 1.52

T-1106 PVZ-E 70 71 1 0.62

78.5 79.5 1 4.29

T-1406 PVZ-E 8 10 2 2.84

28.5 29.5 1 1.44

35 36 1 0.64

55 58 3 0.87

64 66 2 0.86

T-1504 PVZ-E 49 51 2 32.27

54 55 1 1.42

T-1505 PVZ-E 25 28 3 2.18

34 35 1 0.56

69

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

39 40 1 0.54

127 130 3 0.73

133 134 1 1.33

152 153 1 0.69

155 156 1 1.00

T-1605 PVZ-E 6 7 1 0.63

21 24 3 1.18

27 33 6 2.26

47 48.5 1.5 1.18

52 53.5 1.5 0.73

84.5 90.5 6 0.50

157 158 1 2.43

T-1703 PVZ-E 8.5 15 6.5 1.50

29 32 3 1.24

35 37 2 4.10

55 56 1 1.20

T-1906 PVZ-E 6 7 1 0.75

15 16 1 1.16

T-2005 PVZ-E 3 4 1 2.91

T-2203 PVZ-E 75 76 1 1.20

T-2605 PVZ-E 48 49 1 1.46

52 62 10 3.47

208 209 1 0.67

225 227 2 2.25

251 252 1 2.24

T-2802 PVZ-E 4 12.5 8.5 2.58

15.5 18.5 3 3.08

63 64 1 0.60

T-2804 PVZ-E 86 87.5 1.5 0.84

T-3005 PVZ-E 4.5 8.5 4 5.85

47.5 48.7 1.2 2.78

T-3006 PVZ-E 20 22 2 0.93

25 26 1 1.10

T-3203 PVZ-E 12.2 15.5 3.3 0.97

40.2 44.2 4 8.12

53 55 2 1.41

59 64 5 4.09

T-3204 PVZ-E 65 66 1 6.30

T-3205 PVZ-E 19 22 3 2.25

70

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

55 83 28 1.93

T-3602 PVZ-E 21 22.2 1.2 0.83

T-3603 PVZ-E 42.5 44 1.5 1.02

51 57 6 2.73

61 63.5 2.5 1.35

66 68 2 1.69

T-3604 PVZ-E 7 13 6 2.16

T-3802 PVZ-E 14.5 16 1.5 0.56

35 36 1 0.64

68 69 1 4.11

87 88.5 1.5 0.78

T-3805 PVZ-E 13 15 2 3.58

18 19 1 0.63

37 38 1 0.67

44 50 6 1.64

118 119 1 0.60

144.5 146.5 2 1.62

T-4009 PVZ-E 70.5 71.5 1 4.92

T-4010 PVZ-E 64.3 68 3.7 2.77

124 127 3 1.38

147.5 152.5 5 3.72

160.5 173.5 13 3.14

T-4202 PVZ-E 7 9 2 5.56

12 13 1 0.53

19.5 21.5 2 3.88

34.5 35.5 1 0.96

93 94 1 1.30

T-4205 PVZ-E 11 21 10 1.83

T-4401 PVZ-E 33 34 1 1.34

120.5 121 0.5 0.51

T-4402 PVZ-E 11.3 11.9 0.6 1.90

22.7 23.5 0.8 2.05

26.3 28.5 2.2 5.15

49.4 50 0.6 5.15

77.6 78.7 1.1 1.01

T-4608 PVZ-E 31 32 1 1.52

38.8 39.8 1 0.67

137.5 139 1.5 1.64

T-4609 PVZ-E 14 16 2 2.23

71

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

27.5 30.5 3 2.35

40.5 41.5 1 2.27

49 50 1 2.77

57 59.7 2.7 8.54

64 65 1 0.59

71.5 73.5 2 3.02

T-4804 PVZ-E 40 41 1 1.38

47 49 2 1.53

109 110 1 7.91

135.6 144 8.4 0.74

153 154.5 1.5 2.13

160 161 1 0.93

T-4805 PVZ-E 40 41.5 1.5 2.91

93.4 95.4 2 1.63

T-5004 PVZ-E 14.5 35 20.5 11.31

143 146 3 13.42

T-5203 PVZ-E 5 11 6 0.83

19 26 7 1.73

78.8 80.4 1.6 5.66

T-5206 PVZ-E 25.2 25.8 0.6 0.70

T-5207 PVZ-E 1.5 3 1.5 0.65

T-5208 PVZ-E 118 119 1 0.52

T-5402 PVZ-E 91 92 1 5.57

95 98.8 3.8 3.15

T-5403 PVZ-E 7.5 9.5 2 0.96

21.2 23.2 2 2.18

28 31 3 1.34

103 106 3 0.56

146 147 1 2.72

T-5404 PVZ-E 16.2 21.6 5.4 0.80

34 35 1 6.30

T-5405 PVZ-E 39 40 1 0.72

74 75 1 0.90

100 103 3 6.76

226 227 1 2.78

258 261 3 8.46

301 304 3 2.79

310 315 5 12.80

322 324 2 1.45

72

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

332 333 1 0.82

341 342 1 1.22

T-6002 PVZ-E 45 52 7 1.47

T-6003 PVZ-E 23 25 2 0.90

32 34 2 0.94

43 45 2 0.70

T-6202 PVZ-E 4 6 2 0.75

130 131 1 0.66

T-6305 PVZ-E 4 8.5 4.5 3.80

48.7 49.2 0.5 6.60

62.8 63.8 1 1.12

T-6504 PVZ-E 3 9 6 2.62

68.9 70.4 1.5 1.26

T-6603 PVZ-E 8 9 1 1.40

16.2 17.2 1 0.59

29.3 29.9 0.6 4.35

T-6803 PVZ-E 18.3 21.5 3.2 1.56

31 34 3 3.08

37.5 38.5 1 7.32

T-7401 PVZ-E 27 28 1 2.16

T-7602 PVZ-E 21 21.5 0.5 2.64

27 33 6 2.57

T-7802 PVZ-E 4 6 2 5.69

T-8002 PVZ-E 13.5 16 2.5 1.20

59 61 2 3.62

T-8003 PVZ-E 22 28 6 1.45

43 44 1 0.50

T-8201 PVZ-E 84.5 86 1.5 0.50

99.6 100.6 1 6.73

T-8202 PVZ-E 47.5 48.5 1 1.70

T-8203 PVZ-E 41 42 1 0.64

T-8401 PVZ-E 36.7 44.3 7.6 1.72

T-8402 PVZ-E 8 10 2 1.19

T-8605 PVZ-E 11.5 19 7.5 0.92

23 24.3 1.3 1.37

27.5 28.5 1 0.54

35.5 36.5 1 0.52

76.3 78.3 2 2.01

T-8803 PVZ-E 11.7 13.7 2 0.76

73

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

T-9001 PVZ-E 38.5 47 8.5 3.39

68 69.5 1.5 0.62

75 75.5 0.5 0.72

82.5 84.5 2 3.54

94.5 96 1.5 0.67

A2TC4001A Acadia 56 57 1 1.21

A2TC401502 Acadia 34.5 35.5 1 0.67

64 64.5 0.5 0.71

A2TC4101 Acadia 12.5 16.5 4 1.37

19.5 22 2.5 0.66

29 30.5 1.5 0.72

34.5 35.5 1 0.76

44.5 45.5 1 0.75

83.8 84.8 1 0.72

A2TC4201 Acadia 12 13 1 0.62

17 21 4 1.59

A2TC4401 Acadia 49 50 1 3.12

58.5 59 0.5 4.62

A2TC4701 Acadia 0 11 11 1.11

19 20 1 1

44 53 9 1.33

A2TC4801 861 69 79 10 2.41

205 205.5 0.5 1.12

216.2 225.2 9 0.81

229.2 234.2 5 1.75

A2TC54501 861 53.5 58 4.5 1.53

A2TC6303 CD-1 31.5 32 0.5 1.73

76 78 2 1.4

81 82 1 2.08

89 94 5 1.73

104 105 1 1.22

141 146 5 4.57

A2TC6503 CD-1 32 33 1 8.18

68 68.4 0.4 3.7

T-34401 SEA 32 34 2 0.86

112.9 114.1 1.2 1.16

T-34402 SEA 6 7 1 0.55

24.2 28.2 4 1.43

50.2 55.2 5 1.67

74

Trench Area From (m)

To (m)

Length (m)

Grade (g/t Au)

110.1 118.1 8 2.61

190.4 196.5 6.1 1.91

T-34401 SEA 30 35 5 2.98

T-36401 SEA 20 21 1 1.12

31.4 32 0.6 2.5

75.3 77.3 2 0.9

85 86 1 1.45

111.1 112.6 1.5 1.52

T-38401 SEA 81.7 86.7 5 0.56

93.6 95.3 1.7 1.24

10.7.7 2010 Trenching Program Trenching in 2010 focused on 2 areas: Acadia and the XP-861 trend as shown in Table Figure 10.5. While the 861 and XP zones have previously been explored separately, an effort was made, with promising results, in 2010 to test for continuity between the two zones using wide-spaced trenching. See Table 10.5 for a list of areas and number of trenches and total length trenched in these areas during 2010. In the Acadia zone and XP zone, narrow spaced trenching was used to trace the surface contact of several mineralised lenses. Mineralisation in these areas has shown to be more complicated than the main zone and other exploration areas. Narrow spaced trenching helped to define the path of the mineralised zones and provided targets for drilling.

Figure 10.5: 2010 Trenching Summary

Zone No. of

Trenches Length

(m) Acadia 66 4292

861 30 3630

XP 21 755

DMZ-N 6 600

NR-1 6 383

Misc 1 170

Total 130 9830

As in all other years, the trenching was completed with a mechanical excavator though in 2010 some sampling was done at 0.5m. As no significant advantage was found to the narrow sampling, the sampling rate was returned to 1 to 1.5m. Trenches were logged by the Partner’s personnel and translated on-site.

75

Of the 66 trenches excavated in the Acadia zone, 32 returned significant gold values. Of the 30 in 861, 25 returned significant gold values. In the XP zone, 16 of the 21 trenches returned significant gold values. In NR-1 and DMZ-N, 4 of the 6 trenches in each zone returned significant gold values. This makes a total of 81 of 130 or 62% of trenches returned significant results.

Table 10.10: 2010 Significant Trench Assays

Trench Zone From To Length Au g/t

T-1102 Acadia 19.00 22.00 3.00 1.25

25.00 26.00 1.00 0.54

31.00 32.00 1.00 2.15

T-1201 Acadia 129.00 130.00 1.00 0.66

177.00 178.00 1.00 0.60

T-12075 Acadia 1.50 4.00 2.50 0.58

T-1303 Acadia 20.50 21.50 1.00 0.98

24.00 41.00 17.00 2.85

T-1305 Acadia 13.50 27.50 14.00 1.67

T-1307 Acadia 22.00 23.00 1.00 0.54

28.00 35.00 7.00 7.24

93.00 94.00 1.00 0.64

T-1311 Acadia 11.50 12.00 0.50 0.53

T-1401A Acadia 11.00 12.00 1.00 2.63

T-1701A Acadia 21.00 24.00 3.00 0.66

T-2001 Acadia 23.00 24.00 1.00 0.60

T-2101 Acadia 149.00 150.00 1.00 0.63

T-2501 Acadia 28.00 44.00 16.00 8.18

T-301 Acadia 165.00 173.00 8.00 2.60

176.00 177.00 1.00 0.51

T-4001B Acadia 19.00 20.00 1.00 4.83

T-402 Acadia 93.00 97.00 4.00 0.76

T-4101A Acadia 6.50 7.00 0.50 0.88

12.00 20.00 8.00 0.89

T-4103 Acadia 16.00 24.00 8.00 1.85

T-4105 Acadia 11.50 25.00 13.50 2.10

27.50 32.50 5.00 0.90

T-4107 Acadia 12.50 13.50 1.00 0.97

16.00 18.00 2.00 0.96

T-4109 Acadia 26.00 28.00 2.00 1.08

T-4115 Acadia 22.50 26.00 3.50 1.59

76

Trench Zone From To Length Au g/t

33.00 38.00 5.00 2.01

T-4119 Acadia 11.00 11.50 0.50 1.88

T-6005 Acadia 12.50 24.00 11.50 0.82

T-6007 Acadia 7.00 28.50 21.50 2.88

T-60075 Acadia 1.00 5.00 4.00 1.84

9.00 13.50 4.50 2.87

23.00 36.00 13.00 2.53

48.00 49.00 1.00 0.68

76.00 81.00 5.00 0.64

T-6009 Acadia 16.50 33.50 17.00 1.19

T-6011 Acadia 1.00 15.50 14.50 2.60

31.50 36.00 4.50 2.39

41.00 42.00 1.00 0.56

50.00 52.00 2.00 0.76

58.00 59.00 1.00 0.78

T-6013 Acadia 17.00 20.00 3.00 0.70

23.50 27.50 4.00 1.09

43.50 46.50 3.00 1.79

52.50 53.50 1.00 0.64

T-6015 Acadia 17.50 23.00 5.50 0.59

35.00 38.00 3.00 1.32

42.50 50.00 7.50 1.24

73.50 74.00 0.50 1.04

T-6021 Acadia 34.50 36.00 1.50 1.62

40.00 40.50 0.50 1.76

T-6111 Acadia 27.00 28.00 1.00 1.89

65.00 73.00 8.00 1.48

T-801 Acadia 87.00 90.00 3.00 0.70

T-1426 DMZ-N 9.00 12.00 3.00 3.20

T-1432 DMZ-N 3.00 5.00 2.00 2.84

T-1436 DMZ-N 55.00 62.00 7.00 5.66

T-1438 DMZ-N 41.00 43.00 2.00 1.27

52.00 55.00 3.00 0.71

69.00 72.00 3.00 2.53

75.00 77.00 2.00 2.29

92.00 94.00 2.00 0.94

107.00 110.00 3.00 1.94

77

Trench Zone From To Length Au g/t

119.00 120.00 1.00 2.68

T-1501 861 48.00 50.00 2.00 2.35

54.00 55.00 1.00 0.88

65.00 69.00 4.00 1.45

89.00 90.00 1.00 2.00

T-1502 861 72.00 84.00 12.00 4.22

89.00 92.00 3.00 2.18

98.00 99.00 1.00 0.52

T-1503 861 5.00 7.00 2.00 3.23

T-1504 861 74.00 77.00 3.00 2.20

T-1505 861 60.00 64.00 4.00 0.89

T-1506 861 61.00 62.00 1.00 0.58

95.00 100.00 5.00 0.94

T-1507 861 22.00 32.00 10.00 1.57

T-1509 861 29.00 37.00 8.00 1.61

T-1510 861 55.00 59.00 4.00 1.91

T-1511 861 99.00 109.00 10.00 5.91

T-1512 861 63.00 66.00 3.00 2.55

T-1514 861 7.00 13.00 6.00 0.54

30.00 33.00 3.00 1.18

94.00 95.00 1.00 0.58

T-1516 861 55.00 60.00 5.00 2.80

112.00 115.00 3.00 1.99

T-1518 861 75.00 77.00 2.00 0.78

T-1519 861 71.00 76.00 5.00 1.25

T-1520 861 93.00 94.00 1.00 0.59

T-1522 861 93.50 94.50 1.00 1.33

T-1523 861 23.00 26.00 3.00 1.39

30.00 32.00 2.00 0.71

44.00 52.00 8.00 1.13

T-1524 861 116.00 123.00 7.00 3.40

T-1525 861 117.00 119.00 2.00 0.96

T-1528 861 38.00 39.00 1.00 0.99

T150301 861 47.00 51.00 4.00 2.23

T150501 861 28.00 29.00 1.00 2.10

T150502 861 39.00 41.00 2.00 1.29

45.00 49.00 4.00 1.64

78

Trench Zone From To Length Au g/t

T150801 861 89.00 96.00 7.00 1.43

T-1703 XP 27.00 27.50 0.50 0.51

T-1705 XP 6.00 11.00 5.00 2.09

T-1707 XP 6.50 10.50 4.00 1.06

T-1709 XP 12.00 15.00 3.00 1.90

19.50 21.00 1.50 1.97

T-1711 XP 1.50 14.00 12.50 3.26

T-1713 XP 6.00 12.00 6.00 1.05

15.50 21.00 5.50 1.64

T-1715 XP 19.50 23.00 3.50 1.59

T-1717 XP 9.00 11.00 2.00 4.29

T-1719 XP 28.50 30.00 1.50 2.55

T-1721 XP 6.00 8.00 2.00 0.59

22.50 26.00 3.50 5.64

T-1723 XP 9.00 20.00 11.00 3.91

T-1729 XP 10.00 18.00 8.00 2.31

T-1731 XP 8.00 11.00 3.00 1.97

T-1733 XP 4.50 8.00 3.50 1.32

T-1735 XP 7.50 10.50 3.00 4.66

T-3001A XP 102.00 107.00 5.00 1.02

T-1601 NR-1 5.00 8.00 3.00 4.28

T-1602 NR-1 5.00 12.00 7.00 2.47

T-1603 NR-1 53.00 59.00 6.00 0.78

72.00 73.00 1.00 0.56

T-1605 NR-1 17.00 18.00 1.00 0.54

79

11.0 DRILLING During the 2004 and 2005 exploration programs, Inter-Citic drilled 37 NQ-sized diamond drill holes totalling 6,110 m on the Dachang property. Drilling completed in 2004 was designed to determine the location of major geologically inferred structures in the northwest corner of the property and to test the encouraging trench assays at NR-TC-2 and NR-TC-4 (previously discussed). The 2005 drilling program was designed to probe the encouraging gold mineralisation exposed by trenching. All drill core was geologically logged by Inter-Citic although the Partner also had its own geological staff prepare a separate log. Major lithologies and structures were recorded along with the presence of cataclastic zones, veining, alteration (as described above) and sulphide mineralisation. Typically the drill core was sampled at 1-m intervals. However, depending on geology and mineralisation styles present, the samples may have been taken at intervals of less than 1.0 m to respect geological contacts, or in areas of general interest, samples were taken at 1.5 m and 2.0 m intervals. The following sections summarise the drill results for the 2004 to 2008 exploration programs. The location of the drill holes are illustrated on Figures 11.1 and 11.2 later in Section 11. Detail maps of individual areas can be seen at Inter-Citic’s website (www.inter-citic.com). 11.1 2004 DRILL PROGRAM Fifteen diamond holes, totalling 3,623 m were completed during the 2004 exploration program. Holes CJV-1, -2 and -4, totalling 460.5 m, tested a northwesterly trending structure in the northwest corner of the Western Quarter parallel to and approximately 2 km south of the CBx thrust fault. Holes CJV-3, -5, -6, -7, -8, -9, -13 and -14, totalling, 2,391 m, were collared to test the CBx thrust fault at selected locations along its strike. The remaining four holes, CJV-10, -11, -12 and -15 were drilled to test the gold mineralisation in trenches NR-TC-2 and -4. The results of the 2004 diamond drilling program locally defined two major structural zones on the property. The location of the geophysically inferred CBx Fault was determined along strike for approximately 2 km and, where exposed in outcrop and intersected in drilling, the CBx Fault is up to 100 m wide and exhibits a shallow dip (approximately 20º to 45º N). It is characterised by calcareous clastic rocks, siltstones, tectonic breccias and quartz-carbonate stockworks. Silicification, carbonatisation, sericitisation and hematisation are common and locally intense. Arsenopyrite, pyrite and stibnite are locally present as sulphide disseminations (2 to 5% total sulphide) and narrow, more massive, veinlets. The results of holes CJV-10, -11, -12 and -15 were encouraging. Hole CJV-15, totalling 200 m, intersected 6.4 g/t Au over 8.5 m, approximately 110 m vertically below the gold mineralisation exposed in trench NR-TC-2. Holes CJV-10, -11 and -12 were drilled 600 m

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along strike to the northwest. CJV-11 intersected 3.55 g/t Au over 4.5 m. Holes CJV-10 and CJV-12 did not reach this zone and did not encounter any significant gold mineralisation. 11.2 2005 DRILL PROGRAM During the 2005 drilling program, Inter-Citic completed 22 NQ diamond drill holes totalling 2,487 m. The drilling was carried out at North River and Dachang Central. The drilling at North River tested the gold mineralisation exposed in trenching at soil anomaly NR-1 and on the gold zone intersected during the 2004 program in hole CJV-15 at NR-2. On anomaly NR-1, four widely spaces holes (CJV-25 to CJV-28), totalling 774 m, were drilled on two separate fault structures. Limited drill testing of the NR-1 anomaly returned a best result of 1.1 g/t Au over 9.0 m, defining the core of the fault zone At NR-2, 12 holes (CJV-16 through CJV-24, and CJV-29 through CJV-31), totalling 1,547 m, were drilled on the dominant fault structure in the NR-2 anomaly, the NR2FZ (fault zone). This drilling was follow-up work on gold mineralisation intersected in drill hole CJV-15, which was drilled in the 2004 program and intersected 6.4 g/t Au over 8.5 m. Core recovery in the drill holes was consistently well in excess of 90%. Table 11.1 summarises the significant gold intersections reported on NR2FZ.

Table 11.1 : Significant Drill Intersections on the NR2FZ

Drill Hole Anomaly / Line Intersection (m)

Interval (m)

Assay (g/t Au)

CJV-16 [1] NR-2 / Line 51 74.5 to 81.5 7.0 7.59 CJV-17 NR-2 / Line 51 169.0 to 186.0 17.0 [2] 2.67 CJV-19 NR-2 / Line 52 109.0 to 110.5 1.5 3.29 CJV-24 NR-2 / Line 53 108.4 to 110.6 2.2 12.64

CJV-29 NR-2 / Line 52 12.1 to 18.9 6.8 2.0

5.45 6.25

CJV-23 [3] NR-2 / Line52 69.5 to 71.2 1.7 1.63 Notes: 1 The gold mineralisation intersected in hole CJV-16 was intersected at a vertical depth of 55.0

m and is vertically below the mineralisation exposed in trench A1TC5101 reporting 10.25 g/t Au over 4.0 m.

2 The 17.0 m interval reporting 2.67 g/t Au includes 7.08 g/t Au over 4.5 m. 3 Hole CJV-23 was abandoned at the south edge of the NR2FZ; however, the southern contact

of this fault returned 1.63 g/t Au over 1.7 m as noted above.

Drilling on NR-1 appears to have intersected a flat-lying zone of low-grade gold mineralisation associated with a series of thrust faults. These faults have only been tested by one cross-section. Anomaly NR-1 is defined by trenching and exhibits a strike length of 2 km. The drilling on NR-2 has defined the NR2FZ gold-bearing zone and an NI 43-101-compliant inferred resource of 1.28 Mt averaging 5.58 g/t Au (as reported by Inter-Citic in its press

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release of December 12, 2005 and in Wahl, 2006). No further testing of NR-2 has taken place to date. The remaining six diamond drill holes were drilled on the Dachang Central district and were located to test encouraging gold mineralisation exposed by trenching on known gold-in-soil geochemical anomalies. Descriptions and a map of the soil anomalies in the Dachang Central district were reported in Inter-Citic’s press release of May 2, 2005. The holes were collared to intersect the down dip extension of this mineralisation from two directions (referred to as scissor holes). This was done to confirm the dip of the mineralisation. Three of the six drill holes encountered significant gold mineralisation, including CJV-32 with 3.3 g/t Au over 5.8 m, CJV-35 with 4.5 g/t Au over 2.5 m, and CJV-37 with 3.8 g/t Au over 4.2 m. The remaining three drill holes, which scissored the above holes, were abandoned due to bad ground conditions. Table 11.2 summarises the significant drill results.

Table 11.2 : Significant Drill Results From Central Dachang

Hole Number

Line Number

From (m)

To (m)

Interval (m)

Assay (g/t Au)

CJV-32 Line 54 47.1 52.9 5.8 3.32 CJV-33 Line 54 Abandoned due to bad ground CJV-34 Line66 Abandoned due to bad ground CJV-35 Line 66 32.6 35.1 2.5 4.50 CJV-36 Line 67 Abandoned due to bad ground CJV-37 Line 67 12.4 16.6 4.2 3.81

Holes CJV-32 and CJV-33 were drilled on the western end of soil anomaly CD-5 on Line 54. Hole CJV-32 was drilled to the north (024º) at -45º to a depth of 80 m. This hole intersected 3.32 g/t Au over 5.8 m. Hole CJV-33 was drilled to the south (204º) at -45º to a depth of 43 m, but was abandoned due to bad ground before intersecting the target gold zone. Holes CJV-34 and CJV-35 tested soil geochemical anomaly CD-5 at Line 66, approximately 2.4 km to the east, along strike from Hole CJV-32 and CJV-33. CJV-34 and CJV-35 were drilled to test the mineralisation exposed in trench A2TC6601, which returned 7.3 g/t Au over 12.0 m. Hole CJV-34 was drilled to the north (024º) at -45º to a depth of 117 m, but had to be abandoned due to bad ground. It did not intersect the target gold zone. Hole CJV-35 was drilled to the south (204º) at -45º to a depth of 68 m and intersected 4.50 g/t Au over 2.5 m. Holes CJV-36 and CJV-37 tested a satellite soil geochemical anomaly located parallel to and approximately 900 m north of anomaly CD-5. They were drilled to intersect the encouraging gold mineralisation exposed in trench A2TC6702, which returned 2.5 g/t Au over 18.0 m including 4.1g/t Au over 7.0 m. Hole CJV-36 was drilled in a southerly direction (024º) at -45º to a depth of 79 m, but was abandoned due to bad ground before hitting the target gold zone. Hole CJV-37 was drilled to the north (204º) at -45º to a depth of 72 m and intersected 3.8 g/t Au over 4.2 m.

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11.3 2006 DRILL PROGRAM The 2006 drill program consisted of 101 diamond drill holes (total of 15,304 m). Drilling was carried out primarily on Dachang East. Dachang East hosts a mineralised area with an exposed strike length of over 2 km that is open in both directions. This area was previously exposed in work conducted by the QGSI. Mineralisation was observed to be contained within a variably 25 m- to 100 m-wide complex fault structure steeply dipping at 75º to 90º. In 2006, a total of 96 drill holes on the DMZ reported gold mineralisation. Initial 40-m spaced trenches defined a well-mineralised fault zone along a continuous 2.5 km strike length. The gold mineralisation detected in all holes has been related to sulphides (1% to 5% pyrite and arsenopyrite). This gold-bearing sulphide deposit was systematically drill tested by 3- to 5-hole, NQ and HQ diamond drill fences at 120-m spaced sections along its entire 2.5 km strike length. In addition, Inter-Citic drilled several closer spaced sections (40 m) to further establish mineralisation continuity. This work defined a 60º to 70º south-dipping series of sulphide replacement zones with aggregate widths of between 7 to 23 m along the known strike length of the DMZ, which still remains open to depth and along strike. Given the continuous nature of the surface mineralisation along its strike length, Inter-Citic elected to test only the potentially open-pittable portion of the DMZ, so that holes drilled to date have not yet tested the structure below a vertical depth of about 200 m. The majority of holes drilled on the DMZ have been relatively shallow (typically less than 150 m in depth), and show continuity of mineralised width. Drill core recovery averaged in excess of 90% in 2006, with relatively poorer core recovery in more steeply angled holes. Inter-Citic believes that poor core recovery evident in steeply dipping holes may be a factor in returning lower gold assay values in some holes. Inter-Citic began using HQ drill core in the latter part of 2006, and observed improved core recovery from the fault zone. A summary of the significant results from the 2006 drill program can be viewed at Inter-Citic’s website (www.inter-citic.com), in the press releases section, or in Hennessey (2008). Drill holes CJV-45, -46 and -47 were drilled on line 8700W, which is 560 m east of holes CJV-43 and -44 and 160 m west of holes CJV-41 and -42. Holes CJV-43 and -44 were drilled 720 m to the west on section 11500W. Holes CJV-41 and -42 were drilled on section 7900W to test the DFZ below a well-mineralised surface test pit. Both holes failed to detect any significant mineralisation. Results from three other drill holes from the North River District did not show any significant gold values. As a result of the 2006 exploration program, Inter-Citic announced an update to its mineral resources at Dachang. The estimate was prepared for Inter-Citic by Charles Hartley, P.Geo.,

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Inter-Citic’s then internal QP. Inter-Citic’s mineral resource estimate was reviewed by B. Terrence Hennessey, P.Geo., of Micon, Inter-Citic’s independent QP with respect to Inter-Citic’s mineral properties. The estimate was completed as at March 19, 2007 and is CIM and NI 43-101 compliant. The DMZ remained open to the east and to depth. By press release dated March 20, 2007, Inter-Citic announced a total inferred mineral resource estimate at the Dachang gold project of 16.1 Mt with an average grade of 3.88 g/t Au (approximately 2,008,000 oz Au contained). The DMZ inferred mineral resource estimate increased to 14.8 Mt grading 3.71 g/t Au (approximately 1.8 million oz Au contained). The inferred mineral resource on the North River NR-2 anomaly remained at 1.3 Mt grading 5.81 g/t Au (approximately 239,000 oz Au contained), and was not further tested in 2006. In anticipation of possible open pit extraction, the mineral resource estimate was limited to a depth of approximately 150 m below surface. The 2006 inventory was based on assay intervals established with minimum widths of 2.5 m and a 5 gram-metre cut-off. Individual intercepts below this cut-off grade may have been used to allow for consistent geological interpretation. To avoid the influence of isolated high-grade assays an upper cut-off of 18.0 g/t Au was also employed on individual sample assays. The mineral resource estimate included all existing trench and drill hole data and was prepared using a polygonal method on cross-sections with a maximum area of influence from any individual assay intercept of 65 m. Most intercepts have an area of influence of less than 50 m. A specific gravity of 2.92 was used for this inventory based on a set of tests taken by Inter-Citic and its independent consultants. 11.4 2007 DRILL PROGRAM The 2007 drill program consisted of 195 diamond drill holes (total of 27,926 m). During the 2007 season, four areas of the property were drilled. In 2007 the QGSI provided two drill rigs sourced from Shandong Province #8 Geological Survey Institute (Shandong Drilling) of Shandong Province, China in addition to the Cyr drill rigs. Shandong drilled 6,957 m in 2007. The DMZ was tested with infill and fence drilling. The DMZ-X was drilled to the east of the known main zone mineralisation. Drilling was also undertaken on the Placer Valley Zone (PVZ) to the south of the DMZ and a limited amount of diamond drilling was undertaken on the Little Ruby Zone (RZ) to the north of the DMZ. A detailed infill drill program on the DMZ was undertaken by Inter-Citic in 2007. Of the 11,637 m drilled, a majority was directed at a 900 m strike length from sections 12800 to 8300 to test mineral continuity and grade. In 2006, 120-m spaced drill fences allowed for a mineral resource estimate along an 890 m section of the DMZ that contained 7.8 Mt grading 3.49 g/t, or 980 oz Au per linear metre tested. In 2007, with much closer spaced 40-m sections, an 820 m-long section of this same area returned 7.5 Mt grading 3.56 g/t, or 1,041 oz Au per linear metre tested, an increase in both grade and contained gold per linear metre.

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The infill DMZ drilling extended the known mineralisation and provided better control to interpret the connectivity of zones and geology. The new exploration helped to confirm the continuity of the mineralisation, fault zones and structural control of the mineralisation. Additional mineralisation associated with splay faults, and vertical shears was also discovered. The DMZ-X mineralisation was discovered 1 to 1.5 km east of the known DMZ mineralisation. Gold occurs in low angle thrust faults in highly sheared fine grained sediments proximal to thicker sandstone units. The PVZ drilling was a follow-up program to well-mineralised trench assays. Mineralisation in core was associated with blocky, broken fault zones in low angle sheared sediments near surface. Core recovery within the zones was poor. The RZ drilling did not return any significant thickness of mineralisation. Further drilling is not considered warranted. A summary of the significant results from the 2007 drill program can be viewed at Inter-Citic’s website (www.inter-citic.com), in the press releases section, or in Hennessey (2008). Figure 11.1 shows the location of the 2006 - 2007 diamond drilling at the DMZ and Placer Valley. 11.5 2008 DRILL PROGRAM In 2008 Inter-Citic completed 355 diamond drill holes for a total of 49,788 m of drilling in the original Dachang East area of the property. The company added to its three wire-line diamond drill rigs and crews provided by Cyr with two additional rigs from the QGSI and two rigs from a Chinese diamond drill contractor, Shandong. Cyr drilled 23,436 m, almost half (47%) of the drill program. QGSI drilled 13,336 m (27%), and Shandong drilled 13,016 m (26%). Core recovery was generally good usually in excess of 90%. Approximately 25,000 m of Inter-Citic’s 2008 drill program focused on the existing Dachang Main Zone area of the property, which was reported in a press release of April 10, 2008 to have an inferred mineral resource estimate of 23.6 million tonnes grading 3.51 g/t Au (2.66 million oz Au contained). The aim of the 2008 drill program on the DMZ was to increase a large percentage of this inventory to the measured and/or indicated level. Some of the 2008 drill program was directed to address engineering aspects of the project. Exploration drilling also continued with the remaining 23,000 m focused on the eastern extensions of the DMZ, internal areas of the DMZ open to expansion, Placer Valley and new gold-in-soil geochemical targets. Table 11.3 provides statistics on the 2008 drilling program.

Figure 11.1 :: 2006 - 2007 Diam

mond Drill Hole Locations - DMZ AArea

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Table 11.3 : 2008 Drilling Programs

Type Number of Drill Holes

Metres Drilled

Percentage of 2008 Drilling

Infill 179 24,813 49.8 Exploration 157 23,169 46.5 Engineering 19 1,806 3.6 Total 355 49,788 100.0

11.5.1 Infill Drilling A primary focus of the 2008 drill program was to provide data for a preliminary economic assessment of the shallow, potentially bulk mineable mineralisation on the Dachang Main Zone. For the 2008 field season, 179 drill holes, totalling 24,813 m, were targeted on infilling and better defining the existing inferred mineral resource area with the aim of increasing a large percentage of the inventory to the measured and/or indicated confidence category through closer-spaced fence drilling. These infill holes were drilled with HQ-sized equipment over a 2,550-m long strike length between section lines 15700W and 2950W. Between 8100W and 13100W, 1 km of strike extent was tested on sections 20 to 40 m apart. From 13200W to 15700W, 560 m of strike extent was drilled on sections 60 to 160 m apart and between 5900W and 3900W, 400 m of strike extent was tested on 40-m sections. 11.5.2 Engineering Targets Nineteen holes, totalling 1,806 m, addressed engineering aspects of the project in order to provide data for preliminary engineering evaluation of the resource. Thirteen of these holes were drilled by the Inter-Citic drill rig with PQ-sized core in order to obtain representative mineralised samples for specific gravity measurements and metallurgical testing, and 6 holes were drilled by drill rigs with HQ-sized core. 11.5.3 Exploration Drilling Exploration drilling also continued in 2008 with 157 drill holes totalling 23,169 m. This drilling was conducted in order to further expand, and test the continuity of, the mineralised fault structures on the eastern and western extensions of the DMZ, on the Placer Valley Zone (PVZ), as well as to test areas with favourable gold values in trenching and soil geochemical samples and IP geophysical targets in the immediate vicinity of the DMZ and PVZ, in that order of priority. Dachang Main Zone Extension The DMZ-X is a 1.5-km long zone of mineralisation extending off the eastern end of the DMZ as defined by the 2007 drilling program. Ninety holes for a total of 14,262 m tested a 367 m strike length of the eastern extension of the DMZ between sections 1067E and 3900E.

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Dachang Main Zone Western Extension The Dachang Main Zone Western Extension (DMZ-W) is the western extension of the DMZ mineralised structure. The 2008 DMZ-W drilling was a follow-up program to well-mineralised trench and drill samples delineated in the 2006 field program. Eight holes were completed over a 1,080 m strike length of the DMZ-W between sections 16400W and 21800W. Placer Valley Zone The PVZ is a south dipping mineralised fault 600 m south of the DMZ. The PVZ is one of five new areas of gold mineralisation discovered through trenching during the 2006 exploration season at Dachang. Trenching of the Placer Valley anomaly in 2006 and 2007 and drilling in 2007 revealed a mineralised zone approximately 720 m in length. During the 2008 field season 44 drill holes, totalling 5,530 m, were completed on the Placer Valley Zone between sections 500W and 4700W. Three additional holes, totalling 304 m, tested the eastern extension of the Placer Valley mineralised structure between sections 900E and 1400E. Dachang Main Zone Extension North The DMZ-XN is an area that parallels, and lies to the north of, the Dachang Main Zone Extension. It is an area with favourable gold values in trenching and soil geochemical samples that were delineated in the 2006 and 2007 field programs. IP surveying completed in 2008 outlined geophysical targets coincident with some of these areas of favourable gold values. During the 2008 field season, 5 drill holes, totalling 606 m, tested these anomalies between sections 1400E and 2250E. Placer Valley Zone North The PVZN lies approximately 250 to 300 m north of the Placer Valley Zone, midway between the Dachang Main Zone and PVZ. IP surveying in 2008 delineated geophysical targets in this area proximal to sites where favourable gold values were returned in 2007 trenching. Five drill holes, totalling 720 m, tested these anomalies between sections 2900W and 3300W. DMZ Permit Targets Two of the exploration drill holes, totalling 672.5 m, tested 300 m down dip on the DMZ in compliance with Chinese requirements. These holes were drilled with NQ-sized drill equipment on sections 5100W and 12300W. Figure 11.2 shows the location of the 2008 diamond drilling in the Dachang East area.

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Figgure 11.2 : 2008 D

Diamond Drill Hole Locations

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11.5.4 Compilation of Results Of the 328 exploration drill holes completed in 2008 (355 minus 8 re-collar holes, 6 engineering holes and 13 PQ holes for specific gravity measurements), a total of 299 holes (91%) reported significant gold mineralisation, most of which returned multiple mineralised zones between surface and 150 m of vertical depth. Details and results of the 2008 drill program at Dachang were reported in a series of press releases (June 26, 2008, July 18, 2008, August 7, 2008, September 29, 2008, November 3, 2008, December 3, 2008, January 6, 2009, January 21, 2009, February 4, 2009. and February 17, 2009) available on the company’s website (www.inter-citic.com) and filed on SEDAR (www.sedar.com). DMZ Similar widths and grades to those seen in the 2007 drilling were encountered in the centre portion of the DMZ. With the 2008 drilling the geological, structural and mineralised zones were all better defined. Specific gravity measurements of 43 mineralised samples from 13 holes between sections 3500W and 13900W determined an average value of 2.7 g/cm3. Drill holes CJV-667 and CJV-669 are step-out holes 250 m off the western end of the DMZ on section 15700W. CJV-667 intersected multiple mineralised zones, including 21.7 m of mineralisation averaging 3.38 g/t Au and another returning 15.0 m of mineralisation averaging 2.84 g/t Au. Drill hole CJV-669 intersected multiple mineralised zones including 12.0 m of mineralisation averaging 4.31 g/t Au. Both CJV-666 and CJV-669 increased the western strike length of the mineralised fault zone described in the Inter-Citic’s 2007 inferred mineral resource estimate by an additional 250 m. DMZ-X Multiple zones of gold mineralisation were intersected at the DMZ-X. As reported in Inter-Citic’s press release of July 18, 2008, visible gold was encountered in approximately 10 cm of core from hole CJV-414. Towards the easternmost sections the overburden is much thicker and the gold bearing sulphide mineralisation may be deeper and offset by late faulting. This is supported by mineralised gossan exposed at 4000E in a trench (T-4007) 100 m east and 150 m north of the DMZ-X. PVZ The Placer Valley Zone, Placer Valley East and Placer Valley North drilling consisted of 52 holes totalling 6,553 m. Here a number of mineralised intercepts were encountered, mainly 1- to 2-m intervals of 0.5 g/t to 5.45 g/t Au. Some wider intercepts in the PVZ are noteworthy: CJV-487 returned 6.5m of 5.03 g/t Au, CJV-543 returned 3.4 m of 10.98 g/t Au, CJV-584 returned 12.2 m of 3.15 g/t Au, and CJV-631 returned 16 m of 2.59 g/t Au. Three metres of 3.91 g/t Au were intersected in hole CJV -560 drilled in the PVZN area.

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DMZ-XN A few isolated one-metre intercepts were encountered with grades of 0.5 g/t to 2.54 g/t Au (CJV-497). DMZ-W A number of isolated 1- to 1.6-m intercepts were encountered with grades of 0.7 g/t to 1.48 g/t Au. DMZ Permit Drill Holes Although the mineralised fault structures were intersected 300 m down dip in CJV 434 and CJV 442, no gold mineralisation of significance was encountered. A summary of the significant results from the 2008 drill program can be viewed at Inter-Citic’s website (www.inter-citic.com) in the press releases section. 11.6 2009 DRILL PROGRAM In 2009, Inter-Citic continued with its infill drill program of the DMZ and PVZ as well as exploration in previously undrilled areas of the main zone which could not have been drilled before due to difficult drilling conditions. The infill drilling focused on areas which were highlighted for additional drilling after the 2008 block model was constructed. At the same time, several exploration holes were drilled on the east end of the DMZ and in both directions of the PVZ. 14 engineering holes were completed for use in future property assessments including 7 water wells for monitoring groundwater patterns. Inter-Citic also expanded its exploration program to include several previously undrilled areas which have demonstrated potential for drilling with promising soil geochemistry and trench results. These zones are on the soil geochemistry trends seen in the Western Quarter and Dachang Central areas and were named the 861 zone and Acadia zone. See Table 11.4 for a summary of 2009 drilling by area and purpose. Drilling was performed by Inter-Citic Minerals’ own drills with drilling crews supplied by IMOGS, based in Hong Kong and Inter-Citic or by drills and crews which were supplied by QGSI.

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Table 11.4: 2009 Drilling

Zone and Purpose No. of Holes

Meters

Engineering 7 1371

Water Wells 7 1108

Exploration DMZ-X 3 298

Exploration PVZ 11 976

Exploration DMZ (2900W to 1400E) 15 1342

Exploration 861 3 526

Exploration ACADIA 8 769

Exploration T 3 273.3

Infill DMZ 120 11899

Infill DMZ-X 42 4278

Infill PVZ 33 2067

Total 252 24907

11.6.1.1 DMZ, DMZ-X and PVZ The result of the additional exploration and infill drilling was a significant increase in the Tonnage and grade of the resource within these zones specifically an increase to the indicated category of the resource (with a corresponding decrease to the inferred category) and an overall increase in the total (measured, indicated and inferred) resource and grade. 11.6.1.2 861 Zone Hole CJV-861 was drilled to follow-up CJV-32 from 2005. The hole returned 2 significant intervals (2.38 g/t over 9.5 m and 10.05 g/t over 3 m). The following 2 holes behind CJV-861 indicated that the zone was shallow but positive trenching results indicated it continued along strike. 11.6.1.3 Acadia Eight holes were drilled in the Acadia zone in response to positive soil geochemistry and follow-up trenching. Results were very positive with multiple significant intervals in some holes and with intercepts as good as 2.28 g/t over 21.3 m (found in CJV-914). Of the 8 holes, only 2 did not have any significant assays. 11.7 2010 DRILL PROGRAM For 2010, Inter-Citic continued exploration with another 25,000m program which focused on exploration in the Acadia, 861 and DMZ-N trends as well as re-visited the NR1 and XP zones (previously named CD-1) and stepping eastward from the DMZ-X. There were 3 holes drilled in the Gap between the DMZ-X and the South-East Anomaly. This area is covered with a thick overburden which masks soil geochem values and prohibits trenching, making exploration difficult. See Table 11.5 for a breakdown of 2010 drilling.

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Table 11.5: 2010 Drilling by Zone

Zone No. of Holes Meters

Acadia 88 7978

XP 24 1723

861 21 1473

NR1 19 2079

PVZ-X 2 251

DMZ-N 7 770

DMZ-X 71 9988

DMZ Gap 4 808

Total 236 25070

Drilling was performed by 2 drills owned by Inter-Citic and up to 5 drills and crews were provided by the Partner. 11.7.1.1 Acadia Drilling in Acadia zone continued in 2010 with an extensive drill program of 88 holes totaling nearly 8000m. The zone was drilled in 2 parts: east and west, with the central area which separates the area wet and difficult to drill. Drill and trench sections were spaced at 40 to 80 m. Drilling was successful with positive results in 63 of 88 holes drilled in the zone. 11.7.1.2 XP In 2010 XP zone was visited for the first time since 2005. With only 2 previous drill holes but trenches which indicated about 380 m of mineralisation along strike, 24 drill holes were added with 21 intercepting significant mineralisation. 11.7.1.3 861 Twenty-one holes were drilled in the 861 zone in response to promising results in 2009. Twelve of these holes intercepted significant mineralisation, 4 of these were on a lens which had not been drilled before which lies about 200 m north of the original 861 lens. 11.7.1.4 NR-1 Of the 19 new holes drilled in NR-1, 13 intercepted significant mineralisation including several new lenses. Several intercepts were above 4 m and grades were as high as 5.39 g/t though most were 0.5 to 1.5 g/t.

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11.7.1.5 PVZ-X Just 2 holes were drilled in the PVZ eastern extension in 2010. Both intercepted mineralisation though none of the intercepts were above 1.5 m and all but one were below 1.0 g/t. 11.7.1.6 DMZ-N Seven holes were drilled in the small DMZ-N zone which lies just north of the Eastern end of the DMZ and DMZ-X. Of these, 6 encountered significant mineralisation of lengths up to 3 m and grades up to 5.80 g/t 11.7.1.7 DMZ-X The East end of the DMZ-X is overlain by heavy overburden, masking geochemistry values and rendering trenching ineffective. Still, 71 new holes totaling nearly 10,000 m were drilled to try to trace mineralisation and 50 of these holes intercepted mineralisation including intercepts up to 14 m in length and grades up to 10.70 g/t. 11.7.1.8 DMZ-Gap The DMZ-Gap is the large overburden covered area between the DMZ-X and the South-East Anomaly (SEA). Four holes were drilled in an attempt to trace the trend of mineralisation between the adjacent zones. Three of these encountered short mineralised intercepts.

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12.0 SAMPLING METHOD AND APPROACH The sampling at Dachang included the collection of B-horizon soil samples, chip-channel samples of geologically significant intervals exposed by trenching and split core samples over geological significant intervals intersected during drilling. 12.1 SOIL SAMPLING More than 62,000 conventional B-horizon soil samples were taken from the property between 2004 and 2007. The soil samples were collected at 20 m intervals along grid lines, established at 400 m intervals over Southwest Dachang and at 200 m intervals over the remaining four Districts. Samples were collected using a shovel to expose the B-horizon, from which approximately 100 g of material were collected for analysis. The sample density at Southwest Dachang is 150 samples/km2 and for the other Districts the sample density is 250 samples/km2. The latter is consistent with the sample density used at Dachang East for base level comparison and is considered the optimum density to locate the typical Dachang gold zones, which tend to have long strike extensions over relatively narrow widths. There are no known factors that could materially impact on the accuracy or reliability of the results. The samples collected at each site are representative of the soil at that location and there are no known factors that may have resulted in bias. Soil samples are used to target trenching and drilling activities. The results are not used in resource estimation. 12.2 TRENCH SAMPLING Since 2004, Inter-Citic has excavated and sampled a total of 429 trenches at Dachang totalling more than 55,000 line-metres. The sample interval in trenches was typically one metre as this is considered the optimum interval of potential economic significance and is consistent with the historic data, providing a reliable base level for comparison on the property. Trenches were established generally at 100 m intervals with smaller intervals of 25 m to 50 m used where better definition of a zone was needed. All trenches sampled were excavated by backhoe and most uncovered broken bedrock at depths of 1.5 to 2.5 m (typically altered and highly deformed sediments). All trenches have been mapped in detail and channel samples were taken at one-metre intervals across all identified mineralised zones. The gold-bearing zones intersected coincided with areas of secondary sulphide enrichment (or gossans after sulphides). Qualified Chinese geologists and technicians, under the direct field supervision of Garth Pierce, Inter-Citic’s Vice President of Exploration, carried out the trench sampling. The individual samples consisted of approximately 5 kg of material and are representative of the material for the respective intervals. Selected sample “splits” were geochemically analyzed or assayed as the case may be by several independent laboratories using both Chinese and International standards (with good correlation within normally accepted statistical limits.)

95

Because of the nature of gold mineralisation, the potential exists for the occurrence of nugget effect. To account for the possibility and to cover situations where individual assays come into question, duplicate samples have been analyzed. Also in recognition of the potential for nugget effect a larger than normal volume of material was taken over each designated sample interval in the trenches. Inter-Citic believes that because of its sampling approach any potential impact on the accuracy or reliability of the results will be minimal and the samples collected at each site are representative of the rock located there. 12.3 DRILL CORE SAMPLING Approximately 82,000 drill core samples have been taken at Dachang by Inter-Citic since 2004. Core recovery for the programs of drilling was typically in excess of 90%. Drill core was logged and sample intervals, typically one metre, identified by qualified personnel under the supervision of company geologists, Inter-Citic’s internal QP, or Garth Pierce. The drill core samples collected are diamond saw cut core samples. One half is selected for assay with the remaining half being placed into the core box for future reference. Care was taken to ensure that neither half of the core represents a bias with respect to the nature and mineral content of the sample. The sample interval and methodology employed are consistent with industry standards for material which may be prone to nugget effect. Inter-Citic believes that because of its sampling approach any potential impact on the accuracy or reliability of the results will be minimal and the samples collected at each site are representative of the rock at each site.

96

13.0 SAMPLE PREPARATION, ANALYSES AND SECURITY 13.1 SAMPLE PREPARATION AND ANALYSIS 13.1.1 Soil Samples Soil samples were air dried on site and delivered to the Qinghai provincial government laboratory at Xining, the provincial capital. Gold content in the soil was determined by analyzing 10 g samples of minus 200 mesh material obtained by sieving. To the sample was added 10 mL of 1:1 aqua regia to digest the rock and release the gold. Gold was adsorbed with active carbon which was then reduced to ashes, dissolved in 5 mL of 1:1 aqua regia and the gold content read by spectrophotometer. All of the samples collected at Dachang are stored in a restricted, secure storage area at the project’s camp. Samples are shipped by truck to Golmud and delivered to Inter-Citic’s courier agent for shipment to the various laboratories for analysis. Inter-Citic’s courier agents are present at all transhipment points between Golmud and the laboratories. All of the laboratories used by Inter-Citic for soil sample analysis are certified by the Chinese government. Soil analyses are used to direct further exploration activity such as trenching and drilling. Soil analysis results are not used in resource estimation. 13.1.2 Trench Samples Each sample is secured and transported using the same procedures as described in Section 13.1 above. Samples were sent to the Qinghai Institute of Rock and Mineral Testing and Application, located in Xining, Qinghai Province or to the Research Centre of the Xi’an Institute of Geology and Mineral Resources located in Xi’an, Shaanxi Province. Both are independent arm’s length Chinese government laboratories. At each laboratory, the samples were dried, crushed and a small portion ground to -200 mesh. The gold content of each sample was determined by analyzing a 20-g sample of the -200 mesh material with an aqua regia acid digestion and gold determination using atomic absorption spectroscopy (AAS). The precision and accuracy of the results was tested through the systematic inclusion of standards and replicate samples. 13.1.3 Drill Core Samples Drill core samples were shipped to SGS Group Geochemical Laboratories (SGS) located in Kunming and Tianjin, China, for sample preparation and 50 g fire assay with AAS finish. Upon receipt, samples are dried and crushed to 95% passing a 3 mm screen (85% passing -2 mm). A sample split of 250 g is sent to an LM-2 puck and bowl pulveriser where it is

97

reduced to >90% passing -200 mesh. There is a check for sample loss and pulverisation quality every 20 samples. A 50-g sample of the pulp is then weighed out and fire assayed using suitable fluxes. The gold bead left after fire assaying is dissolved in acid and read using an AAS. SGS is the world’s leading inspection, verification, testing and certification company. Analytical work is performed in accordance with recognised standards such as ASTM, ISO, JIS, and other accepted industry standards. All of the core samples collected at Dachang are stored in a restricted secure storage area prior to shipment. Samples are shipped by truck to Golmud and delivered to Inter-Citic’s courier agent in Golmud for shipment to the various laboratories for analysis. Inter-Citic’s courier agents are present at all transhipment points between Golmud and the laboratories. 13.2 QUALITY CONTROL AND QUALITY ASSURANCE 13.2.1 SGS Quality Control SGS routinely carries out a quality assurance/quality control (QA/QC) program at all of its assaying facilities. Its analytical results are tested through the systematic inclusion of standard reference samples, blanks and duplicate samples. In each batch of 50 samples there are eight QA/QC samples. These include 2 analytical standards, 2 blanks and 4 duplicate samples. SGS routinely monitors the results of its QA/QC samples and does not release results to clients until a responsible person has signed off on them. 13.2.2 Inter-Citic Quality Control 13.2.2.1 Soil Samples Because the results are used only semi-quantitatively (to guide drilling and trenching) conventional data verification of the soil geochemical data has not been performed since 2006. However, follow-up exploration trenching has routinely confirmed the identified gold-in-soil anomalies with good correlation of the location of anomalous values in the soil geochemistry and the mineralisation exposed in underlying trenches. 13.2.2.2 Trench Samples In both 2006 and 2007, drilling underneath exposed trench mineralisation has confirmed gold mineralisation in more than 90% of completed holes drilled on the DMZ. In 2005, a total of 4,575 trench samples (designated H-samples) were collected by the QGSI from 101 trenches excavated on the property. That same year, Inter-Citic collected 658 trench samples designated as C-samples in order to check the trench sampling. This re-sampling program amounts to approximately 14.4% of the total samples collected. There were no material variances in the

98

tenor of the gold reported in the respective sample assays given the variables of being able to identify and resample the initial H-sample interval. Sample pulps were routinely checked during analysis with selected pulps being re-assayed at a second laboratory. There are no material differences in the tenor of the reported gold assay. 13.2.2.3 Drill Core Samples 2007 to 2009 In 2009, Micon International Co Limited (Micon) reviewed and analysed the gold assay results from the Inter-Citic quality assurance and quality control programme. A summary of the quality control samples for the period 2007 to 2009 is given in Table 13.1.

Table 13.1: Inter-Citic Quality Control Samples – 2007 to 2009

Type of Quality Control Sample Number of Samples Percentage of Total Samples Standard Samples 337 0.6% Blank Samples 327 0.5% Internal Duplicates 374 0.6% Total QC samples 1,020 1.7% Total Number of Samples 2007-2009 Campaigns 60,326

Standard Samples A total of 337 standard samples were analysed for quality control purposes, which represent 0.6% of the database for the 2007-2009 period. The certified values of the standard samples are given below in Table 13.2.

Table 13.2 : Certified Values of the Gold Standards Used by SGS

Parameters OREAS

52Pb OREAS

7Pb OREAS

61Pb Reported Gold Value (g/t) 0.307 2.77 4.75 +/- 2 Standard Deviation 0.028 0.09 0.28 Standard Deviation % of Mean 5% 1.6% 2.9% Number of Laboratories 17 17 21

Mean and standard deviation values were calculated for the 3 groups of standard samples analysed by SGS, and the results are as shown in Table 13.3. Outliers were identified and removed from the SGS samples (7 for OREAS 52Pb, 7 for OREAS 7Pb, and 4 for OREAS 61Pb).

Ta

meter

n (Au (g/t))

dard Deviation dard Deviation f Mean ber of Samples

were made toon from thes of the stanhan the certi

Figure 13

able 13.3 : SGS

ORE

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47 110

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102

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105

ults of OREAS

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106

13.2.2.4 Drill Core Samples 2010 Standard samples and blanks were each inserted at a rate of about 1/20 (or 5%) and started within the first 5 samples of a hole. This represents an increase over 2008 and 2009 use. A summary of the quality control samples for 2010 is given in Table 13.6. Control samples were graphed and checked as they were returned from the laboratory. If the Inter-Citic staff were unhappy with any trends or individual samples, the laboratory would be requested to re-assay from the pulps. In 2010, Inter-Citic requested SGS re-run 4 sets of lab results and were satisfied with the results as they were returned the second time.

Table 13.6 : 2010 Quality Control Samples

Type of Quality Control Sample Number of Samples Percentage of Total Samples Standard Samples 526 4.6 % Blank Samples 634 5.5 % Total QC samples 1160 10.2 % Total Number of Samples 2007-2009 Campaigns 11427

Standard Samples In 2010, Inter-Citic changed its certified reference material as its previously used standards were no longer available. Table 13.7 shows the basic properties of the selected 2010 standards.

Table 13.7: Certified Values for the 2010 Standards

Parameter OREAS 17c OREAS 60b Reported Gold Value (g/t) 3.04 2.57 +/- 2 Standard Deviation 0.16 0.22 Standard Deviation % of Mean 2.6% 4.3% Number of Laboratories 18 16

Mean and standard deviation values were calculated for the 2 groups of standard samples analysed by SGS and the results are as shown in Table 13.8.

Table 13.8: SGS Samples Used for Comparison with Gold Standards

Parameter OREAS-17c OREAS-60b

Mean (Au (g/t)) 3.029 2.50

Standard Deviation 0.162 0.150 Standard Deviation % of Mean

5.4% 6.00

Number of Samples 441 441

Overall Bias -0.37% -2.74%

13.9 and Finting the samg variation t

able limits. Tnd 2009 stan

igure 13.10 mples as theto the mean

There has bendards result

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show plots y were retur. Results of

een a significs.

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3.10: Results o

107

of OREAS rned from ththe 2010 sta

cant improve

f Standard OR

of Standard O

17c and 60e laboratoryandards anaement in ter

REAS-17c An

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nalyses

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and dispersio

x axis y-axis within on on

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ters

Deviation

(α=0.05)

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of Samples

108

of 11,427 (1nsistency thrd for most oesults.

show a coduplicate sam

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Duplicates - S

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orrelation comples.

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Au (g/t)

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8 1.2

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otal sampleshe season. OS provided a

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icate

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40

s). The dupliOnly 7 of 2a triplicate. I

f 1.00 indic

icates 2,134 In all

cating

samples are mination and

from a prevcore was use

of the 2010ted to the lon limit of 0

used to assemixing dur

vious hole shd for blanks

0 blanks werlaboratory in.01 g/t Au) a

Fig

ess the accurring analysishowed a valu.

re positive an 2010, 264and 99.6% w

gure 13.12: Bl

109

racy of the as. Blanks weue below det

and consisten4 (93%) ret

were at or bel

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assay resultsere taken frotection limit

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110

Conclusions

In 2010, Inter-Citic increased the quantity of standards and blanks used per the recommendations of Gorman, 2009.

The results of the analyses of the two standards show no noticeable bias and very little dispersion, an improvement over the 2008 and 2009 results.

There is a good correlation between the original assays and the duplicates for 2010, demonstrating the good precision of the laboratory.

The results for the blanks samples are satisfactory and suggest that there is no systematic contamination or mixing during analysis.

111

14.0 DATA VERIFICATION 14.1 MICON VERIFICATION SAMPLING Since the start of the 2006 exploration season at Dachang, Micon has reviewed the analytical results from and composite calculations for all intersections from trenches and drill holes at Dachang. During Micon’s second site visit in November, 2007, two samples of mineralised rock (75101 and 75102) from the DMZ/DMZ-X were collected from trenches on lines 1400E and 7900. The assay results from those samples are set out in Table 14.1.

Table 14.1 : Micon Check Samples

Sample Number Gold Grade(g/t)

Silver Grade(g/t)

75101 2.74 1 75102 2.93 <1

The samples collected by Micon show the presence of gold mineralisation at Dachang in approximately similar grade ranges to those claimed by Inter-Citic and confirm the general absence of silver at the deposit. 14.2 POPULATION STATISTICS For the 2008 mineral resource estimate (Hennessey, 2008) Micon made the following statistical analysis of the Dachang East assay data. This analysis was updated for the block modelled resources presented in Section 17 of this report and top cuts are discussed there. The results here are presented for comparative information purposes. Both results are essentially very similar. In 2008, to review the need for a top cut of assays, Micon took all of the mineralised assays from the Dachang East area and calculated the univariate population statistics as well as gold assay histograms and probability plots. The results are shown in Table 14.2 and Figure 14.1 to 14.3.

112

Table 14.2: Dachang East Univariate Statistics for Gold

Figure 14.1: Dachang East Gold Histogram

Au

Mean 2.886Standard Error 0.045Median 1.450Mode 0.010Standard Deviation 3.908Sample Variance 15.269Kurtosis 25.260Skewness 3.698Range 66.695Minimum 0.005Maximum 66.700Sum 22,016.325Count 7,629.000Largest(1) 66.700Smallest(1) 0.005Confidence Level(95.0%) 0.088

Cov 1.35

Dachang Gold Histogram

Au (g/t)

0 20 40 60 80

Fre

que

ncy

0

20

40

60

80

100

113

Figure 14.2: Dachang East Gold Log Histogram

Figure 14.3: Dachang East Gold Probability Plot

Dachang Gold Log Histogram

Au (g/t)

1 10 100

Fre

que

ncy

0

20

40

60

80

100

Dachang Gold Probability Plot

Au (g/t)

0.001 0.01 0.1 1 10 100

Cum

ula

tive

Fre

que

ncy

0.1

1

10

30

50

70

90

99

99.9

114

The graphs and statistics show a lognormally distributed population of assays that is not strongly skewed and has relatively few outliers. The graphs indicate the need for a top cut at approximately 40 g/t Au with only three assays needing to be cut. 14.3 CONCLUSIONS The database at Dachang appears to be well behaved and essentially free of significant nugget effect. Given the QA/QC results described and the well behaved nature of the population statistics discussed above, Micon is of the opinion that the data are suitable for use in a resource estimate.

115

15.0 ADJACENT PROPERTIES There are no adjacent properties which significantly affect the opinion offered in this report. The Dachang property is, for the most part, surrounded by exploration licenses held by Inter-Citic’s joint venture partner or related entities. The Partner has identified a number of gold zones on trend with those discovered on the Dachang property. Under the terms of the joint venture agreement Inter-Citic has the right of first refusal to acquire any of the exploration licenses held by the Partner for which it seeks foreign investment.

116

16.0 MINERAL PROCESSING AND METALLURGICAL TESTING Preliminary metallurgical testwork was summarised by Metallurg in the 2009 technical report entitled “A TECHNICAL REPORT ON AN UPDATED MINERAL RESOURCE ESTIMATE, AND A PRELIMINARY ASSESSMENT AND ECONOMIC ANALYSIS FOR THE DACHANG GOLD PROJECT, QINGHAI PROVINCE, PEOPLE’S REPUBLIC OF CHINA (Gorman 2009)” and dated August 20th 2009 and is summarised in section 18 of this report. Since this date there has been no more recent metallurgical testwork completed on the Dachang property.

117

17.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES Micon has carried out a resource estimate for Dachang Gold Deposit using geology and assay information from 880 drill holes and 493 surface trenches. The focus of this section of the report is on the methodology for estimating the gold resource. Primary or raw assay data were composited for gold and were analysed to determine the basic statistical and geo-statistical parameters. This information has been used in several modelling algorithms, which have been compared and checked for validity. A total of 116 specific gravity measurements were collected. The final resource has been categorised into indicated and inferred compliant with the JORC and CIM guidelines. The resource was estimated using Surpac Software and Datamine Software. 17.1 DATA PROVIDED FOR RESOURCE ESTIMATION Micon was provided with the drill hole database which included borehole collar coordinates, downhole surveys, sample data (gold assays) and geology data for over 114 km of drilling. Systematic checks were performed on the database to ensure that the data met specific validation requirements and that no overlapping intervals were present in the data. Three validation errors were found and corrected in the borehole database during the systematic checks. Inter-Citic also provided surface topography and 3-D wireframes of mineralised zones. The 3-D wireframe solid models for the mineralised zones were created by Inter-Citic, following cross-sectional interpretation outlines of the mineralised zones which were made on each section line at roughly 30 m to 50 m spacing. Both borehole and surface trench data was used in making the interpretations. An assay cut-off grade of 0.5 g/t gold and a minimum interval grade of 2 gram meters were used in making the outlines although some exceptions were made to this rule allowing the inclusion of borehole intervals lower than the cut-off grade to ensure continuity of the lens. Up to 3 m of internal waste was allowed within the mineralised intercepts. The outlines were drawn on each section connecting the intercepts and extruded to 50 m beyond the last borehole interval. The sections were then connected using triangulation to form the closed solid 3-D wireframes. The wireframes represent the Main Zone of mineralisation which is subdivided into West, Central and East area, and also the Placer Valley area to the south of the Main Zone. Each area comprises a number of small separate mineralised lenses which are on average 5 m thick and irregular and discontinuous geometry along strike. However, to improve the continuity for mineral resource estimation, Micon has grouped these lenses into upper, middle and lower stratigraphic zones which are continuous along strike. The 160 lens in the Central area was considered as a separate zone. In total the lenses are grouped into 22 zones; 13 in the Main Zone, and 8 in the Placer Valley area and one further zone made up a number of other, isolated mineralised lenses which could not be grouped. The distribution of the mineralised wireframes is presented in Figure 17.1.

Micon been tri 17.2 Using twere exthe wireextremeerrors aestimatiproductarea and It is cleirrespecoutlier s

has checkediangulated co

STATISTIC

the wireframxtracted for seframes wase high gradeand can exeion of bloction. Log-pd are presen

ear from thective of geogsamples and

Figure 17

d and validaorrectly to fo

CAL ANAL

mes for the 2statistical ans examined fe outlier popert an undueck grades anprobability pted in Figure

e probabilitygraphical locd top-cut thes

7.1: Distributi

ated the wireorm valid clo

LYSIS

22 identifiednalysis. The for each of thpulations foe influence nd lead to

plots were ge 17.2.

y plot that tcation. Basese samples b

118

ion of Dachan

eframes for osed solid m

d zones, the afrequency d

he areas in thor top-cuttinduring blocpoor reconenerated for

the sample ded the plot, Mby limiting th

ng Mineralised

the mineralimodels.

assay databadistribution othe Main Zonng. Outlier ck grade intenciliation of r the distribu

distribution Micon identiheir grade to

d Zones

ised zones.

ase was flagof sample pone to identifvalues resulerpolation r

f expected aution of gol

in all majorified sample

o 40 g/t in th

The solids

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resulting in and actual mld values in

r areas is sies above 40 he database.

have

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The plobelow tresult oextrudeintroduof the dinfluencwhile reCompoof sampalgorithorder tcompos9,392 ccompos

ot also showthe 0.5 g/t cof internal wed through lced by off sdeposit a cece the grade eporting recosites were mples in the

hm that allowto minimisesite file was covering a site data are

ws that arouncut-off. Thiwaste pickedow grade in

section borehertain propoestimation c

overable resmade at 1 m i

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loss of dacreated for etotal lengthpresented in

Table

Figure 17.2

nd 15% of ths is most ap

d up in the lntervals to eholes which rtion of lowcausing somources. intervals, cone 1 m in le

mposite lengtata but maieach of the 2

h of core on Table 17.1.

17.1: Basic St

119

2: Log Probab

he samples fpparent in thlarger lensesensure contin

cut throughw grade samme degree of

nsidering thength. The th to be varintain a con22 zones. Tf 9,661.3 m.

tatistics of the

bility Plot

from within he East and s or where tnuity. Also

h the wireframples are ex

smoothing,

e thickness ocomposites

ied within a nsistent com

The total numm. Some d

e Composite D

the wireframWest areas

the smaller lo, low gradeames. Due txpected. Th

however thi

of the veins were made

a given toleramposite lengmber of comdescriptive

Data

mes have a gand is likel

lenses have e samples cato the compl

hese samplesis will be red

and that maje using a beance of 0.2 gth. A sep

mposites creatstatistics fo

grade ly the been

an be lexity s will duced

jority est-fit m, in

parate ted is

or the

120

Zone Zone

Number

No. of Composite Samples

Maximum Mean Variance Standard Deviation

Coeff. of Variation

DMZ West Upper 101 884 40.00 3.32 18.90 4.35 1.31 Mid 102 2621 38.20 3.56 17.34 4.16 1.17

Lower 103 1130 29.70 3.03 12.23 3.50 1.15

DMZ Central

Upper 201 375 27.60 3.15 15.46 3.93 1.25 Mid1 202 529 22.06 3.31 12.29 3.51 1.06 Mid2 203 477 22.17 3.71 14.35 3.79 1.02

Lower1 204 123 36.19 2.60 14.55 3.81 1.47 Lower2 205 50 8.97 1.74 3.14 1.77 1.02

160 Lens 209 455 26.00 3.60 13.79 3.71 1.03

Placer Valley

A 251 41 22.96 4.85 28.84 5.37 1.11 B 252 74 16.28 2.52 7.89 2.81 1.11 C 253 19 4.63 1.70 1.55 1.24 0.73 D 254 125 17.80 2.22 7.27 2.70 1.21 E 255 257 30.70 4.12 22.78 4.77 1.16 F 256 267 19.24 3.07 10.49 3.24 1.05 G 257 262 40.00 2.51 10.77 3.28 1.31 H 258 124 29.21 2.36 10.92 3.31 1.40

DMZ East

Upper1 301 231 26.10 3.41 16.68 4.08 1.20 Upper2 302 364 40.00 4.04 31.15 5.58 1.38

Mid 303 524 30.54 2.90 12.04 3.47 1.20 Lower 304 460 29.80 3.13 16.58 4.07 1.30

17.3 VARIOGRAPHY Experimental semi-variograms were calculated using the composite data from the mineralised zones. The analysis was done following the orientation of the lenses which make up the zones. A down hole experimental semi-variogram was calculated to help understand small scale spatial variability of the data (nugget effect). Three other experimental semi-variograms were calculated in three orthogonal directions. Due to the irregular geometry and discontinuous nature of the lenses which breaks the spatial continuity of the data set, it was difficult to get good experimental variograms. Therefore where possible Micon created simple spherical variogram models that reproduce the most important features of the experimental variograms. In the smaller zones with too few composites to create experimental variograms, the variogram parameters were taken from the adjacent zones. The variogram modelling shows a nugget effect of around a 40%, and a maximum range varying between 70 m and 90 m. The direction of maximum continuity is generally along strike of the mineralised veins or slightly inclined. This direction is defined as the major axis. The semi-major axis is generally the down dip direction of the mineralisation and minor axis is represented by the width of the veins. The zonal anisotropy factors were derived from the

121

ranges of major, semi-major and minor axis. Zonal anisotropy is found to be around 1.4 to 2 between the major and the semi-major axis and larger in between the major and minor axis however this is defined by the narrow lenses. The parameters of the variogram models which were used in resource estimation are given in Table 17.2.

Table 17.2: Parameters of the Semi-Variogram Models

Orientation Variogram Parameters Anisotropy Zone Bearing Plunge Dip Nugget Covariance Range Semi-major Minor 101 63 24 -32 8.45 12 64 2.13 20.92 102 62 51 -56 7 8.44 70 1.75 16.67 103 66 25 -44 3.75 7.39 80 1.33 30.77 201 99 -6 -34 5.6 9.58 70 1.00 14.00 202 6 47 -11 2.95 7.51 75 1.00 23.64 203 103 -17 -49 4.1 6.9 85 1.70 17.71 204 103 -17 -49 4.1 6.9 85 1.70 17.71 205 103 -17 -49 4.1 6.9 85 1.70 17.71 209 270 -20 -56 6.4 7.7 52 1.16 10.61 251 106 -16 -67 8.67 8 81 1.62 10.62 252 106 -16 -67 8.67 8 81 1.62 10.62 253 106 -16 -67 8.67 8 81 1.62 10.62 254 106 -16 -67 8.67 8 81 1.62 10.62 255 106 -16 -67 8.67 8 81 1.62 10.62 256 106 -16 -67 8.67 8 81 1.62 10.62 257 106 -16 -67 8.67 8 81 1.62 10.62 258 106 -16 -67 8.67 8 81 1.62 10.62 301 0 25 -11 18.2 35 70 1.40 15.05 302 0 25 -11 18.2 35 70 1.40 15.05 303 58 14 -34 4.1 6.89 110 1.83 28.21 304 90 0 -44 6.3 12.4 100 1.43 21.28

17.4 BLOCK MODEL GRADE INTERPOLATION The Dachang block model was formed utilising regular shaped blocks measuring (X) 10 m by (Y) 5 m by (Z) 5 m in height. This block size was the most appropriate shape considering the morphology of the mineralization and the distribution of sample information. To better conform to the mineralization contacts, a system of sub-blocking was used. Blocks were permitted to split to a minimum sub-block size of 2.5 m by 2.5 m by 2.5 m. Block grades were estimated for entire parent cells. The parameters that describe the block model are summarised in Table 17.3. Each block was flagged with vein number and with tonnage conversion factor of 2.7 before grade interpolation.

Grade ithe bloccomposmodel i

In relatinterpol90% ofof ranganalysisellipsoi A minimrepresen

OrigBlocNumMin

interpolationck model ussites from this presented

tion to the relation in the f the range oge was conss. The anisod.

mum of 6 anntation, sam

Table 1

Block mod

gin ck Size mber of Blocksnimum Sub-Blo

n was performsing the wirehat zone. Anin Figure 17

Figu

esults of varblock mode

of major axisidered to reotropy facto

nd a maximumples from m

17.3: Dimensio

el X-D

s ock Size

med using oeframes and n image show7.3.

ure 17.3: Bloc

riography anel. The radius of the varieduce bias (r was used t

um of 16 saminimum of

122

ons of the Dac

Direction (m)

Y

-2900 10

455 1.25

rdinary krigthe grade o

wing the dist

k Model Grad

nalysis an eus of the primiogram round(if any) is rto determine

amples were f 2 drill hole

chang Block m

Y-Direction (m)

-1290 5

344 1.25

ging. The bloof each zonetribution of

de Distributio

llipsoidal semary searchded off to n

range determe the length

used for gres were used

model

Z-Direction(m) 4200

5 80

1.25

ocks were fle was interpograde estim

on

earch was ush ellipse wasnearest tenth mination dur

of other two

rade interpold for a block

n

lagged by zoolated usingates in the b

sed for the gs considered

place. Thering variogro direction o

lation. For bk to be estim

one in g only block-

grade to be 90%

raphic of the

better mated

123

within the search radius. An extended search, double the size of the primary search ellipse was used for the blocks which did not get grade using the primary search ellipse. A minimum of 4 samples were used from at least two drill holes. The results of the grade interpolation were validated by comparing the estimated average grade with average grade of the composites used in the interpolation. This validation was applied locally by declustering the composite samples within the parent blocks in the block model and comparing to the estimated grade of that block, and on a larger scale by taking the average estimated grade from a zone and comparing to the average grade of composites for that zone. The resultant plots are presented in Figure 17.4 and 17.5. Additionally, for the purpose of validation, block grades were estimated using Inverse Distance cubed (ID3) using the same composite data and the same search ellipse parameters as used in ordinary kriging.

Figure 17.4: Zone Average Estimated Block Grade versus Composite Grade

0

2

4

6

8

0 2 4 6 8

Est

imat

ed G

rade

(Au

g/t)

Average Grade of Composites (Au g/t)

Zone Estimation KRG

Zone Estimation ID3

124

Figure 17.5: Declustered Composite Grade versus Estimated Block Grade

Both plots show that there is correlation between the estimated and composite average grades. Figure 17.4 shows that most of the points fall along 1:1 regression line indicating good correlation between the global averages of the composite samples and the estimated grades. Figure 17.5 shows that there is some localised smoothing, particularly in blocks which contain low grade composite data. These blocks represent either internal waste intervals or areas where the zone was extended through low grade for continuity. This smoothing is normal when using a linear method of estimation like ordinary kriging where lower grades are slightly over estimated and high grades are slightly under-estimated. The validation demonstrates that the ordinary kriging estimation has not introduced any significant bias into the block model and to reduce the effect of localised smoothing, Micon calculated recoverable resource using a non-linear technique. 17.5 LOCAL ESTIMATE OF RECOVERABLE RESOURCES The local estimate of recoverable resource makes use of non-linear techniques. The aim is to estimate the proportion of ore blocks within larger panels (parent blocks) assuming free selection of blocks within each panel and corresponding tonnage and mean grade above each cut-off. The main advantage in this method is its swiftness in calculation, but no information on the location of the ore blocks within each panel is given. The in-situ resource was estimated by ordinary kriging using a parent block (Panel) of 10m (X-Direction) X 5m (Y-Direction) X 5m (Z-Direction). The block model output from above process recorded kriging variance in addition to block grades and other parameters (number of samples, distance from block centre etc.). The local estimate of recoverable resource was calculated using a selective mining unit (SMU) of 2.5m X 2.5m X 2.5m.

0.1

1

10

100

0.1 1 10 100

Est

imat

ed G

rade

(Au

g/t)

Average Grade of Composites (Au g/t)

125

The mineralised area was divided into 22 different zones. Variograms were calculated and modelled separately for each zone. These variogram models were used in panel grade estimation and are given in Table 17.4.

Table 17.4: Variogram Parameters used in Recoverable Resource Estimation

Zone Variogram

Type

Nugget Range Co-Variance

(C1) (C0) X-

Direction Y-

Direction Z-

Direction

101 Spherical 0.41 64.0 30.0 3.1 0.59 102 Spherical 0.45 70.0 40.0 4.2 0.55 103 Spherical 0.34 80.0 60.0 2.6 0.66 201 Spherical 0.37 70.0 70.0 5.0 0.63 202 Spherical 0.28 75.0 75.0 3.2 0.72 203 Spherical 0.37 85.0 50.0 4.8 0.63 204 Spherical 0.37 85.0 50.0 4.8 0.63 205 Spherical 0.37 85.0 50.0 4.8 0.63 209 Spherical 0.45 52.0 45.0 4.9 0.55 251 Spherical 0.52 81.0 50.0 7.6 0.48 252 Spherical 0.52 81.0 50.0 7.6 0.48 253 Spherical 0.52 81.0 50.0 7.6 0.48 254 Spherical 0.52 81.0 50.0 7.6 0.48 255 Spherical 0.52 81.0 50.0 7.6 0.48 256 Spherical 0.52 81.0 50.0 7.6 0.48 257 Spherical 0.52 81.0 50.0 7.6 0.48 258 Spherical 0.52 81.0 50.0 7.6 0.48 301 Spherical 0.34 70.0 50.0 4.7 0.66 302 Spherical 0.34 70.0 50.0 4.7 0.66 303 Spherical 0.37 110.0 60.0 3.9 0.63 304 Spherical 0.34 100.0 70.0 4.7 0.66 999 Spherical 0.16 76.0 38.0 3.8 0.84

The calculation of SMU grade requires correction for support effect and information effect. The information effect correction was not considered at this early stage of the project when the future sampling pattern is yet to be determined. Due to change in block size for determination of local estimates at different cut-off, support effect correction is required. Support effect correction requires the following. • Model of Distribution: The change of support model requires a sample distribution model to be used. A truncated normal distribution model was used as against a normal distribution model. Since in practice Au values never return with negative values, use of normal distribution might result in over-estimation of SMU grades as normal distribution would consider negative values on one side of the bell’s curve.

126

• The block variance calculated using the krige’s relationship giving the dispersion variance as a function of the variogram. The block variance for both Panel and SMU were calculated using a discretisation of 6 X 6 X 6 per block. The dispersion variance as a result of change in block size is tabulated for each zone in Table 17.5.

Table 17.5: Dispersion Variance due to Change in Block Size

Zone Dispersion Variance

Zone Dispersion Variance

101 0.1497 253 0.0833 102 0.1333 254 0.0833 103 0.1565 255 0.0833 201 0.1347 256 0.0833 202 0.1772 257 0.0833 203 0.1369 258 0.0833 204 0.1369 301 0.1609 205 0.1369 302 0.1609 209 0.1313 303 0.1509 251 0.0833 304 0.1417 252 0.0833 999 0.2092

Fifteen different cut-offs were selected for calculation of SMU grades. These cut-offs were considered close to the economic cut-off calculated by Micon based on Techno-economic parameters. The cut-offs selected were 0.1, 0.2, 0.3, 0.4, 0.5, 0.6, 0.7, 0.8, 0.9, 1.0, 1.1, 1.2, 1.3, 1.4 and 1.5. Datamine does not allow simultaneous calculation of recoverable resource at different cut-offs. The process was run fifteen times to calculate the proportion of panel blocks above cut-off (PRAB1-15) and grade above each cut-off (GRAB1-15) considering the SMU of 2.5m X 2.5m X 2.5m. The output model thus, provides the grade and tonnes above each cut-off using global change of support. In the case of blocks which do not have grade above the designed cut-off even at SMU size, the output process report selection of best available grade considering the SMU and cut-off. These lower grade blocks are dispersed and are difficult to isolate at this stage of the project. In the absence of information available on future sampling, the lower grade blocks below each cut-off was also retained as part of the resource for that cut-off. These blocks would not form part of the ore reserves as it would not qualify the economic criteria. The grade tonnage curve for measured and indicated resource generated from the above process is shown in Figure 17.6 and is reported in Table 17.6. It is apparent that the deposit maintains a significant profile of measured and Indicated Mineral Resources at higher cut-off grades.

Figure 17.6: Grade-Tonnnage Curve for

127

r Measured annd Indicated RResource for DDachang.

128

Table 17.6: Mineral Resource at Different Gold (g/t) Cut-off

Cut-off (g/t Au)

Measured Resource Indicated Resource Measured + Indicated Inferred Resource

Million

Tonnes

Grade (g/t Au)

Million

Ounces

Million

Tonnes

Grade (g/t Au)

Million

Ounces

Million

Tonnes

Grade (g/t Au)

Million

Ounces

Million

Tonnes

Grade (g/t Au)

Million

Ounces

0.0 5.36 3.33 0.57 13.00 3.14 1.31 18.36 3.20 1.89 10.43 2.78 0.93

0.1 5.30 3.37 0.57 12.86 3.17 1.31 18.17 3.23 1.89 10.32 2.81 0.93

0.2 5.25 3.40 0.57 12.73 3.21 1.31 17.98 3.26 1.89 10.21 2.84 0.93

0.3 5.19 3.44 0.57 12.59 3.24 1.31 17.78 3.30 1.89 10.10 2.87 0.93

0.4 5.13 3.48 0.57 12.45 3.27 1.31 17.58 3.33 1.88 9.98 2.90 0.93

0.5 5.07 3.51 0.57 12.31 3.31 1.31 17.38 3.37 1.88 9.86 2.94 0.93

0.6 5.01 3.55 0.57 12.16 3.34 1.31 17.17 3.41 1.88 9.75 2.97 0.93

0.7 4.95 3.59 0.57 12.02 3.38 1.31 16.96 3.44 1.88 9.63 3.00 0.93

0.8 4.89 3.63 0.57 11.87 3.42 1.30 16.75 3.48 1.87 9.51 3.03 0.93

0.9 4.82 3.67 0.57 11.72 3.46 1.30 16.54 3.52 1.87 9.39 3.07 0.93

1.0 4.76 3.72 0.57 11.56 3.49 1.30 16.32 3.56 1.87 9.26 3.10 0.92

1.1 4.69 3.76 0.57 11.41 3.53 1.30 16.10 3.60 1.86 9.14 3.13 0.92

1.2 4.63 3.80 0.57 11.25 3.57 1.29 15.88 3.64 1.86 9.02 3.17 0.92

1.3 4.56 3.85 0.56 11.09 3.61 1.29 15.66 3.68 1.85 8.89 3.21 0.92

1.4 4.50 3.89 0.56 10.94 3.65 1.28 15.43 3.72 1.85 8.77 3.24 0.91

1.5 4.43 3.94 0.56 10.77 3.70 1.28 15.20 3.77 1.84 8.64 3.28 0.91

17.6 MINERAL RESOURCE CLASSIFICATION Mineral Resources were estimated following the CIM and JORC guidelines. The following definitions were adopted for the categorization of mineral resources. The wireframes were built using a cut-off of 0.5 g/t, these makes the mineralised veins well defined and sample distribution more or less homogenous. Thus processes like kriging variance or relative kriging standard deviation was not found suitable for categorisation of resource. • Measured Mineral Resources were defined as those portions of the mineralised blocks where the average distance of all the samples used is less than 70m, with a minimum distance of 20m from the block centre. In addition, the blocks were estimated using a minimum of 2 drill holes, with a minimum of 6 and a maximum of 16 samples. • Indicated Mineral Resources were defined as those portions of the mineralised blocks where the average distance of all the samples used is less than 90m, with a minimum distance of 50m from the block centre. In addition, the blocks were estimated using a minimum of 2 drill holes, with a minimum of 6 and a maximum of 16 samples.

• based obut ther Figure measur Figure 1

17.7 Micon mineraldefinitieconom Micon gold batopograResourca grade

Measu

Million Tonnes

5.0

The stapermitti

Inferred Mion wide spacre is not enou

17.7 is a vied, Indicated

17.7: Dachang

MINERAL

has considel resource cons of a M

mic extraction

has calculatased on a golaphy. Basedces totals 17of 2.97 g/t g

Table 17.7:

ured Resource

Grade (g/t Au)

MilliOuncof Go

3.55 0.5

ated mineraing, legal, tit

neral Resouced drilling.ugh drilling

iew of the Dd and Inferre

g Block Model(

L RESOURC

ered the teccut-off grade

Mineral Reson”.

ted the breald price of Ud on the 0.67.2 Mt at a grgold. The de

Mineral Res

Indic

ion ces old

Million Tonnes

7 12.2

al resourcestle, taxation,

urces were d. The confidto confirm t

Dachang bloed resources

l from the Sou(Green) and In

CE ESTIMA

chnical and e for reporturce require

ak-even cut-US$750 per 6 g/t gold curade of 3.41etails are giv

source Estima(0.6 g

cated Resource

Grade (g/t Au)

MillOunof G

3.34 1.3

s are not m, socio-econ

129

efined as thodence on geothe confiden

ock model f shown in re

utheast Undernferred (Blue)

ATE

economic ting minerale that “there

off grade foounce. The

ut-off the Da g/t gold. In

ven in Table

te for the Dacg/t Gold Cut-o

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lion nces

Gold

Million Tonnes

31 17.2

materially aomic, marke

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nce on grade.

from the soed, green and

rneath showing) Resources

criteria usel resources. e are reason

or Dachang e Mineral Reachang Meanferred Mine 17.7.

chang Propertoff)

asured + IndicatResource

Grade (g/t Au)

MOo

3.41

affected by eting, politic

s of mineralintinuity has .

outheast undd blue, respe

g the Measure

ed to calcul Both the

nable prospe

mineralizatesource was asured and Ieral Resourc

ty as at June 2

ted I

Million Ounces of Gold

MilliTonn

1.88 9.7

any knowncal or other r

ised area thabeen interpr

derneath witectively.

ed (Red), Indi

ate a reasonCIM and J

ects for eve

ion to be 0updated witndicated Mi

ces total 9.8

28th, 2011

Inferred Resou

ion nes

Grade (g/t Au)

7 2.97

n environmerelevant issu

at are reted,

th the

icated

nable JORC entual

.6 g/t th the ineral Mt at

urce

Million Ounces of Gold

0.93

ental, ues, to

130

the best knowledge of the authors. There are no known mining, metallurgical, infrastructure, or other factors that materially affect this mineral resource estimate, at this time. 17.8 MINERAL RESOURCES (POLYGONAL METHODS) In 2010 Inter-Citic completed 236 exploration drill holes at Dachang for a total of 25,070 m of drilling. This drilling, along with results from 2008 and 2009 drilling, nearby trenching and inferences made from soil geochemistry, has been used to estimate preliminary mineral resources for several target zones in the exploration areas. The exploration area mineral resources were estimated using the sectional polygonal method, as have all previous initial inferred resources at Dachang. The anastomosing brittle faults hosting the mineralization are difficult to interpret, geologically domain and block model until a significant amount of drilling has been completed. The updated exploration area mineral resources presented in this report were based on interpretation of continuous mineralization as determined from drill and trench logs and assays, interpreted on section, and were sometimes influenced by plan interpretation of soil sample results. Full zone width composites were calculated for each drill hole and trench using a 0.5 g/t Au cut-off and a minimum required value of 2.0 gram/metres (g/m), with individual composites carrying up to 2.0 m (drilled width) of internal waste. Individual polygons generally had to exceed 0.76 g/t Au and a combined value of 2.4 g/m to be included in the summation of mineral resources, although over 95% of the intersections were greater than 1.18 g/t Au. Individual intercepts below this cut-off grade may be used when necessary to allow for consistent geological interpretation and to avoid a misleading interpretation regarding the deposit grade. An earlier analysis of population statistics, histograms, log histograms and probability plots revealed that a top cut of 40 g/t Au should be applied to the assays. No values greater than 22.6 g/t Au were seen on section so no top-cutting was performed for the polygonal resource estimate. The mineral resource estimate included all existing trench and drill hole data. The polygons were interpreted and drawn on cross-sections, being projected halfway to the next drill hole, or with a maximum area of influence from any individual assay intercept of 50 m. This is demonstrated in Figure 17.8.

131

Figure 17.8 : Example of Polygon Interpretation

Mineralized lenses were connected to adjacent holes by tapering them to the extents of mineralization meeting the above requirements. If an adjacent hole had mineralization which did not meet the 2.4 g/m requirement but was >0.5 g/t it would be tapered to that mineralization interval. If no mineralization occurred in the adjacent hole the lens would be cropped midway between the holes, following the approximate trace of mineralization. If mineralization >2.4 g/m occurs in two adjacent holes, separate resource blocks were created by connecting the midpoint of each upper and lower zone boundary. Polygon areas were transferred to AutoCAD and measured on section then converted to volumes using a summation of half the distance to the two neighbouring sections. Volumes were converted to tonnes using a bulk density of 2.7 t/m3. This number was derived based on an additional set of tests conducted in 2008. An example section with polygons is shown in Figure 17.9.

a b c

d

a

c

aT-00W

CJV-Z

CJV-Y

CJV-X

d

a

c

aT-00W

CJV-Z

CJV-YCJV-X

d

a

c

aT-00W

CJV-Z

CJV-Y

CJV-X

The min

SimilarNR2 in

neral resourc

Table 1

r methodolog2005.

Figure

ces determin

7.8 : Explora

Acadia 861/XP North RiveDMZ - ExtDMZ - NorPVZ - ExteRuby ZoneTotal

gies were u

e 17.9: Examp

ned for the ex

tion Area Infe

Zone

er 1 tension rth ension e

used to estim

132

ple Polygonal

xploration a

erred Mineral

Tonn(kt)

2,1,1,2,

1,

10,

mate resourc

Resource Sec

areas are set

l Resources as

nes )

Au (

,548 1.,697 2.,436 2.,544 2.331 2.,400 3.309 2.,265 2.

ces on other

ction

out in Table

s at June 28th,

Grade (g/t) .81 .78 .10 .02 .76 .15 .85 .31

r exploration

e 17.8.

2011

n areas inclu

uding

133

17.9 MINERAL RESOURCES The total updated mineral resources for the Dachang property are set out in Table 17.9. The great majority of this resource estimate comes from mineralization at surface to depths of less than 150 m and it has been assumed that open pit mining techniques would be the most likely method of recovering it. The previously reported inferred mineral resource, estimated at the Dachang North River NR-2 anomaly (Wahl, 2006), has not been further tested since 2008 and remains at 1.3 Mt grading 5.81 g/t Au (approximately 239,000 oz Au contained) as described in Inter-Citic’s press release of December 12, 2005.

Table 17.9 : Current Total Mineral Resources for the Dachang gold project as at June28th, 2011

Location Confidence Category

Tonnes (Mt)

Grade (g/t Au)

Contained Gold

(million oz) Dachang Main Zone and Placer Valley Measured 5.00 3.55 0.57 Indicated 12.20 3.34 1.31

Total Measured and Indicated 17.20 3.41 1.88 Dachang Main Zone and Placer Valley Inferred 9.70 2.97 0.93 NR-2 Anomaly Inferred 1.30 5.81 0.24 Exploration Areas Inferred 10.27 2.31 0.76

Total Inferred 21.27 2.83 1.93 The estimates of mineral resources are not affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues. The inferred mineral resources presented have not been sufficiently drilled to demonstrate economic viability. Additional drilling will be required to upgrade these inferred mineral resources to an indicated or measured resource. There can be no certainty that further drilling will enable this inferred mineral resource to be upgraded. In addition, the future economic viability of the mineral resources may be adversely affected by their location, as the Dachang property is situated at an elevation of 4,300 to 4,600 m above sea level, in a high-cold plateau area exhibiting alpine climate and vegetation with limited infrastructure. The nearest major city centre is approximately 300 km away by road, with the nearest primary road and power line approximately 120 km from the property. 17.10 RESPONSIBILITY FOR ESTIMATION The updated, block-modelled mineral resource estimate for the DMZ and Placer Valley was prepared by D. K. Mukhopadhyay, MAusIMM (CP), under the overall supervision of Stanley Bartlett, P.Geo. B. Terrence Hennessey, P.Geo., having made three site visits to the project, reviewed the geological data used for the block modelling. The mineral resource estimate for the NR-2 Zone was completed in 2005 under the direction of David Wahl, P.Eng., Vice President of Inter-Citic (Wahl, 2006). The 2009 mineral resource estimate for the exploration

134

areas was prepared by Garth Pierce, Nathan Cronin and Reg Felix, of Inter-Citic. Those polygonal mineral resource estimates were reviewed by B. Terrence Hennessey, P.Geo., of Micon, Inter-Citic’s independent Qualified Person with respect to mineral properties. Mr. Hennessey has reviewed the polygonal estimates and accepted overall responsibility for them. The 2011 estimates are current as of June 28th, 2011. The mineral resources in this report were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council December 11, 2005 as required by NI 43-101.

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18.0 OTHER RELEVANT DATA AND INFORMATION The following summary is taken from the 2009 preliminary economic analysis and technical report on the Dachang property enitiled “A TECHNICAL REPORT ON AN UPDATED MINERAL RESOURCE ESTIMATE, AND A PRELIMINARY ASSESSMENT AND ECONOMIC ANALYSIS FOR THE DACHANG GOLD PROJECT, QINGHAI PROVINCE, PEOPLE’S REPUBLIC OF CHINA (Gorman 2009)” and dated August 20th 2009. It should be noted however that the results presented have been superceded by the recent resource numbers estimated in June 2011 and presented in this report. The results are summarised below. 18.1 PRELIMINARY ASSESSMENT 18.1.1 Design Concept The purpose of the preliminary assessment discussed in this report was to outline the overall potential of the property and to provide a technical and economic summary of the preferred development concept that is recommended to be advanced to Chinese feasibility study (CFS) and international pre-feasibility (PFS) standard. The preliminary assessment is based on the resources, including inferred resources, estimated to be contained in the DMZ. An economic sensitivity analysis was also performed to provide a preliminary assessment of scheduling the currently estimated mineable resources derived from the PVZ, pending further drilling. The resources in the DMZ and PVZ are amenable to conventional open pit mining. Preliminary metallurgical testwork, however, has demonstrated that the Dachang mineralization is refractory, with the gold principally associated with arsenopyrite and, to a lesser extent, pyrite. Scoping-level metallurgical testwork examined a number of different processing alternatives for the recovery of gold and, as a result, two flowsheets were selected for further study in the preliminary assessment:

Crushing and grinding of 2 Mtpa of mill feed, followed by flotation to produce a gold-bearing sulphide concentrate that would be sold to, or toll-treated at, existing third-party metallurgical plants.

Crushing, grinding and flotation, followed by pre-treatment and oxidation of the flotation concentrate, prior to cyanidation and production of doré at in-house facilities, owned and operated by the Inter-Citic/No. 5 Institute joint venture.

As a result of the preliminary assessment, it was determined that the preferred processing route was an integrated circuit comprising production of a flotation concentrate at Dachang, and then transporting the concentrate to a second site for the production of doré using sequential processes of ultra-fine grinding, bacterial oxidation by the BIOX® process, counter-current decantation and neutralization, followed by carbon-in-leach cyanidation, electrowinning and smelting. The doré product would then be sold to third-party refineries, for conversion to saleable gold bars.

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The preliminary assessment economic model is based upon conceptually processing an estimated 17.8 million tonnes of mineral resources derived from the DMZ at an average grade of 3 g/t Au, containing approximately 1.7 million ounces of gold, of which approximately 1.5 million ounces are recovered in the form of doré. The model does not include consideration of scheduling the inferred resources contained in the Placer Valley area which are estimated to add a further 1.9 million tonnes at 2.7 g/t Au. 18.1.2 Mining The open pit optimization for the Dachang project was conducted using the Whittle 4X Lerchs-Grossman open pit optimization software to the Micon recoverable resource block model for the DMZ. Technical and economic parameters were applied to the block model to create a net value model for open pit optimization in Whittle. In the final stages of selecting the preferred option, pit optimization was run for the two shortlisted 2 Mtpa operational scenarios: concentrates and doré using BIOX®. Due to the preliminary status of the analysis, pit-optimization runs were completed based upon measured, indicated and inferred resources. The open pit optimization of the block model was completed using the economic parameters summarized in Table 18.1. A base case gold price of US$750/oz was used. On the basis of preliminary geotechnical analysis, the overall pit slopes used were 53o for the south-southwest wall and 47o for the north-northeast wall.

Table 18.1 Economic Parameters used in Open Pit Optimization

Parameter Value Units Gold Price 750 US$/oz Operating Expenses Mining Cost Mill Feed 1.70 US$/t Mining Cost Waste 1.10 US$/t Incremental cost (per 100 m vertical depth)

0.15 US$/t

Processing Cost 15.16 US$/t G&A Cost 3.00 US$/t Tailings & Social/community 0.50 US$/t Resource Tax 0.29 US$/t Recovery Overall Gold Recovery 84.3 % Selling Costs and Taxes Refining 10.0 US$/oz Resource Royalty 2.8 % of NSR

As a result of the optimization, three open pits (West, Central and East) were designed for the DMZ. The designed pits contain a total of 17.8 Mt at 3 g/t Au of scheduled resources, which contain approximately 1.7 million ounces of in situ gold. The total waste contained within the pit shell is 214.4 Mt. In addition, there are 1.45 Mt at 0.8 g/t Au of marginal resources within the pit. This results in an overall strip ratio of approximately 12 to 1. Figure 18.1 shows the

locationmanage

The des

Year

Tota

ns of the DMement facilit

sign life-of-m

Mill Fee(tonnes

1 2,000,002 2,000,003 2,000,004 2,000,005 2,000,006 2,000,007 2,000,008 2,000,009 1,837,70

al 17,837,70

MZ pits, and ies.

mine produc

Table 18

ed s)

Ore Gr(g/t Au

00 3.1 00 3.2 00 3.2 00 3.1 00 3.2 00 3.0 00 2.8 00 3.0 08 3.1 08 3.0

the sites sel

Figure 18.1

ction schedul

8.2 : Table of L

ade u)

Margitonn201,4174,7184,189,0172,141,170,6122,789,4

1,447,7

137

ected for the

Dachang Sit

le is provide

Life-of-Mine P

inal nes

MargGra

(g/t A470 0.7749 0.8832 0.8095 0.8871 0.8804 0.8692 0.9738 0.8494 0.8745 0.8

e process pla

te Layout

ed in Table 1

Production by

ginal ade Au)

Waste(ton

24,924,123,624,124,025,625,824,717,2

214,4

ant, waste du

18.2.

y Year

e Mined nnes)

(W

931,503 80,870

698,019 08,684

008,113 663,514 854,681 738,457 238,026 421,867

umps and tai

SR W+M)/O

(t:t) 12.6 12.2 11.9 12.1 12.1 12.9 13.0 12.4

9.4 12.1

ilings

138

18.1.3 Processing The process plant for the preliminary assessment has been designed for a throughput of 2 Mtpa, with the flowsheet selected on the basis of preliminary metallurgical testwork. The process flowsheet consists of three separate sections:

I. Concentrator. II. Pre-treatment.

III. CIL/goldroom.

The unit process stages for Section I consist of:

Crushing, screening and fine ore storage. Grinding and classification. Bulk sulphide rougher / scavenger flotation. Concentrate thickening, filtering and washing, storage and dispatch. Flotation tailings thickening and disposal into a tailings storage facility. Reagent mixing, storage and distribution.

The unit process stages for Section II consist of:

Ultra-fine regrind (UFG). Oxidative pre-treatment using BIOX®. Counter-current decantation (CCD). Neutralization.

The unit process stages for Section III consist of:

Conventional carbon-in-leach (CIL) cyanidation. Elution and electrowinning. Goldroom. Cyanide tailings thickening, detoxification and tailings disposal. Reagent mixing, storage and distribution.

A schematic overall example of a process flow diagram is provided in Figure 1.2. At the Dachang, it is intended to use ball mills for primary grinding, rather than the SAG mill shown in Figure 18.2.

Infrastr

eral overall es of the preng be transponeutralizatior where regi

oposed to primately 150

Figure 1

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139

ic Overall Pro

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140

water supply is obtained principally from groundwater, rivers and springs. Additional field work and study are required to ensure that sufficient water is available to satisfy the needs of the potential mine and processing plant at Dachang. With respect to other services, the preliminary assessment is based on the assumption that a single status, fly in-fly out camp, comprising accommodation, offices, warehouses, dining and recreation/training facilities, will be located in an area upwind of the mining and processing facilities. Personnel will be transported by bus to and from the main working areas before and after shift changes. The site is located at altitude, with sparse population and a relatively harsh climate. Training programs will be mandatory in order to fit the local population for industrial employment. A full environmental and social baseline study needs to be undertaken. In preparation for this, Inter-Citic has established communication with the local population. 18.1.5 Cost Structure Capital expenditures and operating costs for the potential Dachang project have been estimated to a preliminary assessment level of accuracy, judged to be +/- 30%. Costs are quoted in constant US dollars of second quarter, 2009 value. Mine capital and operating cost estimates are based on mobilizing a Chinese mining contractor. It is planned to build a process plant that will maximize the use of Chinese equipment, methods and systems. Process capital cost estimates are based on experience of designing and costing of gold plants in China, and include factoring of quotations received for comparable projects in China. The capital cost estimate for infrastructure and utilities is based on preliminary concepts and preliminary unit rates. As shown in Table 18.3, the total capital cost of the potential project is estimated at US$104.1 million, comprising US$83.1 million of initial capital and US$21.0 million of sustaining capital and estimated closure provision.

Table 18.3 : Capital Cost Summary

Cost Centre US$ Million Mining 5.0 Processing 55.1 Infrastructure/Utilities 23.0 Total Initial Capital Cost 83.1 Sustaining Capital and Closure Provision 21.0 Total Cost 104.1

Mine operating costs were based on a survey of Chinese contractor operations and access to proposals and bids on mining scopes of work, plus a comparable analysis of large scale worldwide open pit operations. Waste mining costs were estimated at US$1.10/t; the unit cost of mining material to feed the plant is estimated at US$1.70/t. Process operating costs were based on experience with other projects in China, and verbal quotations for key reagents, power

141

and wage levels. General and administrative (G&A) costs were based on a review of reported costs at selected operations in China and other comparable sites, plus Inter-Citic’s costs of operating the Dachang exploration camp. A summary of average, life-of-mine operating costs is provided in Table 18.4. Costs include the operational resource related royalties and taxes, according to information supplied by Inter-Citic and as listed in Table 18.1, but exclude state/provincial profit taxes. The estimated average cash operating cost is US$35.69 per tonne milled, or US$404 per ounce of gold produced.

Table 18.4 : Summary of Total Operating Costs by Cost Centre

Cost Centre US$/t milled Mining 15.01 Processing 15.16 G&A and Tailings 3.50 Total Average Cash Costs 33.67 Royalties/Taxes/Fees 2.02 Total Average Operating Costs 35.69 Cash Operating Costs US$404/oz Total Operating Costs US$428/oz

18.1.6 Economic Analysis The economic analysis for the preliminary economic assessment of the potential for production from the Dachang project has been performed by conventional discounted cash flow techniques, on an after-tax basis and under the assumption that the potential project is financed entirely by equity, with no debt component. The economic assumptions for the base case analysis are summarized in Table 18.5 and the results are summarized in Table 18.6.

Table 18.5 : Economics Base Case Assumptions

Item Basis Gold Price before refining and taxes US$750/oz Silver Price before refining and taxes Not used Development Period 2 years Ramp Up Period Full production from year 1 Basis All equity, constant US$, 2 Qtr, 2009 Effective Tax Rate (State/Provincial) 28% used, but 25% expected to apply in practice Resource Compensation Fee 2.8 % NSR Resource Tax US$ 0.29/t milled Working Capital Equivalent of 3 months full operating costs and totalling

US$17.1 million was provided for in the economics and recovered over the life of the mine.

Tax Holiday 2 years at 0% of rate, 50% rate applies for a maximum of 5 years from start of production, 100% from year 6 onwards.

Depreciation Straight line over life of mine

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Table 18.6 : Base Case Project Economics for the 2 Mtpa Flotation/UFG/Biox®/CIL at a Gold Price of US$750/oz, August 2009

Parameter Value Mill Feed Mined (k tonnes) 17,838 Cash Operating cost ($/oz payable) 404 Total Operating Cost ($/oz produced) 428 Total Contained Gold produced (koz) 1,488 Total Capital Cost (US$ million) 104.1 Capital Intensity Factor (US$ capital/oz Au produced) 70.0 Plant Internal Cut-off Grade (g/t Au) 0.93 Project Production Period (years) 8.92 Project IRR, all equity, after taxes (%) 40.5 Project NPV all Equity Case, after tax (5%) (US$ million) 198.1 Project NPV all Equity Case, after tax (10%) (US$ million) 131.3 Project NPV at 10% per ounce (NPV/oz produced) 88

Sensitivity analyses were conducted to test the impact on overall economics of changes in the major input parameters. The results are summarized in Table 18.7.

Table 18.7 : Sensitivity Studies on the Base Case After-Tax Results

Change Project NPV at 5% (US$ M) Project IRR (%) No Change to Base Case 198.1 40.5 Gold Price US$ 800/oz 241.5 47.0 Gold Grade +10% 263.2 50.2 Gold Grade – 10% 133.1 30.1 Capex – 10% 206.1 44.6 Capex + 10% 190.2 37.0 Opex – 10% 235.1 46.6 Opex + 10% 161.1 34.3 W/O ratio – 10% 212.8 42.9 State/Provincial Tax Rate of 25% 202.3 40.8 W/O ratio + 10% 183.5 38.0 Placer Valley Extension (*) 209.5 40.6

(*) This models the effect of adding a further 1.92 Mt at 2.74 g Au/t which will require mining 28.4 Mt of waste and was modelled as being delivered to the plant in operating year 10.

In the order of most to least significant impact, the ranking of the sensitivity factors is gold price or gold grade, operating cost, waste/ore ratio (pit slopes) and capital costs. It should be noted that there are risks associated with reclassifying inferred resources to indicated, achieving the overall metallurgical recoveries, using contract mining and achieving the predicted operating and capital costs, all of which require further work. For all of the cases presented in this report to be valid requires that full upgrading of inferred resources to indicated or measured resources is achieved through drilling and resource estimation studies and that the appropriate economic and technical parameters can be applied to justify converting the mineral resources to either proven or probable reserves.

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18.2 CONCLUSIONS AND RECOMMENDATIONS The principal conclusions resulting from the preliminary assessment are summarized as follows:

At a gold price of US$750/troy ounce, the Dachang project is estimated to generate an after-tax, un-leveraged, un-inflated, internal rate of return (IRR) in excess of 40% and an un-leveraged, after-tax project net present value at a 5% discount rate (NPV5) of US$198 million.

At a gold price of US$800/troy ounce, the after-tax IRR increases to 47% and NPV5

exceeds US$241 million.

Total gold production of approximately 1.5 million ounces is forecast to be generated during a mine life of approximately 9 years.

Estimated mine site cash operating costs average US$404/oz and project capital cost is

forecast to beUS$104 million. It should be noted that all economic results derived from the preliminary assessment are for the overall Dachang project in which Inter-Citic currently has an 83% beneficial interest. The preliminary assessment results are preliminary in nature. The study relies on mineral resources that are not mineral reserves and therefore do not have demonstrated economic viability. The preliminary assessment also includes inferred mineral resources that are considered to be too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the preliminary assessment will be realized as presented. Certain engineering parameters related to construction, operating, environment, geotechnical and other technical and cost factors will require further systematic assessment and validation during the pre-feasibility study phase. Given the positive results of the preliminary assessment, the principal recommendation of the authors is for work to commence on preparing a CFS and a PFS for the Dachang gold project.

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19.0 CONCLUSIONS Micon has completed an NI 43-101 resource estimate update for the Dachang gold project. Based upon drill hole spacing and sample population, the Dachang Main Zone deposit is classified as having measured, indicated and inferred resources. The mineral resources in the exploration areas are classified as inferred resources. Mineral resources in the DMZ were estimated using ordinary kriging and uniform conditioning. The mineral resources in the exploration areas were estimated using polygonal methods. The mineral resource estimates for the Dachang gold project, effective June 28th, 2011, at a 0.6 g/t gold cut-off are: the Dachang Measured and Indicated Mineral Resources totals 17.2 Mt at a grade of 3.41 g/t gold and the total Inferred Resources of 21.3 Mt at a grade of 2.83 g/t gold. The details are given in Table 19.1.

Table 19.1: Mineral Resources of the Dachang gold project as at June 28th, 2011

Location Confidence Category

Tonnes (thousands)

Grade (g/t Au)

Contained Gold

(million oz) Dachang Main Zone and Placer Valley Measured 5,000 3.55 0.57 Indicated 12,200 3.34 1.31

Total Measured and Indicated 17,200 3.41 1.88 Dachang Main Zone and Placer Valley Inferred 9,700 2.97 0.93 NR-2 Anomaly Inferred 1,300 5.81 0.24 Exploration Areas Inferred 10,265 2.31 0.76

Total Inferred 21,265 2.83 1.93

20.0 RECOMMENDATIONS The Company intends to continue exploration drilling on prospective areas of the Dachang gold project. To meet this objective Inter-Citic plans to spend 6.3 million dollars on its upcoming 2011 exploration program, including approximately 25,000 m of drilling and 10,000 m of trenching, as follows.

An initial 10,000 m trenching program will test 7 areas of strong gold soil geochemistry with trenches as close as 40 m apart in areas both east and west of the DMZ. Some of these areas were partially tested in 2010 with favourable results and work in these areas will be expanded and new anomalies will be tested. In general, each target area is comprised of a 2 to 3 km strike length of the fault system with strong gold in soil responses. The structure of these faults is complex and detail trenching is required in advance of drill testing.

As the trenching program is completed, a 25,000 m drill program will be undertaken on three different fronts. The main drill effort will test the most prospective trench results to depths of approximately 125 m. This 15,000 m phase of the drill program is designed to both expand the near surface gold inventory as well as supplement the economics of the DMZ. A further 5,000

145

m of drilling will begin to test the deep potential of the Dachang fault structures at depths of 250 to 450 m, something that has yet to be done. The final 5,000 m of drilling of the 2011 program will test a 3 km section of the DMZ-X directly east of the main deposit in an area covered by deeper than usual overburden.

In addition, acting on previous recommendations as described in Section 18.2, above, Inter-Citic established and staffed a Beijing Representative office in 2010 and led by Inter-Citic's Vice President Development and the Beijing Office, the CJV has commenced work permitting a mine and metallurgical facility development at Dachang. The 2009 Preliminary Economic Assessment produced by Puma on behalf of ICI will form the basis of this development with a base case production level of approximately 180,000 to 200,000 ounces of gold in doré being considered throughout these studies. In addition, the CJV has commenced work on a number of other permitting initiatives which will lead to the approval and development of a mine, concentrator and metallurgical facility to produce gold in doré. As part of this process the CJV, the has completed and had accepted for filing a Geological Resource Report (GRR) on the Dachang Main Zone and Placer Valley area. This resource report to Chinese formal standards compares well with the similar resource area as outlined in the Mineral Resource Update to 43-101 standards completed in July 2010. Inter-Citic has budgeted a preliminary figure of approximately US$12.7M (this estimate will be firmed up as part of the CFS process) up to the end of 2013 to cover the costs of additional permitting and other related studies (including an estimated land acquisition cost of $7.5M), and including among other items, the following:

On the 22nd of March of 2011, the company announced the appointment of China Nerin Engineering Co. Ltd (Nerin,) to complete a Chinese-Standard Feasibility Study, (CFS) a Mineral Resources Development and Utilisation Program (MRDUP) and the associated Project Application Report (PAR) for the Dachang Gold Project. The production of a GRR, CFS, MRDUP and PAR are the first stages in the permitting process for a mine and mill development in China. Nerin is one of China's largest engineering companies, and an internationally accredited Level 1 Design Institute, based in Nanchang. They have extensive experience in all forms of engineering design and construction management, and have acted as the design engineers for numerous mine projects worldwide, including Eldorado's Jinfeng Gold Mine in Guizhou Province (production of approximately 200,000 oz gold per year), plus numerous other mine, mill and smelter designs, both in China and in other countries worldwide. This work is ongoing.

In May 2011, the CJV signed a contract with the Chinese Research Academy of

Environmental Sciences (CRAES) to prepare the outlines for the supporting contracts for an Environmental and Social Impact Report to be prepared by CRAES in early 2012. This work is ongoing. CRAES was established in 1978, is one of China's largest Government sponsored Environmental Institutes and is a Chinese Class 1 national non-profit research institute for environmental protection.

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REFERENCES Anon(a), 2003, 2002 Work Report of Dachang Gold Mine in Qumalai County, Qinghai: Unpublished Report by Qinghai Institute of Geological Survey, pp. 1-129. Anon(b), 2003, Project Design for Gold Mine Pre-exploration in Periphery of Dachang Mining Area-Cuoni Area, Qumalai County, Qinghai Province: Unpublished Report by Qinghai Institute of Geological Survey, pp. 1-65 (English Translation). Anon(c), 2003, Summary of the Dachang Gold Project: Unpublished report by the Qinghai Institute of Geological Survey, pp. 1-26 (English Translation). Anon(d), 2003, Management Process of Gold Test of Dachang Project Team: Unpublished report by the Qinghai Geological Mineral Centre Laboratory, pp. 1-4 (English Translation). Anon, 2000, CIM Standards on Mineral Resources and Reserves—Definitions and Guidelines: CIM Bulletin, Vol., No. 1044, pp. 53-61. Anon, 1997, U.N. International Framework Classification for Reserves/Resources-Solid Fuels and Mineral Commodities: Economic and Social Council. Anon, 1991, Regional Geology of Qinghai Province: Xining, Qinghai, pp. 604-662. Cargill, D. G., 2004, Dachang Gold Property In Qumalai County, Qinghai Province, People’s Republic Of China. A technical report filed on SEDAR (www.sedar.com) by Inter-Citic Minerals Inc. pp 49 plus appendices. Chen, J. 2000, Regional Geology of the Kulun-Qinling Domain: in Concise Regional Geology of China, Geological Publishing House, Beijing, pp. 90 - 131. Dachang Final Project Trip Report and Preliminary Geotechnical Analysis; Ken Myers, The Mining Group, Inc; December 3, 2008. Dachang Gold Project Processing Plant Report and appendices; Gary Patrick, Metallurg Pty. Ltd., July 17, 2009. Dachang Optimisation Report and Accompanying Spreadsheets, Designs and Figures; Jonny Steedman, Micon International Co. Limited, June 29, 2009. Dachang Process Plant Capex/Opex Estimate Spreadsheets; Gary Patrick, Metallurg Pty. Ltd., May 26, 2009. Discussion and Correspondence on ICI Ownership and Fiscal/Tax Rules; Lou Pasubio, C.A., May, 2008 to July, 2009.

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Environmental Due Diligence Topics report and spreadsheet; Wendezhouma, Inter-Citic, February 2, 2009 Fan, C., Regional Geology of the Sichuan-Yunnan-Qinghai-Xizang Domain: in Concise Regional Geology of China, Geological Publishing House, Beijing, pp. 132-171. Fu, W., 1993, Mado and Zhalighu Territories, Geology and Mineral Deposits Sections, Report Accompanying 1:200,000 Map Sheets I-47, (7,8). Qinghai Geological & Mineral Bureau Region #1 Investigating Team. Inter-Citic, 2007. Dachang Mineral Resource Update. A press release by Inter-Citic Mineral Inc. on Tuesday March 20, 2007. Available at the company website (www.inter-citic.com) or with the company’s filings on SEDAR (www.sedar.com). 3 pp. Li, F., et al., 1978, Dachang Gold Placer Region, Geological Exploration Report: Unpublished Report for Qinghai Geology Bureau, Geology Team #4. Ma, J., et al., 2000, Silt Geochemical Survey Report, Accompanying 1:200,000 Map Sheets I-47, (7,8). Qinghai Geological & Mineral Bureau: 16. Li, C., et al., 1999, Geochemical Survey Report for Chaixiyuan Area, Accompanying 1:200,000 Map Sheet, Qinghai Geological & Mineral Bureau. Memorandum of Pit Slope design questions; Ken Myers, The Mining Group, Inc; March 3, 2009. Ni, F., 1982, Aikengdeleisite Territory, Geology Section and Mineral Deposits Sections, Report Accompanying 1:200,000 Map Sheet I-47-(1): Qinghai Geological & Mineral Bureau Region #1 Investigating Team. Shen, Z., 1993, Mado and Maji Snow Mountain Territories, Geology and Mineral Deposits Sections, Report Accompanying 1:200,000 Map Sheets I-47, (9, 10). Qinghai Geological & Mineral Bureau Region #1 Investigating Team. Shen, Y, 2000, Introduction; in Concise Regional Geology of China, Geological Publishing House, Beijing, pp. 1-14. Updated Report on Dachang Project Assessment Issues; Jonathon Guo, ICI, May 18, 2009. Wahl, D. G., 2006; Technical Report, Inter-Citic Minerals Inc. 2004 and 2005 Exploration Programs, Dachang Gold Project, Province of Qinghai, China. A technical report filed on SEDAR (www.sedar.com) by Inter-Citic Minerals Inc. pp 34 plus appendices.

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CERTIFICATE

B. TERRENCE HENNESSEY As an author of a portion of this report on certain mineral properties of Inter-Citic Minerals Inc. (Inter-Citic) in Qinghai province, China, I, B. Terrence Hennessey, P.Geo., do hereby certify that:

1. I am employed by, and carried out this assignment for:

Micon International Limited Suite 900, 390 Bay Street Toronto, Ontario M5H 2Y2 Tel.: (416) 362-5135 Fax: (416) 362-5763 e-mail: [email protected]

2. I hold the following academic qualifications:

B.Sc. (Geology) McMaster University 1978

3. I am a registered Professional Geoscientist with the Association of Professional Geoscientists of Ontario (membership # 0038); as well, I am a member in good standing of several other technical associations and societies, including:

The Australasian Institute of Mining and Metallurgy (Member) The Canadian Institute of Mining, Metallurgy and Petroleum (Member).

4. I have worked as a geologist in the minerals industry for over 30 years.

5. I have read the definition of “Qualified Person” set out in National Instrument 43-101 (NI 43-101) and, by reason of my education, past relevant work experience and affiliation with a professional association, fulfill the requirements to be a Qualified Person for the purposes of NI 43-101. My work experience includes 7 years as an exploration geologist looking for iron ore, gold, base metal and tin deposits, more than 11 years as a mine geologist in both open pit and underground mines and over 14 years as a consulting geologist working in precious, ferrous and base metals as well as industrial minerals.

6. I visited the Dachang project site in China during the periods April 30 to May 6, 2006,

November 24 to November 30, 2007 and September 22 to 28, 2010 to review the results of exploration at site.

149

7. I am responsible for the preparation of Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 13.1, 17.8 (portions) 17.9 (portions, NR-2 mineral resources), 17.10 (portions) and portions of 19 and 20 of the technical report titled “A Technical Report on an Updated Mineral Resource Estimate for the Dachang Gold Project, Qinghai Province, People’s Republic Of China” and dated June 28th, 2011 (the “Technical Report”).

8. I am independent of the parties involved in the transaction for which this report is

required, as defined in Section 1.4 of NI 43-101.

9. I have had no prior involvement with the property that is the subject of the Technical Report other than my ongoing consulting work for Inter-Citic.

10. I have read NI 43-101 and Form 43-101F1 and the portions of this report for which I am

responsible have been prepared in compliance with that instrument and form.

11. As of the date of this certificate, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make this report not misleading.

Dated this 29th day of June, 2011

“B. Terrence Hennessey” {signed and sealed}

B. Terrence Hennessey, P.Geo.

150

CERTIFICATE

I, Dibya Kanti Mukhopadhyay, of Norwich, United Kingdom, do hereby certify that: 1. I am employed by, and carried out this assignment for, Micon International Co.

Limited, Suite 10, Keswick Hall, Norwich, Norfolk, United Kingdom, tel. 0044(1603) 501 501, fax 0044(1603) 507 007, e-mail [email protected].

2. This certificate applies to the Technical Report titled “A TECHNICAL REPORT ONAN UPDATED MINERAL RESOURCE ESTIMATE FOR THE DACHANG GOLD PROJECT, QINGHAI PROVINCE, PEOPLE’S REPUBLIC OF CHINA”.

3. I hold the following academic qualifications: a. M.Sc. (Applied Geology) Jadavpur University, Kolkata, India 1993. b. MBA University of East Anglia, United Kingdom, 2010.

4. I am a member of the Australasian Institute of Mining and Metallurgy (Member # 225557); as well, I am a member in good standing with The Canadian Institute of Mining, Metallurgy and Petroleum (Member # 140645).

5. I have worked as a geologist in the minerals industry for almost 16 years. 6. I have read NI 43-101 and, by reason of education, experience and professional

registration. I fulfill the requirements of a Qualified Person as defined in NI 43-101. My work experience includes 3 years as an exploration geologist looking for gold and base metal deposits, more than 3 years as a mine geologist in open pit and underground mines and 10 years as a surficial geologist and consulting geologist on precious and base metals and industrial minerals.

7. In this report, I am responsible for Sections 1, 2, 3, 13.2, 14, 17.1 to 17.7 and portions of 17.9 and 17.10, and portions of 19 and 20.

8. This report has been prepared in compliance with the criteria set forth in NI 43-101 and Form 43-101 F1.

9. I have had no prior involvement with the property that is the subject of this Technical Report before February 2009.

10. I have visited the property during 21st November to 26th November 2009. 11. I am independent of Inter-Citic Minerals Inc, as defined in Section 1.4 of NI 43-101,

other than providing consulting services. 12. As of the date of this certificate to the best of my knowledge, information and belief, the

Technical Report contains all scientific and technical information that is required to be disclosed to make this report not misleading.

Signed this 29th day of June 2011 [ Signed Dibya Kanti Mukhopadhyay ]

Dibya Kanti Mukhopadhyay, M.Sc., MBA, MAusIMM (CP)

151

CERTIFICATE

I, Stanley C Bartlett, of Norwich, United Kingdom, do hereby certify that: 1 I am employed by, and carried out this assignment for, Micon International Co.

Limited, Suite 10, Keswick Hall, Norwich, Norfolk, United Kingdom, tel. 0044(1603) 501 501, fax 0044(1603) 507 007, e-mail [email protected].

2 This certificate applies to the Technical Report titled “A TECHNICAL REPORT ONAN UPDATED MINERAL RESOURCE ESTIMATE FOR THE DACHANG GOLD PROJECT, QINGHAI PROVINCE, PEOPLE’S REPUBLIC OF CHINA”.

3 I hold the following academic qualifications: a. B.Sc. (Geological Sciences) University of British Columbia 1979. b. M. Sc (Mining Geology) Camborne School of Mines, United Kingdom, 2087.

4 I am a registered Professional Geoscientist with the Association of Professional Engineers and Geoscientists of the Province of British Columbia (membership # 19698); as well, I am a member in good standing of other technical association and societies, namely:

Society for Mining, Metallurgy and Exploration

5 I have worked as a geologist in the minerals industry for 30 years. 6 I have read NI 43-101 and, by reason of education, experience and professional

registration. I fulfil the requirements of a Qualified Person as defined in NI 43-101. My work experience includes 5 years as an exploration geologist developing for tungsten, gold, silver and base metal deposits, more than 14 years as a mining geologist in both open pit and underground mines and 11 years as a consulting geologist working in precious, ferrous and base metals and industrial minerals. I have previous experience with mineral resource estimation.

7 In this report, I am responsible for Sections 1, 2, 3, 15, 16, 18, and portions of 19 and 20.

8 This report has been prepared in compliance with the criteria set forth in NI 43-101 and Form 43-101 F1.

9 I have had no prior involvement with the property that is the subject of this Technical Report before February 2009.

10 I am independent of Inter-Citic Minerals Inc, as defined in Section 1.4 of NI 43-101, other than providing consulting services.

11 As of the date of this certificate to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make this report not misleading.

Signed this 29th day of June 2011 [ Signed Stanley C. Bartlett ]

Stanley C Bartlett, P.Geo.

Managing Director, Micon International Co Limited